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The modern state
Stimulus for a successful transformation
The environment within which governments and public administrations function has changed noticeably in recent years. Global issues such as climate change , migration, international trade links and supply chains are not new but their effects have reached a tipping point and now demand the development and delivery of long-term solutions that work.
The situation is compounded by growing uncertainties and sudden crises and events that require an immediate response. At the same time, there is now much more and much better data on which to base analyses and consistent evidence-based decision-making. All of this makes it more challenging and more complex for the public sector to exercise its functions, and organizations face increased demands in terms of problem-solving capability, speed and reliability.
A great deal of thought is being put into how to modernize public administration, with potential solutions being discussed and implemented at various points across the public sector.
We are highlighting four aspects that we believe are paramount for the modernization drive in the public sector . Our objective is to stimulate the discussion and realization of solutions. The following highlights do not in any way reflect the entirety of the situation at hand.
New responsibility for managers
The modernization of public administration cannot be seen as just a transition to a new, modern paradigm. Transformation in the sense of adapting to a changing environment will be a continuous undertaking across broad swathes of the public sector. The role of managers will change accordingly. In addition to shaping, controlling and delivering the performance of statutory duties, being a transformation manager will increasingly mean dedicating time and energy to how future proof the unit or organization they work for is.
Managers will be responsible for analyzing external developments, proactively working out what needs to change as a result of them, and implementing these changes. They will increasingly become transformation designers, the ones who provide the impetus and press ahead doggedly with the transformation that is needed. Strong leadership and communication skills will be required as well as an openness to dialog, moderating between different parties, and constructive discourse. Managers will also be called upon to explore the scope for action in various areas and must even be willing to change the framework in the interests of achieving a given objective, say, by modifying regulations as necessary or by adjusting people's areas of responsibility.
More "end-to-end" working rather than "silo thinking"...
In the current debate there is much talk of breaking down the silo mentality or overcoming silo thinking. And indeed, the new challenges do not stop at organizational boundaries or the limits of someone's responsibility. This is just as true within organizations as it is across organizations and entire public authorities. Being stuck in a silo mentality means losing vital time, time that could be spent on coming up with good solutions and delivering them. When challenges are interdisciplinary or the aim is to speed up the organization's capability to respond either proactively or reactively, it is essential to develop solutions end-to-end, considering the user from start to finish. The best way to do this is to bring together all of the various areas of expertise and perspectives in a (temporary) team, regardless of which part of which organization they come from.
With its task clearly defined in the form of a target and a due date, this team will be independently responsible for addressing the problem as well as all planning, milestones, methodology, management, and decision preparations. Because teams of this type hold all the responsibility for dealing with the given issue, the new combinations of staff, areas of expertise and perspectives that the team benefits from automatically mean that fresh subject-matter expertise and knowledge of methods are brought in, enabling the problems to be addressed faster and better. Experience shows that these types of flexible structures, by their very nature, overcome silo thinking and provide a holistic perspective of the organization, quite apart from making federal, state and local governments more attractive as employers.
… and flexibility and a change of perspective as the new standard
Taken to its logical conclusion, this cannot merely be a matter of staff looking beyond their own area of responsibility every now and then in temporary project structures. The current and future challenges for public administration are becoming more complex, sometimes arise very suddenly, and are certainly here to stay. Being prepared for this means being ready to see things from a different perspective and to apply new methods, or indeed bringing different perspectives and new methods into the team. Staff must be deployed flexibly where they can add the greatest value. This will involve creating more possibilities for employees to switch to other areas of the organization or different government agencies if they have expertise that is needed there, or the motivation to move. With increased flexibility, public administrations will be better able to match capacities and skills to their needs and will have the ability to solve new problems better and faster.
Broad-based continuing professional development is the prerequisite for all of this. Training may include coaching in project-based working and project management, instruction in data usage and methods or digital topics, among many other things. A clear view of the current capabilities of the individual employees is also crucial for identifying options for their flexible deployment and any further training needs. Tools that enable a performance-based incentive system are also necessary. Lateral hires bring in fresh perspectives and new areas of expertise. The exchange of staff between public and private sector organizations should be perpetuated – in both directions. Evidence from countries like France and Estonia shows that this works. Increased staff mobility helps continuously expand the know-how base and increase employer attractiveness.
Last but not least: IT, digitalization and data
Inhouse digitalization capacities and IT know-how are crucial for public administrations today. And these should not be temporary: Only when inhouse digital capabilities go all the way to top management levels are public administrations able to plan and manage the necessary digitalization of their own offerings. Considering the growing skills shortage, educating and training inhouse staff in digital issues will become the most important lever for developing the required knowledge and securing it within the organization long term. A creative and modern approach to recruitment and attractive job offers to match are also necessary in order to successfully compete for the additional staff resources needed.
That said, the strengthening of capacities and expertise will only be successful if it is accompanied by a reduction in complexity within the IT landscape. This puts the spotlight on technologies and architectures that are flexible, agile and reusable such as microservices, containerization, cloud solutions and software-as-a-service (SaaS). Public administrations need to move away from a mindset of "we have to build this ourselves" towards participating in marketplaces and reusing solutions. In addition, it must be made easier to exchange data between institutions via greater interoperability and data quality must be increased – a good example being X-Road, the open source system for data exchange and access from Estonia and Finland.
The debate in past years and the discussion going on today focus all too often on contrasting the situation in public administration with the private sector. It is generally claimed that only the private sector has the necessary skills for innovation and modernization.
Things may still be tricky during the pandemic and the digitalization deficit in public administration may be significant. But let that not detract from the fact that much of the work of government agencies functions smoothly day in and day out.
The scale of the task ahead calls for ambition and constructive cooperation, a forward-looking, objective discourse, and a shared spirit of getting down to the hard work together. With those prerequisites in place, public administrations are more than capable of tackling this mammoth undertaking.
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Roland Berger regularly publishes studies on the topic of robust organizations, discussing how corporations revolve stronger from change, disruption and crises.