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A Practical Guide to Change in the Public Sector

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  • As any government director of transportation or assistant secretary of human services knows, trying to effect large-scale change in the public sector is not for the faint of heart. Implementing major change or reform is often a high-risk venture that can waste scarce taxpayer funds or ruin reputations if not done with appropriate preparation and effective execution.

    Major transformations are difficult in any large organization. Even in the private sector, where senior executives tend to have more concentrated decision-making authority, companies struggle to make change stick. Most studies indicate that a failure rate on the order of 70 percent can be expected for major private-sector change efforts.

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    Public-sector organizations also struggle to make change stick, with many of their failures cataloged by the media in painful detail. What state has not tried to reform its health-care system, improve its public-transportation network, or implement a major IT program only to give up after several years of minimal impact and ballooning costs? The dispersed accountability of government agencies and the intense public scrutiny given to the public sector combine to make real and lasting reform quite challenging to carry out.

    Each public jurisdiction also faces its own particular challenges to successfully implementing reform. For example, in the United States, there is a high turnover of senior leadership because of frequent changes in political administration. In Australia, Canada, and some European countries, the relative brevity of parliamentary terms can make it difficult to sustain long-term change agendas.

    Because of the confluence of several forces, pressure is increasing on governments to undertake large-scale reform. The lingering impact of the global financial crisis, a long wave of retirements among the baby boom generation, and the new expectations and demands of a Web-connected citizenry are forcing governments to change how they do business—whether by creating new methods of service delivery or significantly cutting costs. On top of this pressure, the complexity of public problems—such as achieving stability in global financial markets—means that we are asking more of our public servants now than ever before.

    The question, then, is not whether to undertake major reform but how to do so in order to maximize the chance for success and minimize risk. In a 2011 survey of nearly 300 senior corporate executives, the Economist Intelligence Unit found that major change efforts most often fail because of poor program execution and management—especially due to a lack of early warning indicators and insufficient commitment from senior leadership. Funding, by contrast, was the least of the problems.

    These challenges can be readily overcome. By focusing on some specific aspects of leadership alignment, program management, and execution, government organizations can substantially increase their odds of success and deliver lasting impact. And this effort can be made in addition to the normal course of operations if the leaders of these organizations are appropriately supported, allowing them to focus on the issues that are essential to making the desired change happen.

    To be sure, the devil is in the details. However, there is a holistic approach to managing large-scale change that The Boston Consulting Group (BCG) has used successfully in many settings. This approach, which incorporates our Rigorous Program Management (RPM) technique, draws on decades of experience partnering with large companies to transform their operations, and it has been tailored to meeting the needs of major public agencies in Australia, Europe, the United Kingdom, and the United States.

    This proven approach can mitigate risks and help tame the multiheaded beast that major reform represents for a government agency. BCG’s experience with scores of public-sector transformation programs suggests a set of five principles to guide the effort and raise the odds of success:

    • Recognize that good policy is just the start. Complement good policy with carefully sequenced and rigorous implementation.

    • Engage key stakeholders. Move key stakeholders beyond entrenched positions by finding points of commonality.

    • Keep the process forward looking. Anticipate risks, allow for fast midcourse corrections, and ensure clarity on emerging progress.

    • Focus leadership on the highest-priority issues. Support senior management with a strategic yet light-touch program management office.

    • Embed change and spread the gospel. Cascade change through every corner of the organization, accompanied by a drumbeat of consistent communications.

    As we will see, these principles are interrelated and work most effectively in concert.

    “All Changes Great and Small: Exploring Approaches to Change and Its Leadership,” Journal of Change Management, Volume 5, Issue 2, June 2005.
    “Leaders of Change: Companies Prepare for a Stronger Future,” Economist Intelligence Unit, January 2011.
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