Thursday’s post discussed how difficult it is to make public sector processes more efficient. That goes some way towards explaining why public sector organisations find it so hard to make cost savings and productivity improvements. However, there are also wider organisational factors which can frustrate attempts to improve efficiency.
Any attempt to introduce change in an organisation will come up against the following obstacles:
- Complexity – the extent to which the business goals are unclear and the level of ambiguity in the organisation;
- Political resistance – the presence of competing interest groups with high levels of power and influence;
- Cultural resistance – how much a proposed change runs counter to the shared assumptions which prevail in the organisation;
- Size and Scope – the extent to which the change affects lots of people and crosses organisational and national boundaries;
- Lack of change experience – the extent to which managers have led similar change programmes in the past.
With the exception of the international dimension, the public sector has all of these factors in spades. They will push against any attempt to make services more efficient.
Complexity and ambiguity are inherent in public sector organisations. To an extent, they feature in all service organisations, where it is relatively easy to measure cost but far more difficult to measure quality. Manufacturing companies can usually tell fairly quickly whether a reduction in cost has led to a reduction in quality. Measuring the quality of tangible products is easier than measuring the quality of services. For service companies quality is more subjective. Again, as we saw with processes in service organisations, the customer plays a greater role. Service quality has much to do with customer perception.
That said, service companies have a fail-safe measure; customers start deserting them if the service quality drops too far. In public services, which are free at the point of consumption and where there is little choice of provider, there is no such measure. Service quality is therefore devilishly difficult to measure. For this reason, productivity, efficiency and effectiveness are also difficult to measure. This paper on health service productivity notes that there is no consensus about measures of quality, or shared definitions of productivity, in the health sector. As Professor Carol Propper says, “in health care, prices are easy to observe, whilst quality is not.”
All of which makes organisational goals and the measurement of them a lot more ambiguous than they are in the private sector. Public sector organisations often have difficulty just defining and measuring what they are actually for. That is why their corporate mission statements can seem so nebulous. It is not uncommon for senior public sector managers to spend hours arguing about the meaning of words. Kevin Ball describes one such conversation here:
My first introduction to public service HR was in the NHS six years ago. I found what should have been a unifying mantra ‘It’s all about the patients’ became a divisive one as each special interest group – GPs, Consultants, Managers, Nurses, Politicians – used it for their own, different, purposes. Each of those big groups also held myriad smaller groups who would equally war with anyone else over exactly what they meant by ‘improving patient care’. In my experience, this culture of conflict and the organisational politics which it led to is the biggest single barrier to change and improvement in every NHS organisation I have ever seen.
Which brings me neatly onto the second obstacle to change; organisational politics. Complexity and ambiguity not only make productivity and efficiency difficult to measure, they also create openings for politicking. People in the public sector are no more prone to playing politics than anyone else but the high level of ambiguity gives them much more opportunity to do so.
Most of us go to work to do a good job but we also want to further our careers, increase our levels of power and status and maximise our financial rewards. The secret of successful politicking is to make the latter look like the former.
Here’s a simple example. An organisation I worked with a decade or so ago decided to review its entire IT infrastructure. At that time, SAP was flavour of the month and IT professionals with SAP skills were in demand. Every techie wanted SAP on his CV. The IT department threw itself into the project; no-one could have accused it of lack of commitment. But as the organisation defined its requirements for its new systems, the IT people manipulated the users into stating these requirements in such a way that SAP would be the only possible solution. Fortunately for the organisation, they did it in such a ham-fisted way that they were spotted.
They had, however, understood that if you can manipulate the definitions in a way that suits your agenda, the rest is easy. Powerful interest groups do this in all organisations but ambiguity widens the scope for such politicking. If you can define ‘patent care’ or ‘well being’ or ‘service quality’ in a way that entrenches or enhances the role of your profession, you can then wave it in the face of anyone who tries to get you to do anything different.
Conflicting definitions and interpretations are at the root of many of the catastrophic IT failures in the public sector. The shifting sands of strategy and policy often mean that systems have to be re-configured after they are built rather than during the design or pilot phases when it would have been much cheaper. This happens in the private sector too but not nearly to the same extent.
Politicking and empire building also create silos and barriers in organisations. More effective cross-organisational working is usually key to making efficiency savings. One or two powerful fiefdoms can therefore bring an entire efficiency drive to a halt. This level of complexity increases when different organisations have to work together. If the delivery of a service depends on collaboration between NHS trusts, local authorities, charities and government departments, so will the delivery of any efficiency savings. In situations like this, no-one has authority across all the organisations and so the scope for resistance and turf wars is magnified. Saving money through collaboration is a fine idea but the outbreaks of tribalism during the Total Place project show just how difficult this is to achieve in practice.
The cultural resistance to change throughout the public sector is worth an entire series of posts and much has been written about it. As Edgar Schien told us nearly three decades ago, culture is driven by shared assumptions and these assumptions are based on what has worked in the past. In organisations which have had year-on-year budget increases for as long as most people can remember, the idea that budgets will be cut takes some time to sink in. As late as 2009, when the papers were already full of stories about massive spending cuts, one civil servant told me:
There is always money available. If you can make a decent enough case you can get the extra budget you need.
Many public sector managers drew up their budgets with a nudge-nudge and a wink-wink. “This is the amount we’re working to but it’s not the real amount. We’ll get some more at the last-minute. We’ll call it ‘re-structuring costs’ or something.”
That’s the trouble with deep-rooted cultural assumptions; they are very difficult to shift. Evidence alone is seldom enough to change them. Even when organisational cultures do change, they do so very slowly.
Which brings us to the final factor, management inexperience. The CIPD and others have bemoaned the inability of senior public servants to make any significant improvements to the performance of their organisations. There are managers in the public sector who have made significant productivity improvements but they are relatively few and are thinly spread. Given that drastic cost saving is outside the recent experience of most of these organisations, this is hardly surprising. Calling people useless for not being good at something they’ve never been asked to do before is rather unfair. Nevertheless, the lack of cost-saving experience among public sector managers will slow down any attempts to make the sector more efficient. Even if they learn quickly it may not be quickly enough.
But even those with good track records in making organisations more cost-effective sometimes underestimate the scale of the public sector task. Those coming from the private sector thinking that just sacking a few people and making the rest work harder will solve the problem are soon forced to reassess their own assumptions.
In general, then, the obstacles to change are significantly greater in public sector organisations than in commercial ones. This is no-one’s fault. Much of it is due to the nature of public services and the way that they have been run for most of the post-war period. Attempts to blame it on particular groups or individuals risk over-simplifying the problem.
Yet over-simplification is what politicians, journalists and even some public servants (who should know better) often try to do. Trying to condense the complexities I have discussed in these posts into a Question Time answer or a response to a John Humphreys challenge is not easy. In a world of soundbites, simple answers are more readily heard – even if they are wrong. If we just got rid of all the bureaucrats, if we stopped spending money on useless back office services, if we could only make these lazy sods work harder, if we could break the power of public sector unions, if we got rid of all those bloody HR people…..
It’s easier to throw meaningless statistics around the Commons chamber than to get to grips with the hard slog of reforming the public sector.
None of this is to say that public sector organisations can’t be made more efficient; they can. People have done it. It’s just much more difficult than those who have not tried to do it realise. Unless you have tried to get your head around arcane processes, or pored over spreadsheets trying to work out where the hell your costs are going, or explained a new way of working for the umpteenth time to a sea of blank faces, it’s difficult to understand the eye-watering effort involved in making even minor efficiency savings.
Offered the choice between a tough diet and exercise regime or a miracle slimming pill, many overweight people choose the latter. Our politicians display similar behaviour. They look for the magic pill and ignore the sheer scale of the task.
As H.L Mencken said, “For every complex problem, there is a solution that is simple neat and wrong.” Simple and neat might make for good soundbites but creating a more efficient public sector will require cleverer thinking and a hell of a lot more hard work.