Articulating strategic choices in the public sector

How would a listed company respond to complex statutory obligations, freedom of information requests, parliamentary and public scrutiny and do so while delivering a quality service for potentially millions of customers? Would public sector standards of accountability and governance stretch even the most capable private sector organisations?
Maybe, Minister

The public sector demands the same strategic thinking as organisations in the private sector, however, this is combined with layers of legislative obligations, bureaucratic processes and public scrutiny.

The stereotype of Sir Humphrey Appleby and his colleagues has never been further from the truth! It has never been more important for public sector leaders to get strategic choices right. It is imperative that leaders conceptualise, articulate and deliver on the Government’s mandate and priorities.

How has the public sector playing field changed?

A tranche of factors – an aging population, the rise of Millennials, budget shortfalls, and technological advances – are already reshaping the way government delivers services. Successful public sector agencies need to adapt to the one constant of the new digital age: change itself. They will need to re-imagine their services and continually innovate the way they engage with citizens and customers. Continued digital evolution may see some public bodies struggle as their ecosystem changes around them, while others will take advantage of the potential that digital transformation can offer and thrive.

There have been a multitude of seismic changes for the public sector to grapple with and augment their operating models in response.

  • Clear mandates from the government of the day have been clouded by the need to simultaneously straddle economic commitments and social license.
  • The pass-through of costs via natural monopolies has been challenged by ‘efficiency dividends’, value-for-money outcomes and contestability.
  • Rising expectations for disclosure and transparency from multiple stakeholder groups.
  • The delivery of homogenised services has been replaced by demand to meet differentiated customer requirements.

The changes outlined above will continue to be compounded by shocks from global changes such as the economic slowdown, digitisation and the sharing economy.

These changes have been produced by a combination of demand “push” factors from citizens and customers (i.e. mobile technology, personalised health care) and supply “pull” factors from areas of competitive advantage for the public sector (e.g. natural monopolies, broad geographic spread).

Cascade of Strategic Choices

Engagements with our key public sector clients highlight a consistent trend in how they are shifting their internal and “go to market” strategies in line with this changing landscape. The Cascade of Strategic Choices assists in articulating an organisation’s strategy, in conjunction with undertaking the deeper and more-complex process of developing strategy. These considerations for public sector agencies and the sector have been summarised below, using the Cascade of Strategic Choices framework:

For instance, an agency may aspire to deliver quality core services and enhance the customer experience. In order to do this, they need to gravitate towards physical and virtual areas of strength (e.g. existing infrastructure and centres of excellence) and achieve uncompromisingly high levels of capacity and capability. To ensure sustained success, a high performance and customer centric mindset must be fostered and the supporting people, processes and technologies aligned.

Alternatively, an agency may aspire to build its reputation in the community with key stakeholders. In order to enhance their reputation, they must align statutory obligations, expertise and the needs of the community. In order to succeed they need to enhance stakeholder engagement and collaboration and have the ability to partner with third parties to deliver core services. This service delivery can only build community reputation and stakeholder confidence with robust governance and accountability frameworks to manage cost and quality.

Government 2020 and the need for agility

Deloitte launched Government 2020 as a means for leaders from all sectors to make sense of the rapidly changing demographic, societal, economic and technological trends shaping our future. This research highlights that the scale and inevitability of change will drive progress and responses from government as the opportunities will be too compelling to ignore.

The linkage between the goals, chosen markets, capabilities and management systems are essential for public sector agencies to explain to the public and their workforce. By addressing each of the five questions from the Cascade of Strategic Choices as an integrated set of choices, public sector leaders have the ability to create and articulate sustainable strategies that can cope with the scope of change currently being experienced and forecast to continue.

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