Three ways to improve gov’t productivity
According to McKinsey, these strategies have been effective in both public and private sector organisations.
McKinsey’s study across 42 countries found that if public services could reach the productivity levels of the leading performers in their peer groups, the improvement would be worth an estimated $3.5t per year.
The management consultancy firm discussed three strategies to improve productivity that have been effective in both public and private sector organisations.
First, public sector leaders should be aware of mindsets that may hinder productivity growth.
Some mindsets that need to be overcome include budget cuts equal to service decline; that automation will alienate users; that investment benefits are hard to realise; that short-term budgeting limits to long-term gains; and the lack of incentives for innovation.
Second, the report highlighted the importance of creating a system that enables productivity growth.
At the federal or central level, some practical imperatives for leaders emerge: set a clear aspiration for improving service quality and outcomes for the public, commit to multiyear resource allocation to enable future investments, explicitly encourage spending proposals that include innovative ideas, and push back on those that do not.
Moreover, they should hold departments and agencies accountable for delivering on their commitments, especially regarding benefits.
They must also emphasise the need for rapidly scaling proposals that are proven to work, being thoughtful about leadership rotation, investing in new capabilities by identifying talent, building skills, attracting new talent, celebrating successes, accepting failure, and helping spread best practices.
Lastly, at the departmental or agency level, the first step toward pursuing productivity improvements is to review current activity.
To deliver the right outcomes, departments and agencies can consider their customers, tools and assets, and the people across their organisations.
Strategies include delivering services targeted to the customer, using assets efficiently and getting value for money from procurement, and organising to develop and upskill talent.
