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Five Cs for successful change: McKinsey claims 80% of efforts to transform public services fail

The success rate of “large-scale change efforts in the public sector” is only about 20% internationally, according to a survey completed last December by McKinsey and Company’s public sector research arm.

“There is no shortage of bold government visions; the challenge is how to translate those visions into reality,” states the latest publication from the McKinsey Centre for Government. This is based on responses from 2,900 public servants of varying seniority in 18 countries, around 80 more detailed case studies and interviews with about 30 senior public sector leaders.

It wouldn’t be a McKinsey report without dramatic headline figures, in this case the claim that US$3.5 trillion in public value could potentially be created each year across the Organisation for Economic Cooperation and Development (OECD) if more government service delivery “transformation” projects met their objectives. (Last year, they said the same amount could be saved through improved public-sector productivity.)

The more recent survey covered Australia, Belgium, Brazil, Canada, China, France, Germany, Japan, India, Italy, Mexico, the Netherlands, Poland, Russia, Singapore, Spain, United Kingdom, and the United States. The resulting report, published last week, includes case studies of public administration in Mexico City, Moscow, Maharashtra (India), Peru, New Zealand, the United Kingdom, Detroit and the United States federal government.

Transformation, however, is not a well-defined concept. The report refers to going beyond mere “reform” in response to massive challenges including ageing populations, the social and economic impact of accelerating technological change, and a new wave of urbanisation putting strain on city infrastructure.

But then explanatory notes reveal an extremely broad definition, covering “… a wide range of government initiatives, undertaken at local, regional or national level, with the aim of improving the accessibility or effectiveness of public sector services, improving their efficiency, and improving outcomes for citizens and service users.”

Richard Dobbs, senior partner and director of the McKinsey Center for Government, added his own explanation of the report’s topic in a related press statement.

“Every day governments around the world are trying to improve the lives of their citizens within their fiscal constraints, whether by improving frontline health services, reducing crime rates, boosting educational attainment or simply by achieving more for less,” he said. “That’s what government transformation means.”

Dobbs argues that “old skillsets” of public servants and traditional expertise in the core spheres of government work like public policy, diplomacy and the military can’t help address these new and emerging issues his report discusses.

“They must now develop new capabilities which allow them to be more agile, adaptive and creative in providing new solutions,” Dobbs advises. “This may feel uncomfortable and new approaches may run counter to accepted ways of doing things – but to deliver change, government services must themselves change.”

The report proposes that the chances of success in such endeavours can be tripled through five management “disciplines” regardless of “scope, geography, institutional context or the trigger for change” in a particular government:

“In-depth analysis of data demonstrates that when none of the below factors are present, programme success rates are just 13%. When three are present, rates rise to 21%; and when all five are present, success rates multiply to 45%.”

MCG senior fellow Tera Allas acknowledges “these might sound obvious” but the survey data suggests it does not follow that they are easy.

“Public-sector organizations face unique challenges when trying to effect change: their political mandate may be weak or short-lived; they are typically larger and more complex than private-sector organizations; and subject to more external scrutiny,” said Allas.

“To meet intensifying demands for public services, governments will need to be more creative, more agile, and deploy more citizen-centric approaches to planning and delivery. Getting government transformations right can change millions of lives for the better, which is why it is vital that change efforts are managed successfully.”

The five Cs of successful change

The MCG researchers condensed their advice into five points, all starting with a c-word.

Committed leadership. Be a role model. Government bureaucracies need “inspirational people who lead by example and commit significant political and personal capital into making change happen” in leadership roles. Potential impact on transformation projects: double the chance of success.

Clear purpose and priorities. Start with “a compelling rationale for change and a handful of crystal-clear priorities, translated into a few, specific targets” and make sure staff understand this. Almost 90% of public servants who responded to the MCG survey weren’t clear on the point of the transformation project they witnessed

Cadence and coordination in delivery. The key here is “maintaining a constant rhythm of change, with regular course corrections and sharp accountability” according to the new report. Just over half of successful change efforts had a dedicated coordination team, compared to 26% of unsuccessful ones.

Compelling communication. It’s been said many, many times before. Change management requires “continuous, two-way communication [that is] visibly led by committed senior leaders, and focused on celebrating success” — regular communication about progress was a feature of about half of the successful transformations, but only 18% of fails.

Capability for change. Training in the new ways is essential. The MCG team says agencies that were “actively building the new skills and capabilities amongst public servants needed to lead and sustain the transformation” saw success rates 25% higher than those that did not.

Go to the McKinsey website to view the full report: Delivering for citizens: How to triple the success rate of government transformations.

Author Bio

Stephen Easton

Stephen Easton is a journalist at The Mandarin based in Canberra. He's previously reported for Canberra CityNews and worked on industry titles for The Intermedia Group.