Qualityworld

Public sector? So what?

There is a natural and wide-ranging assumption that the public sector is somehow 'different' to its private and voluntary counterparts. Andy Bagley of TEAL Consulting Ltd agrees, but argues that a sound understanding of what is different - and why - is actually an advantage when implementing effective improvement programmes

The public sector presents a special set of challenges to those who manage it. But exactly how does the nature of the challenge differ from the private and voluntary sectors, and why does this matter? It matters because experience shows that many improvement programmes fail to achieve their full potential because they try to apply standard quality principles and practices without fully recognising these differences. As a high-level example, the government's compulsory competitive tendering (CCT) strategy of the 1990s eventually fell from grace because it was primarily cost-focused, and failed to address all of the other standards (such as service quality, accessibility and responsiveness) that people expect from their public services.

Public-private myth busting

In many ways, the public and private sectors do not differ as much as old prejudices would have us believe. First, public sector organisations are certainly subject to many pressures and constraints in how they can operate. But so are private companies, for example through legislation, regulatory authorities, contract requirements, or simply owner/group company policy.

Second, inspection regimes such as Ofsted, Social Services Inspectorate, Healthcare Commission, and comprehensive performance assessment (CPA) for local authorities, have put many public sector organisations under intense pressure to deliver improved results. The merits of these inspection regimes may be argued, but certainly the public sector is no longer - if it ever was - a haven for underperforming managers and staff.

Finally, a recent CBI survey indicates that public sector workers average 8.9 days sick leave per year, as opposed to 6.9 days for private sector employees. However, this is greatly overshadowed by the difference between absence in large organisations (which most public sector organisations are) and small ones - 10.2 days per employee for organisations with over 5,000 staff as opposed to 4.2 days for those with less than 50 people. Again, any imputation that the public sector is a soft option appears very doubtful.

The real difference lies in the context in which public sector organisations operate. By definition, they do not 'own themselves' in the way that commercial organisations do, and so cannot, for example, switch from producing widgets to making jam if they so choose. Indeed, the concept of 'successful' public sector organisations is itself elusive, for this reason. The common currency of profit and shareholder value that defines the private sector clearly does not apply to public organisations, and attainment of other goals gives no guarantees for their future. As the requirements of public service and political imperatives change, public sector organisations are often reorganised, reformed or even eliminated, regardless of their past level of achievement or recognition.

For instance, the Inland Revenue's Cumbernauld accounts office in Scotland was the first large public sector organisation to win the European Quality Award, in 2000. Since then, the office still exists but restructuring means that it is no longer a separate business unit, and could not now apply for the award in its own right. Similarly in the local government arena, having a 'good' or 'excellent' CPA rating will not protect councils from the next round of local government restructuring, or from losing some of their present powers to proposed new regional assemblies.

Models and awards

These similarities and differences are known and recognised. Public sector-specific awards have been introduced, most notably charter mark in the UK and the Hammer Award and President's Quality Award in the US. Private organisations would readily recognise the principles and criteria on which these awards are based, but they have been tailored to fit the public sector context (see the charter mark article on page 30).

The excellence model

EFQM originally launched the excellence model in 1991 as a purely private sector model. It then undertook considerable research and consultation before launching it for the public and voluntary sectors in 1996. The criteria of the model and even the weightings remained unchanged, emphasising that excellence principles apply equally to all sectors. What has changed is the interpretation and language of the model, with separate guidance for the public and voluntary sectors, and use of terms like 'key performance results' instead of 'business results'.

At a 1997 conference organised by the Danish Ministry of Finance, public sector representatives from across Europe considered the results criteria of the model in particular, and concluded the four results criteria (people, customer, society and key performance) are all applicable to public sector organisations. This is because public sector organisations are more than simply tools of government policy; their responsibilities go beyond the delivery of immediate results and should incorporate other stakeholder perspectives. Priorities will differ from organisation to organisation though. These could be reflected by varying the criteria weightings, but there should be no 'fixed' set of alternative weightings for the public sector. Organisations should recognise that they may need to vary these weightings again to reflect changing priorities in the future.

The balanced scorecard

Another example is provided by the balanced scorecard which was also initially designed for the private sector. In this context it has graduated from the original four-quadrant model, which Robert Kaplan and David Norton originally developed, to a more evolutionary concept that uses the principle of strategy mapping to define organisation-specific drivers and linkages. Even so, the private sector scorecard still culminates in financial outcomes, whereas the public sector versions of the scorecard work towards a balance of customer and 'fiduciary' results.

Some organisations have taken this further with scorecards designed uniquely to fit their business. In a major project, Centrelink, an agency of the Australian Families and Community Services, has introduced a five-segment scorecard whose components are innovation, cost efficiency, Centrelink people, customer and community, and client partnerships.

Six sigma

What about six sigma in the public sector? Well, the term itself is potentially misleading, because the high-frequency operations that make this statistic meaningful (eg 3.4 defects per million opportunities) are rare in public sector organisations. QW published an article (in January 2001) on six sigma in a courts service although the piece admitted that in this instance achievement of just 2.8 sigma was the main target.

In fact, this apparently limited goal does not devalue the approach, because the principles and improvement techniques on which six sigma is based (statistical analysis, understanding variation, facilitation, improvement techniques) remain entirely valid if suitably adapted to a public sector context. The danger is principally one of terminology, and of implying some mystique to the term six sigma when addressing fundamental process identification and improvement issues.

The stakeholder principle

These 'whole-organisation' methodologies have been refined principally because financial outcomes are not the be-all and end-all of public sector existence. At the heart of this lies the different relationship that the sector has with its stakeholders.

Figure 1 illustrates a generic stakeholder diagram. More complex versions will identify many different stakeholder subsets but the advantage of this simple illustration is that it depicts the way that different groups tend to pull the organisation in many different directions. Often, for example, service users will want to see more money spent whereas central government (with the taxpayer in mind) will want to see less.

Figure 1. Stakeholders

Figure 2 takes this analysis a little further, by considering the relative position and influence of different stakeholder groups in relation to a particular change project. This basic example (not intended to be definitive) envisages the starting point for a local authority seeking to develop a new leisure centre.

Figure 2. Stakeholder map

L e v e l of i n f l u e n c e	High	Government	Local MPs	New centre operators
	Medium	Neighbours	Police, shops,schools, local communities	Land sellers, developer
	Low	Highway engineers	Customers, bus operators, suppliers	Potential employees
		No commitment	Neutral	Committed
		Initial interest/reaction to proposed change

This type of analysis can help establish what is needed to influence change. In simple terms, those stakeholder attitudes, particularly those of the most influential stakeholders, have to be shifted to the right on the diagram, and the challenge will be how to do this (for example getting local MPs to support the project and government at least not to block it).

Relationships with customers are also different in the public sector. Generally, private sector customers are willing purchasers of goods or services. Not so in the public sector. Some people may be enthusiastic service users, but others will have no choice, and may even be reluctant or coerced users of the service ('customers' of the prison or probation service for example).

The police are a good example of this spectrum of service use. Should you be unfortunate enough to be stopped for speeding on the M1 through South Yorkshire, you might subsequently receive a customer satisfaction questionnaire! Of course, this doesn't ask if you enjoyed being stopped and whether you will be returning to speed again. Rather, it focuses on how you were dealt with, understanding why you were stopped, and whether correct procedures were followed.

Figure 3 illustrates how this can be applied more generally. This is not a graph depicting levels of achievement, rather a diagram showing how the measurement of customer perception can vary. With reluctant service users like speeding motorists, the issues are understanding, proper conduct and discharge of responsibilities, whereas with willing customers (such as victims of crime), more conventional measures of satisfaction will apply. And there will be areas in between (such as police witnesses) where measurement will be a balance between these two extremes.

Figure 3. Types of customer feedback

Defining and measuring success

Along with this complex environment and the elusive nature of success comes the difficulty in defining clear success criteria which balance all aspects of public service. A mission statement is fine, but rarely encapsulates everything the organisation is seeking to deliver to all of its stakeholders, or how it wishes to work. Original work in this field took place in the former Benefits Agency (now part of Department of Work and Pensions) in the 1990s, when the agency's core values were:

customer service
caring for staff
bias for action (a proactive, dynamic and empowered culture)
value for money

These values clearly reflected the potentially competing priorities that this organisation - like many others - was trying to balance. The question then was how to turn these values into reality and inspire the real change that the agency was seeking. The solution applied was another matrix, this time an 'achievement matrix' of the type shown in figure 4.

Figure 4. Quality matrix

										Achievement levels





Performance criteria

The performance criteria along the bottom of the matrix are the different success factors, which can be based on the organisation's mission, core values or goals. The number of criteria is flexible (the Benefits Agency framework broke the four core values down into 12 specific criteria). The vertical axis represents levels of achievement - and once again the number is flexible.

The principle of using a matrix like this is that groups within an organisation can assess their own progress, based on credible and commonly-accepted information on what it has achieved. This approach has a number of advantages, particularly for the public sector:

it provides a clear means of articulating the organisations objectives and priorities, through the descriptions in each box of the matrix
it provides a quick and easy means of involving staff in self-assessment activity, and hence of engaging them in improvement action
it can be used to compare perceptions of progress in different parts of the organisation, or between different groups of staff
targets can be set very broadly and flexibly

There are examples of matrix-based approaches from local government, the health sector, social care and the probation service. Some organisations have taken the performance criteria for their matrix from the excellence model, but this is not essential. What is essential is that the structure of the matrix, and the steps described within each of the rating levels, are specific to the organisation and designed to reflect what it wants to achieve and how.

Make it work

These are just some examples of how public sector organisations have adapted core quality concepts. The message, as for all aspects of performance improvement, is 'make it work for you'. Think about what your organisation needs to achieve, how it needs to operate, and the context in which it works. Then think what that means for the systems, standards and improvements that you are trying to achieve.

The most effective performance management control system is not one that does things straight from the textbook or by copying others. It is one that really understands the organisation, and can adapt and apply improvement principles in that particular context. So yes, the public sector is special, but the distinction does not end there. Every organisation is special - different because of its aims, its environment, and the culture of the organisation. Really understanding the implications of these differences is the key to effective change and improvement.

Biography

Andy Bagley is a director of TEAL Consulting Ltd and specialises in performance improvement and organisational excellence. Originally from the public sector, he has worked with many public and private organisations. He has been a senior assessor with the BQF and EFQM, is an associate of the Institute of Management Consultancy and a member of Excellence Yorkshire's management committee. For further information go to www.tealconsulting.co.uk or e: info@tealconsulting.co.uk