Background: Insights from Industry Experts
In June, 2018, the McKinsey Center for Government (MCG) released “Deliver for Citizens How to Triple the Success Rate of Government Transformations.” For those who don’t have the time to read the full 92 page report, this abridged summary will provide you with some of the key insights. The report consolidates data from surveys of nearly 3,000 public servants in transformation efforts across 18 countries. Additionally, MCG interviewed over 30 leaders who had driven major transformation efforts and cross-referenced these interviews with data from over 80 case studies. Needless to say, this comprehensive report provides a wealth of information on government transformation challenges, opportunities, and provides key insights into the type of projects you might work on as a management consultant for the government.
There are tremendous opportunities for change outlined in this report. For instance, only 20% of large-scale government change efforts fully meet their objectives. Additionally, the report notes that if governments across the globe were to operate as effectively as the top-performing governments, government could save as much as $3.5 TRILLION a year by 2021 while continuing to maintain the same level of service quality!
Framework to Consider: The 5 C’s
The report also provides a simple, yet effective framework for improving government transformation efforts. The 5 C’s, as MCG terms this framework, is grounded in research and when all aspects are included in a transformation effort, MCG has found that success has increased drastically (by a factor of 3)! The 5 C’s are:
- Committed Leadership: Executive-level leaders who champion the effort, commit time and resources, and hold themselves personally accountable for the success or failure of the transformation.
- Clear Purpose and Priorities: Successful efforts (over-)communicate specific, outcome-focused objectives.
- Cadence and Coordination in Delivery: Close collaboration between groups and an empowered cross-functional team leads to a fast and steady pace that maintains momentum.
- Compelling Communication: Strong communication at all levels and especially with frontline employees and those most affected by change increases engagement and the prospects of success.
- Capability for Change: Leveraging project/program management, digital, and analytical skills to lead change efforts (and if these skills are not part of the culture, consider hiring consultants who can supplement the skills).
While government expenditures in 2016 was nearly 33% of global GDP, there are three main drivers that are going to place greater pressure on government expenses in the coming years:
- Demographics: The percentage of the world’s population aged over 65 is expected to double from 8% in 2015 to 16% in 2050. The decline in working populations and increase in retirees will lead to greater pressure on the government for services and to manage expenditures.
- Inequality: Two-third of all households in advanced economics saw their income stall or fall between 2005 and 2014. Additionally, the McKinsey Global Institute (MGI) found that 40 out of 95 countries assessed have high or extremely high levels of gender inequality (for more on this, I recommend reading “The Moment of Lift” by Melinda Gates).
- Urbanization: The proportion of the world’s population living in cities is expected to increase from 54% in 2014 to 66% in 2050. The developing world is experiencing the most pressure while cities facing declining growth will need to determine strategies to compete with other urban areas for industry and talent.
- Automation (Bonus One!): Yes, MCG references three drivers and automation cross-cuts all three. Technology will impact the shifting demographics, inequality, and could create opportunities and challenges in urban communities.
Doing More Given the Constraints
Governments are increasingly facing pressure to do things faster, better, and more cost-effectively. In the wake of global trends, the people, process, and technology constraints that governments face, governments will need to rely on creative solutions and talent and expertise that they may not have in-house. Consultants will play a critical role in the success of these transformation efforts and reading reports like these will help you prepare for the challenge!
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