Time for the McDonaldisation of the Public Sector?
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Mark Gannon, from Methods Advisory, sets out a call for change in the delivery and organisaiton of public services. He says that the 4th Industiral Revolution is leading to a social and economic revolution that public sector leaders need to take advantage of, or face the consequences.
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Time for the McDonaldisation of the Public Sector?
- 1. |methodsadvisory.co.uk Shaping Public Services for the Digital Age Time for the McDonaldisation of the Public Sector? Mark Gannon Principal Consultant mark.gannon@methods.co.uk @markgannon @MethodsAdvisory
- 2. Who we are Our mission is to support the delivery of value to our clients with tools, knowledge and solutions. Consultancy is a people business; our eco system of staff and partners are our greatest assets and our strongest brand. When we say we are an “Ethical Consultancy”, that is something we passionately believe. Our delivery model is based on an eco- system of permanent staff and trusted partner organisations Shaping Public Services for the Digital Age MISSION PEOPLE VALUES DELIVERY MODEL 02| methodsadvisory.co.uk
- 3. Our Sectors LOCAL GOVERNMENT CENTRAL GOVERNMENT TRANSPORTENERGY & UTILITIESHEALTH & CARE EMERGENCY SERVICES Heritage & Scale Founded in 1992 Work across all UK Public Services Average 150 active projects across more than 60 different customers at any one time Available through 10 Major Government Frameworks Shaping Public Services for the Digital Age 03| methodsadvisory.co.uk
- 4. Our Services Shaping Public Services for the Digital Age Organisational Optimisation INVESTMENT AND PROCUREMENT Technology transformation 04| methodsadvisory.co.uk
- 5. Our Services Strategic delivery partnerships Shaping Public Services for the Digital Age 05| methodsadvisory.co.uk
- 6. Shaping Public Services for the Digital Age 06| methodsadvisory.co.uk
- 7. Shaping Public Services for the Digital Age http://dera.ioe.ac.uk/9264/ 07| methodsadvisory.co.uk
- 8. Shaping Public Services for the Digital Age 08| methodsadvisory.co.uk
- 9. The internet changes everything Shaping Public Services for the Digital Age Web 3.0 is the next industrial revolution 09| methodsadvisory.co.uk
- 10. Shaping Public Services for the Digital Age 10| methodsadvisory.co.uk
- 11. Shaping Public Services for the Digital Age 11| methodsadvisory.co.uk
- 12. Shaping Public Services for the Digital Age 12| methodsadvisory.co.uk
- 13. Shaping Public Services for the Digital Age 13| methodsadvisory.co.uk “Investor concern over the threat of new technologies is overstated” Blockbuster analyst report, 1999
- 14. Shaping Public Services for the Digital Age Industrial Revolutions Convergence of emerging tech, eg. AI, robotics, IoT, autonomous vehicles, 3D printing, nano/biotech, materials science, blockchain, implantable/wearable tech, mobile/ubiquity, smart cities, etc 14 | methodsadvisory.co.uk
- 15. Shaping Public Services for the Digital Age “[Governments]… will be completely transformed into much leaner and more efficient power cells, all within an environment of new and competing power structures” 15| methodsadvisory.co.uk
- 16. Shaping Public Services for the Digital Age 16| methodsadvisory.co.uk
- 17. Shaping Public Services for the Digital Age The shift from to 17| methodsadvisory.co.uk
- 18. Shaping Public Services for the Digital Age http://www.mcdonaldization.com 18| methodsadvisory.co.uk
- 19. Shaping Public Services for the Digital Age 19| methodsadvisory.co.uk
- 20. Shaping Public Services for the Digital Age 20| methodsadvisory.co.uk
- 21. Shaping Public Services for the Digital Age 21| methodsadvisory.co.uk
- 22. Shaping Public Services for the Digital Age 22| methodsadvisory.co.uk
- 23. Shaping Public Services for the Digital Age 23| methodsadvisory.co.uk
- 24. Shaping Public Services for the Digital Age Austerity = 24| methodsadvisory.co.uk
- 25. Shaping Public Services for the Digital Age Swivel Chair Integration 25| methodsadvisory.co.uk
- 26. Shaping Public Services for the Digital Age Local Public Services 26| methodsadvisory.co.uk
- 27. Our Digital Delivery Framework has been developed specifically to help organisations understand the capabilities of a Digital Organisation based around core, common components. Data Management – Data is the key asset that releases the potential for a traditional organisation to move towards digital delivery; Business Intelligence – Whilst data is key, effective digital organisations have well defined business intelligence capabilities to exploit the data; Workflow Efficiency – Getting the right combination of intelligence and workflow provides organisations with the ability to collaborate; Service Mobility – Service mobility is about creating an organisation that is flexible and agile enough to respond to customer needs now and as they change over time; Iterative Design– Truly digital organisations are obsessively focused on iterating delivery to add value to their customers, whether these are citizens, visitors, businesses or partners and recognise that this is not a one way relationship. Digital delivery framework Shaping Public Services for the Digital Age 27| methodsadvisory.co.uk
- 28. Multi-level analysis – intra-organisation and cross-organisation Applying the framework Shaping Public Services for the Digital Age Looking for patterns: - shared capabilities - areas of difference. 28| methodsadvisory.co.uk
- 29. Shaping Public Services for the Digital Age Wardley Mapping 29| methodsadvisory.co.uk
- 30. Shaping Public Services for the Digital Age 30| methodsadvisory.co.uk
- 31. Shaping Public Services for the Digital Age 31| methodsadvisory.co.uk
- 32. Future of public service value proposition: front line, governance, and data Value is in the data, enabled by shared plumbing of the internet: not tech, or web Business purpose: internal process or platform/ecosystem? State as social platform entrepreneur: stewardship/curation of evolving open architecture Design for innovation/evolution by others Structured data holds more semantic value Shaping Public Services for the Digital Age Data is the business model 32| methodsadvisory.co.uk
- 33. Local authorities as commissioning, process & data hubs Targeted exploitation; infrastructure (registers); governance Shared standards for metadata; structures, processes and APIs Open architecture: exposure of data and function Business model, value chains, ecosystems, service architecture, not just tech! Shaping Public Services for the Digital Age 33| methodsadvisory.co.uk
- 34. IN: Hub Government Platforms/ecosystems Services & service architecture Local public services Cyber Data Open standards Consumption/sharing models Humility OUT: Blockbuster Government C20 ‘procurements’ Tech & tech architecture Councils, Health, Social Care, Housing, etc ‘Security’-as-inaction ’Commercial’ councils ‘Shared services’ Cryogenic outsourcing Egos Shaping Public Services for the Digital Age 34| methodsadvisory.co.uk
- 35. Shaping Public Services for the Digital Age 35| methodsadvisory.co.uk New business model + Web 3.0 + Heroes = Survival
- 36. Internet-Standards-Consumption-Ecosystem- Innovation Shaping Public Services for the Digital Age 36| methodsadvisory.co.uk
- 37. Thank you Mark Gannon mark.gannon@methods.co.uk 07471 218603 methodsadvisory.co.uk Shaping Public Services for the Digital Age @markgannon @MethodsAdvisory
Editor's Notes
- We are passionate about shaping public services for the digital age. Out Strategy Director Mark Thompson has made the case strongly for government making better use of the shared plumbing of the internet. How far has the public sector come?
- Like you I remember slogging away trying to turn the boxes green to hit the 2005 e-government targets. You can see the documents at this website where they are archived if you fancy a trip down memory lane.
- The reality of the move to digitize government in the early days of e-government was there was a little too much of this. Actually, I would argue that much of the digital agenda in the public sector today is still a bit lipstick on a pig. The public sector is not addressing the fundamental need for a new business model which can exploit the current fourth industrial revolution / Web 3.0. They have yet to really exploit the opportunities of Web 2.0!
- Methods Advisory believes that Internet changes everything. Moving from Web 1.0, essentially one way, static web (i.e. e-Government) to Web 2.0, many organisations really exploited this. We are now IN the next industrial revolution – Web 3,0 which will lead to the connection of data, people and things to drive a new model of economic, social and political delivery and consumption.
- What have all these companies got in common? (Ask the audience and get some discussion going). When we were trying to “digitise” government in the mid-200s, not a single one of these companies existed. They have all been founded and grown after 2005. AND they are all now over $1 billion in value each. How did they manage this? Because they recognised the opportunity of Web 2.0 and they exploited it. Every one of these companies is driven by data and platforms and has disrupted the industry in which they are operating.
- None of these companies could have achieved this without the shared infrastructure of the internet. Imagine there was no National Grid and households had to generate their own power and use their own bespoke methods of transmission and consumption? This would be costly, inefficient and hamper innovation and sharing. Thankfully there is a National Grid and thankfully there is an internet with shared plumbing, standards and components that allows organisations like Uber, Spotify and Twitter to innovate and deliver new services and value.
- Contrast this to the canal network in 18th and 189h Century Britain which actually originated as a series of separate projects, all with different standards meaning that moving things around the network was difficult, slow and costly. The way that the Public Sector consumes technology and data and delivers services today is akin to this 18th and 19th century canal network with the ensuing challenges and constraints.
- We know what happens to organisations who fail to realise that their business model is out of date and don’t see the opportunities (and threats) of prevailing global industrial change. If the public sector isn’t careful, it could be the next victim of this myopia.
- It is essential therefore that the public sector understand the opportunities and threats that the fourth industrial revolution (which is already here!) is bringing.
- This guy, Klaus Schwab, who is the Executive Chair of the World Economic Forum has written a fascinating book called ’The Fourth Industrial Revolution’. You should go and read it if you want to understand what the world in the next 5-10 years is going to look like. A key feature of the ’Fourth Industrial Revolution’ is the exponential pace of change.
- Socitm have tried to do some work on the simplify, standardise, share agenda but in reality this has all been quite low key and not really delivered anything substantive. Socitm should have an important role here in setting the agenda for change and I would challenge Socitm to do more in marshalling thinking on this agenda sectorally and nationally.
- If you (in this case ’local government’) are waiting for someone to come over the hill on a white charger with the answer then you are going to be waiting a long time as it is not going to happen. GDS have had a go and trying to do something different about remodeling digital government but have really missed the boat and have just developed themselves as another supplier, building rather than consuming and too focused on the cool, skinny jeans, digital stuff and not enough about the fundamental underlying business model and the need to exploit shared platforms, data and components. And there isn’t going to be a Local GDS. And we don’t need one! This is the wrong approach to the challenge.
- So thinking about the title of this presentation, the ‘McDonaldisation’ is taken from a book by George Ritzer (Professor of Sociology) from the 1990s. It essentially refers to an approach that is focused on rationalisation. I’m not suggesting that Councils should start flipping burgers, my view is that the public sector MUST think about its underlying business model and realise that there is so much similarity that it can no longer afford to fund difference.
- McDonalds have over 30,000 restaurants globally. My son is a fan and therefore we have visited McDonalds when on holiday in the US, Mexico, Spain and Turkey. The striking thing is that wherever you go, the experience is essentially the same. The taste is essentially the same. The menu is essentially the same (aside from some minor local variants) and the cost to buy is essentially the same. McDonalds can achieve this consistency of delivery, even though 85% of their restaurants are not owned by the company but are run by franchisees as they are focused on customer delivery built on their ‘three legged stool’ model. A big part of this model is the relationship with suppliers. It is very different to the relationship most of the public sector enjoy. It is a proper partnership and McDonalds have a powerful negotiating position as they have scale and similarity. Vendors in the public sector love the scale and especially love the difference which stifles innovation and drives up costs of delivery and change.
- And from a customer perspective, this is the experience. Similar organisations with largely the same business but…slightly different menus, slightly different pricing, slightly different restaurant layouts… This is what the public sector is like.
- Because there is too much of this. I hate to break it to you, but individual Councils are not special or unique or different. They are essentially the same…like McDonalds franchisees.
- Now there is a crisis, it can’t be denied, but I would posit that the crisis is one of senior leaders in the public sector imagining that if they bury their heads in the sand that things will somehow get better. They wont and you know what they say about people who bury their heads in the sand? It only makes their backside a bigger target for kicking. The public sector needs to get its head out of the sand.
- If it doesn’t get it’s head out of the sand then this kind of stuff will continue to happen. Surrey County Council recently announced a referendum for a 15% Council Tax hike. This is the wrong reaction. Throwing more money at the problem will not solve it without addressing the underlying business model. Clearly, there is an aging population that requires adult social care and this will only increase. How about exploiting Web 3.0 developments around nano-technology and biotech, etc instead of just paying for demand?
- So you can view austerity as a problem, and at a number of levels it is and Council budgets are under pressure like never before. However, austerity is not the real problem but the result of the problem not having been addressed properly before. This is what Blockbuster would be experiencing if it had been in receipt of public funding rather than allowed to perish at the hands of the market. I see austerity as the opportunity to rectify the historic lack of attention to a) the model of local public service delivery and b) the prevailing technology revolutions
- Given the blurring of boundaries between local public service organisations it is becoming more and more apparent that change is required but this is difficult and costly without proper integration.
- It should be so much simpler – the whole of the public sector should be using this architecture. Registers that store and process data in standard formats that are shared via trust and consent, moved across common platforms and surfaced through services. Then, we could really talk about integrating local public services, The reality is that in 10 years, there won’t be the same plethora of local public service organisations. It doesn’t make sense and we cant afford it.
- We have a number of tools and techniques that we use to help organisations unpick some of this complexity and move towards identifying common components. Our Digital Delivery Framework is one.
- It can be applied within organisations at multiple level and also across multiple organisations and localities. It helps look for patterns around shared capabilities and areas of difference to help organisations plot a route map towards the kind of digital organisation I’ve described in this presentation.
- We also use Wardley Mapping which gives organisations situational awareness. It maps value chains and plots movement towards consumption.
- Again, it helps identify areas of commonality and areas of difference.
- Methods Digital used this approach at the DVLA to map a range of services to identify opportunities to rationalise systems and services.
- On the last point, we must get over the fiefdoms and playing with train sets. The future of local public services cannot by driven by egos. I have three things that I am asking for.
- We need a new business model for the public sector (i.e. the McDonaldisation of the public sector). We need the public sector to exploit Web 3.0 and recognise the opportunities and the threats. And thinking about egos, I think we need some heroes. We need people who believe in public service delivery not personal position. If we can get those three things, then Councils might survive in some form. It is essential that this agenda is addressed.
- Why? Because the revolution is happening (i.e. Web 3.0 / The Fourth Industrial Revolution) based around the shared plumbing of the internet. The public sector can either lead the revolution or be a victim of it. Thank you.