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What it takes to digitize a public sector organization effectively

What drives a transformation in public and private sectors is different, but the needs and the recipe are the same.

Specializes in large-scale transformation programs in municipal transport and logistics development, as well as retail and fast-moving consumer-goods projects, with a focus on strategy, organizational development, operational-performance improvement, and sales growth

Advises on organizational development and innovations in digital- and advanced-analytics-driven transformations

Digital transformations are difficult in the private sector, but even tougher in the public sector. Government IT projects requiring business change are six times more likely to record cost overruns and 20 percent more likely to miss deadlines than private sector projects.

In our experience, we have identified three main challenges:

  1. Difficulty changing due to deep cultural and legacy roots, especially when status quo is valued and risk-taking is avoided.
  2. Lack of employees with the right skills.
  3. Lack of strategic alignment on digital processes across government entities with various units operating independently.

A paradigm shift is necessary, and in the following sections, we look at three pillars of a successful transformation in the public sector.

Talent

While managers play key roles in a classic organization, digital transformations require employees with special skills and competencies, including data scientists, engineers and database administrators. Reliance on business-as-usual capabilities from internal talent is a major contributor to a high failure rate in government transformations.

Taking a talent-to-value approach, the organization needs to define an employee value proposition for each role, as well as an appropriate skill assessment when interviewing candidates for the job. When hiring data scientists and analysts, the focus should be on strong data-related skills and desire to impact the lives of many, not a deep expertise in subject matter or experience in the public sector.

We observed the difference in value proposition between customer (private sector) and citizen (public) communication managers while working with one public sector client. The client struggled to fill an external communications role—the equivalent to a campaign or marketing manager in a private sector company—with an appropriate candidate. Success came when the value proposition for this role changed: The right candidate cared more about making a big change in society, rather than monetization KPIs.

Culture

Public sector culture is built around long-term planning and processes; therefore, a successful digital transformation requires a culture of iterative and agile delivery, a flatter hierarchy, and close collaboration among agencies and functions. That requires building a separate, autonomous start-up unit—correctly positioned within the larger public organization—with flexibility to solve problems as they arise.

Long-lasting change demands weekly involvement and participation from the executive suite, with digital transformation a priority throughout. Transformation drivers must lead by example to facilitate change and challenge long-held conventions, favoring face-to-face communication with those affected and listening as much as talking.

Leadership

During digital transformations, organizations often encounter the leadership role model: Success depends on how a leader drives change. This applies not just to executives, but also middle management and others.

Managers in the public sector often focus on getting the budget and funding for change. This paradigm must shift. To succeed, leaders must base all needs, goals and results on satisfying citizens’ needs. Leaders must continuously gather citizen feedback in the new paradigm.

Success also takes two other ingredients. Quick-win use cases must be selected and launched at the transformation’s early stages. And IT platform building must start in the early stages and control progress weekly, allowing scalability in the future. In short, public sector digital transformations need genuine two-way communication within the organization and with the employees undergoing change.

Algorithm for change

What drives a transformation in public and private sectors is different, but the needs and the recipe are the same: You need talent, close participation of organizational leadership, and to foster a culture of experimentation, quick hypothesis testing, and re-evaluation of goals and results. The road is not for the faint of heart, but the destination is well worth it.

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