Four Principles for Better Government
I’ve spent much of my life thinking about how government works. In my time at McKinsey and at the White House National Economic Council, I’ve become increasingly convinced that government can do a better job for its constituents without getting into partisan debates and politicized headlines. My LinkedIn posts will be mostly about what I see as one of the biggest societal questions: how to create an effective government that we can afford.
The good news is that some governments have hit upon parts of the answer. At the McKinsey Center for Government, we’ve studied hundreds of public-sector initiatives worldwide to find those that made the most impact without breaking the bank. Four themes stood out in our research; these four themes constitute an agenda for more effective yet affordable government.
1. Make policy based on evidence, not politics.
Cynics might say that politicians typically engage in “politics-based evidence making”— they select only the data that fits their ideologies. But certain governments are making a strong push toward the opposite: evidence-based policy making. They’re using hard data and statistical analysis to inform decisions.
One example is the UK government’s Behavioral Insights Team, which uses data from randomized control trials to design and refine interventions. By testing small changes—like tweaking the language and tone of the letter that the tax department sends to delinquent taxpayers—the team identified interventions expected to generate significant savings for the UK government. It’s now advising other governments on how to do what it does.
2. Get citizens involved.
Innovative governments are actively soliciting input and ideas from citizens. This isn’t just about giving citizens a voice—it’s also good for productivity, especially when combined with innovations such as open data or “lean” service delivery.
The city of Cologne, Germany, recently invited residents to help decide how to allocate 10 percent of the municipal budget. The mayors of Boston and Philadelphia have each created an Office of New Urban Mechanics, which works with residents to fund and launch promising ideas about how to improve civic services. New York City’s 311 system allows New Yorkers to report and track non-emergency complaints via a website, a mobile app, text messaging, Skype, or a phone call. The system now processes 60 percent of service requests online, lowering transaction and issue-resolution costs.
3. Build expertise where it matters.
Recognizing that mission-driven employees are among their greatest assets, a number of governments are making big investments in capability building—they’re helping employees develop skills that truly make a difference. Project management is one such skill. Think about this: a study by McKinsey and Oxford University revealed that budget overruns in about 80 percent of government IT projects are due to managerial—not technical—shortcomings.
The US Office of Multifamily Housing Programs, a HUD agency, recently undertook a “lean management” program that included a series of process improvements and lots of coaching on project management and problem solving. The program yielded a more than 70 percent reduction in the agency’s backlog of housing applications and a 35 percent productivity improvement.
4. Harness the best of the private and social sectors.
Innovative governments are embracing closer collaboration with companies and nongovernment entities. The US government’s Challenge.gov platform, for example, invites organizations and individuals to solve “challenges”—in effect, to submit RFPs—in exchange for prize money. Since its launch, 45 federal agencies have awarded more than $13.9 million in prize money through 205 challenges. With Challenge.gov, the government gets more people thinking about how to solve tough problems, and it pays only for solutions that work. The same principle is what led Todd Park, the US chief technology officer, to start “Datapaloozas”—events at which innovators and entrepreneurs build cost-saving apps using government datasets.
These four themes are central to what I call “government by design,” a more systematic approach to government for these challenging times. What are some things your government—whether at the national, regional, or local level—is doing right? Or what are some things you’ve seen other governments do that you wish your government would adopt?
Join the global conversation about how together we can create more effective government.
Visit the MCG website and follow @Farrell_Diana on Twitter.
Photo: Jamie Squire/Getty Images
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