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Ethos Issue 4, Apr 2008
Creating and Measuring Public Service Value
Ng Wee Wei
CHALLENGES AND OPPORTUNITIES IN CREATING PUBLIC VALUE
Accenture advocates defining and measuring public value as the fundamental basis for more effective public service management and high performance in government organisations. In doing so, however, it is recognised that there are a number of complex issues—beyond definition and measurement themselves—that need to be addressed.
First, better public service performance is inevitably rooted in sound definitions of the outcomes to be achieved. While we may be able to agree on the general principle of measuring public services by the public value they create, we also need to be aware that people in society have different and sometimes conflicting ways of relating to these services. As a result, in any one public service organisation, there are multiple dimensions to the outcomes it produces, such as:
- the needs of the individual being served;
- the collective needs of society;
- the concerns of taxpayers; and
- the authorising directives of political leaders.
As consumers of healthcare, for example, people usually want no expense spared on the treatment they or their families receive. But as taxpayers, they are frequently reluctant to pay the price of the quality they demand. Politicians want to have a profound effect on the long-term well-being of their constituencies, yet short-term pressures often require them to demonstrate rapid progress on matters that may not be susceptible to quick fixes. This can emphasise producing short-term results rather than improvements in social outcomes, which take longer to materialise.
There is much scope for conflict, with individuals changing their viewpoint depending on their needs and concerns at the time.
In the US State of Arizona, for example, the Department of Revenue explicitly tried to reduce the administrative burden on taxpayers by introducing faster and more convenient customer services. Yet its emphasis on reducing taxpayer burden actually resulted in a reduction in revenue—in one of the fastest growing states in the US. While the State could hardly withdraw its improved customer service to taxpayers, it had an obligation to maximise voluntary compliance and revenue collection. A new Director used outcome measurement techniques—in this case, Accenture’s Public Service Value model—and found that the net result of current administrative and budget deployment was an erosion of public value. By rebalancing staff efforts and placing greater emphasis on compliance activities, while simultaneously retaining high levels of support to taxpayers, the Department was able to maintain good relations with taxpayers and increase tax receipts in line with the State’s economic expectations.
This example illustrates that the different needs of stakeholders mean that a great deal of detail must be taken into account when organisations define their intended outcomes. For example, improving health service performance should include not only action around improved access to healthcare, but also preventive care and education. In addition, the combined effects should be measured in longer-term improvements in the community’s health, such as reductions in the incidence of heart disease or diabetes.
Similarly, crime reduction could involve putting more officers on the street, but it should also include visible reassurance about the effectiveness and professionalism of the police, ensuring that people feel less threatened by crime, and, over the longer term, fostering closer trust and collaboration between police forces and the citizens they serve. This principle was put into practice very effectively in UK with the Police Community Support Officers (PCSOs) scheme (see box story on the next page). In this case, the focus on intended outcomes challenged conventional thinking about how best to deploy public safety resources. The solution transformed the policing workforce in UK to meet a wider set of duties and, as the data have shown, helped reduce fear and crime in the communities in which they serve.
Ultimately, organisational leaders need to agree, preferably in consultation with their stakeholders, on the right mix of outputs and outcomes and of shortterm and long-term objectives. They need to define an adequate and acceptable way of measuring and linking these goals and objectives to the productive capabilities of their organisations. They need to balance their organisation’s own efforts in an attempt to counter-balance the different and competing interests and timeframes of all of their stakeholders.
UNDERSTANDING HOW TO CREATE PUBLIC VALUE
The concept of value creation is at the heart of what private sector executives do as a matter of course. They add value by combining labour and raw materials through manufacturing processes, for instance to produce cars, or by using skills and knowledge, say, to increase returns to pension funds or to design more appealing and functional buildings. The added value is the margin that businesses take from what we are willing to pay for their goods and services.
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