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New Operating Models for Local Government - Understanding the Variables

In my last blog, I posted some thoughts and the image below outlining six alternatives to a traditional, top down model of public services.

We might call these “new operating models”.

Six alternatives to traditional top down public service delivery

In this article, I'd like to dig a little deeper into the idea of new operating models, and discuss how public sector organisations - and particularly local governments - might think about them.

Importantly, I want to emphasise that exploring new operating models entails fundamentally rethinking the role of a local authority and what it's uniquely placed to do for its community.

The way we've always done it

I began my last piece with the observation that for years, the dominant model of public services has been for citizens to pay taxes to government, which then pays a cadre of public officials (or an outsourced provider) to deliver services that meet a community’s needs, whether that’s removing domestic waste or caring for the vulnerable.

That model has proven to be amazingly durable. Yet today it faces significant challenges in the form of increasingly complex needs, rising citizen expectations and reduced budgets.

For public sector organisations trying to respond to those challenges within this traditional, top down public service model, they can optimise their service by playing with at least the following 18 variables.

We might think about them as settings we can adjust; sometimes in their level, sometimes in the options that sit underneath them.

Variables for Traditional Top Down Public Service

For instance, based on a detailed understanding of user needs, public sector organisations can reform a service by:

  • Dialling up or down the level of time, money, staff and assets that are applied to addressing a particular need.
  • Putting in place different structures; subdividing or combining teams or functions.
  • Refining or adopt new processes.
  • Changing the timing of their interventions - most likely intervening earlier in a issue, when it’s smaller, simpler and cheaper to resolve.
  • Changing the locations they serve or from which they deliver services.
  • Creating incentives to influence demand.
  • Changing (within legal limits) who is eligible for certain services.
  • Altering the scope of a service - perhaps focusing on a core offer while reducing the provision of non essential elements.
  • Prioritising resources, time and attention based on cases of highest risk, need or importance.
  • Raising or consciously reducing awareness about a service.
  • Training staff in new skills to make them more effective, productive and adaptable.
  • Adapting the business model of the service and/or altering who pays, for example by charging citizens for certain aspects of a service, or paying suppliers by outcomes.
  • Using technology and data to enhance their work in a wide variety of ways.

It’s an impressive list, to be sure.

But here’s a hypothesis: some issues that the public sector now has to address are sufficiently complex that these variables are no longer enough. Indeed, the traditional, top down model of public service delivery may no longer be enough.

Variables for new operating models

Instead, it may be possible for local authorities to create or enable alternative - and potentially more effective and sustainable - operating models if they are willing and able to work with these additional six variables.

Additional Variables for New Operating Models

These variables can be regarded as being of a higher order than the eighteen listed earlier. Altering their settings does not merely result in tweaks to the existing system, but potentially in a transformation in the way a need is met.

Look again at the six example operating models outlined at the top of this article, and we see that they are, in part, created by adjusting these variables:

Who’s (able to be) involved. Citizens, volunteers, freelancers, charities, third sector organisations and businesses can be involved in shaping or providing for a certain need. Engaging new groups is pivotal to at least five of the new operating models outlined above. Trained first aider volunteers are engaged in supporting ambulance crews through GoodSam; freelance carers can offer their services through TrustonTap; the third sector through digital social innovation; and businesses through open data innovation.

Relationship. Instead of having a top down hierarchy or a centralised model (the norm in most services), we might consider swapping the relationship for a more decentralised or distributed model. This new structure could be in the form of a different set of relationships between individuals in a system (such as Buurtzorg’s front line staff and their back office); between clients and those who work for them (see platform care models like TrustonTap); or between different organisations in a field, such as when a public sector organisation works with digital social innovators in their community.

Ownership / Organisation Types. We can adopt or develop new organisation types that change the incentives for those who work within them and bring fresh opportunities to addressing social needs. A key example is the growing interest in cooperatives, where professionals are joint owners of the organisation for which they work, and therefore can receive better rewards for their commitment. Platform coops - the combination of a cooperative legal structure and a platform technology and business model - are already been trialed in organisations like Equal Care Coop. Meanwhile, as part of the Rethinking Parks programme, Nesta, The Big Lottery Fund and The Heritage Lottery Fund have helped local authorities test new organisation models such as foundations to help make public parkland more financially sustainable.

Funding Method. There may be alternatives to funding the resolution of a social problem solely through taxes. Nesta has done considerable work on new funding models such as crowdfunding, matched crowdfunding (where an organisation matches or tops up contributions from the crowd), community shares, and so on. Organisations like SpaceHive are showing that, for the right kind of issue, the public may be willing and able to support local projects.

Power. Power might be radically shifted to different people within a service to change who acts or how they act. The Buurtzorg community nursing model involves a radical shift of power and responsibility to the front line. The GoodSam app works through empowering trained first aiders with the information they need to work alongside the public sector.

Public Sector Role. Most importantly, using these additional variables to deliver new operating models entails local authorities playing very different roles in their communities, shifting from being service deliverer or commissioner to (for example):

  1. Funder / investor - providing money to support external organisations to develop new solutions to local needs;
  2. Incubator - bringing social enterprises under their wing to support them in developing solutions and providing ready access to funding, expertise and mentorship
  3. Signposter - councils already point citizens towards useful external services, but this could grow to include a far wider pool, such as the digital social innovators listed at digitalsocial.eu;
  4. Convenor - bringing different actors together to collectively address an issue;
  5. Matchmaker - connecting people in a community with certain needs with individuals or organisations who can address them;
  6. Incentiviser - for example see Essex County Council’s use of challenge prizes to incentivise external innovators to help them find novel solutions to local issues;
  7. Place-maker - taking responsibility for the outcomes they want to see in their communities and building their resilience.
  8. Data provider - publishing and providing rich context around the data they collect to enable the creation of a broader range of services created by others.

In order to be able to use these additional variables and open up the possibility of transitioning to new operating models, it seems likely that a few things need to be in place.

We need public sector organisations that are willing and able to experiment with playing a different role from service deliverer or commissioner. We need the right permissions, such the permission to access the right data; for citizens to buy their own service or use a wider range of providers. We need outcomes based procurement that’s open to a much broader range of suppliers. We need permissive regulations, such as for non-public sector organisations to be able to deliver services like care.

If any of this is broadly correct, it leaves a number of big questions open:

  1. What's the best way to use these variables?
  2. How does adjusting one variable impact on the others?
  3. Is there a set number of viable operating models that they can contribute to, or are there endless permutations?
  4. How can we help public sector organisations determine which types of new operating model might work for different problems they are trying to solve?
  5. What’s the public’s willingness to see public sector organisations adopting new operating models that may fundamentally change their role and their expectations of citizens?

Finding answers to these questions is important for the whole local government sector. We cannot, after all, expect local authorities to switch off their old models of service delivery until there are some proven alternatives to move towards.

More experimentation is needed to see what works and under what conditions.

My colleagues will continue to explore the potential of new operating models through research and practical programmes in the months ahead.

We’ll post more as we go and we’d welcome your thoughts and ideas.

Variables for New Operating Models


Eddie Copeland

Eddie Copeland

Eddie Copeland

Director of Government Innovation

Eddie was Nesta's Director of Government Innovation.

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