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A sufficiency of trends Robert Hickson Nov 21

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Two recent reports highlight a range of trends affecting governments, but they take different approaches. The report from IBM – Six Trends Driving Change in Government – has a focus on the US but the trends are generally applicable.

Their six (some more accurately considered drivers rather than trends) relate to:

  • Performance – using data to inform “real-time” decision making on strategic goals
  • Risk – fiscal constraints and complex operating conditions create the need to adopt different cultures and frameworks to be better able to assess and managing emerging public sector risks
  • Innovation – rapid change in technologies and operating models, processes and services means that the public sector needs a better “culture of innovation” – experimentation, alignment of innovations with agency missions, connection with non-government innovators, and monitoring of outcomes
  • Mission – centralisation of organisation-support functions (HR, IT, finance) can lead to detachment from key agency goals. There are opportunities to better link these support functions to organisational goals or missions.
  • Efficiency – financial constraints are prompting a rethink of traditional processes. Technologies can help improve efficiencies and service deliveries, but there is a need to be transparent about costs, savings and outcomes.
  • Leadership – public sector leaders are adopting different ways of working with each other collaboratively.

The other report – from the Mowat Centre and KPMG – comes up with nine “Global Megatrends Shaping Governments” . They take a bigger picture view, examining:

  • Demographics – longer lives and fewer kids in the west are placing pressure on health and social welfare
  • Growing individualism – increasing demand for transparency and broader participation in public decision-making
  • Technology – ICT creating new types and styles of work and opportunities, while also challenging organisational performance and oversight
  • Increasing economic interconnectedness – leading to more trade, capital and labour flows, and creating the need for better policy and regulatory connections between states.
  • Rising public debt – will constrain what governments are able to do in the face of social, economic and environmental challenges
  • Shifting geopolitical power – will affect existing international institutions and agreements, and may challenge existing comparative economic advantages of some countries.
  • Climate change – will influence economic, political, and social activities and aspirations. Adapting and mitigating effects will require both national and international cooperation, and longer-term planning.
  • Increased resource stresses – rising energy, mineral, food, and water demands will challenge governments abilities to maintain prosperity and develop sustainably
  • Spreading urbanization – can also place stresses on infrastructure, services, resources and the environment

These, of course, aren’t discrete but can interact with and influence others, and the megatrends in the Mowat report are often the factors influencing IBM’s six trends/drivers.

The common factors between these two reports (and other recent trend reports – like Ernst & Young’s Six Global Trends Shaping the Business World, and Rick Boven’s transcribed speech posted on Sciblogs) are significant demographic, energy, economic and geopolitical changes, rapid developments in information and communication technologies, and the global financial crisis.

All recognise that new governance and business models are necessary to adapt to these changes. They provide steps to be taken, or questions to be asked that are designed to encourage the changes. Though I expect they are probably sceptical of the abilities for many governments (and some sectors) to change quickly and consistently enough. History shows us that there’s no ideal, clear sighted and committed government that has done this. Democracies, in particular, wander back and forth between successes and failures.

But you’ve gotta try. And the Mowat Centre report is good at identifying some of the policy, regulatory, program, strategy, structural and skill changes that they think are necessary.

What’s starting to worry me, though, is the growing number of these reports that are appearing – each with an overlapping, but slightly different, set of trends and drivers, and pitched to slightly different sectors. While they usually point out the increasing uncertainties in our future as we move from decades of relative stability and certainty, there’s the risk that setting out a nice set of six or so trends and helpful key questions will give a false sense of managerial comfort to the overworked executives.

The trends are a starting point for more detailed thought and engagement. What’s needed are fewer reports and more action (hah, you say, that’s ironic coming from a blogger, and former/future consultant – you have a point).

Before a gaggle of other government departments and industry sectors get enthused (or not) about creating their own trends reports, scenarios, roadmaps, strategic action plans, etc. lets stop. There’s certainly been a lot of duplication, and unnecessary expenditure, producing similar data sets and reports.

New Zealand is small enough and well connected enough that a common set of trends and scenarios (or other tools for imagining potential futures) should be generally applicable for many planning purposes, as well as having the benefit of illustrating that we’re all in this together. The major trends and drivers that I think most have some agreement over (demographics, energy, technologies, social changes, etc) will be important (perhaps in different ways) to the public and private sectors. Neither sector is isolated from the other and will need to collaborate to meet some of the challenges and create some of the desired futures.

So lets get a few well informed and influential people together from a representative range of sectors and groups to craft a common set of futures scenarios and critical questions for the whole country to think about, discuss, argue and act upon with more of a collective purpose. Or maybe a couple of sets, competition can be good. Save money and have the broader discussions that we need to have, rather than concentrating on own own narrower bespoke set of trends and possible futures. This appraoch can help address those needs to address performance, risk, mission, efficiency and leadership that the IBM report notes.

We seem to have the ability to quickly become proficient discussing sailing (or soccer, netball, etc) terms and strategies when we think it matters. Lets put some of that passion and energy into cheering on our future.

 

[Thanks to John P for putting some of these thoughts into my head]

Short term reforms Robert Hickson Apr 09

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Len Cook, President of the New Zealand Institute of Public Administration, recently criticised the New Zealand fetish for haphazard structural change in the public service. He noted that it undermines the need for continual learning and a culture of continuous improvement. It’s not that change may not be necessary, but that structural change should follow good analysis (as seems to be the case in Australia with their Moran Review).

He also noted the substantial societal, economic and environmental changes underway, and the need for the public service to have the capabilities, mechanisms and people to help address these challenges and opportunities. This picks up on the themes explored in Victoria University’s Institute of Policy Studies’ Future State report released in 2010. Future State noted the increasing instability and diversity in the world and New Zealand, and the consequent rise in unpredictability. They identified four main challenges facing the Public Service:

  • Affordability;
  • Complicated problems involving many players;
  • A more diverse and differentiated population; and
  • A world of faster, less-predictable change.

The recent restructures (and those proposed) don’t seem to take much if any account of these issues. Most of the changes are about reducing costs and improving the efficiency of the public service. As Len Cook noted, there is usually no evaluation after the fact about whether these changes have saved money and resulted in greater efficiency. Colin James commented that what is lacking when this Government talks about public sector reform  is effectiveness — are we getter better services and policy advice from these changes? Effectiveness matters more than efficiency to the public.

Some Ministers seem keen on remodelling the public sector along private sector lines and introducing greater top down command and control. However, this is often a selective exercise. A KPMG international study [PDF] noted that the public sector devotes considerably less emphasis on staff development than the private sector. As KPMG note, politicians favour the short term quick fix approach and ignore the longer term strategic changes that are required.

Types of Public Sector Reforms. Source: KPMG (2009) "Tough choices ahead"

Types of Public Sector Reforms. Source: KPMG (2009) "Tough choices ahead"

As the Future State papers note, as problems become more complex, top down approaches are less likely to succeed.

Reducing staff is the quick and easy option for reducing costs, but it doesn’t always make the organization more profitable or effective. Bloomsberg Businessweek has noted that many firms have realised that they have cut too deep into their workforce and are now rehiring. Zeynip Ton, writing in the Harvard Business Review, notes that retailers need to invest more in their employees. Unsurprisingly, there is not an inverse relationship between staff payroll and profitability. Some firms that pay their staff more and employ more people generate substantially more profit than lower cost competitors. Zeynip also notes that the quality of the work not just the number of jobs within firms is critical to success. James Surowiecki picks up these ideas in the March 26 edition of the New Yorker.

While the public sector isn’t directly comparable to the private sector, some of the basics are the same. Sure more routine work can now be outsourced or undertaken by computers. But the competence and quality of staff matters as much within government departments as in firms, as the recent criticisms about proposed changes at MFAT illustrate. Sadly, other departments don’t seem to be able to make the same point as effectively.

Reform in the public sector is necessary to meet emerging challenges and opportunities, but the government is taking a short term view that means we will not have the public service that we need.

Big Data Money Ball? Robert Hickson Feb 28

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An interesting article on predictive analysis appeared in the New York Times on 16 February. The main focus was on how the US retailer Target was using its information on customers to predict which of them were pregnant, and so send them information on pregnancy and baby-related products. Simultaneously impressive and scary. The article couldn’t find out how accurate it really was, but the company has improved its revenue stream.

Many other companies are doing the same thing, which you may be aware of if you belong to a loyalty programme, or if you shop online.

This is an example of what these days is called ‘Big Data’. It has many firms, governments and consultants very excited. McKinsey Global Institute, along with a lot of others, has been looking at the implications of ‘Big data’. The expectation is that with detailed analysis of lots of different information companies can sell you more stuff or stuff that better meets your needs, while governments can plan more effectively or efficiently, and provide services tailored for you.

This graphic illustrates where McKinsey see better use of data helping a range of sectors

MGI Big Data Chart Feb 2012

You could dispute how McKinsey have characterised the ease of collection or value of big data. I for one think that current departmental silos make it hard to collate a range of government data — and it can be extremely difficult for people in the same agency to get access to even some of their own data. But that is a relatively minor quibble that will be overcome. Although, based on the past record of IT system upgrades, this seems unlikely to be as cheaply or easily achieved as the decision makers may hope.

Who wouldn’t want better health care services through better data analysis, smarter urban design through study of mobile data, or creating new businesses that make data useful? Or even reduced insurance costs because the insurance company can tell I’m being a good boy?

I can see benefits to that, but there are also plenty of challenges. I’m reminded of what my PhD adviser (take a bow David Penny [PDF]) warned me of back in the day when ‘big data’ were 500 base pairs each from about 20 species. I paraphrase but it was something like ‘it can feel nice running barefoot through the data, but it’s not much use if you can’t make sense of it’.

Technology review covers the findings of a paper by Boyd & Crawford about where having more data isn’t necessarily better. The data may not be as objective or as accurate as you assume (eg, users of social networks are generally not representative of the whole population (so far), and have biases to what they post, or don’t post).

Other issues Boyd & Crawford highlight are:

  • Quantity of data isn’t a substitute for quality. A UK Foresight report [PDF] notes that being able to demonstrate the authority of the data in real time will be a critical requirement in the future, particularly for government data.
  • All data is not equivalent. Not every connection in networks are equivalent. Frequency of contact on social networks (or mobile devices) does not necessarily mean you have identified a person’s closest friends or colleagues.
  • There are ethical judgements to be made when using ‘public’ information. They note that in at least one study it was demonstrated that individual privacy could be compromised from supposedly anonymised data. Since the ‘Big data’ field is new it is unclear what ethical implications may arise from aggregating information from individuals.
  • Finally, not everyone has the same access to large databases, so there risks of creating new digital divides and inhibiting testing of conclusions from analyses of large data sets. Researchers in some fields are incentivised and generally good at sharing their data, but others aren’t yet.

Boyd & Crawford exhort researchers to not overlook the value of ‘small data’ — what data you use depends upon the questions you have.

Leaving aside how you analyse super data sets, just the organisational and technical challenges of going from handling small to big data won’t be easy (and it’s not just a question of being cloud based). Governments and firms will also need to have real time information to inform their decisions and services, rather than just being able to analyse what happened previously.

Another article in the New York Times notes that use of ‘Big data’ may exacerbate the economic divide between low paid lousy jobs and well paid interesting ones, as previously middle class work is taken over by computerised analytics.

Wired lost the plot a few years ago when it claimed that you don’t need a scientific method if you have lots of data. The Target example is a case where there is quite a clear outcome being sort,  the company did have a hypothesis to test and threw strong statistical analyses at the problem. Whether such applications are acceptable uses is up for debate.

One final concern is whether we all, as members of the public and consumers, become reduced to sets of data points in cosmic analytical frameworks and suffer the tyranny of regression to the mean. Choice still matters. When buying goods online, being told what items other people also bought is inoffensive and you can choose whether you buy them too. I don’t want to go to my doctor and be told that others with most of my symptoms had treatment X, so that’s all I can have. Big data can better help identify problems and options, but they shouldn’t necessarily dictate the response.

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