Accelerating pace and progress: Three practical levers to boost public sector productivity

For over a decade the UK has been grappling with a slowdown in growth, productivity and investment. Recent figures from the Office for National Statistics (ONS) show that the UK economy has contracted by a further 0.2% between July and September, as soaring prices hit businesses and households. Zero growth in the third quarter of 2022, coupled with the mounting pressure of the cost of living crisis is signalling the advent of a recession.

Now more than ever, the UK needs to accelerate its productivity growth to maintain competitiveness in the global market and improve living standards. Increasing productivity not only boosts economic growth, but it also encourages innovation, creates employment opportunities, enhances educational attainment, renews the social and cultural fabric of the country, and creates a better quality of life. 

To address the productivity challenge, we recently published a report, Making public sector productivity practical in partnership with The Productivity Institute. The report explores the criticality of productivity growth, the different perspectives from which the public sector can approach it, and the three key levers that they can push to achieve their productivity goals:

1. adaptive business design 
2. innovation and digital transformation 
3. building an agile workforce

Adaptive business design: from static to flexible

Organisational design must be at the core of any high productivity organisation. Mapping your service delivery chain will determine how your organisation turns resources into inputs, outputs and outcomes. However, a service delivery chain is inherently dynamic and internal and external forces will continuously challenge its effectiveness, whether through budget changes, shortages of staff or skills, policy changes, altering citizen preferences or geopolitical turbulence. All of these can impact delivery. Therefore, public sector organisations need to become more flexible in responding to changes. Prioritising your resources within budget constraints and spending across multiple delivery chains can improve efficiency and productivity.

Equally, building flexibility gives you the capability and capacity to handle fluctuating demands and unexpected events more effectively. When scaling up services, it’s important to stay focused on the contextual needs of the public, especially regional or local requirements. Tailoring your service delivery to specific customer segments will lead to greater efficiencies and productivity gains.

Innovation and digital transformation: From efficient to intelligent

Creating space for strategic thinking, and cultivating a culture of speed, flexibility, and continuous improvement in the decision-making process are fundamental for driving innovation. Frequently, the adoption of innovation and digital transformation tends to be driven by necessity. In the private sector, urgency for innovation often arises from threats such as losing market share or increasing costs. Whereas in the public sector, innovation may be born out of a crisis or a disaster that requires immediate intervention.

In any scenario, digital transformation can leverage new technologies, and importantly, the data they generate to connect organisations physical assets, processes and people. They can simplify, streamline and enhance the delivery of products and services, as well as release and reallocate scarce human capital to focus on critical services. A prime example is the NHS, who responded to the pressure on resources by accelerating digital strategies, such as telemedicine and data sharing across delivery units, while simplifying governance processes and workflow procedures to increase capacity for covid treatments during the pandemic.

Public sector organisations must also continue to monitor new digital initiatives for privacy and security, especially when using algorithms. Over time, embedded intelligence can improve the performance of products and services, enabling organisations to go beyond efficiency and design systems that work harder and smarter across supply chains.

Building an agile workforce: From rigid to adaptable

Workforce agility can only be achieved when organisations understand their people as deeply as their customers, competitors, and market drivers. Identifying and acquiring the right skills and competencies is critical when undertaking any organisational or technological transformation. For example, it takes more than STEM skills to use big data analytics and artificial intelligence. Soft skills - such as collaboration, creativity, adaptability, and conflict resolution - are equally important in understanding customer needs and experiences, as well as driving continuous innovation.

Agile workforces create greater employee satisfaction and higher morale, but they also require strong consultation processes and ownership from those involved in the delivery of services. The ability to adapt to new ways of working and shape them in practice is part of its success. The skills and competencies of managers are also key enablers of productivity. A recent study of public administration offices in Italy found that a unit increase in managerial talent can raise office productivity by 10%, proving that strengthening managerial quality can significantly improve public sector productivity.

Putting productivity into practice

Productivity in public services is complex and multidimensional. To boost productivity, it’s important to map your organisation’s service delivery chain on a real-time basis, build an adaptive organisation with a culture of continuous innovation, and create an agile workforce capable of identifying and resolving key constraints in a systematic way. Digital technology can enable the change you want to make by improving processes and providing better and more relevant data to monitor and evaluate performance.

Learn more about the different approaches you can take to boost productivity within your organisation: