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Public Value Creation: The New Frontier in Government Strategy

The views expressed are those of the author and do not necessarily reflect the views of ASPA as an organization.

By Bill Brantley
July 7, 2023

Strategic thinking has been a cornerstone of modern business since the 1960s when Michael Porter’s insights on competition began to shape the industry. During this period, three influential strategic consulting firms, Boston Consulting Group, Bain & Company and McKinsey & Company, started offering strategy formulation services. The rise of business strategy marked the beginning of a multi-billion-dollar industry that has since evolved to help organizations set strategic goals, streamline operations and manage organizational change.

The Rise of Corporate Strategies

American corporations have witnessed tremendous growth and profitability over the past six decades, partly thanks to innovations such as Six Sigma and lean manufacturing. These methodologies have enabled companies to optimize processes, reduce waste and ultimately increase their bottom line. As we enter the 2020s, companies are experiencing a renaissance in strategic thinking as they incorporate agile methods and the advanced technologies of the Fourth Industrial Revolution.

The Public Sector’s Struggle with Strategic Thinking

Parallel to the corporate world’s growth, trust in the U.S. Federal, state and local governments began to decline. Citizens perceived a decline in the quality of government services despite an increasing tax burden. In response, various Presidential administrations from the 1970s onwards launched high-profile government reform efforts, borrowing strategies from the corporate sector.

However, transferring private sector strategies to the public sector met mixed results. Primarily because the private sector operates in a different environment, driven by competition and profit maximization. In contrast, public sector organizations are driven by creating public value, which encompasses the agency’s mandate, operational capability and social mission.

Unlike commercial enterprises, the value of products and services that public organizations produce often cannot be measured in monetary terms. For example, what is the value of a strong national defense or a just legal system? The difficulty in assigning a quantitative value to intangibles is a major reason why public agencies must approach strategy differently.

Rethinking Public Strategy

Lusk and Birks, in their book Rethinking Public Strategy (2014), argue that public strategy is more than just solving problems and serving customers. They emphasize that public servants must have a broader understanding of complex issues to avoid short-term solutions with undesired long-term effects. Moreover, citizens should be seen as co-producers of value rather than mere customers.

Lusk and Birks advocate for governments to be shapers of the future. With the world facing climate change, terrorism and resource shortages, governments endowed with authority and resources are uniquely positioned to tackle these problems and shape the future for better outcomes.

Developing a Strategic Thinking Model for the Public Sector

The first step is to recognize the barriers that prevent public agencies from thinking about the future. Shrinking resources and increasing demands often force agencies into short-term thinking. Breaking free from these barriers, such as the “lens of now,” groupthink and expert bias, is crucial.

The second step involves examining the drivers of change, which can be demographic, technological, economic or societal. Trend analysis can help identify the most influential trends, but it is essential to be cautious of linear extrapolations.

The third step is acknowledging that predicting the future is futile, but envisioning multiple futures is not. Creating multiple futures is where scenario planning comes into play.

Scenario Planning with AI

Artificial Intelligence (AI) can be a game-changer in scenario planning for the public sector. By analyzing vast amounts of data, AI can help identify patterns and trends that might not be evident through traditional analysis.

AI can create multiple scenarios by considering various factors and their possible evolutions. These scenarios can then be used to develop robust strategies adaptable to different possible futures.

Using AI in scenario planning enables governments to make more informed decisions. By considering a range of possibilities, governments can prepare for uncertainties and allocate resources more efficiently.

AI can also facilitate citizen engagement in scenario planning. Through AI-powered platforms, citizens can provide input and feedback, which can be analyzed and incorporated into the scenarios. AI-powered scenario planning ensures that the public value is at the forefront of the planning process.

The landscape of strategic thinking has evolved significantly since the 1960s. While the corporate sector has seen tremendous growth through innovations and strategic models, the public sector faces unique challenges that require a different approach. Governments must recognize their role as shapers of the future and engage in strategic thinking beyond problem-solving. By understanding the drivers of change and employing scenario planning with the help of AI, governments can effectively work towards creating public value and positively shaping the future for their citizens.

Author: Dr. Bill Brantley is the President and Chief Learning Officer for BAS2A – an instructional design consultancy for state and local governments. He also teaches at the University of Louisville and the University of Maryland. All opinions are his own and do not reflect the views of his employers. You can reach him at https://www.linkedin.com/in/billbrantley/.

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