Creating Public Value Strategic Management in Government Four

Creating Public Value Strategic Management in Government

Four Key Analytic Ideas n The “Strategic Triangle” n The “Task Environment” n The “Authorizing Environment” n The “Value Chain”

I. The Strategic Triangle

Functions of the Strategic Triangle n Analytic Concept Serving a Function Similar to that Served by Porter’s “Five Forces, ” or Mc. Kinsey’s “Six Circles” in the Private Sector n Namely, to Help Managers Find a “Fit” Between the Environment they Face, and the Enterprise they Lead. n Need to Simplify for the Public Sector, so Got it Down to Three Circles!

Strategic Triangle Legitimacy & Support Public Value Operational Capabilities

Functions of the Strategic Triangle n To help public managers position their enterprises in complex, dynamic environments n To focus and distribute managerial attention across their “Task Environment” and their “Authorizing Environment” n To help them envision a sustainable Public Value proposition to be pursued

Strategic Triangle Legitimacy & Support Public Value Operational Capabilities

II. The Task Environment

The “Task Environment” Social Conditions to be Ameliorated n Substantive Problems to Be Solved n Needs to be Met n Rights to Be Vindicated n Opportunities to be exploited n

Strategic Triangle Legitimacy & Support Task Environment Public (Social Value conditions Operational Capabilities to be Ameliorated)

“Public Value” and the “Task Environment” n To Create Public Value is the point of all managerial activity n Public Value is created when managers transform social conditions in collectively desired directions n The “Task Environment” consists of the particular social conditions public managers seek to change n Demonstrations of Public Value creation lie in evidence showing changes in social conditions n Problem: Not everyone sees Public Value in the same way

III. The Authorizing Environment

The “Authorizing Environment” Definition: Actors from whom manager formally needs authorization and resources to survive and be effective Or, those other actors who can influence the formal actors

The “Authorizing Environment: ” A (United States) Picture Courts Elected Legislature Interest Groups Media Citizens Chief Elected Executive Staff Offices Political Appointee Public Manager Staff Clients

The “Authorizing Environment: ” A (Westminster) Picture Courts Elected Legislature Central Agencies Prime Minister/Premier Minister Dept Head Interest Groups Public Manager Media Citizens Staff Clients

Strategic Triangle Legitimacy & Support Authorizing Environment Operational Capabilities Public Value

Citizens, Taxpayers and Clients

Theory of Public Administration Durable, coherent policy mandates constructed through political deliberation and agreement

The Reality of Public Management Incoherent, fickle mandates emerging from chaotic authorizing environment

Implications for Managerial Orientation and Skills n n Trusty bureaucrats? Or, imaginative leaders? Politically astute? Or helpful in legitimating decisions?

IV. The Value Chain

Strategic Triangle Legitimacy & Support Public Value in e Operational Capabilities lu Va a Ch

“Operational Capacity” And the “Value Chain” Operational Capacity: Assets and capabilities entrusted to manager (plus those that the manager can influence required to achieve the desired results) Value Chain Process by which fungible assets like money, labor, ideas, etc. are deployed to produce particular results

The “Value Chain” Organization Inputs Activities Processes Procedures Programs Outputs Partners and Co-Producers C L I E N T S A T I S F A C T I O N O U T C O M E S

Operational Capacity Organizational Capacity Operational Capacity = Organizational Capacity + “Partners” & “Co-Producers” + (Sometimes Clients!)

Two Different Concepts of Public Value n Client Satisfaction n Social Outcomes

Two Different Concepts of Public Value n Client Satisfaction ¨ Client beneficiaries ¨ Client obligatees n Social Outcomes ¨ Indirect beneficiaries ¨ Achievement of collectively defined purposes

The “Value Chain” Organization Inputs Activities Processes Procedures Programs Outputs Partners and Co-Producers C L I E N T S A T I S F A C T I O N O U T C O M E S

Integrating Clients into Production E-Commerce and Software Production n Mc. Donalds n Ikea n Supermarkets n A Public Example: Solid Waste Re-Cycling n

V. Summary and a Challenge

Strategic Triangle: A Trivial Concept! Legitimacy & Support Public Value Operational Capabilities

The Challenge: Touch all three bases!

Strategic Triangle: Failing to Touch All Bases Legitimacy & Support Public Value Operational Capabilities