Public service entrepreneurs

As current models of public service delivery are radically rethought, Andrew Adonis argues for a truly entrepreneurial approach to reform

March 2011

Andrew Adonis is Director of Institute for Government, an independent charity that helps to improve government effectiveness. He has been a public policy and politics journalist, as well as a government minister and special advisor. He was Secretary of State for Transport from June 2009-May 2010

Harvard Business School defines entrepreneurship as ‘the pursuit of opportunity without regard to resources currently controlled’. If public sector leaders are to meet the challenges of reforming our public services over the next few years, this kind of entrepreneurial mindset will be essential. We need to break away from a view of public services that focuses on the efficient and effective distribution of state resources and instead focus on the opportunities to improve people’s lives, wherever these opportunities exist and whoever is best placed to take advantage of them.

The emerging agenda

The public service reform agenda being outlined by the government is highly ambitious and will demand wholesale reform in how public services are organised. It also represents a fundamental shift in the relationship between citizen and state. For example, the abolition of strategic health authorities and Primary Care Trusts, the schools reforms and the introduction of elected police and crime commissioners all represent major structural changes for their respective services and aim to shift power closer to patients, parents and communities.

The political challenges of such an agenda are immense. My personal experience, working on reforms such as city academies, taught me that even incremental reform takes an enormous amount of sustained energy and momentum if the reforms are to have any chance of taking hold. In 1999, Tony Blair was already referring to the ‘scars on his back’ from public service reform. This was a time when his political power was near its peak, New Labour’s reform agenda was in its infancy and public spending was rising. The coalition government can therefore expect a few ‘scars’ over the years ahead.

Putting these political problems to one side, the reform agenda also presents a unique set of challenges for public service leaders and managers who are tasked with leading their organisations through a period of profound change. This change is being driven by the reform agenda and by the need to make substantial cuts. The level of change is unprecedented in modern times and, as no area of the public sector is immune, it will be occurring both within and outside each organisation.

Change on this scale, in complex systems such as the NHS or the criminal justice system, means that predicting how all the reforms will work in practice becomes impossible. There are simply too many interacting variables, too many feedback loops and too many unknowns. For example, understanding the full implications of the proposed changes to the public health agenda, as responsibilities shift to local authorities, GP commissioners are introduced and new legislation is brought forward to tackle smoking, is an impossible task. Certainly, we can have a broad sense of the direction of travel, but the detailed implementation implications will emerge over time.

Arguably, the Big Society is a response to this reality. Whitehall can never know enough to manage every last detail and so should restrict its activities to those functions that require national-level decisions, co-ordination or facilitation. After that, it has to be for public sector leaders and managers, in close conjunction with local communities, to steer the most appropriate course.

An entrepreneurial response

Responding to this agenda requires public service leaders with a truly entrepreneurial mindset. They will need to be comfortable with, and able to respond to, rapid change. Experimentation and adaptation will be as important as the ability to deliver against a plan, but as the Harvard definition sets out, entrepreneurship is not simply about being flexible – it is about a shift in perspective from resources to opportunity.

Too often, the debate about public service improvement begins with a debate about the resources available to the state. This is understandable, because pounds spent, doctors recruited and schools built all have strong political salience. At a time of growing public expenditure, everyone is keen to make sure they get their share of the pie. During fiscal retrenchment, the emphasis shifts to ‘protecting’ important areas from the worst of the cuts. The resource focus is also reinforced by our audit and accountability systems and the pursuit of ‘value for money’. Given the resources available to you, did you achieve the expected outcomes? I call this a managerial mindset.

Consider the case of Omar, who is 65 years old and until recently wtherorked as an architect and lived in a large three-bedroom house in a leafy suburb of a large town. Last year Omar suddenly became ill and the illness meant that he had to stay in hospital for three months. When the time came for Omar to leave hospital, everyone recognised that he was too weak to fully support himself on his own at home. Typical managerial reasoning would recognise that it is highly desirable, and more cost-effective, for Omar to be supported at home rather than remaining in hospital. The resources of the state would therefore be used to provide some form of home care for a few hours each day – all entirely sensible.

What would happen if we approached this case more entrepreneurially? As Omar lives on his own, it is as much the company of the carer that he values as help with specific tasks. So perhaps Omar should have live-in care. This sounds too expensive, but only in terms of resources available to the state – essentially, paying for a carer. Omar has his own ‘resources’ to offer. He lives in a large house and on a personal level has a lifetime of experience to share. Tom is a 27-year-old mature student who has come to the UK from Canada to study at the local university. He has limited financial resources and accommodation near to the university is extremely expensive. Omar and Tom have complementary resources and needs, so why not match them together? Omar would not be discharged from hospital to an empty house, giving the medical professionals the confidence to let him go home. Tom gets a free place to stay while studying and the personal benefits of helping Omar. A truly entrepreneurial solution which creates far more ‘social capital’ while costing the state very little.

As it happens, this is a real example from a programme called Homeshare, which aims to match people with different sets of needs, both of whom also have something to offer. Some people have a home that they are willing to share but are at a stage in their life where they need some help and support. Other people need accommodation and are willing to give some help in exchange for somewhere to stay. Many housing and support services inadvertently place the user of the services in the position of ‘recipient’ and the people who provide that service in the powerful position of ‘provider’. However hard people try to minimise this obvious power imbalance, it is always part of the arrangement andcan affect the way the service is provided and received. In Homeshare, both participants are gaining from the arrangement and feel valued and respected for whatever they are contributing. This allows them to enter the arrangement with dignity and enthusiasm.

I share this example to illustrate the shift in mindset that I believe our public services will need to see a great deal more of over the years ahead. The biggest risk over the next few years is that, as the public sector cuts bite, our public services will hunker down, retreating to their core mission and becoming more introspective. For example, local councils will focus on the statutory services they must, by law, provide, reducing support for exactly the kind of organisations that can help marshal resources from outside their immediate influence. Instead of greater introspection we should be looking far beyond traditional boundaries for opportunities to improve services.

Making it happen

Much of the government’s reform programme can be understood as an attempt to foster exactly this kind of thinking: devolution of power; removing red-tape and ring-fenced budgets; giving professionals more freedoms; encouraging new ownership models such as co-operatives; and expanding the role for civil society organisations. The coalition is profoundly mistaken, however, if they believe their vision of a Big Society will happen without a great exertion of the state. I’m reminded of the early years of Thatcher’s privatisation agenda, which required considerable and sustained momentum from the top down. Giving power away requires an intensification, rather than a diminution, of effort.

Beyond the structural reforms, we need a change in philosophy. There has been much criticism of the targets and inputs focus of the previous administration – albeit a caricature. What the Big Society has profoundly failed to provide us with is a sufficiently tangible alternative. The reason many struggle with the concept is that it often fails to translate into practical reality for people on the ground. How should I change the way I approach the problems I face in my day-to-day life? Entrepreneurialism is a practical response to this challenge. What we need now is a new generation of public service entrepreneurs.

Further reading

• GP consortia: Search for 'GP commissioning'
• Homeshare
• Institute for Government