Related Expertise: Public Sector, People Strategy
Improving what governments deliver to citizens and how they deliver it is no easy task. Citizens’ expectations are rising sharply, as savvy startups and global technology companies set high standards for digital services. Meanwhile, complex and often chronic challenges such as homelessness and long-term unemployment make it hard for governments to respond, particularly when public-sector structures are rigid and may not be suited to the collaborative approaches needed to drive rapid change. With their eyes on prizes such as greater customer centricity, speed to market, efficiency, improved adaptability, and a more engaged workforce, governments are starting to adopt agile ways of working. But with obstacles lying ahead, the question is—how will governments make the transition?
As BCG argued in its first article on agile in the public sector, “Agile as the Next Government Revolution” (August 2018), the public sector can reap many benefits from agile—an organizational paradigm in which small, multidisciplinary, empowered teams work in iterative, fast-paced cycles while constantly prioritizing value. An agile-at-scale transformation occurs when an organization takes this approach beyond projects or isolated pockets (such as IT) and uses it as the primary means of delivering a core business activity (for example, designing and building new services).
Scaling agile is not straightforward, and doing it poorly can be worse than not doing it at all. In the public sector, complex stakeholder environments, a wide range of objectives, long-established power structures and processes, a risk-averse culture, and labor union influence present significant hurdles to implementing agile at scale. Nevertheless, these obstacles can be overcome. By setting goals and aligning the organization closely with their objectives, governments can empower agile teams and give them the autonomy they need. Creating alternative funding models will support agile teams in developing new solutions through experimentation and iteration. And designing new talent management strategies will enable public-sector workforces to attract, develop, and manage the different capabilities needed to drive rapid improvement in government services.
For scaled agile transformations to succeed, agile teams must be tightly aligned to organizational objectives and empowered to achieve them. This means setting clear missions for teams, delegating decision rights to foster autonomy, equipping teams with the necessary resources and multidisciplinary staff, and establishing measurement and governance frameworks that focus on results. Much of this is challenging to implement in government.
In public-sector contexts, the complexity of policy making can introduce obstacles to empowering and aligning agile teams. Whereas private-sector organizations have clear overall objectives—increasing profitability and maximizing shareholder value—public-sector organizations have a larger set of stakeholders to satisfy and more complex social, political, and economic objectives that may be more subject to change. Short-term election cycles and shifts in political priorities can complicate efforts to set enduring missions for agile teams.
It can also be difficult to empower teams in organizations that need to be responsive to senior elected officials. Traditionally, public-sector organizations have had strongly hierarchical management structures, centralized decision making, limited delegation of authority, and chain-of-command reporting lines. As a result, many teams are highly attuned to their political leaders and can be reluctant to delegate decision making or determine independently the best path to take to achieve agreed objectives. Moreover, the focus on responsible stewardship of public resources often combines with a culture of risk aversion to slow down change and require constant consensus building at senior levels of the organization.
Added to these factors are constraints related to public accountability to legislative bodies and the need to meet audit and record-keeping requirements. Heavy reporting burdens and the need to follow certain procedures can slow or disrupt the work of agile teams, as can norms regarding ongoing documentation and reporting (for example, intradepartmental briefings, audits by other government bodies, and risk and impact assessments) and centralized procurement processes.
We recommend that public-sector organizations adopt the following four measures to overcome these challenges:
Traditionally, government agencies have been constrained by rigid and lengthy funding processes that support linear, predictable, project-based development. Often, central finance authorities must approve detailed business cases and project plans, particularly given expenditure controls and public scrutiny. Yet in many instances these funding approaches are flawed because the plans create false precision and certainty. Solving complex problems requires iteration and refinement with real users, and continual adjustment as political realities, technologies, and citizens’ expectations change.
Successfully scaling agile demands a fundamentally different approach. In a digital world, governments need flexible funding models that can accommodate experimentation, user testing, and iteration and can give teams latitude to shape the direction of a product or service (within legislative bounds). Instead of exercising project-by-project control, central government authorities should emphasize an organization’s medium- to long-term outcomes and metrics. As long as they meet these metrics (linked directly to value to government or citizens), agile teams should have autonomy to push ahead, and the authorities’ regular discussions of their progress should focus on the value that the teams are delivering.
We recommend taking the following measures to overcome public-sector funding constraints:
Central government bodies often exercise control over job role classifications, compensation packages, and recruiting methods used to hire public servants. This can make it difficult to adopt more innovative and tailored approaches to attracting, developing, and managing different talent needs for a new way of working.
For an organization to scale agile successfully, people management must be transformed at all stages of the employee life cycle, from recruitment to talent development and performance management. Agile typically requires different skill sets, such as product owners and scrum masters (agile team facilitators), alongside user-experience designers, data scientists, and developers. Expertise alone is not enough; agile organizations need people who are also adaptable, motivated, and effective in cross-functional teams.
Managers—particularly those overseeing IT, legal, compliance, or some other functional area—can find it disconcerting to move to an agile way of working. As cross-functional teams are established, these managers often have less involvement in setting day-to-day priorities and overseeing the work of functional staff, since this falls to the leadership of agile teams. As more members of their staff become embedded in cross-functional teams throughout the organization, functional area leads must focus on playing a broader coaching and mentoring role, facilitating “communities of practice” for their function, and developing a talent pipeline for the organization.
For government organizations, adapting existing HR processes to attract, develop, and promote the talent needed for agile teams can be a challenge. Leading companies in the private sector can, of course, offer generous compensation packages—but for governments, offering less competitive rates of pay is only part of the problem. Centrally established recruitment processes, pay grades, and job positions restrict flexibility in public-sector hiring. To enable governments to build agile teams, this situation needs to change.
Furthermore, the structure of agile teams tends to be flat, which runs counter to many traditional hierarchies in government, where tenure and experience managing teams often carry more weight than adaptability or technical skills. The comprehensive HR changes needed in a shift to agile can therefore spark concerns on the part of employees and unions.
We recommend four ways of managing talent to support agile at scale:
Implementing agile at scale in the public sector is no easy task. The changes to processes, structure, and culture are significant, and challenges unique to the public sector must be overcome. Moreover, progress must occur in the face of long-standing power structures and constraints that make adopting new ways of working difficult.
Yet public-sector organizations have often had to adapt to new circumstances—and like any organization, they can apply the principles of smart change management. As is true in any major transformation, visible and committed leadership is vital to steer the organization toward new ways of working. This includes creating alignment through shared purpose, empowering teams by building trust, promoting candid communication across the organization, and engaging all stakeholders.
Adopting agile at scale can yield significant benefits. Public-sector organizations moving in this direction can build an enduring capability that delivers service to citizens faster, better, and more cost effectively.