Good day bloggers

There is increasing media speculation about the amount of outsourcing of public sector services that will occur over the next few years as a means of delivering cuts to public expenditure. That’s not all that’s increasing mind you, as Serco (a giant amongst outsourced providers) has recently announced a 21.6% surge in profits, adding up to a very tasty £101.4m.

Serco’s Chief Executive, Chris Hyman, has gone on record to say he expects to make inroads into new public service areas not previously delivered by Serco including: education, welfare to work and prison services. Mr Hyman highlighted that only 15% of the available public service market has been outsourced - and resembling great white sharks in a feeding frenzy it seems a number of private sector providers are anticipating sinking their jaws into the other 85%.

Now I’m sure all of this is good news for the private sector and may help kick start their business…but clearly the private sector depends on profit-making for survival (see Michael Porter’s writings, Competitive Advantage and Value Chain)and that means making a profit from public services. That’s fine if those services can be provided at a considerably reduced rate than currently provided with no depreciation in service quality.

Cabinet Office Minister, Francis Maude,says he expects private sector service providers to curb their profit margins - but I’m not sure how in practice he’s actually going to regulate such profit-making. Serco is currently acting as an adviser to the Cabinet Office’s Efficiency and Reform Group to help identify where savings can be achieve in public sector services.

Whilst I’ve no doubt outsourcing will on occasions be the best business solution for the provision of public sector services, there is a danger of one trick pony thinking. Business options analysis is, in my opinion, key to taking sound, evidence-based judgements…and outsourcing isn’t always the best option, what with building in those profit margins.

I don’t think we should reject shared services, total place and good old business process re-engineering from those options just yet…do you?

Dean

Earlier this week the IDeA and PPMA ran a conference on the topical issue of organisational design, at the Hyatt Regency hotel in Birmingham. At the conference delegates heard from a number of organisations on the approaches they had taken to redesigning their organisations in a bid to create sustainable structure and efficiency savings.

The conference topic was obviously contemporary, as the event was sold out. Further events are now planned across the region and a follow-up online conference is being held. Further details can be found on the IDeA website.

Interviews with some of the key speakers were recorded at the event and in this first clip, Gillian Hibberd, describes the approach taken in Buckinghamshire County Council as part of their wider transformation programme.

Here are the other video interviews from the event.

Extraordinary times - extraordinary events.

We have witnessed bitter political rivals put aside their differences last week to form a political alliance not observed in the UK in decades. There are key leadership lessons to be gleaned from the UK’s governance and economic situation - the manifestation of which produced affiliation between previous political foes.

In terms of leadership lessons learned I stress the importance of the ’situation’ descriptor. Challenging situations require situational leadership, where an adaptive leadership style produces innovation, co-operation and commitment to a common cause.

In the two London Boroughs I work for, two different political administrations have worked together to create a unique HR shared service - in fact all three main political parties have contributed to produce a unique outcome that provides efficiency and cost reduction locally to the tune of saving £500,000 each year in the cost of HR.

Replicate this approach and level of savings across the public sector and surely we’d be a long way down the road to address the national debt?

Dean Shoesmith - PPMA President

Joint Executive Head of Human Resources - London Boroughs of Sutton and Merton

Hello bloggers

So, who was the originator of this well-know phrase? You have to go back into the annals of history to find the answer… it was Plato the Greek author and philosopher writing in The Republic in Athens (427 BC - 347 BC).

The phrase may well be over 2,300 years old but I suggest it’s as appropriate to our contemporary situation as it was all that time ago…

…as we face tremendously challenging times, post-election, to reduce the cost of public service expenditure we’ll need to consider ever-increasingly inventive ways of service delivery.

With all these thoughts whirling round in my head faster than my washing machine’s 1400 spin cycle, I was suddenly struck this week by the launch of a new business scheme - ‘Business Thinking’ sponsored by HSBC Bank. HSBC has committed to supporting the growth of UK businesses by offering the UK’s best business thinkers the chance to share in £90 million lending plus a financial reward of up to £100,000 each by sharing creative thoughts and business solutions. The scheme is deliberately designed to encourage inventive thinking in the business community to enable the UK to compete effectively within the hyper-competitive global economy as we emerge from recession.

Taking a leaf from Michael E Porter’s ground-breaking book Competive Strategy, the HSBC-led scheme is seeking to sow the seeds of competitive advantage - necessity being the mother of invention. In other words, create something different that the consumer wants and you have a competitive advantage over your rivals.

Whilst competitive advantage is a private-sector, profit-making, concept it also struck me that in the public sector we could usefully adopt a similar scheme to ‘Business Thinking’ to generate, stimulate and share ideas about how to provide transformed public services. The Improvement and Development Agency (IDeA) has made a start with their communities of practice guides. Gillian Hibberd and I were speaking this week to incoming IDeA chief executive, Rob Whiteman, about transformation issues, including Total Place and I mentioned ‘Business Thinking’ during our discussions.

Personally I think ‘time and tide wait for no man’ to quote another well-know phrase…the earliest known record of which is from St Marher in 1225.

So what do you think?

Dean