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Sustaining high performance beyond public-sector pilot projects

Company: McKinsey & Company, Inc. Prague

Public institutions can turn remarkable short-term efforts into meaningful long-term results.

All pilot projects come to an end—and therein lies the rub. In the short term, we’ve seen public-sector managers achieve remarkable results with small, dedicated projects, testing programmatic and operational changes even with a small budget and on a limited scale. But when those projects end, the strong results often do too, as organizations fall back into old patterns of behavior and lose momentum.

One explanation for this may be the so-called observer effect. Behavioral psychology suggests that individuals participating in such projects work harder because they know their managers are watching more closely than usual. The challenge is to sustain that level of performance over the long term—which comes down to the strength of the organization’s performance-management system. In fact, effective performance-management systems are particularly relevant for public-sector organizations, which are steered by budget priorities rather than profits, sales, or market share. Held accountable to taxpayers, they are limited in their use of financial incentives, and their efforts are often complicated by short-term political priorities.

So it didn’t surprise us when a recent McKinsey survey suggested that public-sector officials are less likely than their private-sector counterparts to agree that their organization’s “current performance management has a positive impact on individual employee performance.”(1) While the survey’s sample size was small, its findings were consistent with our experience with more than 500 projects in public-sector organizations that sought to improve performance-management systems and practices.(2) We’ve distilled seven critical lessons to sustain the performance of public-sector institutions beyond the original pilot project (Exhibit 1.) While some of them may seem obvious, we frequently observe public-sector organizations encountering challenges when trying to implement them.

Seven ways to sustain high performance in the public sector.

More information here.



(1) The worldwide online survey was in the field from July 18 to July 28, 2017, and garnered responses from 1,761 participants representing the full ranges of regions, industries, company sizes, functional specialties, and tenures. Of the participants, 63 said they worked in the public sector and another 27 were employed in the private sector but reported working for a government agency or department. See Sabrin Chowdhury, Elizabeth Hioe, and Bill Shaninger: https://www.mckinsey.com/industries/public-sector/our-insights/sustaining-high-performance-beyond-public-sector-pilot-projects?cid=other-pso-twi-mps-mps-oth-1810

(2) While this article draws on in-depth case studies from a sample of European countries, we believe the findings to be relevant for most developed economies.


Tags: Economics | Business Development |

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