10 Tips on Overcoming Obstacles in Public Sector Shared Services

Public Sector Shared Services: It’s Another World Completely For those of you who think that shared services problems are basically the same across industries – meaning you have demanding clients to serve, you need to drive down transactional costs, and you struggle to bring services into scope as clients put up a fight – you’re partly right, but, as I realized after attending last year’s Public Sector Shared Services event held in beautiful San Diego – you’re also terribly wrong. Last year was the third year that SSON has run this specific conference for Higher Education, Healthcare and Government – and we’ve seen year-on-year growth, interest, and advances. If it carries on like this, we may have a public sector event to rival our giant Shared Services & Outsourcing Week gathering in Florida, each spring. While many of the issues raised are fairly close to what we hear at our conferences around the world, there’s no questioning the fact that the Public Sector is a "different-natured beast". Whether it was the folks from higher ed, those from the health industry, or those from government … they all had a similar story when it came to challenges encountered and unique approaches that worked. Here are 10 suggestions on how to chip away at the obstacles you are facing: 1. Acknowledge that public sector ‘customers’ are not like other customers The public sector is riddled with steep layers of managerial staff and political appointments. What drives these people is not always a common sense business case (that does not always work in the private sector, either), but power and influence. What really stood out was that the typical span of control of the private sector, where managers commonly have at least seven direct reports for efficiency, evaporates in the public sector. Over lunch, some folks from a California university told me it was not unusual to have managers with just one reporting staff clogging up the system. Two to three reports was a fairly typical scenario, they assured me. If you apply that to a university with 20+ thousand staff, the result is eye-popping. But there’s more. One representative from an elite school along California’s coast told me: "What differentiates Higher Education from the rest of the public sector is, first, that we have this category of staff called "faculty"; and second, that we suffer from a culture that does not consider what’s good for the whole, but what’s good for the department – or what’s good for ‘me’." As these folks can’t be shifted (it’s called tenure), and their reputations are crucial in attracting students and funding, the result is a circle of demi-gods jealously safeguarding their turf. For the brave souls trying to blaze a path of common [services] sense through this maze, it’s an uphill battle. So given it’s unlikely that the head of the Biology department will change her stripes after 30 years of reigning the roost, Shared Services proponents are using the best tricks from their change management toolbox to exert influence. One of the presenters, Michael Kane, Associate Dean, Science & Mathematics, at Sierra College, offered some great ideas: You’ve got to have courageous conversations, he told delegates, but be smart about them. Practice your pitch first, he said, and make sure that your core "stakeholder" group includes the biggest influencers. In a revealing exercise, he asked delegates to write down their five core stakeholders, and then review that list based on "how are these folks most likely to influence the outcome of a given project?" That’s where the obstacle builders, the rumor mill crankers, and the loud-mouthed New Yorkers come in, he explained. The point is: the people who carry a lot of influence in swaying opinion are often not the ones who – according to the org chart – have the biggest stake. So form strategic alliances – but do your homework first! 2. Present yourself as a confident, tried-and-tested team If you are about to pitch some new-fangled Shared Services concept to a disparate group of public sector employees who are not used to being held accountable for dollars spent, consider your front men and women. You’ll need people that are non-threatening, but have the gift of communicating that the ‘wins’ will be beneficial to those key audiences: faster local government service turnaround times (equals more money to invest back into improved services); lower error rates in medical orders (equals less wasted money and faster access); improved access to grant monies (gets you behind that microscope faster) … you get the picture. Consultant-speak and being defensive about your new initiative will not win you friends nor help you influence people. Not coincidentally, the two speakers who impressed most had a military background and had both achieved fairly stupendous results in their respective jurisdictions. Tommy Gonzalez, CEO and City Manager for the City of Irving, Texas [he has since taken the same role for El Paso] single-handedly drove Six Sigma through Irving’s government operations and in doing so improved services (time, money, you name it) to the extent that his steam was awarded the Malcolm Baldrige National Quality Award for performance excellence. The other thing that stood out was his generosity in crediting the teams at the frontline, as opposed to his department. One of the best moments was a 30-second video Gonzalez showed of a City employee explaining the difference the new process had made to his work and turnaround times, and being completely overcome by emotion in doing so. And that’s the crucial element: driving change makes people’s jobs easier and better. And people like that. The other leader that stood out was Harlan Sands, Vice Provost Administration and Quality Improvement at the University of Alabama at Birmingham. His military background gave him a commanding air while combining respect and honor in serving in the best of traditions. Sands represents the public face of change at Alabama, but he knew that he needed someone on his team who could bring real Shared Services experience to bear. Enter Lee Smith, Executive Director of Institutional Effectiveness and Analysis. Together, they present an impressive team, highlighting the impact of complementing your skill set by surrounding yourself with the best people you can find. I’d trust those two to take on any situation; for now, it’s Alabama. 3. Remember to make your bosses look good With the political influence so strong in this sector, it’s worth taking a moment to consider a smart approach to any new initiative. Walking in with a business plan that talks numbers should suffice, but it doesn’t. If you can figure out how to make these improvements shine a bright light on your institution, however – be it a university, a government body, or a hospital – then you’re onto a winning strategy, because everybody loves that moment in the spotlight. One of the speakers shared a memorable anecdote on how he finally gained support for one of the "sustainable" drives he was spearheading across the campus. He was hitting brick wall after brick wall, until he till he had an epiphany: the end result would propel the school into local headlines, which led to an award in Washington, which led to more headlines. That directly impacted the university’s most crucial metric: their ranking and valuation on the US World News website. Once he hit on that realization, doors mysteriously opened for him. 4. Foster the right strategic relationships These are not always going to be your bosses, or the groups you report to. They are the people who can enable you, or who can close you down. That means school janitors or postal workers, nurses or administrators. Know who can make things happen, acknowledge them (photo opportunities were very effective in Irving), and they’ll be your friends and allies for life. Another point that was made and that caused a lot of head nodding in appreciation was that those client groups that were the most vocal in opposition ("this will never work!") are also the ones that you have to drag kicking and screaming to training. So start there. Take the time for one-on-one meetings, explain the reason for training, visibly demonstrate the benefits (visual displays and testimonials from others are really effective), and see if you can’t slowly chip away at their resistance from the foundation. 5. Identify the obstacles This is really important but generally not at the top of anyone’s list. Try to identify the biggest naysayers. Flush them out in a workshop – they are always quiet at the start of a project and so won’t be immediately visible and possibly hard to identify. Often their core concerns are based in their operations, not yours. An honest conversation will expose this. Once you identify them and their issues, it makes sense to spend most of your time in working on them. The rest will follow – and may seem a piece of cake by comparison. 6. Remember why you are doing this One of the single most important steps is, to borrow a phrase from NASA’s Kenneth Newton, to identify the mission-critical element of the project. Take universities. They are living and breathing organizations just like all others, but here is their scoop: Without students, they don’t exist. Without a positive student experience students won’t stay the full four years of an undergraduate course, let alone choose to spend time in post-graduate work. Without happy graduates, alumni donations will soon dry up … you get the picture. Universities like Alabama have tackled this truth squarely by making it all about the student experience. They’ve gone from treating students like the kids we all think they are (sending them on a treasure hunt of sorts to get parking permits, sort out finance issues, health concerns etc.) to treating them as you would any valued customer – a customer who you hope will stay. They’ve invested in "one-stop", which has improved the student experience massively and has been so successful (along with other operational benefits derived from Shared Services) that they’ve razed their old student center to the ground and are able to afford (and prioritize) a brand new state of the art student center which will be finalized in 2015. And that is a smart investment – students are attracted by facilities and infrastructure. The same story was told by healthcare and government practitioners: Given funding’s evaporation, being more efficient is not just an "initiative of the month"; it’s a strategy for keeping afloat. And while some entities focused on costs to meet lower budgets, the more heartening stories were those where savings were ploughed right back into the operations, to deliver a better experience. 7. You will need to deal with that quintessential public sector culture While we are nowhere close to seeing the kind of accountability that rules the private sector, times are changing. The public sector is loath to create redundancies, and it’s certainly worth a moment’s pause to appreciate the implied loyalty in this somewhat old-fashioned view. But if service is unreliable and slow, if staff focus more on their inhouse procedures than on what the customer needs, and if you’re hemorrhaging money with no improvements to show – what’s the point? 8. Focus on the right metrics The biggest concern for most folks was how to identify, measure and track the right quality metrics. Specifically: What are the metrics to measure yourself by? Customer surveys have their place, but as one of the Federal government speakers put it so well, you can get top marks from your end users (customers) and still find that those actually funding the service (let’s call them clients) are not pleased with it for various reasons unconnected to service quality. So right after establishing a watertight "as is" measure, it is really important to define the metrics that align best with your customers’ needs (that is needs, not wants). There is a lot of great technology out there that drives some pretty impressive reporting functionality. Jesse Samberg, Head of Business Services atMTA in New York told us he has a mobile tool that updates consumers’ use every 2 hours and pushes those dashboards out to all relevant parties. At any moment in the day, he said, you are only two hours away from real time data on your operations. That’s impressive. Where metrics can really help to focus public sector operations is by forcing the eye out to the distant horizon – away from the myopic limits of your own departments. Again, the challenge is to persuade your audience that the greater good won’t undermine their local fiefdoms. But if you invest in some of the change management skills referenced above, you’ll get somewhere. Maybe slowly, but you will. 9. Be innovative Sometimes the best results come from new ideas. Paul Bartley, whose HHS Program Support Center provides an impressive 44 services to the Federal Government, shared one of his best wins, which relates to a government-sponsored subsidy for commuters that opt for public transport versus driving their own cars. While the previous system was based on handing out tickets for 3 months’ worth of travel up front – which led to waste in terms of unused tickets, fraud by tickets being passed on to friends, and unnecessary outlay, the new visa-based card has completely redefined the service. A maximum credit is transferred monthly and staff are consequently much more careful, and conservative, in paying for the trips they take. It’s easy to monitor, abuse has dropped, and there is little waste relating to purchasing tickets that won’t be used. 10. Communicate wins through results A point really driven home by all of the presenters was the fact that if you don’t talk about what’s working well, how will anyone know? Once the rumor mill starts, it’s too late. So whether you are celebrating 6 months in service, the 25,000th transaction, or a team member’s first milestone, do it publicly and visibly. It’s not always the big numbers on a spreadsheet that impress. In fact if you think about it, those numbers won’t impress your all-important end-users. It’s the results around engagement that matter. It’s the impact on the institution’s output and how it is perceived that everyone can understand. In Conclusion: Shared Services Works If you feel you’re fighting an uphill battle, bring out the big guns. Whether it’s in terms of monies saved, staff retained, a happier and more engaged workforce, more satisfied patients, students or citizens … you can find the right markets that draw attention to the wins. No matter where the results come from though, focus on what they mean: more money to plough into buildings and facilities; more money to pay staff; more money to invest in broadening the service. One final trend that will influence the development of Shared Services in the public sector: Given the risk-averse tendency of this segment of the economy, we foresee it reaching out to cherry-pick some of the brightest lights from the private sector. Two great examples: University of California’s Andrew Dunn, who was brought into UC’s team after a successful Shared Services career in Silicon Valley; and Kathleen Bienkowski, who had led Kelly Services’ successful SSO for many years before moving across the country to take a leading role in establishing a Shared Services approach for Emory university’s US$500 million annual grant administration. When the numbers are that big, and the projects are that sensitive, you want the best of the best. As we see continued growth in the public sector’s interest in Shared Services, we may witness a lot more of this cherry-picking occurring (so hold onto your staff). However, if you want to acquire the caliber of staff that can really get results, you’ll need to pay up. On the basis of ‘you get what you pay for’, it’s going to be important to recognize the value of a strong SSO leader in driving internal efficiency, just as a CEO is recognized externally for their achievements. [Note: if you liked this article, please use the buttons on the left side of the screen to share it across your LinkedIn groups. Thank you for being part of SSON's community - Barbara Hodge] [eventpdf]

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