Reinventing and Forced Obsolescence

Can government make the changes needed to remain effective in the Information Age?

by / October 31, 1996
Can government make the changes needed to remain effective in the Information Age?
Much of what we read in the popular press today focuses on the efficiencies of the private sector, and the ability of private enterprises to reinvent themselves in response to market forces. Witness Microsoft's Internet strategy "about-face" once Bill Gates sniffed the Internet's huge potential. Or the continuous forced obsolescence instilled at GE by CEO Jack Welch in response to his frequently quoted credo: "When the rate of change outside is greater than the rate of change inside, the end is in sight."

Some believe, given government's often snail-like pace of responding to changing citizen needs, that "the end is in sight" for government as we know it. The challenge these examples pose to government executives is to discern which practices can best be applied in the public sector, where such practices can have the most impact, and like Bill Gates, to determine what impact technology will play in these changes.

The concept of forced obsolescence suggests that an organization reinvent itself before market forces require it to, be it through executive management shakeups, wholesale changes in business processes, or discontinuing certain lines of business. The hoped-for benefit is continued growth and dominance of a given market (again, witness Microsoft).

The opposite scenario is an organization that retains a structure that -- though once effective -- gradually becomes less effective as market dynamics and customer requirements change. Some critics argue this is exactly where government in America is today. The challenge, therefore, is to determine where to start this forced obsolescence process.

Payback on the complex and time-consuming process of organizational change often hinges on the degree of support afforded such change by executive management, and the degree of involvement of key business-unit managers. In the case of GE, Jack Welch set forth a vision and consistently reinforced why change was critical. He empowered high-level managers to help forge change throughout GE's business units. The goal was survival first, as each manager and executive knew that business-as-usual could force them out of business.

In the case of Microsoft, change started within the organization and bubbled up to the surface. Lower-level managers and business-unit directors sensed the promise of the Internet, and drove the organization in that direction. In each instance, managers were challenged to think -- and to tinker with (blowup?) the status quo.

Like the private sector, governments -- in order to excel -- must force their own obsolescence prior to changes in market and customer dynamics. Some contend the best approach to improve on current government services is to run it like a business. This cry originated with Osborne and Gaebler's Reinventing Government. Though this might be overly simplistic and even misguided in some instances, the goal of achieving in government the levels of effectiveness and efficiency attained in the best of private business is commendable and certainly worth pursuing.

In order to do that, however, it will be necessary for government to abandon the bureaucratic model that has served it for nearly the past century and replace it with operational principles and practices more attuned to the Information Age. A good place to begin is with the personnel and procurement systems. Both were established to maintain a degree of fairness and, in the case of procurement, reduce the likelihood of fraud -- admirable goals for 50 years ago. Both systems have outlived their usefulness, however, given the marketplace dynamics of today.

Needed revisions to personnel rules and structures in the private sector were rewritten five years ago by many corporations. However, even more important changes are just entering the discussion phase in many government jurisdictions. And with technology making major advances every 18 months, traditional procurement lag-times prevent governments from taking advantage of the latest and greatest market offerings. Also, traditional procurement models focus on acquisition only, rather than complete lifecycle acquisition and disposal strategies for major assets. Both models encourage reaction, rather than anticipation of customer and market changes.

Beyond this, the present relationship between the legislative and executive branches must also be revised to give the latter greater latitude to make decisions (as contrasted with all major decision-making being reserved for legislators, as is now most often the case). Why? Timeliness consistent with citizen needs and pace of technological change.

Most leading private-sector firms have evolved to leverage knowledge throughout the enterprise. They have created employee suggestion programs, self-directed work teams and independent management units with P & L accountability. Though all such innovations are not transferable to government, the point is that internal knowledge is being harvested to reposition and reinvent the enterprise. In these instances, innovation and creation comes from inside the organization, and is fostered by clear and consistent vision from the top. Rather than trying to lead the process, the equivalent of a lawmaking body -- the board -- serves as advisor to the suggested change inspired by this internal body of knowledge.

While most elected officials want to positively impact their constituents, pulling this off in an outdated structure that keeps legislators removed from the customer is impossible. Change inspired by internal enterprise knowledge can only be spurred by harnessing the intellect and energies of those responsible for "doing the work" instead of expecting them to mindlessly carry out the prescriptions of the elected body (legislature, parliament, Congress, city council or county board of supervisors) that is increasingly out of touch with citizen needs.

Bottom line: The greatest need and opportunity for reform in government lies in the legislature (with procurement and personnel to follow). In the private sector, executives have found it necessary to give up their power in order to transform their companies into the flexible, innovative, learning organizations that are required to survive in today's complex, competitive, global environment. Elected officials must follow suit if we are to restore citizen trust and confidence in government by "running it like a business."

Ian Temple is program director of GartnerGroup's Executive Program for Government

The private
sector carried
out crucial
five years ago.
Can government
make the
changes needed
to remain
effective in the