Last week I had the pleasure of meeting an interesting state CIO. The conversation concerned the ever-lasting debate about centralization versus decentralization and to what extent lesson learned in the private sector can be applied to government.
He clearly thinks that there are few excuses for government not to apply best practices from other industries and noted how complex conglomerates with very diverse businesses achieve a much greater degree of consolidation and rationalization than much smaller government organizations do.
My contention was that the concept of government as an “enterprise” is inherently far more complex than in other industries: tax and revenues, public safety and law enforcement, human services, education, these are all very diverse businesses, often pursuing competing objectives.
Of course I fully agreed with him that more would be possible and desirable in terms of rationalization of assets, resources and services. However the real challenge – which is also the primary cause for the divide between those who pursue centralization and those who fight it – is to agree on where to draw the line between what is common and what is unique, between horizontal and vertical.
In difficult times like these, calls for centralization are louder, but the urgency to realize benefits does not always allow to take a much needed strategic perspective, to socialize where to draw the line between horizontal and vertical, and to agree on governance processes that constantly reassess whether the line should be moved (either way).
The state CIO said that he would love to develop and implement an operational model that strikes the right balance between competing priorities, allowing government to operate more like a business. On my way back from the meeting I started thinking about how such a model would look like and how one could combine a compelling vision with an (almost) flawless execution. Should breadth prevail over depth, or should one be laser-focused on a specific domain, program, process, using that as a driver for change? How would this model combine existing disciplines – such as enterprise architecture, strategic sourcing, portfolio management, IT operational excellence, process transformation, change management – in new ways, to make the vision of government as a business possible irrespective of policies, tiers, domains?
Then a sudden thought occurred to me: should government really be run as a business? This state CIO and many other government executives I have been speaking to over the last year buy into the idea of an open government, where people are re-engaged in pursuit of the original meaning of democracy (actually “demos” means people). But isn’t this antithetical to what businesses do? The financial and economic crisis that we are facing is rooted in the lack of transparency and the unregulated (or unsupervised) power of large corporation, which operate in pursuit of profit.
Now, if we take open government at face value, we have to accept that people have a say in the debate between centralization and decentralization, want to collaborate to help government run its operations more efficiently, co-create services and solutions, and collate and manage information that critically influence the nature and outcome of government processes.
Let’s take a concrete example: procurement. A highly regulated, expensive and time-consuming process, which is a great candidate for standardization and centralization across multiple agencies. This is exactly what large corporations do.
But what happens when we start engaging our citizens in such a process? There are already examples of crowdsourcing, where RFPs get collaboratively produced by multiple experts, including vendors. One could easily imagine to involve citizens in other phases, such as commenting and rating vendor responses, being engaged in trying out solutions or building use cases and scenarios to assess solutions. Now, how does one operationalize innovation? How can you have a well run, optimized procurement process, which is the same to buy assets or services across multiple agencies and domains, and yet be able to sustain the bottom-up innovation that open government implies?
One could argue that it is more likely for that to happen at an individual agency level, where the right combination of organizational culture, maturity, risk management attitude, may create the right conditions for innovation. For instance, I assume that a scientific agency or a library procuring services may be in a better position to try out new and open procurement approaches than a law enforcement one buying guns.
The irony is that while the need to optimize costs is driving toward greater consolidation, the creativity required to identify completely new ways to innovate may require less centralization. While some of the innovations stemming from open government will become enterprise-wide processes and will ultimately benefit from centralization, it is important to reflect on how much centralization today may strangle, rather than nurture innovation.