Malcolm Morley is Chief Executive of Harlow Council in the UK and is a Visiting Professor at the University of Bedfordshire specialising in strategic management. He can be contacted at email@example.com
The roles of public sector organisations are changing. They are increasingly becoming service commissioners as well as service providers.It is also the case that public services are increasingly being provided by non-public sector organisations; particularly private sector organisations. Whilst this joint working between the two sectors has become the norm in the U.K. for major capital projects, such as the construction of roads, bridges and buildings, it is now increasing for a diverse range of service provision.
Many different public sector organisations are entering into joint working relationships with the private sector for the provision of services with varying success. A number of lessons have had to be learned in the U.K. to ensure that the potential of joint working is realised in practice. This experience has illustrated that it is easy to talk about joint working, and to use the language of partnership working (one form of joint working), but difficult to achieve it in practice.
Before seeking to enter into joint working with the private sector it is important for a public sector organisation to be clear about the following:
It is vitally important that this question is answered clearly. The answer often relates to meeting both external and internal objectives. External objectivesoften includemeeting service demand or providing access to assets, facilities and services or changing the socioeconomic profile of communities. Internal objectives include filling resource, competency, capability and capacity gaps or changing organisational culture or changing organisational strategy.
It could be that the organisation wants to achieve a different balance between the economy, efficiency and effectiveness of resource use and doesn’t believe that it can do this by itself. Similarly, it might want to achieve a greater resilience in service provision and to transfer risk to the private sector. The rationale for seeking to explore joint working needs to be fully understood both internally and externally.
I have found that different parts of the same organisation often answer this question differently. It is really important that these differences are identified and addressed to remove confusion and to ensure that there’s consistency of communication, commitment and action. Private sector organisations considering working with public sector organisations need to understand the motivation and aspiration for the joint working. It can then look at what it is willing and able to contribute to the achievement of those objectives.
It is also the case that the objectives for the joint working need to inform and guide the development of the specifications to be designed to underpin the joint working. These objectives will define success and inform the development of milestones and performance requirements. They will also create a context for investment and clarify the outcomes and outputs to be achieved.
There are three principal types of joint working with the private sector. These are:
Transactional is the traditional client and contractor relationship based upon a specification and compliance with it. The specification states that certain activities will be undertaken to produce specified outputs for an agreed cost and the contractor (not partner) is held to account against the specification. At its most fundamentalthe relationship is based upon you specify what is to be provided, they provide it and they get paid.
Whilst this type of relationship can work for basic service provision it is more difficult for more complex services. Transactional relationships create an ‘us’ and ‘them’ interaction. There is little scope for innovation and despite the evolving needs of service users the services stay the same as they are limited by the specification on which the contract is based. Variations from the specification are often costly.
The client incurs costs in contract supervision with ‘inspectors’ checking the work of the contractor to ensure that it meets the specification. It is difficult for trust between the two parties to develop as the relationship is based upon compliance and verifying performance. The interface between client and contractor often focuses on things that have gone wrong or where disputes associated with the contract specification arise.
There is little shared commitment to objectives or indeed shared objectives other than to ensure that the contract specification is delivered. Each party looks after its own interests.
Collaboration is where the public and private sector organisations agree to work more closely together either informally or formally. There is a higher level of relationship development, more shared understanding of, and commitment to, shared objectives that provides greater flexibility of response to issues that arise. The two parties work together to develop the service offer and to respond to the changing needs of service users.
Collaboration involves some risk sharing and a willingness to try innovation. Whilst there is a clear focus on resource inputs, there is a greater willingness to focus on outputs and outcomes. Communication is more proactive with issues and problems more likely to be shared with joint approaches to the identification and evaluation of potential solutions.
There remains, however, a clear distinction between the resources, competencies, capabilities and capacity of the two organisations. The organisations work well together but they remain separate with clearly defined roles and responsibilities.
Partnership is where the public and private sector organisations have a tangible commitment to shared objectives, shared accountability for performance and a willingness to share risks and rewards. They jointly support innovation, see resources, competencies, capabilities and capacity as shared and have compatible leadership and organisational cultures.
As partnerships develop the organisations involved grow closer and closer together. Trust and confidence grow and teams develop with shared aspiration, shared commitment, shared sense of identity and a sense of belonging. Ultimately this can lead to the merging of the organisations into a single entity.
Joint working between the public and private sectors represents both huge opportunities and huge challenges. Opportunities to challenge and to change the performance delivered from public sector resources for the benefit of the communities served. Opportunities to support innovation, entrepreneurship and to ensure that learning is transferred and used throughout the public sector.
Challenges to achieve the changes in organisational strategy, culture, behaviours, leadership, competencies, capabilities and capacity required to make joint working effective. Challenges also to recognise that joint working requires time and investment, relationship building and that it cannot be achieved just by producing glossy documents stating that partnership working is in place.
Traditional approaches to public services are no longer adequate. Joint working within organisations, within the public sector and between sectors will increasingly be required to enable the portfolio of public service outcomes desired to be achieved. All public sector leaders and managers need to develop the competencies to ensure that their organisations understand and can be effective in joint working. They also need to be able to identify if the private sector organisations that want to work with them have the leadership and cultures necessary to make joint working possible. The procurement process needs to develop from just focusing on operational specifications to include an evaluation of the competencies, capabilities and capacity of private sector organisations for joint working.
A key question for leaders and managers for the future is: Do both public and private sector organisations have the willingness and ability to be effective in joint working?