We are at the beginning of a new technological revolution that is generating dramatic changes. There is a broad consensus about this among experts. We have to deal with a rapidly changing world, and the ones that work in government are suffering a lot of anxiety. Our public organizations are not prepared for facing all these new challenges: we are not flexible, not agile, and we hate change.
If governments do not adapt, there is a significant risk that the public sector may lose a lot of power and influence in society, as the distance between citizen expectations and public services provided increases. We are already seeing examples where private incumbents have started to replace governments (for instance, cryptocurrencies) as they are more efficient and innovative. The big issue is that weaker governments will struggle (much more than now) to guarantee the values and principles of the common good: solidarity, equality, basic public services for all (education, health, security), etc.
It is essential and urgent that public administrations rethink the way they work, organize, provide services and manage employees to keep its fundamental role in society. And one of the best areas to learn from is looking at how the start-ups work. They are agile, user-centric, and innovative: they must, because if they don’t, they die quickly.
This is my desideratum about ten essential hacks that I believe a government, especially a local one, should adopt to “survive” the tsunami of the current digital revolution. It is a list of actions that can be taken on its own, without relying on the state/federal government policies or the Parliament Acts. I am sure there are many other important hacks, but this is my contribution from my personal experience:
We are living in a VUCA world: more volatile, uncertain, complex and ambiguous than ever. The question of having a clear purpose is essential. Governments think that they already know it: essentially, it is to provide good public services to citizens, but, in reality, it is about doing the same things in the same way, as always, but using the new technologies. That is absolutely insufficient now.
One of the central traits of successful organizations is that they have stated a clear, simple, and ambitious purpose: they express the impact they want to make in society (vision) and their role to achieve it (mission). The greatness of having a compelling vision is that it becomes the lighthouse of your strategies, action plans, and tasks. It provides direction to define priorities and to be consistent with the mission to align resources and talent. It is tough to be coherent: on a daily basis, management is easier without an ultimate goal.
It is not a matter of wishful thinking. It is about defining an ambitious but achievable purpose, taking into consideration the passion, strengths, capabilities, and reality of your organization. To be credible, it must incorporate what makes your organization authentic and unique.
2. Talented public servants
At the very end, everything is about people. There are no transformation and innovation without the talent, passion, and leadership of the public employees. Attracting the right people to the government is essential. People who desire to be a civil servant that think that working in government is not just another job: it is a privilege, and they are truly passionate about it. People who are eager to change, transform, and provide excellent public services. Bold people who dare to make the key and disturbing questions that challenge the status quo because understanding the essence of the problem is more than 50% of the solution. And also people who sincerely care about the citizens.
Talent attracts talent and mediocrity generates mediocrity. Without talented public servants, we have no chance. We must hire talent and passionate employees and invest in long-life training to develop their skills in change management and leadership.
We also need public officials that understand that leading is to serve; it is not the organization serving them. So, they have to be humble and understand that changing the government is a long-term project and there are no shortcuts. They do not start from scratch; they have to take advantage of all the good work done by previous administrations, and they should leave a worthy legacy to the following. Everybody has personal ambitions, but officials who prioritize, above all, their personal agenda and egos to achieve short-term vanity wins, take selfish decisions that are not aligned with the mission, and they end wasting a lot of time and resources. This kind of egocentric officials is a big issue: they transform nothing, and they generate a great deal of frustration and demotivation in the public servants.
3. Change management
Governments have no other option than to adapt to the new world and moving forward towards the new social demands. But managing the change is about creating the right culture, and that is very tough and complex. There is no general roadmap for all: it is a craft work, and it is unique for each organization.
However, here you have some basic guidelines:
- It starts leading by example, particularly from top management. Organizations are like kids: they learn, not from what you say, but from what you do. Digital transformation is an attitude and starts with yourself.
- Bear in mind the eight-step process for leading change by John Kotter: creating a sense of urgency, building a powerful coalition, forming a change vision, communicating the vision, empowering others to act, generating short-term wins, consolidating improvements and institutionalize cultural change. The very first step is to develop a sense of urgency: we, humans, do not want to make any change unless it is unavoidable.
- There is no change without resistance: changes always create some people that have the feeling of being the winners or losers. If there are no critics, there is no real change. So, be aware of the ones that try to ask for a unanimous consensus: actually, they are against any change.
- Transforming government is a hard and long-term project. Significant changes are only achieved only by adding up lots of small changes. There are no real short-term great changes, and if somebody says so, you will just get hot air.
- Communication is essential. Leaders are good communicators if they are great at explaining simply and understandably complex challenges, doing synthesis and prioritizing. They are good not because they make great speeches, but because they deliver clear vision, well-defined actions and, above all, they are coherent between what they say and what they do.
4. Citizen-centric passion
To provide excellent public services, a citizen-centric approach is essential to understanding the real needs, expectations, motivations, and capacities of the users. To do this, government employees have to be humble: they know a lot about the existing public services, but they do not know what the best services for citizens are in a context of rapid changes, and they have to be open to involve them in developing collaborative design projects participating in all the phases. And here lies the difficulty: governments know little about how to engage with citizens and how to co-design and to co-create services. At the very end, they are considered a nuisance because they require spending a lot of time and learning completely new methodologies like design thinking and lean start-up.
Placing the citizen at the center is the best way to avoid auto-complacency and mediocrity. It implies changing your organization to better serve the citizens and avoid making an organization structure based on internal politics and self-interests. It fosters creating a culture of innovation, challenge, debate, learning, and citizen service. A citizen-centric focus is not an action or a plan; it is a continuous process, an attitude, and it should form part of your culture. It is not easy, and it is tough.
A citizen-centric outlook makes us never forget that we are humans after all. We all want efficient, simple, and 24×7 services. We love digital services, but whenever there is an important issue, we do not want to fight with an electronic form or a bot. We want human empathy, somebody assertive who supports us. We have to provide hybrid models of assistance that combine the best of the digital world with the human touch when necessary.
5. Data-driven decisions
Data is the new oil of the 21st century, and governments have lots of information, but they are not taking real advantage of it to make smarter decisions. Judgments should be based on evidence and on the “brutal” facts, not on intuition because “without data, you are just another person with an opinion” (W. Edwards Deming).
Governments should define a data-driven strategy to make it possible. They need to ensure that they have available the right data, well organized. They have to break the information silos and enforce processes that guarantee good quality data. They need to define what are the key indicators aligned to the mission (as Kaplan and Norton state), build smartly balanced scorecards, and avoid the vanity metrics. They have to collect the information that helps us understand citizens’ needs and satisfaction, and gather all the information with public value, which is spread between government departments, service providers, and private companies. Advanced data analytics open excellent opportunities to public bodies and, at the same time, huge risks. Governments will need data science analysts and chief data officers to make sure that the results of the data-driven strategy are aligned with the purpose of the organization. And they will have to invest in cybersecurity and ethical managers to minimize the new threats and the dilemmas of the digital revolution we are living.
With a proper data-driven strategy in place, governments will be able to measure the outcomes and public value of their policies effectively. Moreover, they will be able to develop advanced algorithms to improve planning, make predictions, and develop customized and proactive services to citizens, as some private services are already doing.
6. Be agile and lean
In a rapidly changing world, agility is key to the successful execution of a strategy. But the reality is that the public authorities are not flexible and have great difficulties in adapting; that is why they struggle to meet the demands of the citizens. In this context, governments have to rethink the way they work. First, they should be “lean,” radically anti-red tape to get rid of the tasks that do not provide a value to the citizens and, hence, to free resources. Second, they have to change the way they design and develop public services and adopt agile methodologies. We need more strategy (aligned with the mission) and fewer plans that are not flexible to reality. We have to work on shorter projects, starting with what is called a minimum viable product (that fits the top requirement), in an iterative and incremental process, with high interaction with users to validate or modify the product, who are engaged from the start and throughout all the projects. The lean start-up methodology by Eric Ries is an excellent example of this way of working, and it is widely used by innovative companies to design new services.
In the public sector, bureaucracy eats the agility for breakfast. And bureaucracy and hierarchies kill innovation. Being agile implies organizations based on horizontal structures, decentralization, empowerment, autonomy, trust, accountability, quick decisions and meritocracy. In the end, it means new public management.
7. KISS UX
“Keep it simple, stupid” should be a mantra for governments. In some industries, the leader’s main value proposition is having an excellent user experience. Governments are, by nature, very complex organizations with highly complicated procedures. That is not an excuse to invest in user experience (UX) to make public services as simple as possible. Right now, many citizens try to submit electronic forms, but they are not able to finish them online. We waste their time twice, first online and then on-site. UX makes a significant impact on the adoption rate of digital services and user satisfaction. There should always be UX experts involved during the design and evolution of digital services.
8. Open to innovation
Currently, the public sector is facing many new challenges about rising expectations from citizens, shrinking budgets and fragile trust in the political system. There is only one answer to this dilemma: governments must do things differently to deliver effective solutions, they must innovate and rethink public services to improve citizen satisfaction through smarter use of people, data, and technology. In a complex world, the answers to the new challenges are very often outside the department in charge. The government has to promote open innovation initiatives that arise brilliant ideas from citizens, companies, or public employees from other areas.
But the great ideas are often uncertain, and they have to be validated that are feasible, realistic, and provide real value. Innovating means understanding that there is no learning without fails. The government should be open to explore, experiment, and assume controlled risks. They can do so, creating sandbox areas for experimentation where there is fail tolerance, and we can fail cheap, quick, and often, to finally succeed. Innovation is, at the very end, a sum of failures and successes with positive global return on investment. It requires a culture in favor of creativity, risk, motivation, empowerment, and trust.
9. Embrace collaboration
The most critical defies that governments are facing cannot be solved by only one public authority; even if it is a big one. We are living a global and very interdependent world, and the new problems are highly complex, interconnected, and require the ability to approach them from multiple perspectives, with a multidisciplinary team, with fresh and innovative ideas, gathering the collective intelligence. In the digital arena, we are talking about digital identity, trust, cybersecurity, sustainable digital services, applying emerging technologies, etc.
Public administrations should embrace collaboration enthusiastically to face common purposes. This implies that government officials must have the skills required by working on collaborative projects. They need a well-defined mission, building trust, governance of the team, transparency of the information and processes, clear communication, engagement, and consensus decisions. It is very different from the ordinary leadership in a hierarchical organization where decisions are taken top-down. As the African proverb says, “if you want to go fast, go alone. If you want to go far, go together.
10. Technology is just a means, not an end
Technology is very cool, and we easily fell in love with the latest disruptive technology. That is why, too often, we get confused, and we forget that it is just a mean, not the end goal. We adopt it without thinking about what the social objective is, and then we try hard to find a problem that fits in. These kinds of projects tend to be a complete failure.
First of all, we have to decide the social challenge, and then we chose the right technology to solve it. The key factors are all the ones mentioned before: mission, people, managing change, citizen-centric, etc. Many studies show us that technology is not the key factor to succeed, but it is a great accelerator if you have the right focus.
Moreover, technology evolves extremely fast: for many public authorities, it is impossible to be up-to-date as it requires large investments and dedication. For most of them, the best strategy is to consider technology as a commodity and use, as much as possible, shared platforms from state/federal governments or specialized cloud services.
Governments have scarce resources, so they should focus on where they make a meaningful impact on citizens, and that is not investing time and resources in the latest technology. Using shared platforms as a service has many advantages: the use of (almost) state-of-the-art technology, continuous improvements fostered by the collective intelligence from all the users, to apply consistent standards, to have in place great cybersecurity measures and to enjoy a high quality of service that is easy to scale. And all of that for a fair price and much cheaper if you want to do it on your own.
We are living a digital revolution and governments are facing the major risk of disruption in history. There are real threats that they may become irrelevant if they do not adapt. At the same time, governments have considerable opportunities to provide much better public services through smarter use of the organization, data, and technology.
There is no alternative. Some industries have already learned the digital revolution the hard way because they do not exist anymore: encyclopedias, rental videos, etc. The public sector challenge is how it manages the change to expand gradually (but non-stop) the daily agenda with a transformation program to create governments with talented public servants, a clear mission, and a citizen-centric passion. Organizations that take decisions based on evidence do evaluate their results and are obsessed with agility, user experience, and citizen satisfaction, reducing red-tape. Administrations that embrace innovation and collaboration to deliver the best public services.
We must be realistic. Transforming government is a gigantic task which will take a long time and energies, and there are no shortcuts. But if we have a clear road-map, we will make sure that every step forward, it gets us closer to our goal.
- Good to great, Jim Collins. https://www.jimcollins.com
- Lean Start-up, Eric Ries. http://theleanstartup.com
- Avoid mediocrity, Xavier Marcet. http://www.xaviermarcet.com
- The eight step process for leading change, John Kotter. https://www.mindtools.com/pages/article/newPPM_82.htm
- Why do purpose-driven companies do better? Peter Fisk. https://www.linkedin.com/pulse/why-do-purpose-driven-companies-better-peter-fisk/
- Balanced scorecard, Kaplan and Norton. https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2.
- Four things the Public Sector can learn from Silicon Valley, Miguel Carrasco. https://www.linkedin.com/pulse/four-things-public-sector-can-learn-from-silicon-valley-carrasco/
One informal way to describe the value of blockchain is that it can manage trustworthy electronic transactions between strangers without a trusted third party. It is, definitely, a significant breakthrough that will create a vast variety of new and exciting business applications.
Nowadays, our economy is strongly based on intermediaries who guarantee or certify a transaction or some information. The intermediaries are usually expensive, slow and, often, offer little value. Some of them are banks, insurances, public registers (land, commerce, etc.), notaries, certification organizations and, of course, governments. One of the main functions of the public authorities is managing information and provide official documents or certificates about licenses, permits, registration in public databases, etc.
Internet was a revolution of communication and information. Since 1993, we can connect and share any information with anybody at any time, at the cost of zero. The blockchain is argued to be the revolution of trust between foreigners: the promise of disintermediation. But, let’s be fair, there are many areas where the intermediaries still provide value (not just keeping a database of transactions) that cannot be replaced by a distributed ledger or by smart contracts. In some situations (not all), notaries, official registers, etc., provide worthy legal advice, very hard to automate.
One of the areas where blockchain has already created popular business cases is in cryptocurrency (bitcoin, etherium, and a hundred more). It seems likely that the future of currency will be based somehow on the blockchain. We could expand it to the tokenization of assets, either digital or physical. For instance, Singapore (a financial center in East Asia) has announced the development of a blockchain platform for stock exchange securities’ settlements.
What are the limitations of blockchain?
The blockchain is a disruptive technology, but to take real advantage of it, we should have a clear understanding of its limitations. Let’s explain some of them:
- It does not record information: It just saves logs (date, time, quantity, origin, destination, hash, etc.) and, at most, small pockets of data used to execute and guide smart contracts. But it is not designed for data storage. For example, it records the metadata that you have a property, but not the official document and detailed information that describes your property.
- It is not cheap. Each transaction saved in a public blockchain network cost a few cents to fund the members of the network and the huge energy consumption. If we have a business case that generates millions of transactions, it will be a costly project, much more than a centralized database. We can create a private or a consortium blockchain, but then there are, again, relevant costs to build the network and maintain it.
- It is not fast. Transactions are grouped in blocks, but by security reasons, a difficult puzzle has to be solved, and it has to be validated by most of the members of the network, before being added to the distributed ledger. So, that means a block is not saved immediately. Depending on the network and the complexity of the algorithm, it may take seconds 10 seconds (Etherium), 10 minutes (Bitcoin) or even hours (some services aggregate many blocks to reduce costs).
- Anonymity but no confidentiality. The DNA of the blockchain is to manage anonymous transactions: it is not known who is behind each one. But all of them are published in all the nodes of the blockchain network and, therefore, there is no confidentiality (unless some encryption techniques are used). By design, Governments are designed (regulated) on the other way around: the users are very well identified, and the data is confidential.
- It is not easy to scale, as each transaction (and block) is saved in all the members of the network.
There are complementary technologies to overcome some of these limitations, but it requires additional developments and costs. It is essential to understand what blockchain was designed for and what is good at. The blockchain can be used in almost any current use case, but because of its limitations, it is not always the best option.
Because of all these constraints, some experts are now talking about distributed ledger technologies (DLT) instead of the blockchain. The blockchain is just a type of DLT, a democratic one where all are equal, and all record the same information. We are in a learning phase, and some experts are already pointing out that the best solutions would be a sort of DLT, which may not be exactly the blockchain we know now.
Where are we now in the hype cycle?
There is a lot of fuss, but the reality is that we are just in the early stages and there are very few real (in production) blockchain projects in governments. Gartner estimates that blockchain will reach ‘maturity’ in the next five to ten years. It has already passed the “peak of inflated expectations,” and now it is going “through the disillusionment phase.
The Economist magazine stated in a recent article “Blockchain has been hyped to the skies’ (August 30th, 2018), “progress has been slower than hoped, and some apparent successes turn out to have been exaggerated.” Cryptocurrencies are far from being in our daily lives yet. For instance, it is very difficult to find a shop where to pay online or offline with bitcoins, at least in Barcelona where I work.
To learn a bit more about the limitations and the hype, I strongly recommend to have a look at the following videos:
- What should NOT go on a blockchain? (5′) by Andreas M. Antonopoulos a renowned blockchain expert
- What is the difference between a Blockchain and a database (27′) by Gideon Greenspan CEO and founder of Coin Sciences
Approaches about using the blockchain
Although it is not mature yet, governments have the responsibility to learn, experiment, and evaluate government use cases to be well-prepared when the revolution comes and make sure that the public authorities take advantage of it. That means promoting prototypes and pilots in use cases that make sense from the public value perspective to provide better and innovative services to citizens.
When planning blockchain projects, there are two radically different approaches:
First approach: the blockchain can be used in almost every use case. Projects are usually launched on the criteria to have the most significant media impact. It is a fair approach, but we have to be honest: we will basically learn about how to use the blockchain technology, not about the added public value it provides in comparison with existing technologies.
Moreover, there is the risk to create problems where we already had good solutions because we change applications that have been performing fine for years without any relevant issue, just because we now have a trendy new technology. Unfortunately, most of the initiatives fall in this approach. There are several guides to help you decide where the blockchain is the suitable technology.
Second approach: let’s identify the public challenges that we have not been able to solve so far with existing technologies and then analyze if blockchain can help us out. It is a disruptive technology, so let’s use it in disruptive business cases. This approach is much harder because we have to understand first, what are the public challenges, and then the restrictions of the blockchain.
In Jim Collins’ brilliant book “Good to Great”, there is extensive research about successful long-term companies. One of the conclusions is that “they do not adopt a new technology just because it is the latest trend or state of the art: if it does align with your mission and strategy, then you need to take it by the horns and become a pioneer in it. But, if it isn’t, then you should ignore it.”
So, the key question is what are the government business cases unsolved or with a poor performance where disintermediation could create better public services. In this approach, it is essential to foster experimentation and prototyping blockchain labs to learn about their potentialities, where any government with a good idea can prove the concept with a small effort and cost. We should encourage the start-up’s methodology of learning by doing, “fail fast, fail cheap” and user validation of the value proposition.
Let me point out a couple of interesting use cases (at least in Spain) that I am working right now:
- Global identity for both, public and private sector, based on evidence provided by governments (ID card, passports, driver license, etc.), private companies (banks’ documents, insurance contracts, telecom operator registers, etc.) and social reputation (your social network activity that has been validated by many other users). Your identity is not based on a piece of plastic issued by the government. Your identity is the collection of evidence about your life.
- Empowering citizens with the control of their personal records: citizens own their data, and they can share it with governments and with private organizations, with their explicit consent. The blockchain can support this initiative by having the logs about the authenticity of the data/documents and recording the authorized data exchanges.
Real use cases of blockchain in government
There are hundreds of potential use cases that are in the research or the development phase. The Illinois Blockchain Initiative has done excellent work to create a database tracker to compile the blockchain projects in government worldwide.
In this database, we can find (at them moment of writing this article) 17 in-production/live projects, with a description and a project link for additional information. But, sadly, only 11 of them (4 from Estonia) have a project link to a government website: some of them have a link to media articles and some even don’t have a link. Furthermore, some of the 11 initiatives were temporary projects and, in others, the described project is live but, related about using blockchain, they are at the development phase and they are not using it in production yet: that is why in some of the government project links they do not mention blockchain at all.
One of the live projects is the Official Gazette of the Republic of Argentina. They deserve a lot of credit to be innovative but the fact is that they have followed the 1st approach and the way they are using blockchain in this use case is not providing any added value to the existing technologies and, at the end, it is less usable for a citizen to understand and to validate the published date.
I definitely go for the second approach to focus on disruptive business cases and learning by doing, fostering experimentation, pilots and evaluating the impact in government. We are living exciting times, and we have great opportunities to create better transparent, open, efficient, and trustworthy governments. The blockchain may help the process as long as we are smart enough to focus its application to provide public value and not just create great marketing campaigns.
Whoever wants to learn more about blockchain in Government I highly recommend the OECD guide “Blockchains Unchained: blockchain technology and its use in the public sector”
- I am not a technology expert in the blockchain, but I have extensive experience in digital government transformation. This article is based on the learning of the blockchain technology application in the public sector during the last year.
- Thanks to Daniel Martínez for his contributions
- This article was originally published on October 28, 2018. It was reviewed in Novembre 11, 2018.
- Berryhill, J., T. Bourgery and A. Hanson (2018), “Blockchains Unchained: Blockchain Technology and its Use in the Public Sector”, OECD Working Papers on Public Governance, No. 28, OECD Publishing, Paris, https://doi.org/10.1787/3c32c429-en.