Session on Delivering public services – adding value to citizens through co-production

Prof. Dr. Stephen Osborne University of Edinburgh

Delivering public services: adding value to citizens through co-production? Professor Stephen P Osborne, Director of the Centre for Service Excellence, University of Edinburgh Business School, Scotland

Centre for Service Excellence, University of Edinburgh Business School

Centre for Service Excellence University of Edinburgh Research and Engagement Centre Cross-school and concerned with public and private services Research into effective service delivery Engaging with service firms and organisations to improve service delivery Working with our UG and PG students to prepare them for working in the service sector Stephen.Osborne@ed.ac.uk Centre for Service Excellence Centre for Service Excellence, University of Edinburgh Business School

What are public services? NMP is flawed and failed Public services are… SERVICES But different… NOT products Intangible, process-based, co-produced with citizens Are on a continuum and contain concrete elements Value for public services is subjective and values-based What do your citizens value? How do you resolve differing perceptions of value based on differing value-bases? Public service management is a process of NEGOTIATION Public services are only promises. Real value is only value-in-use and value-in-context. Performance management is (relatively) meaningless Are delivered in service systems SO… Understand expectations (which frame experience) Understand differing value-bases Understand the need to negotiate between these value-bases Understand the role of citizens at the centre of co-creating/co- producing public services Understand public services only promise value. In reality it is a dynamic concept What are public services? Centre for Service Excellence, University of Edinburgh Business School

What is ‘value’ (not)? What value is not… …Just another word for service effectiveness or outcomes …Simply financial value …Created internally in Public Service Organisations (PSOs) by internal value chains (Lean) …Public Value… What is ‘value’ (not)? Centre for Service Excellence, University of Edinburgh Business School

Overarching definitions of value OED Value: ‘The regard that something is held to deserve’ Marx Value is determined by ‘…the amount of labour necessary to the production of a marketable commodity.’ The process of production determines value Pilkington ‘Value is attributed to objects due to our desire for them. This desire, in turn, is inter-subjective [and socially determined].’ The process of consumption determines value by its symbolic nature But what of values??? Centre for Service Excellence, University of Edinburgh Business School

New Public Management and value Value as indicator of the public service production process Transformational process of inputs, outputs and outcomes for ’value for money’ Three E’s (Economy Efficiency and Effectiveness) & CCT - transactional atomised contracts employing the market to reduce costs and increase (economic) ‘value’ Best Value 4 C’s – Challenge, Compare, Consult, Compete Is this value – and where are values? Centre for Service Excellence, University of Edinburgh Business School

(III) Public Value 1 Public value is created by public managers just as private managers create commercial value – it is determined by and distributed to citizens as shareholders (Moore 1995) – Shareholder driven ‘[A] reflection of collectively expressed, politically mediated preferences consumed by the citizenry’ (O’Flynn 2007) - Demand driven ‘[T]he value created by government through services, laws regulation and other actions’ (Kelly et al. 2002) - Supply driven [Value] is collectively built through deliberation involving elected and appointed government officials and key stakeholders’ (Stoker 2006) – Politically driven Public value as values driven Private value (‘rubbish is collected’) vs public values (‘a sustainable society’) Key role of trust in creating and sustaining public value (reduced refuse collections) Centre for Service Excellence, University of Edinburgh Business School

Public Value 2 BUT Who determines the ‘values’ of, and the ‘value’ in, Public Value? And how to arbitrate conflicting value positions? Ultimately, PV is a policy making tool not a service delivery one Centre for Service Excellence, University of Edinburgh Business School

So… what is ‘value’? Value is… …About how PSOs positively change the lives of citizens …Dependent upon the values that citizens hold (frames expectations and mediates experience) …Socially constructed and subjective Values are an input, value is an outcome… and frames the future ...Created externally to PSOs Without an external focus you just create very efficient but permanently failing PSOs So… what is ‘value’? Centre for Service Excellence, University of Edinburgh Business School

4 dimensions of value for PSO Meet the social or economic needs of citizens/communities ‘Fit for purpose’ (expected but not indicator of satisfaction or quality) Outcomes Improve the quality of their life experience Lived experience Create capacity for citizens/communities to change in the future Individual/social capital Make Scotland a ‘’better’ society Public value Public Service Organisations only facilitate value creation - value is only created by citizens and service users 4 dimensions of value for PSO Centre for Service Excellence, University of Edinburgh Business School

How is value create in public services? (I/IV) I – Co-experience Not citizen/user empowerment or control but a partnership Is a constant in public services – part of being a service Is intrinsic/unconscious not voluntary PSOs need to work with it - not against it or in ignorance of it Is being re-framed and changed by digital/smart technology Public service professionals from the holders to the interpreters of knowledge How is value create in public services? (I/IV) Centre for Service Excellence, University of Edinburgh Business School

How is value create in public services? (II/IV) II – Co-construction Public services are changed by the life experiences that citizens bring to them, and Public services change the life experiences of citizens to create a lived experience, irrespective of outcomes This creates service satisfaction, but is much more than that – well- being - or not… How is value create in public services? (II/IV) Centre for Service Excellence, University of Edinburgh Business School

How is value create in public services? (III/IV) III – Co-production The conscious involvement of citizens in the delivery of their public services Needs a framework and expectations about what can/cannot happen May empower citizens by their taking control of their lives Needs to be facilitated in the beginning (‘learning to and learning from’) Creates capacity in citizens to take control in the future (c.f. private sector services) A partnership How is value create in public services? (III/IV) Centre for Service Excellence, University of Edinburgh Business School

How is value create in public services? (IV/IV) IV – Co-design and Co-innovation Role of citizens in improving existing public services/creating new forms of public service Led by their needs but co-created with professionals (expertise) and politicians (mandate/resources) Unlock the ‘sticky knowledge’ of service users – where most innovation in service delivery comes from Digital/smart technology is changing the ability of citizens to access information and take the lead in public service change How is value create in public services? (IV/IV) Centre for Service Excellence, University of Edinburgh Business School

Co-design & co-innovation Value creation matrix VALUE PROCESS/ VALUE CREATED Outcomes Lived experience Capacity Public value Co-experience Co-construction Co-production Co-design & co-innovation Co-destruction Centre for Service Excellence, University of Edinburgh Business School

Creating value must be externally focused not internally focused Need to balance underpinning values of public services and the value they create – ‘value’ is ‘value-based’ A process of negotiation – between differing value-bases, resource constraints, and capacity Co-production is just one of a cluster of processes through which value can be co-created/co-destroyed with citizens It is as possible to create unwanted value and/or to destroy value by public service delivery as to create it. Has the citizen at the centre, not at the end or the periphery, of creating value through public service delivery Finally… Centre for Service Excellence, University of Edinburgh Business School

Discussion by Prof. Dr. Elio Borgonovi Bocconi University

Delivering public services: adding value to citizens Discussant Elio Borgonovi President of CERGAS, Bocconi University

KEY ELEMENTS OF PUBLIC SERVICE DEFINITION Stephen’s presentations is insightful and inspiring. I want to underline some concepts: Dynamic process vs bureaucratic rigidity Different value-basis: it raises the problem of democracy (crisis of Western countries model) and of inclusive society (different from selection and simple integration) Co-production: from the technical point of view is common for all services (public or private); the peculiarity of public service is involvement, engagement, empowerment that are much more difficult to obtain from market driven services Peculiarity of public value: understanding the environment, agreeing among different interest groups, evaluating processes

THE CONCEPT OF PUBLIC VALUE (1) It’s fascinating for me the distinction between: Values as input Value as outcome I’m not sure to understand it correctly, but in my mind ‘values as input’ means that people and social groups behave and interact with public administration (co-produce) on the basis of their concept/philosophy of life (egoism/altruism, utility, ethics, religion, etc.). ‘Value as outcome’ is a result of an evaluation process by those who interact with public administration based on how services actually meet needs, perceptions, expectations. Public value definition needs to clarify: How PA meets needs How PA respects rights How public services contribute to recover, maintain and consolidate community relations, that means how they contribute to social capital

THE CONCEPT OF PUBLIC VALUE (2) Public value has a different meaning if we consider public service as: Commons (that affect the entire community) Merit goods (they provide individual utility but are guaranteed by public choice process) A mix of both (transportation, education system) Anyway, the critical aspect is public value measurement: Ex-ante for decisions Ex-post for evaluations

PUBLIC SERVICE MANAGEMENT I agree with the idea that public service management is basically a negotiation process based on trust I do not completely agree with the statement ‘performance management is (relatively) meaningless’ Actually, negotiations require: A better clarification of what you negotiate A precise, detailed, explicit definition of objectives and quantitative and qualitative indicators because there is no market price (as it happens for many public services) The agreement on the methodology of result measurement in order to compare with the objective The maintenance of ex-ante and ex-post indicators to built and to strengthen trust

THE LEVEL OF ANALYSIS For sure public value is a policy making tool Anyway I consider that is still relevant as public service delivery I think it is important to frame the concept at three different levels: Policy making Managerial Operations

BUREAUCRATIC NEW PUBLIC MODEL COMMUNITY POLITICAL COUNCIL (BOARDS) POLICY OBJECTIVES ADMINISTRATION (MANAGER) ELECTION (CONSENSUS) PUBLIC SERVICE DELIVERY

PUBLIC VALUE MODEL COMMUNITY POLITICAL COUNCIL (BOARDS) PUBLIC VALUE ADMINISTRATION (MANAGER) ELECTION (CONSENSUS) CO-PRODUCTION

VALUE IN THE PUBLIC SERVICE FRAMEWORK Prof. Osborne’s insights suggested me some conclusive remarks. The concept of public value in service delivery is relevant for many reasons: Is a way to create a better power balance/sharing among four stakeholders: politicians, public managers, individual citizens, communities Is a way to balance individual interest and community/common interest Is a way to regenerate the representative democracy in Western countries Is connected to new technologies perspective Is a dimension of sharing economy Is an intellectual challenge to promote the shift from «management as knowledge, competences and skills to do things in the right way» to «management as knowledge, competences and skills to do the right thing (value for all) in the right way»