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Hybrid public-service delivery models: Best of all worlds

Public service delivery is an issue of contention for governments the world over. In many instances, traditional methods of achieving public service objectives no longer offer adequate solutions. We explore the alternatives provided by hybrid organizations.

Overview

Governments the world over face new fiscal realities that are forcing them to reconsider how they can best deliver public services in the future. The need to make significant cost savings, to do more with less and to tailor traditional service models more closely around the citizen calls for innovative models of provision—no single traditional model of delivery will bridge the gap.

A study of the terrain of public service provision in the United Kingdom reveals the emergence of a new model—that of hybrid organizations that combine elements of the private, public and social sectors. This new class of service delivery model represents an exciting opportunity to combine business innovation and a vibrant social ethos while pursuing public service objectives. In time, businesses and non-profits may also seek to adopt similar hybrid models.

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Background

We define “hybrid spinouts” as having five key characteristics: autonomy from government; a social mission; robust business models; non-traditional enterprise; and citizen centricity. There is no single blueprint for a hybrid model of public service provision; a flexibility of approach and an ingrained pragmatism are common to the most successful spinouts.

This unconventional approach to service provision and funding has allowed many individual spinouts to combine organizational elements of the public, private and social sectors—elements that may typically be considered hard to reconcile—to bring to bear the best of all worlds. By putting in place conditions to encourage more spinouts from the public sector, policymakers can go some way towards realizing a new era of social value creation across the economy.

Key Insights

As the demand for citizen services rises on the back of aging populations, governments are being forced to seek more cost-effective options of provision. Against this backdrop, there is growing evidence that hybrid spinouts provide more effective and efficient ways of delivering public services. Our analysis suggests that this value proposition emphasizes three distinct areas:

  1. Innovation

    Freedom from government control encourages innovation and helps spinouts to tailor service provision to user needs.

  2. Employee ownership

    Employee ownership results in healthier, happier and more dedicated staff and triggers improved organizational productivity.

  3. Flexible funding​​​

    Spinouts can take advantage of a more market-driven environment and access flexible funding to sustain innovation as well as engage in mixed payment models.

Furthermore, a growing body of evidence suggests that hybrids are more effective at stimulating economic outcomes in three key ways:

  1. Opening up public servic​​es to new players, such as hybrid spinouts, reduces the direct burden on public finances while driving competition.

  2. Greater efficiency and ability to reduce overhead costs, while at the same time improving service delivery, enables hybrids to contribute to higher levels of productivity in the economy more broadly.

  3. Hybrids are catalysts of job creation, increasing income levels and domestic consumption while improving life chances, often in deprived areas.

Our research found that leading hybrid spinouts were able to create a virtuous circle through their ability to hold the following elements in a state of creative tension:

  • Talent strategies that combine social ethos with business acumen

  • Innovation strategies that married continuity and reinvention

  • Organic growth that scales innovation and drives economies of scale

  • Leadership that institutionalizes individual drive

Recommendations

To facilitate the spinout process, public managers need to focus on four areas that will spell far-reaching change:

•  Adopt common standards to create a social capital market.

•  Make careers in hybrid organizations more attractive.

•  Embed innovation in cross-sector social value chains.

•  Incentivize smarter commissioning.

In future, we expect to see similar hybrid organizations emerge from both the private and non-profit sectors. Along with their counterparts originating from the public sector, we would collectively term these organizations “social-value hybrids.” In time, they may help businesses combine economic growth with societal value, while offering non-profits a more sustainable route to scale. Leaders from all sectors would do well to study the examples provided here as well as those emerging from across the globe.

For further insights read:

Best of All Worlds: Hybrid Models of Public Service Delivery (European Business Review)

The rise of social value hybrids requires a rare blend of leadership (The Guardian)

Social value hybrids: Best of all worlds? (The RSA)

Delivering public service for the future: Harnessing the crowd (Ivey business journal)

Best of All Worlds – How hybrid models of public-service delivery can improve citizen outcomes and stimulate growth (UK Heritage Research Group Blog)

About the Institute for High Performance

Accenture Institute for High Performance develops and publishes practical insights into critical management issues and global economic trends. Its worldwide team of researchers connects with Accenture's business leaders to demonstrate how organizations become and remain high performers through original, rigorous research and analysis.


Authors

 

Matthew Robinson
Managing Director of Policy Research


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Tim C​​​o​oper
Thought Leadership Senior Research Fellow


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