The Path to High Performance Bureaucracy

Large public sector organizations—government agencies, multilateral institutions, and non-profi ts—today face unprecedented management challenges, including entrenched organizational structures, complex stakeholder environments, and shifting regulatory regimes. Problems which result from these challenges have come to defi ne the very meaning of the word “bureaucracy”: slow decision-making, high costs, and resistance to change.

These conditions are not simple to overcome, and the recent economic downturn and broader discontinuities in a changing world have only added to the challenge. Think of fundamental geopolitical changes reshaping the global economy, in which the West no longer hosts the fastest growing cities, sets the rules for business or consumes the most resources. Consider the evolving social contract pushing the private and public sectors to adapt to new rules of engagement advocated by non-governmental organizations and government. Look at emerging technologies, which enable new relationships—and create new demands—between customers and service providers.

It is against this backdrop, rife with challenges, that leaders of today’s bureaucracies must seek to achieve positive results. In a recent research effort and in our experience, Monitor found that about one in ten bureaucracies can truly be called high-performance organizations that not only operate highly efficiently but also deliver  superior results in serving their constituencies.

Another 25 percent are poor performers dwelling in a “red zone” of failure, exhibiting significant or material performance shortfalls. The rest are in the great middle. They suffer inefficiencies and waste limited resources. The majority of large public organizations are stuck on a performance plateau of “good enough for now.”

There are many reasons why reaching high performance is difficult for any organization, and additional factors make it even harder in the more-constrained, more-transparent public sector. In the paper that follows, based on our practical experience with clients in all types of organizations and our recent research effort looking specifically at large bureaucracies, we shed light on the drivers of and barriers to high performance and derive a set of actionable improvement imperatives without which significant change cannot occur.

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