The provision of consulting services to public administration and the public sector must respond to the particular challenges and problems of the sector. In turn these challenges and problems derive from the national, social and economic context and, in large measure, the present and future policies of the government. Governments turn to consultants because the challenges they face are new and complex and the right responses are difficult to find in the absence of precedents, experience, and resources for adequate analytical and conceptual work. In addition, governments are constantly exposed to political pressures and criticism, which may or may not be justified. Comparisons with the private sector are frequently made, hence the growing interest in evaluating and using private sector experience to enhance effectiveness and efficiency in the public sector.

The evolving role of government

The role of government in modern society is pervasive. Not only do governments provide or regulate a vast array of services, they also provide the legislative framework for governance. Government can achieve its objectives in many ways: by producing and delivering a service itself; by making direct payments to individuals and businesses; by setting up a government-owned commercial enterprise; by providing direct grants or low-interest financing loan guarantees; by offering tax incentives to individuals and businesses; or by regulating business and other activities of individuals and organizations.

The total outlay of government is between 30 and 50 per cent of gross domestic product (GDP) in most Western industrialized countries, while in some developing countries the public sector represents an even higher proportion of GDP. Governments also provide a relatively high percentage of total national employment. An exhaustive list of challenges facing the public administration sector in various countries would be very long indeed. Governments have sought assistance from consultants on a wide range of economic, social and administrative issues.

Government needs to be reinvented; there can be no prosperous and democratic society or flourishing market economy without a strong and effective government. Criticizing governments in general terms is of little use: what is needed are workable proposals. We are going to learn ten broad principles, or directions, that underscore how public organizations can “reinvent” and structure themselves, moving from centralization to decentralization, from monopolies to competition, from bureaucratic to market mechanisms and from funding inputs to funding outcomes or results.

reinventing government

The ten principles:

  1. Catalytic government: steering rather than rowing.
  2. Community-owned government: empowering rather than serving.
  3. Competitive government: injecting competition into service delivery.
  4. Mission-driven government: transforming rule-driven organizations.
  5. Results-oriented government: funding outcomes, not inputs.
  6. Customer-driven government: meeting the needs of the customer, not the bureaucracy.
  7. Enterprising government: earning rather than spending.
  8. Anticipatory government: prevention rather than cure.
  9. Decentralized government: from hierarchy to participation and teamwork.
  10. Market-oriented government: leveraging change through the market.

When management consulting was first introduced to public sector management, assignments tended to be general in nature. In recent years a number of factors have changed this pattern. Government programmes are becoming more complex. There is a need to improve the productivity and social impact of government services in the face of shrinking budgets and the steadily increasing demand for more diversified and higher-quality public services. Advances in information technology are both facilitating and requiring the redesign and re-engineering of major government programmes and services. As a result, the nature of consulting services required by this market is becoming more specialized and more complex. Most of these services tend to be in one or more of the following four areas.

  • Strategy and policy advice, generally related to wide societal or administrative problems facing the public sector. Management consulting services are generally bought by the top echelon of public sector managers and politicians, who aim to clarify options and determine the optimum direction in a highly complex environment. This market is small, and is generally limited to consultants with publicly recognized experience in the policy area.
  • Designing, developing and managing programmes and operations is an area in which there are far more frequent requests for management consulting assistance. These requests may be made by public managers, in reaction to an evaluation or audit, or may be triggered by consultant marketing.
  • Adjustment of the machinery of public sector organizations. These adjustments usually focus on organizational structures, processes and supporting systems such as finance, procurement and human resource management. Concerns to increase productivity and use new information technology to the full have greatly intensified the pressures for public sector managers to restructure the processes and systems for which they are responsible.
  • Facilitating change processes in public sector organizations. Whether the change is to the structure of the organization and its way of doing things, or to supporting systems, the management of the change process itself is critical to the success of the organization. Consulting support in establishing continuous learning, total quality and performance management processes can provide the framework for the change process. With the reduction of in-house services, public sector organizations are increasingly retaining consultants to provide training and counselling services to their staff. Training is frequently needed in management and communication skills for new organizational processes, as well as in standard management and technical areas.

Understanding the public sector environment

The worst error a consultant can make in entering the public sector is to believe that management is the same everywhere and that solid private sector experience provides all the answers. True enough, drawing on private sector management know-how is currently one of the principal ways of improving public management. However, there are significant differences in complexity, driving and impeding forces, time horizons, resource constraints, hierarchical relations, organizational cultures and traditions, individual motivations and other factors that make public sector processes and organizations different from private ones.

Most, if not all, public sector problems are embedded in larger social, economic, political or administrative issues. It is very important to understand thoroughly the nature and dimensions of the problem. The problem presented is often deceptively simple, and it is sometimes necessary to build problem definition (with the various stakeholders) into the consulting process. Inadequate problem definition, conflicting views of what the real problem is and how it should be handled, and an insensitive approach to social, political and environmental issues can lead to an unmanageable assignment, especially in its later stages.

Public sector decision-making

Public sector decision-making is the process by which a government or government agency responds to a societal or an administrative issue.

Societal issues are those social or economic problems or opportunities that require collective action by society, generally through a government programme or agency. Government programmes  be they services produced or arranged by the government, regulatory programmes or economic grants to individuals or businesses – require careful analysis, planning and organization.

Administrative issues are problems or opportunities related to the machinery of government. A government is a large administrative system, organized to provide different types of service or to deliver regulatory programmes. As with any large administrative system, it must develop organizational structure, policies and procedures. It must also operate a multitude of administrative services. These administrative services may or may not affect the public at large, but their quality and productivity strongly influence the efficiency and image of the whole public sector.

The process is initiated when issues arise in society or in the machinery of government. Public sector decision-making usually comprises four major steps, in each of which there may be a demand for management consulting assistance. To understand the nature of the issue, data collection is required (step 1). Many public issues are by their nature complex, and data collection may be extensive. Data may be collected from secondary sources or as primary data by surveys or other means. It is particularly important to understand the scope of the issue being examined and the decision elements that the data will have to illuminate, in order

to decide on the extent, depth and nature of the data gathering.

The collected data are analysed (step 2) to develop different strategies for a programme. Once again this analysis may be relatively simple or very complex depending on the nature of the issue.

Consultation with major stakeholders (step 3) is not unique to public decision-making, but it is of particular importance in the government sector. Invariably societal issues and some administrative issues affect a great many people in different ways. Clearly identifying and consulting stakeholders, both within government and in society, can be essential to the weighing of strategy alternatives and the eventual success of a programme.

When the three preceding steps have been completed, an alternative is selected (step 4) from which to develop a programme. This selection will be heavily influenced by the opinions of all stakeholders, including the government of the day, the public at large, special interest groups, and the body of public servants. While good data collection, analysis and consultation can greatly facilitate decision-making, decisions themselves are strongly value- based and, unlike most private sector decisions, must respond to many conflicting interests and criteria.

Once a decision has been made, it must be translated into a carefully designed programme, which should be evaluated during and after implementation. The evaluation may lead to adjustments to the programme. A specific initiative may not involve all the steps of the process as described, but generally a significant initiative must go through the entire process. The process becomes more political in the later stages of decision-making.

National and local politics

Important decision-making processes in the public sector are political processes even if the issues concerned are technical. Minor administrative decisions, seemingly without any political implication or significance, may involve political criteria and can become politicized under certain circumstances. Senior administrators may well emphasize their independence and non-political approach to decisions; but politics are omnipresent and the power of political parties and their coalitions shapes public sector decision-making through senior personnel appointments, reorganizations, budget increases and cuts, changes in legislation, decisions taken by the council of ministers, and more or less direct personal interventions and lobbying. Invariably, politicians think of the political impact of legislation, budgetary choices, resource allocations, decentralization, programme proposals, investments, changes in public services and their costs, etc. The nature of a particular national or local political scene is extremely important to consulting. In an atmosphere of political polarization, hostility and confrontation, even the most rational and needed practical proposals may be difficult to pursue and may be considerably delayed or even discarded.

Opposition parties may attack and destroy them for purely political reasons. In less confrontational political environments, national interests may prevail over ideology and political party interests, though not without negotiation and compromise. The status, quality and independence of the civil service will also influence the quality of relationships of public administrations with consultants.

Social objectives

A key requirement of political decision-making is the balancing of social and economic objectives in developing and implementing public policies and programmes. Social objectives may include the development of specific regions, the promotion of small businesses, job creation, education and services for minority and underprivileged groups, equitable distribution of contracts and purchases, the development and improvement of public services, provision of vital but costly services to remote regions, environmental protection, and so on. A problem often faced by consultants is that social and economic objectives and criteria are vague, inaccurate or even conflicting. It is usually necessary to seek an operational (explicit and measurable) definition and categorization of social objectives, draw attention to their cost side and consider alternative ways of financing them.

Attitudes to change and to consulting

Seasoned administrators, who may have seen many unnecessary reorganizations, unfulfilled political promises and failed projects, tend to be cynical about new change proposals and consulting projects. The pressure of competition and the opportunities created by globalization, market liberalization, new technologies and other developments tend to have a smaller impact on public administrations than on private businesses. Consultants may be viewed with suspicion and distrust, as outsiders who have the easy job of writing another report and then leaving the organization, while the public manager will once more be left with a proposal that cannot be implemented, without any real support from superiors, and with insufficient resources. Consultants may be seen as privileged individuals whose remuneration is out of proportion to their experience, contribution and responsibility.

The consultant’s attitudes and behaviour

Experienced consultants are aware of these apprehensions. They realize that the key issue is to develop a relationship of trust and an understanding of the client as a person. Many public managers are competent and dedicated people working in systems that do not encourage high performance, make changes difficult, and require special skills and approaches to get anything improved. The consultant must not only understand why certain things are possible and others not, but must empathize with the client and develop a true partnership in working on

solutions that the client can accept as his or her own and defend with superiors, elected public bodies and even with the public at large. It is important to believe that quality public services are essential to the life and development of the community, including healthy development of the private sector. A negative and unduly critical attitude to public sector managers and other civil servants is counterproductive and inhibits effective problem-solving.

“Shoulds” and “should nots” in consulting to government

“Shoulds” that work

  1. Show knowledge of the agency’s methods, procedures and processes.
  2. Demonstrate genuine interest in the public sector work environment and the difficulties faced by public servants.
  3. Learn the specialized jargon.
  4. Understand how the agency is measured.
  5. Treat each government employee as an individual, separate from governmental stereotypes.
  6. Match your own staff qualifications closely to the agency’s requirements.
  7. Recognize that decisions often take longer than in business.
  8. Respect the fiscal year constraint.
  9. Identify and meet the client’s perception of a good job.

“Should nots” that don’t work

  1. Refrain from a hard-sell approach.
  2. Avoid designing projects that require a great deal of interdepartmental cooperation.
  3. Don’t just finish a project but “ease into the completion”, suggesting review steps and follow-up activities.
  4. Don’t forget to keep the client fully informed and closely involved, even if the client tries to avoid responsibility.
  5. Don’t underestimate the role of the written agreement, especially with deliverables.

Working with public sector clients throughout the consulting cycle


Most marketing to the public sector (development of leads and identification of consulting projects) is through networking and personal contacts. A good network can only be developed over the course of time and requires constant effort to maintain. In a limited number of cases, it can lead to direct selection, but more often will facilitate pre-selection and shortlisting.

Most large assignments in the public sector are awarded on the basis of competitive bids; the success ratio of firms bidding competitively varies but is not very high, and preparing proposals is both expensive and time-consuming. Consultants are therefore well advised to develop an efficient process for competitive bidding and to try to maximize their chances of repeat business, which is much less expensive to obtain than is new business. It is useful to develop some business as sole-source, directly awarded contracts: these are generally small, but are relatively inexpensive to obtain and permit consultants to build up and maintain good client contacts.

Selection through public procurement

The selection of consultants, as indeed of other goods and services, has to comply with legislation and rules applied to public procurement in general. What, then, is typical of the public sector? Invariably, formal, precisely defined and structured procedures are used. Most probably there will be an official document, issued by a government agency, which describes the procedure and criteria for selecting a consultant and provides information and guidelines, contract clauses, forms and the like.

The reasons for the use of mandatory formal procedures in the public sector can be summarized as follows:

  • to give all eligible candidates the same chance;
    • to increase the probability of identifying and choosing the most suitable consultant;
    • to make selection “transparent” and less open to criticism;
    • to reduce the risks of favouritism, nepotism and corruption;
    • to harmonize the approaches used and transfer good experience among various government departments and public agencies;
    • to improve the overall quality of consultant selection and appointment in a complex public sector environment.

As a rule, the procedure separates project identification and the drafting of terms of reference from project implementation. A consultant who helps the client to develop a new project idea, analyse the situation and the client’s needs, and produce the terms of reference is regarded as an “insider” and is not usually authorized to participate in the bidding for project execution. The consulting process is thus split into two separate phases, for which different consultants are engaged. This can create technical difficulties and discriminates against the consultants who do the creative and conceptual work of designing the project and producing terms of reference. Conversely, consultants who implement a project may not feel responsible for conceptual flaws because they follow the instructions – which may be very detailed – in the terms of reference. They can always refer to the terms that were given to them if the client is not happy with the focus of the assignment and the results produced.

Data banks. Many public sector organizations maintain a data bank of consultants. These data banks may have thousands of consultants and consult- ing firms, classified by skill areas. In some cases, registration with the relevant data bank is a prerequisite to receiving invitations to make a proposal or being eligible to supply services.

Competitive bids. Depending on the size of the proposed consulting assign- ment, competitive bids may be requested from consulting firms or individual consultants. Bid documents must generally conform to detailed specifications; failure to respect these specifications leads to the disqualification of the bidder. The evaluation procedures of these bids also depend on the size of the proposed assign- ment: the criteria, and often the results, are usually available to the bidder.

Budgetary constraints. There may be a strict budgetary constraint limiting the size of the assignment, or predetermining its time schedule.

Managerial discretion. Despite the predominance of formal procedures, public sector procurement of consulting is not totally inflexible. As a rule, small assignments may be arranged by direct selection or using simplified procedures. In certain cases, the appointment of consultants who have done a satisfactory job may be authorized for further services related to the previous job.


Both consultants and public sector client agencies may have their standard contract formats. In such a situation, the consulting firm will normally be more flexible and agree to accept its client’s mandatory contract format. Several aspects of contracts with public sector clients ought to be stressed:

  • Definition of results should be clear and detailed (what results, including their quantity and quality, who will identify and endorse results, who will assess quality, who will have the final word).
  • There needs to be a clear understanding of what is meant by implementation and how far the consultant should go, e.g. in implementation of a new system, what is understood by “system”? Does the consultant have to deliver a pre- liminary proposal, complete documentation, a system that works, a system plus trained staff to operate it, a system that has attained agreed parameters? etc.
  • The participation of the client’s management and staff should be specified precisely, especially for projects that cannot be completed without this participation.
  • Confidentiality is a key issue.
  • The consultant’s right and obligation to contact directly and consult the public administration’s own clients, users and stakeholders should be specified.
  • ●    The fee structure should be clear (what is reimbursable and at what rates, e.g. subsistence allowances, first-class air tickets or hospitality expenses).
    • The budget and payments structure and schedule should be clear (to comply with budgetary and payment periods and procedures of clients).
    • The fee levels should be specified. Requests for proposals generally ask for detailed information on pricing, including the daily rates and time allocation of individual consultants. Often maximum or set fee rates are established by regulations, and these may be below market rates in the private sector.

Many experienced consultants consider that in the public sector, people and process problems prevail over technical problems. It is important to adopt an approach that includes full consultation and communication with all stake- holders. Consultants can be excessively idealistic or tempted to recommend the best theoretical solutions. While there is academic satisfaction in finding a “best” solution, what matters most is finding solutions that are practical, acceptable and stand a good chance of being implemented. A recommendation that leads to real change is worth any number of elegant reports that will gather dust on the shelf. Full consultation will ensure that conclusions and recommendations do not surprise and antagonize stakeholders, although it is in the nature of societal problems that not all stakeholders will be equally satisfied with a recommendation.

As with all consulting, public sector assignments must be managed for quality, scheduling and budget. Perhaps the greatest risk with public sector work lies in inadequately forecasting the amount of time necessary for working with stake- holders and for the decision process in general. There are no short cuts in the process of consultation with stakeholders, and neglecting this process can have painful consequences. Another characteristic of most public sector assignments is the need to produce well-edited reports: these documents are, or might be, made public and care and time should therefore be given to their production.

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