Public Policy Making: The 21st Century Perspective

by Thei Geurts

Over the past decades, many reforms in government have been aimed at increasing efficiency, effectiveness and value for money. Mostly these reforms are characterized by very little focus on the actual policy process and the way it affects the ability of policy makers to meet the needs of constituents in an increasingly complex, uncertain and unpredictable world. However, if this core process were to be modernized, it would yield considerable economic and social benefits, including enhanced productivity, openness, transparency and participation, as well as actionable and interoperable policy intelligence.

It is for this reason that I wrote the booklet “Public Policy Making: The 21st Century Perspective”. The booklet offers a concise overview and analysis of the nature of the public policy making system, its challenges and its decelerators for modernization. Based upon the analysis it addresses the opportunities for improvement in the primary policy making process as well as in the political and production dimension of the process. These improvements are based upon a collaborative approach to support multi stakeholder and participants involvement in the policy making system.

Public policy making can be characterized as a complex, dynamic, constantly evolving interactive and adaptive system. The process is stakeholder-driven. Actors are engaged in a goal-driven decision-making process and have a great deal of autonomy in the way they organize their work. The process is people driven, requires flexibility to respond ad hoc to events in a way that is appropriate to the specific known context at that moment in time. Higher demands from the system in which policy makers operate require a level of support that existing facilities cannot deliver. The current support infrastructure for policy makers is characterized on the one hand by isolation, fragmentation and non-responsiveness to change, and on the other hand by a lack of crucial support elements.

Policy makers need an infrastructure that seamlessly integrates with regulation-specific sources and services. This infrastructure should be designed for people and built for change. We have concluded that policy makers need an environment that brings together heterogeneous activities and functions in a meaningful actionable ensemble, organized around the case of a policy initiative and based on the making of decisions about a policy intention. The combination of case management, dynamic rules support and knowledge support instantly adds high-level value to the support provided to policy makers. It can be used to synthesize policy making and integrate it seamlessly with policy execution, thus creating a solid basis for the innovation of public sector services. And last but not least, policy makers can reap considerable economic and social benefits, including bringing government closer to citizens.

The booklet can be obtained at www.lulu.com. A free pdf-dowmload is also available.

The book’s author has also written a white paper entitled “The Policy maker Workplace”, which describes Be Informed’s solution for innovating the policy making process. This white paper can soon be downloaded free of charge at www.beinformed.com.

Plato's cave: what is real and what is not?

By: Frank Buytendijk, chief marketing officer

To question what is real and what is not, Plato tells a story about a cave. In the middle of a cave, a number of prisoners sit against a small wall, chained since childhood. Behind them there is a huge campfire, which they cannot see. In between the campfire and the prisoners, people walk in and out. All the prisoners can see is the shadows of these people on the cave’s wall in front of them. And because of the echo, even the sounds the people make seem to come from the direction of the shadows. The prisoners would know no better than these shadows to be the real world.

Now let’s assume, Plato continues, that one prisoner is released from his chains, gets up and walks around. First he will not recognize anything in this new reality, but after time he would adapt. He would understand more about the new world, and perhaps even understand how people walking alongside a campfire cast shadows on the wall. What would happen if he would return to the other prisoners and tell them about what he has learned. They would ignore him, ridicule him, and if it weren’t for their chains, they would probably kill him.

A story from the ancient past? Certainly, but it still holds true. In fact, this is something to remember every time we sit behind the computer and look at a graph in our business intelligence tools, and study a Visio-style diagram that defines a process. They are not real, they are nothing but reflections. While we stare at the computer, reality is what is happening behind us.

Don't be like the prisoner, mistaking graphs and diagrams for reality. Reality, or the most approximate thing to it, is in conversations between you and your customers. The more you try to model them, style them, and simplify them, the more abstract they become, the more of a shadow of reality they are. Instead, business managers and business analysts should focus on following the conversation with the customers and other stakeholders, and conduct business based on this reality. A business process then becomes not a predefined set of steps, but nothing more than a set of activities that allows you to talk, share and interact. Freely. Really.

Plato’s Cave in an illus­tra­tion from 1604

Why good companies create bad regulatory strategies

By: Thei Geurts

In the McKinsey Quaterly, June 2011 edition, Andre Dua, Robin Nuttall, and Jon Wilkins discuss possible reasons why good companies create bad regulatory strategies. The authors argue as follows:

“The field of behavioral economics is rapidly making its way into the tool kits of regulators. In stark contrast, we’ve rarely heard, in our work with more than 300 companies over the past three years, a senior executive consider the impact that cognitive biases might be having on his or her company’s regulatory posture. That’s understandable—people don’t like to think about the mistakes they could be making—but it’s also a missed opportunity. Our sense is that looking at regulatory strategies through the lens of behavioral economics can help clarify the missteps corporate leaders make and the corrective measures they should pursue.

We’re not suggesting that leaders are downplaying the importance of setting an effective regulatory strategy. On the contrary, in a survey of roughly 1,400 global executives we conducted in January 2011, more than half of all respondents agreed that governments and regulators will be among the stakeholders with the biggest economic impact on their companies over the next three to five years. An even larger proportion expects governmental involvement in their industries to increase over that period—all this despite recent conservative shifts in the United States and the United Kingdom.

Nonetheless, a surprising number of corporate leaders and companies continue to take positions that may seem credible internally but are totally incredible to outside observers and regulators. Simply put, there’s a disconnect between external perceptions and internal beliefs that often undermines efforts to engage productively with regulators. For evidence of this disconnect, consider some other results from our January 2011 survey. Seventy-six percent of global executives responding said they believed that regulators would rate their companies’ reputations as positive. Yet less than a quarter said that their companies frequently succeeded in influencing regulatory decisions. These executives think they’re doing right in the eyes of regulators, but their own, self-reported results say otherwise…”

“A related challenge for companies in regulatory strategy is putting themselves into the shoes of policy makers…”
“Another issue for regulatory strategists is the prevalence of “stability” biases that create a tendency toward inertia. The impact of such biases is acute in regulatory settings because the typical career track of successful executives in many industries—save highly regulated ones, such as telecommunications or electric utilities—doesn’t involve exposure to government issues. As a result, those executives often are personally ill-prepared for shifting political winds that boost the importance of regulatory issues and are prone to underinvest in the regulatory skills of their organizations or to delegate without exercising sufficient oversight. That’s one explanation for the frequency with which companies must rapidly scale up their government-relations function when they or their industries enter the crosshairs of regulators—a phenomenon we saw during 2009 and 2010 as the US health care reform debate heated up.”

Source: Why good companies create bad regulatory strategies
About the authors: Andre Dua is a director in McKinsey’s New York office, Robin Nuttall is a principal in the London office, and Jon Wilkins is a director in the Washington, DC, office.

These arguments led to the following comment by the Be Informed International Business Development Consultant Thei Geurts. The comment is after scrutiny published in the McKinsey Quaterly on the 15th of June 2011.

“Reading this article makes one wonder what the state of companies’ internal regulatory mind-set really is. How sophisticated are their systems for translating strategic goals into policies, of tracking and measuring the output of these policies, of establishing a well-functioning continuous feedback loop, and of using predictive analysis? One may expect a serious gap between strategy and execution, because internal and external strategies require similar attitudes, capabilities, methods, and tools. As in the public sector itself, it must be quite difficult to close the gap between purpose and practice in these circumstances. In other words, one is tempted to assume that creating bad external regulatory strategies could be directly linked to having bad, or at least weak, internal regulatory strategies. By experience I have seen that there are ways to tackle this problem once it is understood and once the company has the capabilities to visualize, perform, and execute the solution.”

“Do you see this connection between external and internal regulatory strategies as well?”

Be Informed to be measured in Function points

By: Willem Dicou

Function Point Analysis (FPA) is a method for measuring the functional scope of an information system, by looking at relevant user functions and (logical) data collections. The unit of measurement is the Function Point (Fp), which can be used in various ways.

A widely used application of FPA is making estimates for system development. The costs for building a system are related to its size: the larger the system, the more expensive it will be. From past experiences we know how many hours it takes on average to realize a function point: the production standard. Subsequently it is possible to calculate the value of a system and compare it to the price it was paid for.

The NESMA (Dutch Software Metrics Association) developed counting guidelines that in 2003 were certified by ISO as an official ISO standard. Basis for the Standard are the NESMA FPA counting guidelines as expressed in the “Manual of counting guidelines for the definition and application of function point analysis”. The standard is known as NESMA ISO / IEC 24570 and is now used in many countries worldwide.

Based on these standard guidelines, Be Informed created a directive by which systems developed using the Be Informed Business Process Platform can be measured, in both the preliminary stages based on the Be Informed Pattern Engine, and subsequently using the models stored in the repository. This directive has been validated by Galorath, an internationally renowned company in the field of software metrics.

Measurements of actual systems show that it is possible to reach a four to five times better score per function point using Be Informed. These results are already significant, but are even more remarkable when we consider that function points within Be Informed are not only used in building and testing, but in the "full life-cycle" of implementations.

Business and IT Alignment

By: Frank Buytendijk, chief marketing officer

I recently received a promotional email for a "masterclass" on business and IT alignment. The training promised answers on the following questions: "how do you know your IT strategy is aligned with your business strategy?", "how can you put together a governance model that ensures IT follows the business?" and "Pitfalls and success factors".

I checked, the email wasn't from 1983, but seriously from 2009. How can we still have that discussion? Has nothing improved in the last 20 years? And moreover, how can business/IT alignment be so misconceived?

First of all, let's define alignment, this is usually skipped already. From a social-psychological view, a person is aligned when the self, self-perception and external perception closely match. The self-perception is how you look at yourself, and the self is who you really are. If there is a mismatch you could become delusional, frustrated, and generally uncontrolled. You don't understand yourself. If there is a big gap between the self and self-perception, and the external perception, people expect you to be someone that you are really not. This leads to role distance, and unauthentic behavior too. The same can be said of organizations. If there is a big gap between true organizational behavior and who we think we are, we are kidding ourselves. Did you check out your mission statement and values lately? And if there is a big gap between external perception and the organization's true motives, you spend more time figuring out how to spin your strategy externally than actually executing on it. Quite dysfunctional.

Same with business/IT alignment. Like any relationship, it needs to come from both sides. Business perception about value needs to match the IT perspective. But... functional relationships should be based on equality. If both parties agree that IT should follow the business, you're in a dependent, submissive relationship. Not mature.

Business needs to align to IT, as much as IT needs to align with the business. It's a two way street. The nature of technology dictates so, for starters. If you are a carpenter, and you buy one of those circular saw tables (new technology), you'd better organize your process and work around that table, instead of lifting the table to go to the wood. If IT were to follow the business, deleting text on a screen would have to be done with Tipp-ex. The whole point of technology is to not align with the business, but to bring innovation. New, different, better ways of working. If anything, business should align to technology in order to be more successful. In fact, secretly we do so already. It has become a best practice to adapt the business to the processes built into the ERP system and CRM application, and rightly so.

Then, let's discuss Business/Business alignment. How many times is IT struggling with suboptimal business cases, based on budget held by the business, by having to put in a departmental solutions, because each department is "unique"? IT is often found to be "nerdy" and having "no sense of urgency" for talking about architecture and infrastructure. True, IT driven projects are usually not very successful (the business will see to that), but the only thing worse is a business driven project. Short-term successful, but ill-architected, nothing repeatable, and lots of them combined form one big negative ROI in two years down the road. It is the role of IT to see commonality between functional requirements, and take an integrated approach. It would be a lot easier if the business departments would align with, well, the other business departments, instead of IT having that struggle all the time themselves.

And, while I am on the subject, it's a pity if organizations are still discussing business/IT alignment. The real battlefront has moved on already. The name of the game is value chain integration. Aligning all stakeholders around a successful and sustainable business model. Making sure partners, suppliers and channels all benefit from integrated logistical and administrative flows, while taking into account the requirements of investors, regulators, and society at large. This is how alignment contributes to the business strategy.

But perhaps we should start with something else. Remember the definition of alignment. The self, self-perception and external perception need to closely match. Perhaps the real problem is the gap between self and self-perception. IT people sometimes think too little of themselves, and desperately want to be seen as a 'business partner' and considered of strategic importance. Don't worry. You are. Because of the nature of technology. And IT people sometimes think too much of themselves, claiming they understand the business better than the marketing, operations or sales executives. Don't kid yourself. When was the last time you talked to a customer, and constructed a multi-year deal? Think of yourself as who you really are: at the core of business innovation, while at the same time making sure the business runs smoothly.

Thanks for listening. Rant over.

Change you can believe in

By: Rik Hoogenberg, chief executive officer

Be Informed’s case based approach in administrative processes, that are becoming more knowledge-intensive, allows organizations to boost efficiency, agility and customer intimacy. Organizations that do not postpone the inevitable and carefully plan an overhaul of their business processes with Be Informed profit most from these benefits. Yet many IT projects in large organizations fail. How to succeed in changing the way your organization works? It’s simpler than you might think.

First of all, working with Be Informed allows you to change the way you work. Considering that many administrative organizations have organized their work in overcomplicated systems, procedures and applications, this would seem a logical step, right? Then, make sure your transformation is done by people with a ‘can do’, solution oriented approach. This requires critical minds, looking for the simplest solutions. To give you an example; an administrative organization required an ID from citizens to perform certain actions. Many hours of discussions were spent on which type of ID would suffice: passport, drivers licence, or ID card. ID regulations as described in national law proved these discussions to be pointless; use what is needed, instead of what is currently implemented.

An important reason why many IT-projects in large organizations fail, is that traditionally all requirements, functionalities and so forth need to be exhaustively predescribed and, consequently, built. These projects take years, increasing the risk that the eventual outcome will be outdated upon implementation. Simply because too many changes will have taken place: in business, technology, society, et cetera. Also, many organizations fail to benefit from innovative technology by upholding the complicatedness of their systems and processes in new environments. With Be Informed, organizations don’t need to build systems or applications, we model our solutions based on a central business model, using a pragmatic approach that allows business users to see what they get, and reuse what is there already. Working with Be Informed means successful innovation by simplifying systems and processes.

We don’t ask the business users what they want, we interact with them on what they need to do their job. As car manufacturer Henry Ford once said: “If I had asked them what they wanted, they would have said faster horses”.

Within one or two months we present the first application showing the new way of working, discussing functional requirements with business users. This way, enthusiasm for new solutions is gained from the start of the project, which will prove helpful along the way in which an integrated approach, supported by a solution oriented project team consisting of experts from all corners of the organization will guarantee the organizations ability to embrace complexity for years to come.

What is fact-based, anyway?

By: Frank Buytendijk, chief marketing officer

After the series of articles on how Marx predicted the end of Google and Facebook (part 1, part 2, and part 3), I have just finished a new series of articles on the "analytical world". Again, this series has three parts.

In part 1, I argue that although "fact-based management" and "competing on analytics" both sound really cool, the concepts have some serious shortcomings. According to most philosophers, there is not much we can really know for sure. And analytics, as a model of the world, are removed even one step more from reality.

Part 2 discusses the practical consequences of this analysis, taking recent examples such as the outburst of the Eyjafjallajokull volcano in Iceland and the credit crunch. Both cases where people relied too much on analytical models. Part 2 also contains a critique on predictive analytics.

I do realize it is easy to criticize things, so if I do I should present an alternative view. This I have done in part 3, where I will introduce the concept of "messy analytics". We should pay more attention to factors that mess up the model, as they represent this nasty thing called reality. In fact, I propose to mess up models on purpose, just to see if they can handle what is often called "black swans". Messing up model so they become more precise may sound counterintuitive, but I am almost convinced you will agree with the logic I will present.