Creating Public Value
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CREATING PUBLIC VALUE STRATEGIC MANAGEMENT IN GOVERNMENT Mark H. Moore HARVARD UNIVERSITY PRESS Cambridge, Massachusetts London, England - Copyright © 1995 by the President and Fellows of Harvard College All rights reserved Printed in the United States of America Fifth printing, 2000 Library of Congress Cataloging-in-Publication Data Moore, Mark Harrison. Creating public value : strategic management in government I Mark H. Moore. p. cm. Includes bibliographical references (p. ) and index. ISBN 0-674-17557-3 (cloth) ISBN 0-674-17558-1 (pbk.) I. Civil service ethics. 2. Government executives. 3. Public administration. 4. Strategic planning. I. Title. JFl525.E8M66 1995 353.007'2-dc20 95-18074 public administration. It is those who practice this craft that I primarily seek to aid. SOURCES AND METHODS The ultimate proof of the pudding is in the eating, and I don't want to delay the meal much longer. Still, a cautious diner might want to know something of the pudding's ingredients before taking the first bite. To meet this reasonable demand, I offer the following list of ingredients. The book is based on academic literatures that seem relevant to understanding the context, purposes, and techniques of public sector executives. These include literatures within political science, econom ics, organizational theory, public administration, administrative law, and business management. Perhaps no one ( and certainly not I) can really hope to master these diverse literatures and distill from them the key points they offer for the development of a normative theory of public management. Still, I have been able to scan them and learn some of the most important things that each had to contribute to this intellectual task. The political science literature revealed a great deal about the char acteristics of the settings in which public managers now operate: the political context that surrounds public-policy-making and implementa tion;17 the nature and behavior of legislative institutions;18 how the press behaves and how its behavior affects the conduct of government;19 and what motivates and shapes the behavior of elected chief executives.20 The economics literature not only contained an implicit theory defining the proper role of government in the society,21 but also pro posed some valuable methods for evaluating proposed and ongoing governmental activities.22 Moreover, it suggested how owners and over seers of operations might structure incentives for managers who are supposed to act on their behalf,23 and how complex negotiations might be analyzed and carried out.24 The organizational theory literature provided different images of organizations that clarified why public and private sector organizations behave the way they do.25 It also helped explain why organizations have difficulties in adopting and sustaining innovation and why managers face obstacles as they seek to improve their performance.26 The literature on public administration supplied a rich, well-devel oped theory of public management in a democracy.27 It contributed a philosophy of public management animated by the goal of ensuring effective democratic control over public sector organizations and the INTRODUCTION- achievement of both consistency and effectiveness in public sector op erations.28 It also described the important instruments of managerial influence and how they might best be wielded to produce efficiency and effectiveness.29 In addition, it presented several important studies of what public sector managers actually did and how public sector organi zations did or did not produce consistency in their operations or adapt to changing circumstances.30 The literature on administrative law set out a normative conception of how public decisions involving the use of public resources should be made to ensure fairness and emphasized the continuing importance of ensuring equity and due process in public sector decision-making as well as efficiency and effectiveness.31 This literature also examined key case studies of agencies involved in the adjudication of specific cases.32 Finally, the literature on private sector management offered a differ ent, and in some ways competitive, picture of the context, philosophy, and instruments of management and organizational leadership.33 It fo cused attention on the dynamics of the marketplace rather than the stability of governmental mandates;34 on how to stimulate innovation and change in new missions rather than on how to increase efficiency in old operations;35 and on the role of imagination and enterprise among managers as well as technical competence and dutifulness.36 Of these literatures, the one closest to the task at hand, of course, is that on public administration. This literature provides a treasure trove and a crucial starting point for any effort to give guidance to public sector executives. I have borrowed from it quite liberally. At the same time, I have focused particular emphasis on two ques tions that, though not at the center of the classic literature, did seem much on the mind of practicing public executives. First, how should managers cope with inconsistent, fickle political mandates? Second, how can they best experiment, innovate, and reposition public organizations in their changing environments?37 To reach these questions my Kennedy School colleagues and I added a new ingredient to the mix: the operational experiences of practicing pub lic executives. We tapped into that experience in three different ways. First, we wrote cases describing the problems that managers faced, the calculations they made, the interventions they chose, and ( as best we could see) the results of the interventions. Indeed, over the last decade, the Kennedy School's Case Program has written and published more than six hundred cases describing managerial problems and interventions. 38 Second, each year we encountered several hundred practicing manag ers in the Kennedy School's teaching programs-primarily in our execu- INTRODUCTION- tive programs. Because we taught these executives through interactive case discussions, over the years we learned how they would analyze and act in these cases as well as how the protagonists did. This meant that we often learned as much about management from them as they did from us. As one distinguished colleague explained, "They aren't just students, they're data and teachers as well! "39 Third, we invited distinguished practitioners to join the Kennedy School faculty to ensure close, continuing contact with those whose accomplishments indicated that they knew how to size up and exploit opportunities to create public value.40 They, like the students in our programs, brought the perspectives and wisdom of emerging "best prac tice" into our midst for explication and examination. Having written the cases and heard them discussed by our students and practitioner colleagues, we came to understand them: how the situ ation portrayed by the case was best analyzed, what possible interven tions existed, what their prospects for success were. By repeating this process for many cases, we gradually learned how to generalize and abstract from the particular cases and how to form our generalizations into coherent intellectual forms. It is these forms that I have tried to record in this book. I must acknowledge one more ingredient: the special set of influences that operated within the Kennedy School as an institution. It is fair to say that the view of management developed at the Kennedy School reflected our own intellectual traditions as well as the requirements of the outside world. More specifically, our views of management were shaped by the emphasis that the school gave to the use of special analytic tools drawn from economics, operations research, and statistics to ana lyze the substantive value of proposed or implemented public policies. What was exciting about the study of public policy ( as opposed to the study of public administration) was that it focused attention on the ends of government as well as the means. It also focused on new ideas and innovations in government rather than on routine maintenance of gov ernmental organizations. What admitted one to these conversations was the mastery of the difficult analytic techniques that enabled one to challenge political judgments with an alternative way to gauge the public value of proposed or existing governmental enterprises.41 Given this culture, it is hardly surprising that the view of manage ment we ultimately developed would be one that sought to understand how specific policy decisions were made and implemented rather than one that focused on organizational maintenance or the refinement of administrative control systems ( which had long been the focus of public INTRODUCTION- administration). Indeed, for a long time the idea of effective implemen tation of particular policies (rather than the successful management of public sector organizations) was taken as the central subject of public management.42 This conception of management as policy implementa tion eventually faded because, in focusing on policy rather than organi zations, it left out important questions about how public sector organi zations should be developed and used. It was silent, for example, on the issue of how that portion of an organization's assets that were not engaged in a particular new policy initiative should be used. And it seemed to be indifferent to the effect that a new policy implementation effort would have on the overall performance and position of an or