Delivery as a Management Problem

This article was published by McKinsey & Company in honor of the Skoll World Forum.

Delivering social goods, as well as services and social change, in developing countries is a great source of frustration for governments and development partners.

Systems in developing countries—whether economic value chains, education, health, or other kinds of systems—are complex. Governments and development partners work with a fragmented, diverse set of stakeholders that have variable capabilities and often conflicting goals. They typically must contend with a disparate, low-income (and often ill-informed) “consumer” base, a weak and costly supply-chain infrastructure, corruption, and political intervention. Organizations typically work within their corner of the system, unable to see it as a whole or to optimize that whole. In such a system, no one—not even the government—can act as a single point of control.

No wonder delivery is hard.

Yet such complex systems share another characteristic: They are adaptive, meaning leaders in the system learn from experience, share information, and can shape it through individual and collaborative actions. Over the past decade, the study of complex adaptive systems in a management context has identified a number of shaping actions that can accelerate improvements in system effectiveness and efficiency. By deploying such accelerators across the system, governments and development actors are making marked progress in delivery, even in the most challenging environments.

Accelerating improvement in delivery

In 2011 and 2012, a team led by the chief minister of Punjab, in Pakistan, supported by the United Kingdom’s Department for International Development (DFID), worked to improve the province’s school system, resulting in an additional one million children enrolled and a reduction in daily teacher absenteeism by more than 50 percent. The number of schools with upgraded basic facilities (for example, toilets, drinking water, electricity, and boundary walls) rose to 91 percent from 69 percent. Some 180,000 teachers received training and follow-up coaching in the field to increase the quality and consistency of daily lessons.

This is just one of several recent examples where development actors collaborated with others to improve delivery at scale through systemic, managerial actions. Typically, such success stories have included some, if not all, of the following six accelerators.

Catalyze joint ownership and action among leaders representing a cross-section of the system. The aim is to raise their awareness that they are indeed the system’s leadership team, lift their personal aspirations to leave a lasting legacy, build a shared mission and pursue collective goals consistent with individual leaders’ goals, and actively build leadership skills through “field and forum” approaches, which combine learning through real work with coaching and classroom-style training.

The Sustainable Food Lab (SFL), for example, assembled more than 40 leaders from agribusiness, food manufacturing and retailing, grassroots farming, nongovernmental organizations, multilaterals, and government agricultural departments in a series of off-site sessions. The SFL worked with the leaders to help them realize that collectively they made up the leadership team of the global food system—or at least a sizable subset of it—across the entire food supply chain, from field to fork. They developed a shared intention to make the food supply chain more environmentally and socially sustainable, and they agreed to cooperate, as leaders of the system, to do so. Over the past eight years, the SFL has expanded to more than 75 members and jointly tackled major issues such as making fisheries more sustainable, helping small growers to access markets, and delivering food without increasing greenhouse-gas emissions.

Whatever leadership role is played by international-development partners, local stakeholders—particularly the local government—should ultimately take the lead in driving delivery-system improvements. Since the Paris Declaration, the development community has accelerated country ownership, including enhancing political and institutional ownership, building local capacity and capability, and strengthening mutual accountability.

Agree on a coordinated, integrated portfolio of initiatives that addresses major delivery bottlenecks across the system (for example, supply-chain gaps, frontline skill issues, specific “customer” behavior, or financing), and reallocate roles and resources to relevant stakeholders. This requires increased transparency into stakeholder budgets and resources, as well as a willingness to adjust roles and reprogram activity based on relative return on investment, rather than simply encouraging individual actors to pursue their own agendas.

For instance, in Ethiopia, the government collaborated with the Bill & Melinda Gates Foundation to identify bottlenecks in the agriculture system, from seeds to farmers to manufacturing to market to consumers. They worked together with international-development partners and local agencies to revamp priorities and investments, leading to a revised slate of initiatives they have agreed to pursue jointly.

The government of Tanzania, supported by DFID, recently set up “delivery labs” where stakeholders from the public and private sector convene to co-develop solutions to pressing delivery problems. Such efforts produce creative ideas and practical, detailed plans that enable successful implementation.

Shift mindsets and behaviors to enhance delivery. Behavioral psychology has made significant contributions to delivery. Behavior change communication (BCC), social mobilization, and related approaches have been used to improve outcomes by positively influencing patients, farmers, nurses, teachers, and others in the system. Governments and development partners can accelerate behavior shifts in two ways.

First, they can systematically identify and directly tackle the mindsets underlying current behaviors across the delivery system. In Namibia, for example, health officials discovered that pregnant women avoided visits for first-trimester antenatal care (ANC) primarily because they believed they were medically unnecessary and found the experience unpleasant and long (a typical visit lasted six to seven hours). Meanwhile, nurses drew their vocational pride from clinical expertise rather than patient satisfaction, so they felt little need to attract patients or improve their experience. Health officials realized that they needed to shift mindsets among both groups to sustain any improvement in delivery.

Changing behavior works best when four types of interventions are applied together:

• Creating a “felt need” or conviction to shift behavior (typically the focus of BCC). In Namibia, health officials ran radio call-in shows to educate prospective fathers and mothers about the critical need for first-trimester care. Officials took ANC nurses on “learning journeys” to understand the experience from a patient’s point of view.
• Revamping processes, systems, and incentives to support desired behaviors. Namibian health officials used lean-operations techniques to streamline clinic procedures, reducing ANC visit duration by 30 percent and freeing nursing capacity to provide better care to more patients. Shortened visits also attracted more women to go in for first-trimester visits.
• Equipping people with the skills to support the new behavior. Nurses received supplementary training in management and patient interaction.
• Using role models to reinforce desired behavior. In Namibia, the local hospital chief would drop by the clinics first thing in the morning to encourage staff to arrive on time and to demonstrate higher-quality patient care through his own interactions.

Engage the private sector to inject new resources and capabilities into the system. Private-sector know-how in performance management, supply chain, lean operations, “design to value” (for example, low-cost design of products and services), information technology, and mobile communications has produced big improvements in delivery effectiveness, efficiency, and sustainability.

For example, in Senegal, healthcare facilities had contraceptive stock-out rates in the 80 percent range. Medical staff found it challenging to reliably forecast demand and order supplies, given their significant clinical workload and lack of inventory-management skills. In response, the government outsourced forecasting and ordering to private logistics providers, using a model known as informed push. Contraceptive stock-outs have been practically eliminated in two states, with plans to scale up the program nationwide.

In agriculture, private-sector-run “nucleus farms” are becoming popular, as they provide access to inputs, finance, training, and markets for neighboring smallholder farmers. Governments in Africa, often supported by development partners, now promote such approaches as a more effective way of increasing smallholder productivity than expensive public-subsidy or extension programs.

As we describe elsewhere in this volume, the keys to successful private-sector partnerships include the alignment of objectives, a mutually beneficial value proposition and clear exit strategy, and coordinated investment and action. Development agencies can help governments in defining and managing fair public-private partnerships as developing countries often lack experience and run the risk of being disadvantaged in dealing with companies.

Deploy new technology to drive major improvements in delivery. For example, M-Pesa, a money-transfer system launched in 2007 by the cellular-phone provider Safaricom, linked 15 million Kenyans to financial services in less than five years. M-Pesa not only reduces transaction costs in transmitting funds to families and small businesses, but also enables a range of innovative services in health, education, agriculture, and finance to reach the poor at a lower cost. In agriculture, for instance, UAP Insurance and the Syngenta Foundation are offering farmers index-based insurance using M-Pesa to collect small premiums and issue payouts. The social enterprise KickStart uses M-Pesa as a mobile layaway plan, collecting small installment payments from farmers acquiring irrigation pumps.

Technology also offers new opportunities to collect, analyze, and use data. In Nigeria, high-resolution satellite images and GPS are replacing hand-drawn maps for polio campaigns, enabling vaccinators to plan more efficient routes and reach areas they had been missing. In the Philippines, school officials and governments use GPS, mobile devices, and SMS to gather student-performance data from local monitors and then publish the information to increase school accountability.

Establish “delivery units” to drive coordinated execution of the integrated portfolio of initiatives in the system. Michael Barber and Tony Blair describe in this volume the genesis of the delivery unit in the UK government in the 1990s. Increasingly, such units are being established as part of broader systems to ensure timely, coordinated, effective delivery from the president’s office to the front line.

For example, the Ethiopian government created the Agricultural Transformation Agency (ATA) to coordinate and manage the portfolio of initiatives described above, as well as to provide hands-on support to the ministry of agriculture, where delivery capacity is constrained. Eighteen months into its existence, the ATA has more than 130 staff members, combining local talent with international experts who work as one team. The ATA found that Ethiopia had developed technologies for improving productivity that failed to reach farmers. The agency initiated the introduction of new planting technologies and practices to more than 75,000 smallholder farmers, helping to double productivity of the Ethiopian staple grain teff through improvement in the seed-planting rate. The ambition is to roll out the program to one million smallholder farmers in the next year and double overall national teff production in five years.

We call on governments and development partners to apply the above approaches in concert to tackle their most significant delivery issues. We have seen how such an integrative, holistic, and coordinated approach can accelerate improvements in delivery effectiveness and efficiency, even in complex systems.

To be sure, working in this way means overcoming orthodoxies. Governments should lead and take ownership of the effort. Ministers must strive to work across silos. Development agencies should have the courage to support new approaches and build appropriate capabilities. Finally, private-, public-, and social-sector leaders must overcome suspicions and work together in new ways. The stakes could not be higher.

Editor's Note: This collection of articles is part of "The Art and Science of Delivery," an anthology of essays published by McKinsey & Company in honor of the 10th Anniversary of the Skoll World Forum. It is the most recent installment of McKinsey's ongoing series, Voices on Society, which convenes leading thinkers on social topics. (Copyright (c) 2013 McKinsey & Company. All rights reserved. Reprinted by permission)

Read more stories by Jens Riese, Lynn Taliento & Kathleen McLaughlin.