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As we enter a period of intense economic uncertainty on the back of one of the biggest public health crises in modern times, leaders from the public sector must feel like they’ve been thrown out of the frying pan straight into the fire.
While macro pressures – like high inflation, high interest rates and high energy costs – are being uniformly applied across public and private ownership structures, business leaders from the public sector highlighted the unique challenges they are currently facing during Criticaleye’s recent Public Sector Forum, held in partnership with Capita.
One of the key threads running through the discussions centred on the complexities associated with implementing meaningful change during a period where employees are being tested every day and pay is simply not keeping pace with the broader economy.
Gary Kildare, a Non-executive Director at Defence Infrastructure Organisation and a Board Mentor at Criticaleye, said: “There's a £55 billion fiscal hole that needs to be addressed in the next few years. In real terms, that means a reduction across the board for all departments. I think all of us – whether part of the public or private sector – are dealing with constant change, volatility and, in some cases, unpredictability.”
Responding to risk
When there are periods of high risk and instability, there can be a tendency for leaders to exercise more control and manage more tightly. This can mean over-governing, becoming even more risk averse and putting too many obstacles and limitations in place. “Sometimes as a leader, you have to find ways to loosen some of the strictures in order to let the organisation and colleagues move forward more quickly,” said Gary.
Criticaleye CEO Matthew Blagg highlighted the pressures bearing down on the public sector, but also emphasised the opportunities available to those leaders willing to make bold decisions. “We've collectively gone through a massive disruption and have a period where everyone is shaken up. Boards have to recognise the ambiguity and that executives are very near to burnout.
“Making small steps that everyone can see is currently more important than big statements. Despite all the difficulties that come with this environment, it’s actually a time when you can make a huge impact. Strong leadership and capable Boards will really make a difference.”
Participants in the Forum were asked to identify the single biggest barrier to executing on strategy. While ‘no clear strategy’ (34 percent) garnered the highest percentage of responses, ‘lack of funding’, ‘loss of key talent’ (both 25 percent) and ‘inadequate IT/technology’ (14 percent) were notable replies.
With likely restrictions on healthcare spending overall and nursing vacancy numbers at a five-year high, the NHS is managing several of the aforementioned challenges on the back of numerous strains caused by the pandemic. Indeed, the impact of the last three years on NHS staff manifested in a positive mandate for strike action – the first time the nursing workforce has taken such action in 162 years of the Royal College of Nursing’s existence.
However, one positive development that came out of the pandemic experience was the rapid rollout of an integrated care system, amongst other digital innovations. “We rolled out digital consultations, which was a programme of work we did in about three weeks, because we needed to. That was unheard of,” said Caroline Anderson, HR Director at Great Ormond Street Hospital for Children, NHS Trust.
This speaks to the rewards that can be reaped by having the mentality to embrace transformation, particularly with technology unleashing those changes towards a more efficient overall operation. “I do think that technology is an area that can yield and deliver much more, particularly at a time when there’s resource pressure,” Gary added, before advising peers to remain pragmatic with regards to big ticket changes in the current climate.
“We tend to think about five-year and ten-year cycles in the public sector, but a lot can happen in just one year, as we’ve seen. Everyone has to think about doing things differently, speeding up cycles and being more pragmatic. Five years is a lifetime for everyone right now.”
In terms of implementing technology, it’s often smaller upgrades and improvements that can contribute to noticeable improvements to internal operations and service delivery, Gary and Caroline agreed.
“Sometimes it’s about your core infrastructure,” said Caroline. “It’s your processes, your systems, your connected technology that releases the efficiency, not the great big shiny thing. It’s the fixing of the infrastructure process and systems that actually often releases the efficiencies.”
Motivating Staff
The discontent among many public sector workers cannot be underestimated or air-brushed. Serious problems exist and industrial action will continue for the foreseeable future given the restricted pay environment.
From a leadership and management perspective, it’s going to be difficult. David Lewis, Chief of Transform and Consult, Public Services at Capita, emphasised the importance of communication and the onus on leaders to keep it meaningful. He described the process of building mutual trust amongst upper management and the wider team as “people talking to people".
 "I am a huge advocate of engagement and ensuring that everyone, no matter where they sit in the organisation, is empowered to have a voice, share ideas and contribute to success,” he said.

“We regularly ask our people what they feel they need to be successful, healthy, happy and want to come to work. We actively work with our people to collaboratively define structures that work for everyone while delivering better outcomes for our clients and service users."
Making small changes on the ground to mitigate the various impacts of the challenging economic environment is another way in which public sector leaders can keep staff motivated. For instance, Caroline recommended maintaining a level of flexibility with regards to shift patterns, which could help those staff struggling with the cost-of-living crisis.
“It’s that kind of support that can be defined at a local level, because staff feel that connection to their line manager rather than the organisation itself, along with encouraging line managers to be thoughtful of the current context people are living in.”
This example is exactly the kind of simple mindset shift that was championed by speakers throughout the Forum to help public sector organisations manage through the upcoming storm. But ultimately, it will require integrity, openness and strong emotional intelligence to navigate through this testing period. 

“We need to be very honest and mature in leadership and management,” said Matthew. “What you are seeing is the need to have managers that are supported heavily, because if your management structure falls over, then I think you have a huge issue.
“Leaders are there to inject energy and that energy cascades to the team underneath them. So, if you're sitting in an organisation where the Board and the leadership team are flat, then you've got real trouble.”

Jacob Ambrose Willson, Senior Editor, Criticaleye