Digital Leaders Study 2023
Producing effective digital strategies
Visions often depict a future picture of great digital services – but unless governments detail the levers, resources and reforms required to realise their goals, progress is typically slow and shallow
“I see a lot of strategy around the world that has tried to cover it all,” Siim Sikkut, former Government Chief Information Officer of Estonia, said at our online Vision and Planning workshop. “It’s really hard to then say: ‘What is it that you’re really trying to achieve?’ The strategy is as much about what you leave out as what you put in; the more focused it is, the easier it is to start delivering it.”
In terms of the strategy’s goals, Sikkut argued that “there’s a lot to be said for anchoring digital plans into the overall national agenda; some sort of narrative or political goal.” Many of today’s best digital government plans tie the agenda to wider economic growth – ensuring that digital ID systems and open data policies create new business opportunities, for example. Doing so can help garner the support of departmental heads and ministers – a crucial consideration (see Solution 1).
Before producing a strategy, it can be helpful to prepare the ground with practical actions that signal the direction of travel and build momentum. “I was explicitly told when I started my job: ‘Do not start with a strategy. We want you to start by doing things’,” said Andri Heiðar Kristinsson, Chief Executive Officer of Digital Iceland, at the 2022 Government Digital Summit. “The focus initially was very much on some of the low-hanging fruits… something enabling the politicians to say: ‘We did that!’, and to build out that credibility.” Eighteen months later, “we decided to sit down and write the strategy, based on what we’d learned and what we were executing.”
There are also options short of a comprehensive, long-term strategy. Without the right conditions in place, according to USA Federal Chief Information Officer Clare Martorana, there’s a risk of generating “a wonderful white paper that goes on a shelf someplace” setting out policies that “are not implementable, with agencies given unfunded mandates without the budget or the personnel or the talent to execute with excellence.” Her solution was an operating plan: “It’s very tactical; it was designed to show how we flow money through those organisations in order to enable technology delivery,” she explained.
Where digital leaders are producing a full strategy, there are some hard and fast rules. It must balance quick wins with long-term changes in structures and capabilities, commented Sikkut, and map the first steps on the path to distant objectives. “Having a detailed road map doesn’t make any sense beyond two or three years; things change so much in the world of technology,” he said. “You can look quite far ahead in terms of the vision, and then renew the roadmaps on a rolling basis as you make your way towards that goal.”
Surveyed on which capabilities a strategy must focus on delivering (see graph A), our Vision and Planning workshop participants put “a common, cross-government method of identifying individuals, and a secure way of sharing data between departments” in joint first place – giving it a mean score of 4.75, where 4 means ‘very important’ and 5 ‘essential’. This topic is closely linked to the provision of digital ID – rated as their third priority, with a score of 4.6 (see Finding 2).
Graph A: Building capabilities
Data management shared its top spot with “a digital workforce with the required skills, capacity and distribution” (see Findings 5-7); and this is the field in which respondents saw by far the biggest gap between the topic’s importance (rated at 4.75) and how they’d score their own country’s strategy on this topic (3.25, where 3 means ‘mediocre’ and 4 ‘strong’). The second biggest gap between need and delivery was relatively small, at 0.5 points, and lay in the provision of shared components and platform services.
Along with better data management, workforce development and a workable digital ID system, strategies must also foster the development of an expert, well-equipped digital centre. There is a chicken and egg problem here: surveyed on the obstacles to producing a digital strategy in the first place (see graph B), workshop participants first named “a shortage of central digital capacity and/or expertise” – giving it an average rating of 3.6, where 3 means a ‘significant’ and 4 a ‘major’ problem. Where this is the case, it makes even more sense to undertake ‘pitch-rolling’ work and build up capability before publishing a strategy.
Ultimately, though, there is no substantive alternative to building up that central function. Much of the potential of digital technologies lies in creating horizontal connections across government – with departments running joint services, sharing data and using common platforms, for example. This demands cross-government coordination by a centre with both the capacity to monitor departmental plans, and the muscle to shape them. The centre must also be able to track departments’ delivery against strategic goals, ensuring that public bodies are taking steps down the road towards transformation (see Solution 2).
It is pointless setting stretching targets, however, if organisations lack the means to achieve them – so strategies must pay careful attention to the support and assistance given to departments. Surveyed on the reforms most central to an effective strategy – and the extent to which their own national plans address them (see graph C) – workshop participants were most concerned about the “allocation of sufficient resources to support the work required in departments”. This is ‘very important’ (4.0), they said; yet asked to rate their own strategy’s provisions on this point, their average score was ‘mediocre’ (3.0). The “provision of support, advice and practical help to departments” was meanwhile rated 4.1 on importance, and here too delivery lagged – scoring 3.5, midway between ‘mediocre’ and ‘strong’.
This is a key point: after a lack of digital leadership and central capabilities, survey respondents named “departmental resistance to the introduction of new requirements, targets or central powers” as the third greatest obstacle to producing a strategy (rated 3.25). In most cases, trying to steamroller over departmental resistance will only exacerbate tensions: to create the change required, departments must be assisted as well as propelled towards the shared vision (a balance addressed in Solution 3). And that vision must contain clear benefits for departments in terms of efficiency, intelligence, and their ability to realise public policy goals.
Producing a digital government strategy is a complex and time-consuming task; but it’s now widely recognised as essential to meeting the public’s needs and elected leaders’ objectives. So these days digital leaders have more air cover for supportive reforms, while departmental leaders are increasingly aware of the value of digital capabilities. You’re likely to navigate some heavy seas during your strategic planning journey, but the tide is with you.
1/ In producing your strategy, focus on shared development and ownership
In most countries, the digital centre cannot simply instruct departments to follow common policies and standards: departmental leaders’ accountabilities to ministers and parliament are often greater than those to central digital teams, giving them the autonomy and the incentives to resist digital reforms that might expose them to risk or weaken their control. As a consequence central digital leaders, short of ways to get departments on board, can prove reluctant to develop ambitious digital strategies.
So how to bind departmental leaders into digital strategies? To develop its 2022-25 roadmap, ‘Transforming for a Digital Future’, the UK’s Central Digital and Data Office (CDDO) worked closely with departmental executive teams to secure their buy-in. Setting up workshop groups on a wide range of digital topics, and engaging with leaders such as chief operating officers as well as CIOs and permanent secretaries, it brokered agreements on specific departmental reforms – sometimes securing dedicated funding – then produced a set of specific commitments, underpinned by metrics to monitor performance.
The Cabinet Office then managed a formal ‘write-around’ among departmental ministers, agreeing a text that was approved by Cabinet. Every permanent secretary and CIO has signed up to the strategy, with some departmental leaders taking on roles as sponsors for particular agendas, and delivery forums have been established – bringing together key groups such as chief technology officers. Every quarter, the permanent secretaries come together in a Digital and Data Board to check on delivery and address any weak spots.
The planning process involved “a lot of analysis, discussion and debate on what would constitute an ambitious but achievable plan”, explained Megan Lee Devlin, chief executive of the CDDO. Her team had to “make sure it was not just designed by the centre, but something we all owned, believed in and could deliver.”
Ultimately, said Lee Devlin, the result is a plan designed and led by the departmental leaders: “The intention was to gain alignment: to demonstrate that collectively we are more than the sum of our parts – and, crucially, to highlight where we wanted to work more closely together going forwards.”
2/ Develop performance metrics with muscle
Effective strategies detail how organisations across government will act to realise the shared vision, setting measurable goals and explaining how departmental performance will be monitored and incentivised.
Setting these metrics is itself a tricky task. Savings within IT spending can easily be assessed, commented former Estonian government CIO Siim Sikkut, but often “you’re not saving on back office or bringing new revenues into government, you’re adding new convenience for the user – and capturing these social benefits is tricky.” What’s more, many of the savings of digital reforms come through in reduced service delivery costs rather than falling IT spending, making them hard to measure and allocate.
One approach involves setting delivery milestones: the UK’s roadmap, for example, specifies that two thirds of the government’s 75 most important services will reach a defined ‘great’ standard by 2025. Governments can also use outcome-based metrics: in Iceland, the main performance indicators use survey data on citizens’ satisfaction with public services. Either way, it’s helpful to set a mix of short- and long-term goals,
To catalyse departmental action against the strategy, the best digital strategies embed these metrics into departmental heads’ performance management frameworks – helping to balance the pressures on them to prioritise stability and minimise risk. In one advanced digital country, the president’s office oversaw a team charged with tracking departments’ performance against a basket of KPIs. Some KPIs were linked to over-arching public policy objectives, measuring how departments’ digital work helped to realise economic and social goals. Others were built around audits combining technical assessments with service centre inspections, the use of ‘mystery shoppers’ and data on service performance. These audits generated star ratings for each department; and both ministers and departmental chiefs knew that a conversation with the president would follow.
As Sikkut argued, performance management in digital transformation “perhaps needs to develop still. We need to prove the impact that we’re making, because that can unlock resources.” Without clear metrics to measure success, he added, “we’re asking our political masters to put faith in our belief that if we do x, y and z, the magic will happen.”
3/ Create a strong central unit – but use your powers carefully
We haven’t seen any governments making good progress on digital without having established an influential and effective central digital unit. Our survey of digital strategy workshop participants emphasises the importance of getting this right: respondents named “increased resources and capabilities for the digital centre of government” as their top reform priority in a digital strategy (see graph C above), and saw shortages of central leadership and capacity as their greatest challenges (see graph B above).
Central teams can both set and enforce cross-government policies and standards, and assist departments by providing shared tools and support with project delivery – and most will indeed require both sticks and carrots in order to achieve their goals.
On the sticks side, many countries operate a gateway system under which departments must secure the digital unit’s approval before making significant IT investments. In Singapore, for example, the Ministry of Finance and the Smart Nation and Digital Government Office check that proposals are aligned with the government’s digital strategy, present a strong business case, and don’t create new capabilities when an existing solution already exists within government.
The UK’s system of ‘spend controls’ takes a similar approach, and was initially highly effective in creating momentum across government. However, demanding that departments constantly leap digital quality hurdles can generate as much heat as light – creating friction that damages relationships and erodes support for digital reforms.
Once the digital agenda is well established, providing advice and assistance often proves more effective than the use of hard levers (see Finding 5). In recent years the Government Digital Service has taken a more collaborative approach, emphasising the support it can offer departments. Singapore too provides carrots: if an agency’s plans include developing a useful tool that’s not currently available, the central team may fund its development and offer it across government.
Estonia’s journey represents a mirror image of the UK’s, beginning with carrots and later introducing sticks. Initially, the country offered to help fund departmental digital projects that met the central team’s quality standards; but digital leaders found that some departments preferred to self-fund non-compliant IT schemes than take money that came with strings attached. So the CIO’s office began working with the finance department, building digital quality checks into the mainstream project budgeting process: they had moved from relying on incentives to both “carrot and stick, because the carrot alone was not appealing enough,” recalled Siim Sikkut. “But if there is a way to charm, it often works best.”
Every central digital team needs the ability to apply both leverage and incentives. In general, you’ll get a better result with the velvet glove; but if it contains an iron fist, you’re likely to find departments much more willing to embrace the power of digital.