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To meet these criteria Government needs to delegate to departments, in a controlled manner, responsibility for the operational or executive types of decision that represent the bulk of Government activity. The generally more difficult and more important policy-making or matter-of-judgement types of decision should be retained as a central responsibility.
The present machinery does not permit the departments actually to take many decisions, since it provides few means of ensuring that any delegated decision powers are properly exercised without individually checking each decision. As a consequence, large numbers of relatively unimportant decisions have to be taken centrally for example, whether to buy a calculating machine, whether a new filing cabinet is warranted.
When the Government machine is small and most applications can be examined in depth by the few top-level staff, this approach can work well and be highly efficient. But as the size of operation grows, this approach can be maintained only by further fragmentation of responsibility for individual resources. It then becomes increasingly difficult to:
Maintain or improve value for resources
Allocate resources in a balanced manner
Obtain good value from scarce experienced staff
Achieve a rapid response for decisions and implementation
Focus on problems as a whole.
What is needed, therefore, is a new approach for managing departmental activities that will permit the desired delegation. We believe that an approach that concentrates on planning and controlling departmental activities in terms of their end results or their output of goods and services rather than, as at present, in terms of the input or the individual resources used, will meet this requirement.
Although this recommended approach is very different from the one used at present, there is nothing novel about it. It is the kind of approach used by most large businesses with diverse operations; it is also being adopted progressively by central and local government, notably in Sweden, the United Kingdom and the United States.
To adopt this new approach the Government needs to make four changes in its machinery.
McKinsey & Company, Inc.
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