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Increasing Resilience and Sustainability in the Public Sector – Futurum Tech Podcast The Intelligent Enterprise Industry Series
by Daniel Newman | October 29, 2020

This episode of the Futurum Tech Podcast – Interview Series is the sixth installment of our newly launched Intelligent Enterprise Industry Series — done in partnership with SAP — where I will be speaking with advisors and executives across ten different industries on how they are focusing on furthering their intelligent enterprise story. I’m excited to welcome Maria Mizell, an executive advisor for the public sector industry at SAP.

The Interconnected Public Sector

SAP recently partnered with Oxford Economics to conduct a research study to identify how an interconnected mindset can impact management as organizations attempt to navigate times of uncertainty, especially now during the COVID-19 pandemic. The report includes findings from 3,000 senior executives, including 300 from the public sector.

My conversation with Maria revolved around the following:

  • The state of government today in the wake of the COVID-19 pandemic.
  • How many government organizations rely on outdated ways of working.
  • How interconnectedness is impacting the effectiveness of these organizations.
  • The changes we are seeing governments make in regards to interactions with citizens.
  • The technologies that are enabling better citizen interactions at every level of government.
  • The impact of the millennial workforce on the public sector.

Maria and I explored some of the findings of The Public Sector Transformation Imperative report, but I know we only scratched the surface. If you’re interested in a comprehensive overview of the subject download The Oxford Economics report on the Interconnected Public Sector here.

Listen to my interview with Maria here:

Disclaimer: The Futurum Tech Podcast is for information and entertainment purposes only. Over the course of this podcast, we may talk about companies that are publicly traded and we may even reference that fact and their equity share price, but please do not take anything that we say as a recommendation about what you should do with your investment dollars. We are not investment advisors and we do not ask that you treat us as such.

Read more analysis from Futurum Research:

Increasing Resilience, Profitability, And Sustainability In The Professional Services Industry

Increasing Resilience, Profitability, And Sustainability In The Retail Industry

Increasing Resilience, Profitability, And Sustainability In The Oil And Gas Industry

Image Credit: europa.eu

Transcript:

Daniel Newman: Welcome to The Futurum Tech Podcast: The Interview Series. I’m your host today, Daniel Newman. And I am excited about this interview series podcasts that I have with Maria Mizell and Maria is joining us as one of the youngest industry execs at SAP, which is going to be super fun because we always like to get lots and lots of different perspectives. And today, we’re going to be talking about the public sector a little bit. For everybody out there that has been following The Futurum Tech Podcast and The Interview Series, this is the sixth interview captured of a 10 part series that we did on the Oxford Economics Study and talking about the intelligent enterprise across vertical industries.

And there’ve been some great podcasts. And before I bring Maria onto the show, I just want to say for everyone out there, no matter what industry you’re in, I promise you all 10 of these podcasts have a lot of applicable insights that are going to provide good understanding of the challenges. So, whether you’re selling to the public sector in this case, or working with them or automotive or whatever the podcast topic was, there are lots of great insights here. And we’re excited to have another one today. So Maria, welcome to The Futurum Tech Podcast Interview Series. How are you doing today?

Maria Mizell: Thanks Dan. I’m doing great today.

Daniel Newman: That’s awesome. So I really appreciate you joining me today. We had a little time to talk offline, and it was a great conversation and I’m excited to talk public sector, intelligent enterprise, the challenges of digital transformation, what you’re seeing. A crazy year that we will call 2020 and that we could not forget about soon enough and all good things about 2021. But before we get into the show, into the questions, talking about your work, tell us a little bit about yourself and what you do at SAP.

Maria Mizell: Yeah, absolutely. Thanks Dan. And thanks so much for having me. So, as you said, I’m Maria Mizell. I am an Industry Executive Advisor at SAP, supporting our public sector customers. So my specific focus is our federal civilian and our state and local customers. And really my role is to help our customers understand how our solutions benefit them in their industry and their business and to accomplish their missions and objectives. So great to be here. Thanks for having me.

Daniel Newman: Yeah, no, it’s great to chat. Now again, I mentioned this in the introduction about you being the youngest. I love multiple generations in the workforce. I think giving different perspectives, whether you’re out of college for a few years or you’ve been in this business for 30 years, I don’t think when it comes to digital change, driving culture in a business, digitally transforming, adopting new technologies, utilizing tech and tools. I don’t know that years in itself are the differentiator between great success. I wrote my first book, it was called Millennial CEO. I wrote it, one of seven. I wrote it almost a decade ago. So I’m aging myself. I’m 39 years old. I’m the oldest millennial in 1981. Some millennials say I’m not even a millennial. It just depends on which research or a chart you go by.

But the point is I’ve been there, Maria. I’ve been the youngest. I know what it’s like. I know you’re fighting for people to say, “Oh, you don’t have a lot of experience.” Well, I tell you something, when it comes to tech, I believe the up rising Gen Zs and younger millennials that are infiltrating the workforce have tremendous experience, grew up on the technology, have totally different perspectives about what work will look like. And I’m confident that this group will help us solve problems that some of us, my age and older, have been somewhat remiss to fix because hanging on to things that we liked and ways that we’ve wanted to do business maybe a little bit too long.

So slight diatribe, but not completely off topic today, because one of the things that you do focus on is building an intelligent enterprise.

Maria Mizell: That’s right.

Daniel Newman: So I know today we’ve got a few questions. I want to talk to you about, there was an Oxford Economics Study that SAP put out and it talked across a number of different industries. And by the way, don’t worry about looking it up right now if you’re listening to the show. I’m going to put a link in the show notes, you can click on it. And there was lots of insights. It dug into the experiences and gathered unique data from executives across industries. And it was really trying to better understand what was helping these companies transform, what was helping these companies adopt technologies, adapt to the forces of change in the marketplace.

And so public sector, of course, is a big one. And right now there’s a ton of attention turned to government and public sector. So you’re in the middle of a very interesting field, but let’s get your take because I have so many. What is the state of government today? And how is it interconnected? And is positively or negatively impacting its effectiveness?

Maria Mizell: Yeah, thanks Dan. The general state of government right now is that you tend to find a lot of silos and kind of a general lack of network. But as you’ve mentioned, the Coronavirus has been very eye opening for government in really highlighting the need for a consistent systematic approach to technology. And it’s really in a crisis like this one that you see just how important the public sector is, and the role that government must step in to play that the private sector won’t.

So, for example, the federal government made investments in research and development for a Coronavirus vaccine in order to jumpstart the path to a vaccine, and take on that financial risk of investing millions of dollars that the private sector might not have taken on so quickly, if at all. Additionally, unemployment systems in state governments that tend to be a little bit more outdated, but are now absolutely critical to million more families.

And we also have the paycheck protection program loans and other extra benefits being distributed during the Coronavirus pandemic that have required our state governments to adjust quickly to new demands, while state governments have been absolutely critical in propping up businesses and families in order to keep the economy from falling apart. What we’ve witnessed is that many of them have struggled to pivot so quickly or had systems that just couldn’t adapt in the required timeframe.

But these are examples where governments truly are the backbone and are filling a gap or a need that can’t be left to the private sector. So having the ability to quickly respond to these challenges in the future will require that public sector organizations have a cohesive, flexible approach to their operations. It may have been that many of these gaps in system’s flexibility and adaptability could have been overcome with manual efforts during non-crisis times. But in crisis, governments need the ability to act fast and have seamless coordination.

According to the Oxford Economics Study that you mentioned, just 21% of public sector organizations say that their organization’s operations across functions are completely integrated in terms of communication, data sharing, and process management. And 41% identified a lack of effective collaboration across functions as a barrier to carrying out their strategic change initiatives. So, there’s that lack of interconnectedness, which can often be caused by bureaucracy and limited funding. Public sector respondents were also more likely than others to say that working with outside partners and across functions is highly complex for their organization. About one quarter said that their reliance on outdated ways of working is a barrier to carrying out strategic change initiatives.

And that’s really a concerning statistic when you think about the government’s role during a crisis. So for example, COVID-19 testing and the upcoming vaccine are both critical lifesaving efforts that will require a truly cross industry approach between life sciences, healthcare, the federal government, and state and local governments to come together and to really work together for a seamless delivery of tests and vaccines.

It’s a long story short. There’s some work to be done to create true interconnectedness within public sector organizations. But I think now we’re really seeing the importance of that interconnectedness and the importance of investing in technology modernization with a holistic strategy. And the Census Bureau is a good example of this.

So for years before the Coronavirus pandemic hit, the Census Bureau had been preparing to leverage technology in several new ways for streamlined data collection. And it was really this pre-work and investment that put the Census Bureau in a position to still carry out the census, but to do it in a way that minimized the health risks to their personnel and to those being surveyed.

Daniel Newman: So, you covered a lot there. Almost to the point where I would have said long story long, but I know there’s a lot there and there’s a lot to unpack. And so, I agree with you 100%. You actually don’t even need to be in the business to have seen and read the headlines in the news of just how much the resources of the States were pressed. And a lot of people don’t necessarily understand the divide, Maria, between federal and state, but States are like little countries in themselves.

These governors are like the president, they have their own legislature, their own laws, their own processes, their own health departments, their own unemployment, all that stuff. So, federal is like this overarching organization that sort of backs it up.

But on the other side of it, it is the States. And so, that’s why you heard some States seem to be very well equipped. They were able to get support in loans to businesses, and they were able to quickly deploy resources. And you probably, everybody out there probably heard about PPP loans. And you also heard about PPP, as in protective gear, for healthcare workers and States again, responsibility to sort of work with federal, manage it all, distribute. And this came down to systems, right? This came down to… I have read so many things about people because of unemployment numbers shooting through the roof. And the systems a lot of times were antiquated systems that just were not prepared to handle the influx of applications for unemployment insurance.

And it came down to technology and you hear backlogs adding up, simple things that used to be done, like maybe getting a driver’s license renewed became difficult because resources, again, stacked up. So there’s so much pressure on the system. And then, so you do this 50 plus times, plus territories, and then you can actually even say you’re doing kind of state, local and the public sector, but this actually starts to boil down too, into municipalities. You hear about the big cities, New York City and Chicago, they have their mayors and their own little city councils.

So it does, it breaks down system into system. And each one has a certain amount of distribution of the responsibilities. That’s a lot of technology, a lot of systems, a lot of stress for the systems to work. And that is a big case study in why transformation is so important. So, let me ask you that, with all that in mind, Maria, from this, from COVID, you work side by side, SAP is one of the leading technology providers, works closely with governments around the world, but especially here domestically.

What are the changes you’re seeing? I mean, first of all, I imagine you saw some interesting reactions from your customers trying to solve this problem. And then, I’m guessing you’re starting to hear about and see some sort of effort to implement processes, strategies, software, technologies to actually enable better interactions between citizens and their local state and local governments.

Maria Mizell: Yeah, absolutely. And it’s very interesting to see the differences between how people trust the private sector versus how they trust the public sector. So for example, Starbucks. Everyone has a Starbucks app on their phone and they’re willing to share their location data with Starbucks. Similarly, Google Maps, right? It knows which restaurants you go to most, it knows when your appointments are and where, it knows where you parked your car. But would you put all of that information into a government system? The general answer for most folks is that they wouldn’t put that data into a government system, or they would feel uncomfortable with the government system tracking that data. Your location, your credit card information, your appointments, your special coffee orders.

But as we mentioned before, it’s really in times of crisis, like we are right now, that you see how big of a role government plays in our lives. And people have really come to expect that the government will offer a similar level of intelligence the way that the apps on your phone do. That they’ll know who you are, that there’ll be able to predict what services you need, and that they’ll be able to be trusted with all of that data. And I think if that level of trust can be accomplished, think of all of the great new value that governments could offer to their constituents.

So for example, dating websites. They have all of these algorithms that match people based on interests and values. How much more effective could the foster care system be if a similar tool was used to match children with compatible families? In another example, as you mentioned with the Coronavirus pandemic and the COVID-19 vaccine, I’ve seen estimates in the realm of 70% or greater of the population must be immune in order to interrupt the chain of infection. But, we’re also seeing studies that indicate that much less than 70% of the population is willing or planning to take the vaccine once it’s made available. And that’s a critical pandemic ending difference.

I think what we’re seeing is that in order for governments to effectively carry out their missions and protect the population, they have to have the trust of the population. And in order to maintain and keep building that trust, governments have to modernize to deliver the types of engagements that constituents expect and get residents to buy into those services. And a big part of that is transparency. The Oxford Economics Study that you had mentioned pointed out that transparency is completely overlooked as a key component in building trust with citizens. It noted that 13% of public sector respondents have not increased transparency into their operations at all.

I think that governments need to critically think about improving data sharing efforts and infrastructure. Also noted in the Oxford Economic Study is that data sharing with partners, which can include public sector departments or private companies, is dramatically lower for the public sector. A full 21% said that they have no plans to increase data sharing with their partners, but realistically, effectively distributing public resources is much easier when data can flow across entire ecosystems to improve decision-making, increase efficiency and reduce fraud and abuse.

I think it’s interesting to think about what creates trust and what destroys it. And I think that governments will need to start offering the types of interactions and engagements that constituents expect and are receiving from the private sector. And they’ll need to increase data sharing and transparency to do it.

Daniel Newman: Yeah. I think that’s a great point. And that’s a hard one. So, we’ve studied, in our firm, a ton about digital transformation. What enables it? And culture always rises to the top. And in the body of culture lies a level of honesty, transparency, trust that has to exist. You cannot have a strong culture if trust is broken. It’s just like you can’t have a strong family, a relationship, friendships, business partnerships, clients, really anything when the trust chain is broken. Everything will be fundamentally flawed because of that.

And so, in public sector it’s so nuanced. And I would say right now, during this pandemic period of time, we’ve seen such extremes that it would be very interesting, without jumping into any sort of political stance, because that would ruin the show. But we really do have like this massive gap and two mountains in between it, and people are either extremely trusting right now, feeling that their government has a very strong desire and has their back. And this can vary at the state level because state policies are so different. And it tends to be, you’re either really on board right now, or you’re almost completely in contempt, is kind of this weird.

So it’s really difficult for States to deliver consistent services at scale, when you have anywhere from probably 30 to 70% of your population assuming that you’ve got some sort of divide that is completely onboard or against. And the more that they are against the ideals or the States or the policies or the systems, because right now, you even have people that are like, “We love what our state is doing.” I mean, I read Twitter, I read news, but they’re like, “Why can’t we get our benefits? Why is it taking six weeks, 12 weeks to get unemployment? Why can’t anybody meet with us? What’s going on with our schools? How are we getting the Zoom classes to be up to a certain standard for our students right now?”

Because we’ve basically had our kids out of school for seven months. And no, they’re not out of school, they’re e-learning. But let’s be straight forward, right? Maria, you could probably contest that our public vector, and our municipalities were not prepared to deliver school at scale remotely for this extended period of time. And even through the summer, most schools were preparing for a return. Most schools believe that there’s no way that this pandemic was going to last and become as bad as it’s become through the whole year. Most kind of went into summer thinking, “Okay, we’ll build our plan, but we’re probably going to come back to school. All is good.” And bam, I mean, now here we are. We’re recording this, it’s October 20th. And I only tell you that because you may be listening to this, it could be 2025 because the internet, it’s like a time capsule. It’s October, and frankly, we’re hitting peak cases now.

Now we’ve seen some improvements from State and from our medical community, public health in terms of being able to treat the virus. So, it’s not quite as scary as it might’ve been in March when we didn’t know. But we still have peak cases. We have high hospitalizations in many places. And my point is, this kind of cyclical nature has caused a lot tension between the States.

I love that insight there. And I love that you pointed out the trust and the transparency. I think the government’s probably have a long way to go in order to get the masses to believe that’s their plan. But if they’re able to accomplish this, you will see much better adoption, much easier. And that’s not only for these constituents, but also for the employees, the State employees, that trust, “Is my pension in good shape? Are my benefits safe right now? Is my job safe?” We’re hearing cuts, anyways. I digress. This is a big topic.

I had no idea how much fun this could be to talk about. So I have one more question for you, Maria, and thanks so much for your time today. I started talking about millennials. I wrote a book about it, right? I told you that already. And you mentioned, and we were talking about the size of the millennial generation. It’s now the largest in the workforce. So, let’s circle back to that. Maybe a little more fun than talking about trust and transparency with government right now.

How will millennials impact public sector organizations? And if you don’t mind me adding to it too, even the generations coming up behind as well. Because I think I just like to talk about how is the youth, the impending youth that’s infiltrating our workforce, changing the interaction between constituents and citizens and their public sector?

Maria Mizell: Yeah, absolutely. And I think there are a lot of synergies between the public sector organizations and the millennial and Gen Z generations. It’s generally pretty accepted that the majority of folks who join public sector organizations do so out of a commitment to a purpose driven vision and to making a difference around a particular social or environmental issue. According to the Oxford Economics Study that we’ve been mentioning about, half of public sector respondents say that leading with purpose.

So for example, by focusing on social or environmental change is a priority for organizational success. In fact, acting on these priorities improves employee satisfaction and talent attraction with a large majority of public sector respondents, having said that there are social and environmental reputations provides an advantage when searching for skilled talent. Now, millennials and Gen Z are very similar. They’re very purpose-driven with a focus on social and environmental issues.

Even just within the SAP community we’ve seen that social justice is really driving the millennial consciousness. Social justice issues are absolutely top of mind to a majority of SAP millennials, which I think really depicts the community oriented mindset of those generations.

So, given the great similarity in purpose-driven mindsets between the public sector organizations and millennials, the question is what does the public sector need to do to attract millennials and to provide them the job satisfaction to retain them?

A big part of that is the employee experience. Public sector organizations must prioritize and invest in improving the employee experience in order to advance their reputation as an industry leader. But there’s an interesting gap here though, that those highlighted in the Oxford Economic Study, that 61% of public sector organizations cite a shortage of skilled talent as a barrier to meeting strategic change initiatives. However, only about one fifth have completely executed decisions that would improve the employee experience. And just under half have restructured their organization to accommodate the way people actually live and work.

It will be interesting to see how this shifts because of what we’re living through right now with the Coronavirus pandemic. In many ways, we’re learning to live very differently this year. And I think it’ll be interesting to see if that changes the way that we think about what’s necessary in the long run. So, many businesses that never thought that they could have become virtual basically overnight, and they’ve done so really without losing productivity.

So in the future, do we need to sit in traffic to commute to work and have our cars plagued the environment in that way? And do we really need to live so densely in cities when it doesn’t really matter anymore, what time of day you get your work done? I think governments and businesses will need to take a hard look at, where do we revert back to normal after the pandemic? Where do we not? And how does this impact the workforce and the way that work and the employee experience intertwined with our personal lives?

With the economic difficulties that the country is facing right now with high unemployment and loss of businesses, it’s really hard to predict what is on the other side of that for public sector organizations, especially with the funding constraints that have been caused by the pandemic. But there is a very noticeable similarity between the purpose-driven natures of both public sector organizations and the millennial and Gen Z generations that I think could prove very fruitful for both with a more flexible workforce and improved employee experience.

Daniel Newman: Yeah, no question. I mean, again, you had a few things to unpack there. I mean, it’s a really big topic. Sometimes I feel like these generations get sort of lumped that they’re all the same and all think the same. And of course, it’s a huge generation that spans over like 15 to 20 years, depending on, like I said, which organization is basically identifying the generational spreads. Half the generation of the millennials was almost pure born on tech, meaning has had a cell phone, more or less, from the moment they went to school and were on mobile devices. And I’m not saying cell, really a smartphone. And then, the other half were sort of came into it during college where, around the early 2000s when Facebook and social media started taking their lives by storm.

But I will say it’s created a great groundswell opportunity for the generation to be more outspoken. Everybody became citizen journalists in a lot of ways, whether that’s through micro blogging or tweeting, posting on your social channels, creating stories, which has sort of been an evolution of the early days of social media. And that’s given a voice, a bigger voice to the community. And I think what used to be able to be somewhat bottled up by local governments, politicians, even national government, has been unearthed. It’s been uncanned, you can’t hide it, you can’t suppress these opinions because the local governments have to listen to their constituents and their constituents, it’s not just writing an op-ed to the newspaper anymore. It’s as easy as hitting that button saying, “I really don’t like this service. I don’t like this Secretary of State. I don’t like this governor. I don’t like..” Or, “I love this particular…” It doesn’t always have to be bad.

But as we all do know, the data, Maria, says overwhelmingly, we are much more likely to share our negatives and complaints than we are our positives. Something about the human condition, 2020 has only exacerbated that. But no, this is really great stuff. And I think in the end, the one thing I’d like to point out is that the technology is really the underpinnings of all this. It’s the ability to get these municipalities, States, more closely connected to their constituents. Understanding that data, of course, has a certain amount of intrusiveness, but if done well and working with the right company that protects the data and manages it and anonymizes that correct data, it can also be used to create better experiences, everything from improving the traffic patterns in your local cities to make sure people can get in and out. To, as you mentioned, potentially putting more workers remote that are able to do their work at home or provide better benefits so that employees can stay home when they have children longer. Things like that, that are offered in other parts of the world that have never really been offered much here in the United States.

So, there’s a lot of things that tech can enable. And that comes with data, that comes with the analysis, that comes with the right tools, that comes with systems that make sure that States and local governments, and of course the federal government, are able to run as smoothly as possible. And Maria, I’d say you guys are seemingly working very hard on this, but this is a big challenge. This is a big challenge with a lot of gaps yet to fill because my 39 years here on earth, almost 20 as an adult living on my own. And I would say that it can be a little hit or miss.

So there’s a big opportunity for SAP, a big opportunity for these state and local governments and public sector organizations, and those that support it and deploy the technology within it to really make a bigger impact and use technology to make a better future.

Maria Mizell: Absolutely.

Daniel Newman: Maria Mizell, I just want to say thank you so much for spending time with me here on The Futurum Tech Podcast Interview Series. There’s so much to learn. Public sector is a very interesting field. It is certainly a convergence of the human condition of building trust and transparency, of entering generations in the workforce. And of course, being able to adapt, adopt, and scale as these governments have new added pressures and changes with things in the world, like what we’ve dealt with in 2020.

So thanks a lot. Hope to have you back on the show soon.

Maria Mizell: Thanks so much for having me Dan.

Daniel Newman: So for everyone out there that heard us talk about that Oxford Economics Study a few times, go ahead and check out the show notes. Click on the link, it’s available for free. I’m sure you will enjoy it. For those of you that haven’t hit that subscribe button yet for The Futurum Tech Podcast, hit it. I promise you tons of good shows, interviews, executives from around the industry that’ll tell you all kinds of things all across the digital transformation and technology and business landscape.

But for now, for this episode, I’m Daniel Newman, Principal Analyst, Futurum Research, I’ve got to say goodbye. We’ll see you really soon.

Daniel Newman