The City of Mannheim (about 329,000 inhabitants) in South-West Germany is one of the most ambitious local authorities in Europe when it comes to transforming public services. The transformation programme Change Squared  www.change2.de (which alludes both to the scale of the transformation programme but also to the famous baroque grid-like layout of the inner city, the “City of Squares”) is widely admired in German local government for its comprehensive portfolio, based on all public services being provided in-house. What makes Mannheim’s transformation strategy so interesting for the UK and other countries is its strong commitment to implementation based on a carefully designed top-down and bottom-up strategy. Mannheim doesn’t just have great ideas – it is great at implementing them.

So what is the Mannheim transformation programme about and what are the results after the first phase of delivery (2008 to 2013)?

1. Rationale of Mannheim’s transformation

When the directly elected mayor Dr. Peter Kurz took office in 2007, Mannheim council was characterised by a number of shortcomings, which are common to most other local authorities in Germany:

1. A strong focus on inputs (budget and staff) but little awareness of outcomes to be achieved.
2. Fragmented public services, with departments operating as ‘silos’.
3. A strong service orientation but neglect of governance issues, such as citizen participation.

For Dr. Kurz it was obvious that a new direction of travel for Mannheim entailed changing behaviours and perceptions inside and outside the local council. Mannheim had lost most of its industrial base in the previous 25 years (having been the city where Daimler invented the world-famous Mercedes brand) and was in the process of shaping its new identity as ‘the inclusive city’. This new identity focused on the diversity of local people (representing more than 170 nations) as a central asset. Furthermore, Dr. Kurz introduced the idea of the political citizen, who has both rights and responsibilities, and who is not just a passive “consumer” of public services.

2. Design of the transformation strategy

In order to make this new vision real, an overarching strategy was needed. It has focused on seven strategic goals:

1. Strengthening urbanity
2. Promoting talent
3. Winning business
4. Living in tolerance
5. Raising educational equality
6. Strengthening creativity
7. Supporting involvement

For each of these strategic goals, strategic performance indicators were defined to measure outcomes. Besides conventional indicators like the number of recorded criminal offences or the unemployment rate, data from the Urban Audit perception surveys are used to measure the satisfaction with such things as the cultural facilities and cleanliness of the city. Since 2009 the number of registered associations, used as an indicator of Mannheim‘s inhabitants involvement in its civic society, rose from 2,384 to 2,576 in 2013.

All stakeholders participating in the delivery of the strategy took up the new city motto “Together We Have More Impact” (Gemeinsam mehr bewirken).

3. The Masterplan with 36 projects

A new unit to reshape the organizational architecture (Fachgruppe Verwaltungsarchitektur 2013) was set up, reporting directly to Dr. Kurz. It co-ordinated 36 projects to deliver the seven new strategic goals. These projects ranged from macro-concepts such as preparing an application for Mannheim to become the European Capital of Culture in 2020, all the way through to strengthening localism through neighbourhood management. A key project focused on increasing the level of volunteering and participation in decision-making processes in the conversion of a former military base.

Another project involved the participation of the managers of all local services in ‘strategy workshops’ to define outcomes and performance measure to assess progress towards agreed targets. An important project was the development of new guidelines for “leadership, communication and collaboration” in Mannheim Council, co-designed with senior managers. In 2010 a Competence Centre was set up to help the local council to recruit new staff and train existing staff. A steering committee representing council members, heads of services and the staff council (a distinctive feature of German organisations) monitored the transformation process.

4. Communication and staff participation as key success factors

The change management process introduced new forms of communication across services. A roadshow, based around the concept of a “mobile bar” (called “veränderBAR” in German, which is clever word play, which we might translate as The ChangeAble Bar) invited managers and staff to engage in dialogue. Dr. Kurz invited a randomly selected group of staff to have a conversation with him on a regular basis. A new staff journal reported regularly on the new projects. Furthermore, several staff and customer surveys were conducted to assess levels of satisfaction. As one district manager said:

“Previously, I used to send masses of e-mails and thought that was sufficient. Now I take time for discussions with individual staff members more often.”

The recently published report on phase 1 of the transformation process also points to the importance of:

• Strong leadership of the corporate management team, with the directly elected mayor as the central driver of the transformation process
• Clearly defined objectives and strategies
• New organisational structures
• Culture change
• Public participation and local democracy

Professor Gerhard Banner, a senior local government expert in Germany and former Director of Governance International, states: “Never was comprehensive reform in a local authority implemented as quickly as in Mannheim. The objective, stated in public in 2008 by the Dr. Kurz, to make Mannheim one of the most modern cities in Germany, can already be said to be achieved”.

The authors:

Do you remember playing with Lego as a child or with your children? Let me give you a good reason to use LEGO at work to trigger your imagination and redesign your services the way LEGO did a couple of years ago.

Governance International has shown me that it is worth exploring new scenarios in which public service providers enable and skill up service users to help themselves and empower local communities to harness their knowledge and expertise to solve ‘wicked problems’.

The 50+ case studies in their Good Practice Hub show the wide range of co-production approaches all over the world. They demonstrate that co-production can either achieve improved outcomes or better value for money. Often it does both.  The Co-Production Explorer developed by Governance International highlights innovative co-production models so that you can design a new vision for your service. At the same time, it helps you to build on existing pockets of co-production in your service to link the present with the future.

Ignoring the imagination unleashed by co-production is almost like accepting the inevitability of future failure. Once again, don’t read on if that really is what you think is acceptable - but I certainly don’t.

Be honest - you probably need to save budget? Guess what, co-production can help with that, too. Co-production champions are refreshingly unwilling to accept that offering ‘less’ is the only path. Even with financial constraints, it is possible to do better.

Perhaps you might not expect a well known company to use co-production approaches? Well, read this Toy Story about Lego’s transformation.

Lego is now so popular that there are 62 little coloured blocks for every person on the planet but few people are aware that the family-run business nearly went bankrupt in 2004. From being an amazing start-up in the economic depression in the 1930s and experiencing a fast expansion in the 1960s Lego started to suffer losses in a fast changing toy market in the late 1990s. Kids simply preferred to play video games and playing with Lego was not cool any more. As a portrait of the Lego company in the Guardian states, in January 2004 the company reported a record deficit of £144m.

According to the brilliant analysis in Tim Kastelle’s blog on the Innovation Lessons from the Rise, Fall, and the Rise of Lego, its economic downturn was due to three factors:

1. Poor overall management.  As LEGO reached its crisis point in 2003, everything was going wrong.  Its financial control was very poor, and it had lost touch with what customers wanted.  Furthermore, even when people who loved LEGO reached out to try to contribute ideas, the firm was fairly arrogant in ignoring this input, believing instead that they knew best.
2. Lack of strategic focus.  In all of the pre-2003 innovation efforts, LEGO was obsessed with novelty – with doing new stuff.  But they were so far removed from understanding what their customers wanted (or even who they were), that these new ideas failed to create value.  They thought that the power was in the brand – so they launched things like LEGO TV series.  But really, the power was in the bricks – it was refocusing on this that started to turn the firm around.
3. Disconnection from customers.  Many of the misfires prior to 2003 were the result of not understanding what kids wanted – most of the new products were based on assumptions about this, not on feedback from the customer base.

Does this sound familiar to you? Do you think that your commissioners know their clients – or what they need?

If not, continue to read the Lego story. Of course, as Lego is a private sector business not everything may be transferable to a public service context but in my view the LEGO transformation shows the potential of co-designing services with people using services.

Tim Kastelle describes in his blog how LEGO discovered co-design as a method to drive product and service innovations:

Shortly after LEGO released Mindstorm, the enthusiastic community of adults that love LEGO, hacked the software.  After a great deal of thought, instead of shutting down the hackers, LEGO embraced them.  This then led to further collaboration with the community. It was this community that drove the overwhelming success of the product:

Instead of taking a year to find two potentially big growth opportunities and then invest significant resources to develop them, the front-end team would align with entrepreneurs who were already working on nascent but promising projects. Within a matter of months or even weeks, the team would use the LEGO Group’s know-how to help these entrepreneurs test the market, make necessary revisions, and test again. The idea was to avoid making bet-the-firm mistakes by launching a series of low-cost, low-risk experiments, which would increase the odds that one might grow into a runaway success.

LEGO also discovered that the key to its success was harnessing the ideas of its end customers – children!  Lugnet, a Lego user community, works with users to co-design models, even using open source design software to create shared visions from different cities. This virtual community even tackled problem solving and design - for fun! Children are enabled to create their own designs making them co-designers of their own dreams. Lego now incorporates public feedback into its heart, soul and philosophy, contributing to its choices, designs and decision-making on new products.

In the end, it was its new strategic focus and this new collaboration with customers which turned the company completely around. As a result, five years after reporting its biggest ever loss, Lego was reborn and reported a net profit soaring to 32% to DKr1.35bn and sales up a healthy 18.7% for 2008 (source: http://www.theguardian.com/lifeandstyle/2009/mar/26/lego-billund-denmark).

Are there any bells ringing yet or light-bulbs flashing inside your head? There should be…!

The transformation of Lego is the starting point for imagining how co-design can not only create ’improvements’ but can transform a whole organisation and its relationship to its clients and local communities.   

The many forms of co-design that Lego adopted illustrate the tremendous potential of harnessing the ideas and skills of people using services. And, as I’ve experienced in my career in public services, one ‘co’ leads to another ‘co’, involving clients and communities as part of the process, starting from co-commissioning, all the way to co-design, co-delivery and co-assessment.

Scotland has an amazing wealth of case studies to learn from – just look into the publication 

Co-Production of Health and Social Care in Scotland. But there is also an increasing number of local authorities in England and Wales such as LB of Lambeth, Stockport MBC, Surrey County Council and Swansea Council which have embarked on a co-production journey. What a difference it would all make, if even more service providers and commissioners adopted these ideas.

So we do some good things in the UK already – but don’t we now have a golden chance to harness fully the opportunities offered by co-production?

USA basketball legend Michael Jordan famously gave what I consider to be one of the best motivational quotes of all time:

“I can accept failure, everyone fails at something. But what I cannot accept is not trying”.

Now ask yourself honestly, why don’t you get in some Lego for the next senior management or team meeting and ask your colleagues to design an alternative service delivery model based on co-production? It’s obvious – what LEGO could achieve, you can do too!