Mark MacDonald, EY Global Lead Partner, Public Financial Management; and Lead Partner, Government & Public Sector: Interview

By on 10/11/2016
Mark MacDonald: EY Global Public Finance Management Leader

Long interested by how governments respond to the big issues of public policy, Mark MacDonald has spent his entire career working for better public administration. Now leading both EY’s global public finance management practice and its Ontario public sector operation, he helps governments to understand and adapt to the public’s fast-rising expectations

When Mark MacDonald began his degree course in toxicology at the University of Guelph, 100km west of Toronto in Canada, he planned to follow that with an MSc in human physiology. But things didn’t quite work out like that: whilst he was a student, MacDonald recalls, “there were some healthy debates taking place around free trade, environmental policy, constitutional reform and so on – and I got very, very interested and excited by those issues.”

Though he stuck out his undergraduate degree, MacDonald instead followed it up with an MA in Political Studies – switching his focus from healing human bodies, to helping public bodies improve their fitness for the modern world. “It was a fantastic experience to be in the science programme, but at the same time one is growing up and trying to figure out what you’re going to do – and I just got very interested in government,” he says. “That built into a lifelong interest in the study and application of public administration, public policy, public management.”

Via a PhD in Public Policy, MacDonald found his way into consultancy – and built a career helping state and national governments to square that most awkward of circles, “the supposed contradiction between being able to deliver better public services, whilst at the same time doing so in a fiscally-responsible, efficient manner.”

Public bodies, he explains, are endlessly pushed by political leaders and public opinion to achieve “better policy outcomes, economic development, service delivery and regulation results”; their challenge is to do so within the “constraints of budget and the complexity of the modern world”. And it’s here that he’s found “the most interesting work that I’ve done, and the most productive work. It really goes to the heart of what governments are challenged with every day.”

Over the years, MacDonald has worked in many countries – generally at the state or provincial level, where public services are often designed and delivered. But in the modern world, that frontline work is shaped and informed by lessons and experiences gleaned from public bodies scattered across the globe. Canadian officials “respond very well to the policy learnings of other peer jurisdictions and countries around the world,” he says. “I think we’re seeing, on a global basis, that notion of policy learning really taking hold: the idea that if it works somewhere else, then perhaps it can work here too”.

MacDonald’s interest in learning from overseas will serve him well in both his new roles at consultancy EY; for he’s recently been appointed leader of both EY’s global Public Finance Management operation, and its Ontario Government and Public Sector division in Canada. During our interview, we discussed both jobs – finding in the public finance landscape a microcosm of the big, strategic challenges facing democratic governments across the developed world.

Amongst those cross-government challenges, he believes, is the task of rebuilding public sector structures and processes to take advantage of today’s opportunities. Digital technologies, he says, can dramatically improve transactions with service users – improving the customer experience whilst stripping costs out of the system. But “that’s really about delivering essentially the same service through a different channel; to me, the more interesting thing is going to be about how this emerges into a more fundamental change in the nature of those services.”

MacDonald is highlighting the tensions between our current public sector structures and processes, and the models and capabilities facilitated by digital technologies. For governments tend to manage services, control spending and provide democratic accountability in vertical structures, pointing upwards towards elected political leaders. But digital tech enables them instead to move information and foster collaboration horizontally, building services around individual users.

To realise the potential of digital, then, organisations “end up having ultimately to change some of the very traditional structures of public management and administration – and that’s probably the hardest part of it.” MacDonald believes that we “require a fundamental rethinking of the way that public organisations are structured, and the way we deal with very important issues such as public resource allocation, public accountability.” This is clearly not just a technological task: “It’s going to take innovation in thinking as much as in technology.”

Changes this big will be evolutionary, rather than revolutionary – and it’s already possible to see, in the Petri dish of some governments’ public sector reforms, the emergence of ecosystems well suited to a digital approach. MacDonald points to the Ontario state administration’s use of “results-based budgeting and outcomes-focused allocation of resources” – an approach now adopted by the Canadian government in its new Delivery Unit, as the country’s cabinet secretary recently told Global Government Forum.

Under this system, ministers collectively set shared outcomes goals for their public services, requiring departments to work together towards common objectives and focusing public funds on a clear set of results. “It’s the linkage between the resource and its effect that we’re trying to manage, and I think that’s right at the heart of what modern public administration is all about,” MacDonald comments.

Fostering interdepartmental collaboration and focusing on outcomes in the real world, this approach requires public officials to change their systems of planning, resource allocation and service delivery. And this is where MacDonald’s other job comes in – for public bodies are increasingly asking their finance departments to play a key part in reshaping their structures and business processes. Traditionally seen in the public sector as little more than budget managers, finance professionals are taking on a much more strategic role as organisations try to rebuild themselves around new performance systems, digital technologies and value for money goals.

Chief finance officers (CFOs) are “being asked to respond to these incredibly diverse pressures and opportunities around seeing the government get better at delivery,” says MacDonald. “That strategic perspective [on finance] must be at the heart of that, because every decision that a government takes to improve something will have resource implications. It’s the role of the CFO to understand those implications – they’re much more than an accounts executive.”

Alongside these new strategic responsibilities, he adds, finance chiefs must also get to grips with using digital technologies within their own teams – realising the potential of techniques such as analytics and automation to both improve the operation of finance functions, and help inform wider organisational reforms. “There will be a technical expertise required to achieve that,” he comments. “It’s essentially about satisfying a strategic mandate with the tools of the trade.”

From this perspective, finance teams are right in the frontline of the digital revolution – and they’re pushing forward on three fronts. For CFOs must not only adopt digital technologies within their own operations, improving traditional financial management. They also need an excellent understanding of how digital systems could be used to transform their organisation’s wider decision-making and service delivery systems, plus the digital and data analysis techniques to assess the various options for reform.

This presents quite a challenge for finance professionals – and MacDonald is clear that the demand for public sector CFOs and their teams to develop digital, project management and strategic planning skills is only going to grow. “There are a couple of things that finance professionals can be quite attentive to,” he says, naming “an evidence-based approach; and that notion of linking the service value that gets delivered – the performance outcome which is intended – to the resource that is allocated, and the processes, business models, organisational and policy instrument choices that go to translate resource into action into outcome.”

Like the work of government itself, the role of public sector finance staff is evolving – and fast. “The modern finance professional who best understands how to deal with that, and how to make a contribution to improving that, is I think the one that is most likely to be successful,” he says.

So Mark MacDonald is now leading EY’s work in support of two parallel evolutions: the reform of Canada’s public bodies; and the development of public sector finance functions around the world. In both fields, he concludes, “we can use technology to create different ways of doing things, leading to better interventions for individuals and, at the same time, a more efficient allocation of public resources. And I think we’ll look back in five years, and discover that today we were just at the beginning of this.”

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See also:

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