Honing leadership excellence in the public sector

Much is known about what makes private sector CEOs successful. But research is lacking on the practices of public sector leaders—even though they manage one-third of the global workforce, around a quarter of global GDP, and services that are essential for societies. To help close this knowledge gap, McKinsey has built a database of public service leaders who have excelled, drawing on a global survey of over 750 senior leaders and interviews with over 60 current and former secretaries and public sector CEOs.

We found that the traits that underpin excellence in public sector leaders overlap significantly with those of their private sector counterparts (see McKinsey’s CEO Excellence research). Yet the political and operating context of public leaders is far more complex and challenging—calling for a special capacity to drive impact while transcending limitations. As one leader put it, they need to be able to do everything private sector CEOs do, but “backwards and in high heels.”

A large majority of our survey respondents said their organizations face significantly tighter budgetary constraints, and most felt challenged by limitations in their ability to attract and retain necessary talent. Three-quarters of those leaders agreed that the next five years will bring even greater disruption than the past decade. (We set out the findings of our survey in full in a forthcoming article.)

When asked what characterized the most outstanding leaders they had worked with, the respondents suggested that character is destiny: One of the most-cited traits was being respected for character, values, and integrity. As one interviewee put it, “Your integrity and ethics are the core of being in the public service.” This set the foundation for two other essential traits—clarity of purpose and the ability to deliver results despite ambiguity and change.

In our survey and interviews, we asked leaders what differentiated the public sector from other sectors and what this meant for leadership (Exhibit 1). By far, the most significant difference was navigating the ever-changing political dynamics and complexities of cabinet government. As several leaders noted, when senior leaders join government from the private sector, they are often shocked at how little linear accountability there is.

On top of this, public sector leaders face a level of external scrutiny that is unmatched in other sectors, as well as significant limits on their ability to influence and direct resourcing. They must also grapple with asymmetric incentives and risk tolerances. Put more plainly, failed programs can be highly visible and bring severe, personal consequences for top leaders—while successful programs, which can be harder to measure, may be rewarded with a reduced budget when delivered efficiently.

It’s not all bad news, however. Through our research, we spoke to many excellent public sector leaders who have achieved transformational outcomes despite the many headwinds and obstacles. Our analysis shows that these leaders not only embody character, purpose, and grit—but they are also deliberate about six practices and core responsibilities (Exhibit 2). In this article, we shine a spotlight on each of these elements of public sector leadership excellence.

1. Set the direction

Setting a clear direction comes at the top of the list of practices of excellent leaders—so said our study participants, who ranked this as the primary hallmark of leadership success, irrespective of department size, executive tenure, and jurisdiction. As a civil service leader said, “The best leaders I’ve worked with had a transformative vision beyond the next five years. . . . They don’t just manage for today, but for a larger vision.”

Three specific practices matter:

• Define a purposeful vision—and bring it to life. Stating a vision is necessary but not sufficient. Excellent leaders bring their vision to life, making it authentic and meaningful to themselves, their organization, and the people they serve. For example, one mayor reframed their city’s vision from an emphasis on technological progress and growing key economic sectors, to a focus on the benefits these advances would bring to families across the city. Speaking of the importance of bringing a vision to life, one leader said, “What differentiates those who excel is a compelling vision on what the future of their organization and community looks like; and they’re capable enough to help everyone buy into the vision.”
• Translate vision into strategy and policy. Excellent leaders are pragmatic about translating the big picture into real choices. This is particularly true in the first 100 days of a new administration or term of office, when leaders need to define both their nonnegotiable reforms and a broader set of options for intervention—including some they are willing to sacrifice. Especially with the flurry of activity that coincides with a new term, leaders need to be pragmatic and prioritize based on their strategic objectives. As a leader told us, “Don’t anchor too hard on your conceptual view—use judgment and empirical tests to get feedback loops, as opposed to focusing on the perfect policy idea.”
• Mobilize and allocate resources creatively. Given constrained budgets, excellent public sector leaders are vocal about the resources they need and are savvy in marshaling the necessary political support to secure them. They are also adept at leveraging resources from outside their organizations, for example, through strategic partnerships. One leader put it like this, “As a manager in the public sector, you must never resign yourself to the available budget. What is important here is how I organize political support in order to realize a growth strategy.”

Excellent leaders root such efforts in clear, long-term planning and a deep understanding of the appropriations cycle. But they are also acutely aware of how quickly things can change. They work constantly to ensure their plans and budgets are resilient—and they are thoughtful in reallocating resources to align with evolving strategic and political priorities. For example, a service organization restructured its budget framework, shifting from a “source of funds” approach to aligning with “four stated missions.” This realignment identified $400 million in contract savings that could be reallocated to the priority missions.

2. Mobilize through leaders

Excellent leaders put great thought and effort into the composition of their top team and navigate several constraints that can make it difficult to attract and retain senior people: lower compensation relative to other sectors, shortages of critical talent at supporting layers (such as digital), and fewer levers to address poor performance when it occurs. As one leader reflected, “The primary challenge of the CEO [or equivalent] is to identify the strengths of their team and find situations where they can be effective.”

Three practices are essential:

• Build a team that goes the extra mile. One of the most important decisions of leaders, especially those newly appointed, is the formation of department leads—senior talent who “share the same passion and perspective and are willing to go the extra mile,” as a leader put it. One digital transformation leader noted, “I was successful because I was able to rely on a team that I could choose. I could only do such complex tasks with a team of people I could absolutely trust. This is one of the most critical factors for success: hand-picking your own team.”

  Others counseled against a complete reset of the top team (known as a “spill and fill”) and instead leaned into enabling the current team. A transport and infrastructure leader shared, “I don’t like to shock the system when I come in by changing or replacing the people massively. I like to understand people and their motivation to create a balance where they feel safe, but they are on their toes to deliver their maximum. I would only make changes after one year.”

• Role model accountability and ownership. Excellent leaders unapologetically share their intent and expectations with their teams, role model ownership, and empower their teams to execute. However, leadership is ultimately judged by results, not just intentions. In an era where execution is often the missing link between ambition and impact, the most effective leaders stand apart by prioritizing relentless follow-through. This involves recognizing and leveraging the strengths of team members to achieve collective goals, supporting them through creative problem-solving, and emphasizing the importance of adapting as new information and circumstances arise.

  Clear accountability and reliability in execution are especially crucial in the changing public sector landscape, where commitments can outpace delivery. As one leader said, “You can be the smartest with the greatest ideas and have a view and vision, but without skills and knowledge to execute, it is not effective. There is no room today for leaders who cannot execute.”

• Adapt what you inherit. Once a top team is in place and the leader’s intent is clear, the team can move into a new operating rhythm. Our research suggests that the best leaders find a way to integrate this operating rhythm into the existing governance, rather than overriding it, to maintain institutional continuity and build trust among the team. This push-pull approach can unlock rapid shifts when properly handled, as another leader shared, “When I became secretary, a huge lesson was how even very senior level people, if they are with you emotionally, can absolutely grow and adapt to new ways of working.”

3. Align the organization

Decades of research are very clear on this point: The best leaders treat the “soft stuff” of culture and engagement with the same rigor as the “hard stuff” of operational and financial management. They know that organizational health (“how we run the place”) is the critical enabler of performance, as the healthiest organizations outperform the least healthy by a factor of three. As one senior civil service leader put it to us, “If you want to make change in the world, you need to understand the conditions under which humans are more or less likely to change for the better.”

Three key practices underpin such leadership:

• Set the culture, and live and breathe it. Excellent leaders take the time to identify the “big thing” that will define their culture, then actively role model it. One leader reflected on the culture he was trying to create and how he needed to shift it in his new role, “What I found was a culture of learned helplessness. The previous leader transmitted a hierarchical culture. Everybody called people by their last name or a title, not their first name. I changed that, because a first name leads to a relationship which leads to intimacy, and intimacy leads to trust, and trust is what makes an organization very, very efficient.”
• Design for success. The best leaders deliberately craft the structure, accountabilities, and processes that give their agency both stability and flexibility. Typically, this will involve building stable delivery and enabling teams that deliver the core mission, while establishing the cross-functional groups—or “challengers”—that can act quickly to address emerging goals and priorities as they arise. Some establish centralized units for performance management to accelerate project delivery with enhanced quality and cost-effectiveness.
• Match talent to impact. The public sector is facing chronic, persistent talent gaps, and all interviewees raised this as a real challenge today that they expect to get worse. Given the many constraints, there were no silver bullets cited, but there were several examples that had shown results. Many leaders spoke of task forces and rotational leadership opportunities as ways to solve complex problems while giving “talent magnet” leaders a higher profile and apprenticeship on leading teams. This created pockets of excellence in several departments, which had above-average recruitment and performance rates.

4. Navigate the government

Excellent leaders demonstrate just as much awareness and focus on their external environment as their departmental context. They are masters of the rules of the game within and across departments—as well as the tactics of networked decision-making and cabinet coordination.

Such leaders embrace three essential practices:

• Enable the agenda of the head of institution. Heads of public institutions operate in many different publics: the press gallery, the general public, the Parliament, and the Cabinet. The key requirement of a senior-most civil service leader is to understand and enable the agenda of the head of institution across these domains. Excellent secretaries provide counsel and leverage this relationship into a productive partnership to lift ambitions and drive greater public impact. In some cases, this means advocating for sharper focus, as one leader recounted, “I went to the head of state to say we were stuck—and that the only way we could change was if we had one person who was fully dedicated to digital reform.”
• Nurture relationships to build political will. Excellent leaders (in politics or administration) never work alone. They are constantly engaging across government because they know that collaboration and coordination are essential to resolving policy problems. As the pace of disruption increases, this will only be more true. In response to the COVID-19 pandemic, for example, nearly 80 percent of centers of government in OECD countries reported increased cross-ministerial coordination. As one leader said, “The world is changing, and with all the challenges, you’ll never be able to learn everything—so you need to be comfortable in managing alliances and bringing people together to solve problems and build things along the way.”
• Work with the system to get coordination right. Effective coordination—powered by systems thinking—is fundamental to achieving strategic objectives, especially where multiple departments or agencies are involved. Previous McKinsey research found that agencies that coordinated change through dedicated teams had 50 percent more success than others in achieving their goals. In the words of one senior official, “The leader of the future is someone who is quite comfortable operating in a space with very little hierarchy, in a dynamic network of skills and talents and partnerships.”

5. Cocreate with stakeholders

Any complex task relies on players outside of government, and the vast majority of governments have programs that underpin public consultation. However, great leaders use coordination in a fundamentally different way—they bring a level of curiosity and openness to both the problem and the solution and actively develop support for new policies and services along the design journey. As one leader emphasized, “The ecosystem is so big, and we can’t make decisions, develop policies, or make calls alone. It is important to engage with everyone you need to—other entities, the private sector, peers. It’s important to listen first and make decisions accordingly.”

Three practices are crucial:

• Prioritize citizen satisfaction. Governments play a critical role in shaping citizens’ lives, yet many government agencies strain to deliver program benefits and meet the public’s rising expectations. Satisfied citizens are nine times more likely to agree that government agencies achieve their mission and nine times more likely to trust the agency providing good service.
• Listen with humility and act with coalitions. Excellent leaders understand that coalition building with industry and business is a real way to pressure-test and strengthen their policies and act in the national interest. A leader of a central bank reflected that, during the pandemic, they did not have the regulatory powers to force the finance industry to provide credit relief and needed to engage with skill, “Those were difficult conversations. You’re basically asking banks to take risk. However, if you engage the right parties early and show willingness to listen and incorporate their views, it does build consensus.”
• Leverage the media to your advantage. Our research suggests that many public sector leaders are reluctant to engage with the media or see it as a lower priority. As one leader said, “Most of us in the public sector are terrified of media and what it can do to us, so we shy away from it. We need to be more courageous.”

Excellent leaders maximize media engagement by focusing on the long-term game. As another leader put it, “Attention spans are much shorter, and something happens almost every day. If you live from crisis to crisis and fixate on the daily news cycle, mishaps, and complaints, then we would have failed as leaders. So, we need to create the bandwidth for the long-term stuff.” While many leaders continue to use traditional media to their advantage, the best invest in communications teams to keep a pulse on “the word on the street” and are not afraid to engage in long-form, nontraditional formats to engage citizens and proactively shape their narratives.

6. Manage personal effectiveness

Excellent leaders constantly and deliberately upgrade their personal operating system to handle the demands of public service. But less than half of our study participants considered themselves strong in this area—suggesting significant room to improve self-management. One leader reflected, “Most leaders tend to underestimate their own challenges on the emotional and mental well-being front until it hits them directly. It is a blind spot that leaders have because they think they’re handling these things well—until they realize it is not that straightforward.”

There are three approaches that distinguish the best:

• Define your personal presence. Excellent leaders are deliberate. They set a leadership intention and define who they are, how they show up, and the actions and behaviors they embody. They are authentic; they lead with integrity and transparency, being genuine about their values and beliefs, and thinking about their long-term impact and reputation. And they are adaptive—they understand the type of problem they are facing and apply the right tools to it. Character is the golden thread that connects these practices. As one leader said, “At the times when you are most stressed or at risk professionally or physically, you demonstrate the content of your character through your behavior.”
• Build your office. Excellent leaders recognize that an essential part of personal effectiveness is having the right team around them whose top priority is to make that individual leader successful and safe. The demands of a role are naturally greater than what an individual can handle, so it is essential to have trusted people to manage your schedule, guide you on where to prioritize, and act as a sounding board. As a leader said, “I think this is one of the most critical factors for success: your personal team. In emergency organizations like police and fire departments, this is common practice.”
• Manage your energy. Leaders often focus on time: being present, being efficient, and making the right trade-offs in the moment regarding who and what they spend their time on. However, when demands rise in the workplace, many leaders feel their main problem is a lack of time. The issue with working longer hours is that time is a finite resource, but energy can be expanded and renewed. As one leader put it, “Is there some medical drink, some ginseng root, pixie dust for maintaining energy and balance? There isn’t unfortunately. But for me . . . the value of being in the public sector is there is great purpose that continually sustains and drives you.”

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Across all our conversations with public sector leaders, one idea shone very brightly: the honor of service. It underpins many of the essential leadership traits, helping create energy and build resilience. Character and commitment animate excellent leaders and sustain them through the challenges and rewards that public service brings.

If you are a senior public sector leader and would like to participate in this study, please click here.

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