Value Innovations and Service Delivery Reform in the Post-NPM Era: Lessons from Malaysia's National Blue Ocean Strategy

Since the 1980s, public sector reform programs around the world have largely been driven and shaped by the dominant New Public Management (NPM) paradigm. Though it was seen as a model of universal relevance soon flaws and contradictions of the NPM model became evident. These, together with increased policy complexity and wicked problems facing modern governments, gave rise to newer approaches to governance and service delivery reform. Among others, the whole-of-government, collaborative public management, networked government and the digital-era governance have gained currency in the post-NPM era. These approaches reflect a shift with focus on value innovation requiring multiple agencies including those in the private sector to work together to deliver integrated solutions to common service-delivery problems. Although much of the contemporary reforms especially in the OECD countries revolve around such models and/or theoretical underpinnings, Malaysia has pursued an unconventional approach to public service reform seeking to achieve similar results i.e., value innovations in service delivery and better outcomes for the citizens. Inspired by its private-sector equivalent, Malaysia introduced the National Blue Ocean Strategy (NBOS) to offer a leap in value in public service delivery at a relatively lower cost. Initiated in 2009 by the former Prime Minister Najib Razak the NBOS was presented as a vehicle that would produce high impact and novel solutions to service delivery problems at the same time accelerate national development. This paper explores Malaysia’s experience with the NBOS approach to public service reform and its impacts and outcomes. Drawing on data from official sources and semi-structured interviews it shows that the NBOS projects have shown encouraging results in areas where previous reforms performed poorly. They have helped tackle a range of economic and social problems; they also helped reduce cost of service provision by breaking down silos across ministries and agencies and by fostering collaboration among them. However, the NBOS was not without challenges and pitfalls. The NBOS was more directive in style, it suffered from poor implementation due to limited uptake by collaborating organisations and inadequate knowledge and understanding at lower levels of the hierarchy. Such weaknesses coupled with its failure in tackling Malaysia’s growing economic malaise made the NBOS vulnerable to political change. The new government that came to power following general elections held in 2018 abolished the NBOS citing it as a costly experiment. Nevertheless, nearly 10 years of the NBOS experiment in Malaysia offers valuable lessons for the theory and practice of public management reform. It shows that, among others, leadership and commitment at the highest political and bureaucratic levels is critical for reforms to succeed. Likewise, it is important to put in place an effective governance structure and adopt a combination of top-down and bottom-up approaches to execution. It also shows the importance of creating collaborative culture and engaging with all stakeholders including the employees at lower levels of bureaucracy. Equally important is to attune the mind-set and knowledge of the staff at these levels to the implementation effort.