What is the public sector's equivalent of a company's profit? The question sounds simple, but the answer changes how a public organisation is led. It is the question Professor Mark Moore, of Harvard Kennedy School, placed at the centre of his work.
In 1995, Moore published Creating Public Value: Strategic Management in Government, with Harvard University Press. The book named an idea that has shaped the development of public leaders in many countries: just as private executives create value for shareholders, public leaders create public value for society. And, like private executives, they need to show that the resources they use produce something worthwhile.
What public value is
In the market, value is revealed by the customer: if people pay, the product is worth it. The public sector has no such yardstick. The state spends tax money and often uses its own authority to compel, inspect or restrict. That is why the value of a policy cannot be measured only by the satisfaction of those who receive the service: it must be recognised by citizens collectively, through democratic institutions.
Public value includes the results the mission pursues, such as lower illiteracy or greater safety, but also the fairness with which the organisation treats people and the quality of the experience of those it serves. In Brazil, the concept has made its way into regulation: Decree No. 9,203 of 2017, on the governance of the federal public administration, defines public value as products and results that represent effective and useful responses to public-interest needs or demands.
The strategic triangle
For Moore, a public strategy only holds when three conditions are present at the same time. He arranged them in a triangle, which became the best-known image of his work.
The vertices are the three conditions Moore describes. At the centre is the NEXT C-LEVEL reading: the CPPO, the state executive, is the one responsible for keeping all three aligned.
1. Clearly defined public value
It answers the question: what does this organisation exist for, and what difference does it need to make in people's lives? The definition must be concrete enough to guide choices. A strategy that does not declare the value it seeks ends up measured by what is easiest to count: budget spent, processes completed, systems delivered.
2. Legitimacy and support
No public organisation decides on its own what is valuable. It works within an environment that authorises and funds it: the elected government, the legislature, oversight bodies, the courts, the press, civil society and citizens themselves. Moore calls this the authorising environment. A good idea that does not earn legitimacy rarely survives the first change of circumstances.
3. Operational capacity
It is what makes value possible in practice: people, skills, processes, technology, data and budget, as well as partners outside the organisation, such as other agencies, businesses and civil society, who help produce the result. A valuable and legitimate strategy fails if the machinery cannot deliver it.
The strength lies in alignment
The triangle is not a checklist. It is a test of coherence: the three vertices must support one another. In practice, the most common misalignments are recognisable in many public organisations:
- Value without legitimacy: the proposal is good, but it has not won over those who authorise and fund it. It loses momentum at the first change of priorities.
- Legitimacy without capacity: the initiative was approved and announced, but the organisation cannot deliver. The cost shows up in credibility.
- Capacity without defined value: the machinery works and delivers systems and processes efficiently, but nobody can say what difference it makes to the citizen.
Moore also highlights managerial imagination. In one of the book's most cited examples, a town librarian notices that every afternoon children with nowhere else to go after school fill the library. The first impulse is to treat it as a problem. The alternative is to see an opportunity to create public value, combining the library's mission with a real need in the community. That shift, from routine to the pursuit of value, is what the triangle helps to discipline.
Where digital transformation comes in
Technology and artificial intelligence expand the state's operational capacity as never before. That is precisely where the risk lies: a digital project that works only on this vertex can be technically flawless and still fail to create public value.
Artificial intelligence makes the test more demanding. Automated decisions require clearly declared value, because someone has to say what each agent is for, and stronger legitimacy, because oversight bodies, data protection and society will ask who answers for what the machine decides.
That is why digital transformation is not carried out by IT alone. The technology area is decisive for operational capacity; the leadership accountable for public policy is the one holding all three vertices together. We explore this role in CPPO: the state executive who delivers public value.
How to recognise the value produced
In 2013, Moore returned to the subject in Recognizing Public Value, also with Harvard University Press, devoted to the hardest question: how to measure it. He proposes a kind of income statement for the public sector, recording on one side the costs, including the use of state authority, and on the other the achievement of the mission, fairness in operations and the satisfaction of those served. It is complemented by measures of the legitimacy earned and the operational capacity built.
For Brazilian public leaders, the message fits the moment: accountability increasingly looks at results, not only at compliance, and federal governance regulation itself already speaks the language of public value.
Three questions for your next meeting
- What change in the citizen's life justifies the resources and the authority this initiative will use?
- Who needs to authorise and support this choice, and are they already convinced?
- Does the organisation have, or can it mobilise with partners, the capacity to deliver what it promises?
When all three answers are clear, the strategy has a chance to last. When one is missing, the triangle shows where to act before investing. At NEXT C-LEVEL, it is one of the lenses of The Exponential Manager, the programme that trains the CPPO.
Further reading
- Mark H. Moore. Creating Public Value: Strategic Management in Government. Harvard University Press, 1995.
- Mark H. Moore. Recognizing Public Value. Harvard University Press, 2013.
- Decree No. 9,203 of 22 November 2017, on the governance policy of the Brazilian federal public administration.