OUT! New Public Management. IN! Relational Services

When we talk about declining and emerging systems in the Two Loops Model, particularly related to health care, I can’t help but think of the emerging discourse around New Public Management (NPM) and Relational Services.  In a recent article by Dennis Vergne The Hidden History of Relational Public Services: From the Coal Mine to the Front Door he describes how the NPM or “Model I” system continues to hold on in many public service systems despite the evidence that it doesn’t work. I agree with this and assert that NPM health systems are in decline (top loop) and Relational Services is the Emerging System (bottom loop). 

New Public Management (NPM) has been the focus of health systems for decades, rooted in the belief that efficiency, control, and accountability lead to improved outcomes. While NPM aimed to inject a business-like efficiency into public administration, it has increasingly become clear that this approach is no longer fit for purpose. The issue lies in NPM's primary focus: treating citizens as consumers within a transactional framework rather than recognizing them as individuals with complex needs and aspirations. This model fosters a culture of defensiveness and compliance, where feedback is often stifled, and innovation is jeopardized by rigid protocols and repercussions for failure. Public servants become trapped in a cycle of meeting targets, adhering to standardized processes, and ultimately losing sight of the people they are meant to serve.

The Emerging System or Model II - Relational Services - represents a profound shift in mindset—a move towards valuing collaboration, trust, and genuine engagement in public service delivery. Rather than prioritizing control and efficiency, Relational Services emphasizes understanding the communities we serve, encouraging adaptability, and prioritizing relationships over transactions. In this system, public services pivot away from the mechanical and predictable towards the dynamic and responsive. This approach champions the idea that effective service delivery is rooted in the quality of the relationships formed between public servants and citizens. When we empower frontline workers with the autonomy to make decisions, we unleash their potential to engage with community members meaningfully, building trust and fostering collaboration.

The shift towards Relational Services draws on valuable insights from a range of disciplines, emphasizing the importance of empathy, contextual understanding, and community engagement. Research has shown that when teams operate under principles of trust and collaboration, outcomes improve—not because of top-down mandates, but because individuals feel empowered to act in the best interests of those they serve. For instance, organizations like Buurtzorg in the Netherlands exemplify Model II in action. By entrusting self-managing teams of nurses to provide care in their communities without bureaucratic interference, Buurtzorg has achieved impressive results in both patient satisfaction and cost-effectiveness. This model stands in stark contrast to the conventional, hierarchical structures characteristic of NPM.

The path to imagining and implementing relational services requires us to confront the fears and resistance that often accompany change. It calls for a collective commitment to embrace vulnerability and acknowledge the limitations of our current paradigms. As we learn to let go of the certainty that NPM strives to enforce, we open ourselves to a world rich with possibilities—where public services can adapt, evolve, and truly meet the needs of the individuals and communities they serve.