From Stock to Flow: Moving Public Administration Forward

An interesting elemental economic concept to apply as a mental construct to the practice of public administration is the notion of stock versus flow. One of the challenges with public administration is that we feel comfortable in stock, but far less comfortable in flow. The world outside of public administration has been much faster to adopt out of stock mentalities and into flow mentalities.

Examining Stock

Very simply, stock is a snapshot in time. How much of something do we have at a given time?

A stock is static at a point in time

A stock in this sense is closer to a noun than it is to a verb.

A lake can be thought of as a stock

A highway can be thought of as a stock.

Examining Flow

Very simply, flow is movement or motion. It is something that is moving over an increment of time.

A flow is dynamic

A flow is closer to a verb than it is to a noun.

A river can be thought of as a flow

The number of moving cars on a highway is the flow

Stocks and Flows in Public Administration

Historically, public administration has dealt disproportionately in stocks.

How many income support programs do we have? How many public schools do we have? How many pediatric nurses do we have? How many children in grade 8 can solve these math problems? How many research laboratories do we have? How many intensive care beds do we have? How many seniors do we have in our population?

Thus things that, relatively speaking, are relatively static are things that have had a disproportionate amount of attention in public administration over time.

Flows are harder to measure. Sometimes they are even harder to see. It almost always takes some work to figure out flows. It is almost always easier to see a stock than it is to see a flow.

Now let’s play back the same stock examples above, but this time as flows:

How many income support programs have we added since the end of World War II? How many public schools have we added since our population exceeded 5 million people? How many pediatric nurses have we accredited since 2007? How many children in grade 8 could solve these math problems from 1988 to 2004? How many research laboratories have we closed down since 1960? How many intensive care beds have been added since 1995? How many seniors have we added to our population since 2014?

As stocks are easier to see, they are harder to ignore. So stocks are typically addressed.

Flows are harder to see unless they become anomalous — if they increase or decrease at a rate that makes someone notice.

If the flow of a river is relatively constant, people stop noticing. In fact, if a flow is so consistent, it can even fool you into thinking it is a stock. But when flows become anomalous by dams or rapid snow melt or torrential rain or climate events, then we see them. So flows then are addressed. But often only then.

Notice now that we have indirectly introduced a third notion — a degree of relatively to a flow. In most disciplines, this is called velocity of flow. For public administration, anticipated velocity is mentally treated as a stock — it is dealt with. Anomalous velocity that creates crisis is also dealt with, because it too is seen — seen because it has become a flow crisis. What is often not seen is when velocity is material but not a crisis — when flow is mistaken for stock. But at some point, accumulated or deaccumulated flow can cause a stock crisis without ever having incurred a flow crisis.

That is, if students in grade 8 are slowly losing the capacity to solve math problems, that flow issue is not a problem in any given year. But the accumulated flows over 16 years — that becomes a problematic stock at a point in time. Note that it can even become a stock crisis without ever having even been a flow problem.

For public administration, a flow disguised as a stock then can become devastating. Suddenly, like the algae in a lake that doubles every day — no one has noticed until the lake is a day or two or three or four away from being completely covered. It is “sudden” in appearance but not in development. That is, it becomes “sudden” only as stock. As flow, it was always there.

Working in Stock

A second notion of stock and flow applied to public administration — perhaps even more particularly to public administration — is that public administration organizations not only tend to deal with stock better than flow, but they also tend to live in stock much more than they live in flow.

Indeed, public administrations are generally built on stock:

• Organizational structure
• Reporting hierarchies
• Job Descriptions
• Work Rules

All of these are stocks — static descriptions and accounts at a point in time.

Increasingly, successful entities are more structured on the notion of constant flow. In fact, dynamic organizations try hard to consciously and deliberately stay in a constant state of flow instead of congealing into a state of stock.

Thus the organizational structure is as fluid and flexible as possible. Thus reporting in a hierarchy is replaced with working in fluid project-based teams. Thus job descriptions are becoming … “work hard and be creative and add value to your teams and your projects”. Thus work rules are being replaced with “what tools and resources do you need to get the job done?” Indeed in organizations that have gone to the extreme of flow — they do not have traditional jobs any more. They organize around the notion of projects and tasks.

Conclusion

Stock and flow is a useful mental construct to apply to the work of public administration. As an official, ask yourself — am I spending too much time on stock? That is should I be:

• building the best possible org chart? Or should I be working towards removing roadblocks that stop my team from working seamlessly together?
• spending my time writing perfect 20 page job descriptions for each of my employees? Or should I be communicating our goals and our values and our objectives more to each of my employees?
• counting the number of intensive care beds? Or should I be monitoring the flow of intensive care beds relative to my population, or to the age of my population, or to the velocity of aging in my population?
• telling my political decision-makers how many kids in grade 8 can do the math test? Or should I be telling my political decision-makers that fewer and fewer kids can do the math test over time?

Stock and flow. A helpful framework to better incorporate into public administration.