Enhancing value creation in inner areas through dynamic performance governance

Inner areas are contexts with rich and diverse cultural heritage and environmental assets (e.g., high-quality agricultural products, natural landscapes, archeological & historical settlements, museums, etc.) but distinct from urban settings because of their low population density and distance from key welfare services like healthcare, education, and transportation (Ottomano et al., 2022) (Ros. Such contexts face numerous challenges (e.g., depopulation, urban decay, aging population, limited job opportunities, outmigration, etc.) that worsen the existing constraints and limitations in their respective environments. These problems have a negative impact on the economic dynamism of these areas, leading to a decrease in public service provisions, external investments, and the overall quality of life and attractiveness of the area (Almeida, 2018). Such problems, referred to as “wicked problems” by Rittel and Webber (1973), have a feedback loop that worsens the already declining conditions of the socioeconomic, cultural, and ecological systems. These exhibit a growing blurriness, stemming from the complex structure of the relationships across different governance levels, making the policy agenda difficult to plan. Addressing such problems requires, on the one side, a long-term perspective that identifies the underlying causes and considers the broader systemic context to produce lasting change, and, on the other, adopting innovative modes of planning (Ansell and Torfing, 2014) to foster public value creation (Osborne, 2021). In this perspective, by adopting effective policies, public sector organizations (PSOs) have the potential to profoundly shape society’s path. Based on this, we posit the following. To address the above-mentioned challenges, it is crucial to involve different stakeholders (PSOs, businesses, and civil society) in co-planning, co-designing, co-producing, and co-evaluating holistic policy solutions (Bovaird, 2007) and to manage public programs or assets (Ansell and Gash, 2008) (p. 2). By collaborating – through formal and informal dialogue – stakeholders jointly create rules and structures guiding their interactions and deliberations, involving shared norms and mutually beneficial interrelationships (Madden, 2015; Thomson et al., 2009; Wood and Gray, 1991) so as to leverage and foster tangible and intangible shared strategic resources (e.g., time, skills, knowledge, values, contacts, etc.) (Bianchi, 2021, 2022). Such collaboration also implies the need for performance management and governance systems able from the one side to capture the intrinsic dynamic complexity characterizing inner areas and the related wicked problems affecting such contexts, and from the other, to support stakeholders in collaborative initiatives to foster consistency across an organizational, interorganizational and context perspective of sustainable value creation. This requires a suitable method able to cut across different and interconnected viewpoints, i.e., time horizon, accountability, and field (Bianchi and Grippi, 2024). In this contribution, it will be highlighted that such collaborative initiatives necessitate strong performance management and governance approaches for framing critical strategic resources, drivers, outputs, and outcomes. In line with this, the chapter aims to illustrate how the Dynamic Performance Governance approach (DPG) (Bianchi, 2016, 2021, 2022; Bianchi and Vignieri, 2020; Vignieri, 2022) may effectively enhance collaboration through stakeholder learning, thereby facilitating the creation of public value in inner areas. It will be emphasized how, building on three bodies of knowledge i.e., system dynamics, performance management, and collaborative governance, DPG is able to support the design of performance management and governance systems that help frame trade-offs in time and space (Bianchi and Williams, 2015; Bianchi et al., 2019), so to deal with the intrinsic dynamic complexity of wicked problems affecting inner areas. In our view, stakeholders could benefit from systems modeling and causeand-effect models as tools for capturing public value drivers, outputs, and both intermediate and final outcomes, therefore contributing to a discussion on public value creation in collaborative settings. In line with this, this chapter addresses the following research questions: (1) How can DPG play a role in creating public value in inner areas? (2) Why can DPG be a methodological guidance to foster stakeholder collaboration? (3) What role could DPG play in fostering inner areas resilience? To make these questions the thrust of this chapter, we will first frame, in Section 2, inner areas as dynamic and complex systems experiencing a set of interrelated wicked problems and then will delve into how collaboration among different stakeholders could be a powerful tool to deal with the inner areas dynamic complexity and create sustainable value creation. Section 3 will present the Dynamic Performance Governance approach as a suitable method that may help stakeholders create a shared understanding of the feedback structure behind inner areas dynamic complexity. In line with this, the Sicani mountain example will be presented in sub-section 3.1. to better capture the functioning of the proposed method. Section 4, will, then, highlight the benefits of adopting such an approach in the investigated domain. Concluding remarks, implications, and future research are provided at the end of the chapter. The overall goal of the chapter is to propose an approach that integrates performance management with collaboration through systems thinking to tackle the dynamic complexity of inner areas. In doing so, it aims to fill the gap by introducing the DPG approach as a novel contribution to the discourse on inner areas. It recognizes inner areas as complex ecosystems with interdependent actors whose interactions in co-experiencing and co-producing public services contribute to creating public value (Strokosch and Osborne, 2020). The originality of this chapter lies in proposing the DPG framework to operationalize these principles in the context of inner areas. By combining system dynamics, collaborative governance, and performance management, the DPG approach provides a framework for coordinating stakeholder efforts to solve the dynamic complexity of wicked problems. It emphasizes how a place-based perspective can improve governance system design by facilitating stakeholder learning, framing trade-offs over time and space, and promoting long-term public value creation