The present study aims to design a public value-creation model for provincial governance, focusing on the role of public service management and excellence in advancing the public interest. Employing a qualitative approach and grounded theory methodology, this study conducted in-depth, semi-structured interviews with 30 key governance stakeholders in North Khorasan Province, including senior and middle managers, experts, council members, private-sector activists, and citizens. Data analysis through three stages of open, axial, and selective coding resulted in a paradigmatic model in which "the necessity of transition from execution-oriented governance to value-creating governance" was identified as the core phenomenon. Findings indicate that this phenomenon—i.e., the awareness of the necessity of transition—emerges at the intersection of institutional pressures, functional inefficiencies, and increasing stakeholder demands, and is shaped within six contextual conditions: socio-cultural, economic-resource, geographical-infrastructural, institutional-governance, environmental-climatic, and human-organizational capacity. Influenced by political, economic, managerial, and environmental intervening conditions, actors pursue six categories of strategies: institutional-strategic, operational-service, communication-trust-building, human capacity development, governance role-making, and technological-adaptive. The consequences of this process manifest at economic-developmental, social-institutional, governance-institutional, functional-service, and macro-symbolic levels, with feedback loops placing the governance system on a self-regulating path in interaction with national governance. By presenting a dynamic, process-oriented model for public value creation, this study demonstrates that public service excellence depends on local actors' capacity to adapt strategies creatively to multifaceted provincial contexts through feedback loops and continuous learning, while interacting with national governance levels and aligning with upstream documents.