Thursday, December 08, 2016

Ensuring that digital transformation delivers the right outcomes for Australia's Government

I wrote this post in response to a LinkedIn conversation around this article, Digital government could become just more cost cutting, warns Internet Australia - which should be read first for context.

Digital transformation should never focus on the digital, it's about transformation.

Digital is a toolset and has opened new doors to how services and organisations may be transformed - however the culture and structural changes must occur or any digitalisation of services is simply a bandaid measure that will have little impact on the effectiveness or productivity of an organisation in the long-term.

The public service has, and continues, to resist cultural and structural reform for three main reasons:
  1. The current cultures and structures suit the people in charge. They've benefited from the current system and have been normalised into it, making it difficult and frightening to consider changes and reforms. 
  2. The status quo is supported by legislation, policies, rulings and lived experience ('it's how we've always done it'). Changing culture and structure is hard when it is shaped by these influences and requires disruptive, not incremental, steps to make strong inroads (such as creating new agencies or having all staff re-apply for adjusted roles).
  3. There's little urgency for change. The public sector is seeing a slow leaching of budgets and talent but, similar to the analogy of boiling a frog, the water is heating too slowly for the frog to get concerned and hop out, until it is too late. While many agencies now have innovation programs in place, with some real successes coming from these, they still tend to mostly focus on fringe and low priority areas, 'safe' areas that don't threaten existing structures, services or operational modes. 

The political end of government is slowly being less well served by public servants but, from the evidence at hand and my conversations, doesn't always know what to do about it.

They're busy fighting ideological battles over control and interests to get, or retain, power and largely do not have executive experience within large organisations - essentially they lack the skills to lead change in government, as do many public sector leaders whose roles are about maintaining the status quo and serving the government of the day, not retooling the public service for the future.

As a result we're seeing a slow decay in our institutions, a hollowing out of the talent pool (with good people fiercely contested over and 'deadwood' slipped into Machinery of Government changes where agencies can offload them, as managing them out is too hard) and increasing brittleness as capability is lost.

The average tenure for a public servant is ten years, and 77% have only worked in one agency - down on past years, but still indicative of organisations that are very comfortable and safe places to work - whereas private sector 'imports' on average last 3 years (less in senior roles) before leaving for greener pastures.

How do we fix this situation? 
Good question - it requires effort at all levels, including:

  • Working to upskill upcoming politicians and their advisors to understand how to work effectively and lead the public sector,
  • working with senior bureaucrats to develop and supplement their knowledge and skills, 
  • working with mid-tier Managers (future senior bureaucrats) to shift their track before they become too embedded in existing culture, and 
  • working with staff to push responsibility downhill, with strong KPIs that can be used to weed out the unsuitable and support and reward high achievers. 

How likely is this approach?
Right now it doesn't look particularly likely to me, as an external observer, but here are a few areas where progress could be made.

  • Rewarding talent
    The public sector's pay scales do not foster or encourage consideration of the APS as a career option, providing little to no room for individual outperformance or achievement.
    The government's pay policy, as being carried forward by the APSC, is a strong disincentive for external talent to work for the public service as staff. The lack of rewards and diminishing flexibility, with long-term pay disputes in progress for over three years, leaving public sector wages stagnant in many places, falling below private sector equivalents, do not encourage private sector talent to consider the richness, diversity and opportunity to create national change that exists across public sector roles.

  • Unnecessary movementsUnnecessary movement must stop - such as Deputy Prime Minister Joyce's 'pet project' of moving agricultural agencies out of the bush capital (which is surrounded by farms), costing enormous amounts of money, lost time through disruption and skills loss, as most will not move away from career opportunities or families to work in locations where their access to other agencies they must work with, and parliament, is far diminished.

    Also the incessant shifts of parts of agencies to other agencies (Machinery of Government changes, or MOGs) must cease - with portfolios defined and set for a decade at a time, with reviews of their responsibilities occurring independent of political dictates as broad engagement processes looking at best practice across public and private sector organisations globally and consultation processes with staff, thought leaders and politicians, who then are appointed to specific portfolios or cross-portfolio duties.  Any changes at the fringes within each period can be managed through collaboration between agencies, enabled by more flexible and modular systems.
  • Standardised SystemsAgencies must stop going their own way on systems and IT. The Commonwealth only requires one financial system, one HR system, one grants management system, one email system and so on - in fact there are companies larger than the entire Australian Public Service which make this work very effectively at greatly reduced management costs.

    With agencies all independently procuring it does fosters a level of market competition (generally between multinationals as these systems are largely provided at scale), but at enormous cost.

    Instead government needs to look at framework approaches where vendors can 'plug in' to an overall consistent framework, providing specialist services without the huge expense to agencies OR to the vendors in relentless tender processes.

    This will also help with moving people about (when necessary or as career moves), with far less retraining and human errors, as well as faster paths to productivity.
  • Institutionalise changeFinally, agencies must stop having 'change programs', or 'digital transformation projects' and recognise the reality that change is constant and a stop/start approach with beginnings and endings is not serving them well (for the most part).

    We need public service agencies to develop the systems and cultures to manage and thrive in constant change, not to change from A to B over a period, take a break for a few years, then change from B to C, as their environment moves in the same time from A to Z.

     Their current approach to change holds it at arms length, treats change as the unnatural state between points of stability when, in truth, the reverse is true.

    Change is the constant and brief periods of stability are unusual and becoming rarer. Until this flip in thinking, culture and approaches occurs, government will lag further and further behind and struggle to build the necessary change-resilient systems needed for 21st century good governance.
That's my key thoughts right now - my views have not really changed on this front for a decade - in which we've seen six governments/prime ministers and over 150 Ministers come and go, as well as at least 30 agencies get created and destroyed.

With that rate of change and uncertainty potentially continuing, it's hard to see how the Australian Government will continue to thrive without taking some of the steps above.