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Address to Australian Institute of Management
Andrew Podger
6 November 2002
1. Introduction
I am pleased to participate in this celebration of members achieving 10 years association with AIM.
Of course, AIM like any successful business, is very clever with its marketing
- flattery is particularly effective;
- and who could possibly leave AIM when it makes you a Fellow
But, seriously, AIM plays an important role in promoting management professionalism, and interaction between public and private managers
- we in the APS Commission see AIM as a fellow contributor in improving public sector management, and as a colleague and sometimes a direct partner in our field.
2. Tonight I thought I might highlight a few of the key challenges for public sector managers today.
In doing so, I shall draw from the Commission's State of the Service Report tabled last week.
3. The first concerns values, and values-based-management
It is possible to trace our growing interest in values per se as a natural development : from the focus on 'managing for results' in the 1980's, through increased attention to how we achieve those results reflected in performance management and people development and competencies, and most recently on organisational capabilities and relationships where values and leadership become the explicit focus for management attention.
This development is also associated with our continuing search for an enduring framework for our operations, when constant change and uncertainty requires flexibility and agility, traits not enhanced by prescriptive rules and processes.
And, of course, there have been some headline breaches of ethical behaviour which raise serious questions for the public about whether they can have confidence in big business or in the nation's institutions.
In addressing the management challenge of values, I would highlight two particular points
- we must be careful that the discussion doesn't become too philosophical or too unreal : values-based-management does need hardwiring into organisational systems and procedures if it is to successfully affect behaviour and relationships, which is what it is all about. This includes governance arrangements, corporate planning, Chief Executive Instructions, performance management and appraisal as well as learning and development activities;
- also, if we want to influence behaviour, there is no avoiding the responsibility of leadership - practicing what we preach, appreciating our own influence, and acknowledging our own human frailties.
4. The second challenge concerns performance management.
My assessment is that Australia's record in public sector reform is one of the best, in large part because it has been sustained over 20 years with constant extension and evolution, not only accepted by public sector managers but embraced and often driven by them. We have not had U-turns, nor have we had only occasional reforms separated by periods of drift.
Yet we all observe room for further improvement.
The efficiency and effectiveness of Government programs has improved, with the program budgeting and evaluation agendas of the 1980's and the increasingly sophisticated outcomes/outputs budget arrangements under accrual accounting in more recent years. These, together with more systematic reviews of program performance and the wider application of competition in the public sector, have not only improved efficiency but also improved responsiveness to clients and program effectiveness more generally.
Under devolution, agencies have been able to increase the alignment between broad financial management and their internal corporate planning and governance, their strategic directions and their management of people.
The MAC Report last year on performance management highlighted the importance of alignment, credibility and integration, and most agencies are well down these paths.
I think the key challenge now is to direct our attention to capability building, using performance management systems to address more systematically skills and knowledge development, career planning, and knowledge management more generally.
5. The third challenge I want to highlight is workforce planning.
This flows directly from my last comments.
MAC will finalise a report soon on Organisational Renewal, which focuses particularly on our ageing workforce and on recruitment, development and retention of graduates.
The story is not one of crisis, but of risks not being managed well, and of capabilities and corporate knowledge being lost unnecessarily. Agencies need to improve their workforce planning.
Managers, and staff, also need to be better aware of the options open for phased retirement that may provide win/win possibilities through innovative workplace agreements. Increased mobility also adds to the importance of more structured skills and knowledge development. Workforce planning may also lead to better career planning and succession management which I believe can promote, not undermine, the merit principle.
Another observation from our Workplace Diversity Report is the impact of some of the structural changes we have seen, particularly the continuing decline in low level positions, and recruitment of school-leavers. This is adversely affecting employment of youth, particularly Indigenous Australians and other socially disadvantaged people. I suspect we need to develop clever new initiatives in these areas, consistent with the changing roles and structure of the APS.
6. The fourth challenge concerns accountability. It is closely related to the first challenge around values and leadership.
While most of the recent improvements in public administration have come from a closer focus on results rather than process, "the way we do things around here" remains critical.
Accountability is one of the foundation values of the Service, helping to define our role as an institution in Australia's democratic system.
Similarly "due process" is a particular responsibility of public servants. The elected Government may be responsible for defining the public interest in terms of policies and program priorities, but the Public Service has particular responsibility for the public interest in upholding the law and ensuring due process - impartiality, fairness, openness etc.
Again, we have seen many improvements in accountability over the last 20 years - or more like 30 years in this case. The panoply of administrative law reform has opened up our decision-making to far greater scrutiny, and budgetary reforms have also helped Senate Committees in particular to examine how well public moneys are managed.
Yet the Auditor-General and others are clearly uncomfortable. Our record-keeping is poor, partly because of time pressures to get on with the job, partly because of our changed culture which emphasises results over process, and partly because our obligation to be responsive to the elected Government in making public servants more sensitive about what is recorded and how.
I think there is room to achieve better alignment here, rather than to see everything as being in tension
- good record-keeping enhances knowledge management and therefore should improve future performance in "getting on with the job";
- technology which seems to be one of the villains contributing to poor record-keeping over the last 10 or 15 years, should now be seen as part of the solution, enabling public servants to maintain and access records with minimum effort;
- our obligation to be responsive to Government incorporates 'frank, honest, comprehensive, accurate and timely advice', all of which should be enhanced by good record-keeping not troubled by it.
Of course, there are tensions also, hence this remains a challenge. But it is one we need to take on.
Whole of Government
Finally, let me mention the challenge of whole-of-government management.
Many of the achievements of recent years have come through devolution that has allowed "managers to manage", with the flexibility and agility to handle different businesses and constant change and uncertainty.
Yet "joined-up government" is internationally a key focus of attention.
The IPAA recently released a study on Integrated Governance, and its national conference this year has the theme of "Powerful Connections". This was also one of the themes of the Commonwealth Association of Public Administration and Management conference in Glasgow in September.
For the most part, I think our national policy coordination processes in Australia work well - supported by PM&C and Finance in particular, and with a budget estimates system that is still the envy of most other countries.
We have also improved integrated service delivery, for example, through Centrelink.
Yet we have not systematically drawn lessons from the past (or from overseas) regarding regional coordination, crisis management, "wicked" problem-solving and so on. To get integrated services, what are the best models for the "management space" between the ground where services are delivered and the policy coordination structure at the top? How do we best balance lines of accountability upwards, with flexibility and responsiveness downwards and outwards? What role can information systems play in facilitating integration?
Conclusion
In conclusion, I want to draw from my experience in Health.
Health is as big a system as any, spending about 8.5% of GDP, most of which comes through the public sector.
It faces all these challenges in spades - values-based-management, performance management, workforce planning, accountability and whole-of-government management.
In my view, with a system as big and complicated as health, no matter how one restructures it, refines the policy setting, sets up performance systems and reporting, it is essentially beyond direct management. Critical to its success is the quality of leadership out there - not just in the Commonwealth and State central departments in the hospitals, area health services, GP Divisions etc. It is their capacity to build relationships, to address local problems, to be innovative within a framework of general values and understandings, that will make the difference.
Similarly, the role of AIM, like the Commission, is a vital one to nurture and maintain high leadership and management capability.
I wish you well.
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