State of the Service Report 2013-14: Steve Sedgwick Dodgy APS Commissioner Launch speech

1 December 2014

Good afternoon.

I would like to begin this afternoon by acknowledging the Ngunnawal People and their ancestors on whose traditional lands we come together today to launch the 2014 State of the Service report.

I would also like to pay my respects to their elders past and present, and extend that respect to other Indigenous Australians who have joined us for the launch.

I see many of my senior colleagues—thank you all for making the time to be here today.

I also see my colleague from PNG, John Kali, who is the Secretary of their Department of Personnel Management, and some of his senior colleagues.

John also attended the launch last year and we are grateful that he is again in town and able to join us.

My thanks also to the Shared Services Centre (and to Secretaries Lisa Paul and Renee Leon) for making this facility available to us today to launch this Report.

Our hope is that this State of the Service report and the surveys and other reports that underpin it will be a valuable resource for you.

This is the seventeenth State of the Service report.

The earliest compilers saw it primarily as a report card for the APS.

However, over the years, it has evolved to become more of a collaborative document through which the Commission works with agencies to identify opportunities for continuous improvement.

This collaboration has intensified since we moved to an APS employee census in 2012.

I would like to thank the 99,392 APS employees who completed the census and all the agency heads and their contact officers for the support they provided to us this year.

The report has grown to become a core source of information and analysis for agencies.

However, most importantly, much of the data that underpins the report is now made available to agencies sooner and in more useable forms than ever before.

Each agency, for example, has had access to their results of the employee census—including key benchmarks against comparable agencies—for some months.

This year, in addition, the demographic data from the Australian Public Service Employment Database (APSED) was made available through the Statistical Bulletin in September rather than the traditional December.

This was possible because of efficiencies in how we collect the data but mostly it is possible because the diligence of agencies in providing cleaner data to us.

Hence, although the State of the Service report is principally a statutory report by the Commissioner to parliament, it is the tip of a much larger iceberg of information exchange, learning and collaboration that takes place between the Commission and agencies throughout the year.

The State of the Service report is a small example of a more collaborative approach to improving APS performance that is working its way into every aspect of the work we do together in the APS.

This year the report takes a systems-level view of the Service.

What does that mean?

It means the report is focused on the way processes, systems, culture and structures combine to deliver better business outcomes more efficiently.

Why are we focusing on this?

Because we stand at an important cross roads in the history of the APS.

Both sides of politics are looking to us to help them reinvent government so that they can deliver against the community's dramatically higher expectations for services and engagement without dramatically higher taxation and while repairing the budget over time.

And both sides of politics are looking to the Service to play its part in lifting national productivity growth—which effectively means to secure greater outcomes at lower costs, including by working more collaboratively across program and agency boundaries.

In effect our challenge is to review, root and branch, what we do and how we do it.

This slide captures this requirement schematically.

We need to examine the efficiency of what we do (including in respect of our back office), the effectiveness of programs, the effectiveness of our organisations and how well we collaborate to maximise outcomes achieved.

The focus on organisational effectiveness and on collaboration are relatively new issues for us.

The attention now paid to organisational effectiveness partly has arisen because when we have looked into the entrails of the occasional major failure in delivery by the APS we find typically that there have been multiple points of failure in those systems, processes, governance arrangements and culture that go together to produce results in an organisation as complex as the APS.

What does this mean in practice?

This means that in practice we need to think beyond the management of projects and teams to the management of each APS organisation as complex, human system.

A system needs governance and in a human system culture eats strategy every time.

We need to pay close attention to both.

Moreover, priority setting and the alignment of resources to priorities is key to maximising the outcomes achieved with the resources available.

This lies at the heart of an effective performance management system.

But, equally, does clarity about the accountabilities and responsibilities of every individual, backed up with a workplace culture that supports and requires that accountability of each individual.

Indeed, it means that our focus on managing performance—organisationally or individually—must be intense.

Far more intense that it has been in the past.

I'll say more about this shortly.

This chart, which appears in the Overview of the report also provides a road map to where these issues are addressed in the body of the report.

Why do we need to focus on this now?

Over the years we have successfully created an APS that is responsive and action-oriented.

But having successfully created a responsive, action oriented culture concerns have emerged that the APS may have become too reactive, too focused on the short term and the delivery of tasks, and unable to generate the range of new ideas that we might have liked.

For the first time, the State of the Service report includes a diagnostic that allows us some insights into APS culture.

This is based on a widely accepted model of organisational culture that sees organisations responding to two sets of competing demands:

• first, there is a tension between the need to maintain stability to deliver consistent outcomes (a focus on task and process) and the need to constantly adapt to changing circumstances (a focus on innovation and people);
• second, there is a tension between the need to manage internal agency resources that produce capability (a focus on people and processes) and the need to meet stakeholder expectations (a focus on task and innovation)

This model is a little complex.  You will find a fuller explanation of it in Chapter 5 of the report.

This slide shows the results when this model is applied to the agencies that comprise the APS.

The whiskers show the range of average scores recorded against the model across agencies.

The diamonds show the average of agency scores and the boxes the interquartile range, i.e. first to third quartile.

As you can see there is some variation in the extent to which employees believe their agency emphasises the different aspects of this model.

Nonetheless, there is also strong agreement that APS agencies place more weight on task and process than on people or innovation—an emphasis on stability over adaptability.

This is not surprising but we do need to ask ourselves:

• At what cost? What are we missing?
• Is the urgent distracting us from the important task of longer term organisational renewal?
• Are we preserving what we have rather than focusing on where we need to be?

Today, in the cold light of recent external reports we need to address these questions openly and directly.

Although in general we have a record of achievement that we can be very proud of, both the Independent Audit of NBN Public Policy Processes and the Home Insulation Program Royal Commission, explicitly or implicitly, levelled substantial criticism at the culture and capability of the APS.

While a lot has been done across the APS over recent years, particularly to encourage a greater focus on becoming more forward looking, innovative and creative, the task of renewal remains incomplete.

These imperatives have been reflected in amendments to the Public Service Act introduced in 2013.

Of course, APS leaders remain responsible for delivering the government's immediate agenda.

The changes to the Public Service Act now also require leaders:

• to develop and use the capability to provide forward looking, creative contributions to the government about what that agenda should be; and
• to be stewards of an enduring institution who scan the horizon and build capability within their agency ahead of predictable need.

The renewed emphasis on capability is an encouragement to think beyond the immediate to the medium and longer term, recognising that it may be necessary to invest in building capability in the short term to minimise costs and maximise the effectiveness of the agency over time.

But we also need to reform our organisational systems.

The Capability Reviews—which are intensive, externally led examinations of agency leadership, strategy and delivery systems—have provided particularly