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Dr Alan Ryan

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The Secretariat

Independent Review of the Australian Public Service

Department of the Prime Minister and Cabinet

Submission to the Independent Review of the Australian Public Service

I am pleased to make the attached submission to the Independent Review of the Australian Public Service (APS). It is an independent submission, the views expressed in this submission are the responsibility of the author and do not necessarily reflect the position of any organisation.

I would be delighted to discuss the content of this submission with the Review panel. I may be contacted at REDACTED

Yours sincerely

Alan Ryan

31 July 2018

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Submission to the Independent Review of the Australian Public Service

Dr Alan Ryan

The views expressed in this submission are the author’s in his private capacity and do not reflect the position of any organisation.

Contents

Introduction3

The impact of the Fourth Industrial Revolution on the APS3

Summary of recommendations:4

Driving innovation, delivering high-quality policy advice and tackling complex challenges5

Acquiring and maintaining the necessary skills and expertise to fulfil the APS’s responsibilities7

The historical context7

The shifting educational profile of APS entrants8

Generalists and experts: public servants need to be both9

Form must follow function in the Information Age workforce12

Agility is founded on the ability to rapidly assemble expert teams12

Professionalism – what needs to change13

Competing demands for Public Service Capability15

National policy-making is bigger than any single portfolio15

Making adaptation work: Implementing the Integrated Approach to policy-making17

None of this is new, there are precedents . . .17

Ensuring that our foreign and security interests are coordinated and well-managed20

We do not need to keep making the same mistakes . . .20

What we learned from our longest war20

Conclusion22

Introduction

This submission to the Independent Review of the Australian Public Service (APS) identifies ways that the APS can create efficiencies and effectiveness through the application of an explicit Integrated Approach to cross-portfolio coordination. This approach, which has been adopted by the Government of the United Kingdom, means that the APS will move from conducting policy-making, planning and operational delivery in departmental stovepipes. Multi-disciplinary and multi-departmental teams will increasingly manage complex issues.

I submit that the task of creating public value that is unique to the APS requires it to shift its focus and composition away from being a generalist, ‘non-expert’ employer to being one that is explicitly professional and more capable of providing expert advice to the Government. This adjustment requires significant cultural change. This change is already underway.

The combination of new technologies being identified as a ‘Fourth Industrial Revolution’ and operational necessity is driving it. Across government departments and agencies are already building greater preparedness and resilience in multi-agency task forces and through multi-agency exercises, collective education and training and cooperation on domestic and offshore operations.

The impact of the Fourth Industrial Revolution on the APS

Within a decade the fusion of artificial intelligence, Big Data, robotics, the internet of things, quantum computing and machine learning has the potential to supplant many, if not most, traditional service interactions with the public. The expense of maintaining a public sector workforce will continue to place pressure on the outsourcing of basic service functions to private sector providers, while many traditional functions will be automated. This process, identified as the Fourth Industrial Revolution, will radically transform the future of work in a very few years.

Public sector service provision is fundamentally different from private sector service provision. As Harvard Kennedy School Professor Mark Moore has demonstrated, public sector managers must both satisfy the legitimizing requirements of their political masters and meet the needs of the broader community by creating public value. Once it made sense to do this in discrete, siloed portfolios – effectively applying the Industrial Age model of centralized command and control to the efficient delivery of standardized processes.

Now the degree of interconnectivity produced by a data driven economy means that to be effective, let alone efficient, then the APS must adopt an entirely new approach to coordinating its efforts. This public sector includes civilian, police and military personnel, not just the traditional civilian bureaucracy. Increasingly, the most creative public sector workers are those who have had cross-over careers and who are capable of conceiving cooperative interactions across institutional boundaries.

In a nutshell, the APS has a significantly decreased requirement for process managers and workers, yet it continues to recruit these skill sets. Many of today’s leaders and managers are still inclined to recruit people just like themselves – not the people who are required for future public sector work. The APS requires staff who have both deep subject matter expertise and who are able to collaborate with other experts across portfolio boundaries. To meet this requirement requires a clear-eyed and robust national commitment to managing the greatest technological and cultural revolution of all time.

Summary of recommendations:

The APS requires a whole-of-service workforce plan that reflects the principles-based professional approach most recently exemplified in the UK Civil Service Workforce Plan.

The APS must professionalise its workforce, which requires the adoption of the Information Age ‘Adaptive Approach’ to public sector leadership.

The APS must invest in professional development that maximises on-the-job learning, sector-wide training courses and experiential learning through rigorous multiagency exercises to promote high levels of preparedness for unanticipated challenges.

The APS needs to invest in a skills and knowledge register to access its existing and future human capital effectively and efficiently.

To be characterised as a professional public service, there needs to be greater opportunities for movement for APS members and for entrants at every level from outside the sector, with career benefits accruing to those with private sector, academic, non-government and international career experience.

The APS should implement the ‘Integrated Approach’ to policy planning and operational execution. Departments and agencies should retain their ‘Raise, Train and Sustain’ function, but policy planning and operational execution will increasingly be the province of specific purpose multi-agency task forces.

The APS needs to invest in those agencies whose business it is to enable Information Age integration. This includes an explicit commitment to whole-of-government lessons analysis, dissemination and inclusion in strategic policy decisions.

The sensitive issue of Ministerial/APS relationships needs a fundamental formal reassessment – similar to this Review. In an era of digitally-driven complexity, Ministers are most effective when they are supported by their departments to focus in the critical larger policy picture. APS departments and agencies need to develop the ability to better support their Ministers – which requires a greater commitment to building deep professional expertise within the APS. Until the relationship between Ministers and their Departments is re-articulated to cope with the data overload of the latest phase of the Information Age, Ministers will be overburdened and the APS will not deliver its full capability.

Driving innovation, delivering high-quality policy advice and tackling complex challenges

My sense is that the future of work is to be organised more around teams, where authority does not so much come from supervisory authority but more from being a team whose members and leaders have different skills.

John Lloyd, Former Australian Public Service Commissioner.

Governments everywhere are grappling with the major cultural adjustments required to make the objectives of this review a reality. The Australian Public Service has always stood comparison with international counterparts in government effectiveness. This standing cannot be taken for granted as new technology, changing demography and evolving expectations of the public sector impact on the way that government agencies organise themselves. Those countries that take advantage of the benefits of an adaptive, integrated public sector workforce will be better able to handle the shock of the new than those that do not.

Government departments and agencies are more connected in making and implementing policy than they have ever been. It is commonplace for one agency to have the recognised policy lead while dozens of other organisations are involved in program delivery, or share specific policy responsibilities. Public/private sector partnerships are increasingly the norm. Accordingly, no single individual, or organisation, can possibly possess all the knowledge required to provide the Executive Government with fully integrated and thoroughly considered policy advice.

Good policy is developed by teams of experts who have considered all the angles. As the former Head of Australia’s Public Service, Professor Peter Shergold wrote, reflecting on the policy shortfalls of the Australian Home Insulation Program and the National Broadband Network:

Mistakes can be costly, and not just because taxpayers’ funds may be wasted, misapplied or used profligately. Poor administration can, on occasion, deprive citizens wrongly of their liberties, constrain the application of their rights, fail to inform them of their responsibilities or even, tragically, cost them their lives. Public servants need to answer for their actions.

We are witnessing a shift from a traditional centralised, rules-based public service culture to a more normative, principles and behaviours-oriented culture. Initially, this will be more of a change of emphasis, but generational change will cause the culture to evolve faster than institutions are likely to. This way of doing things has the potential to free up ministerial executive offices and departmental senior executive teams to make strategic determinations rather than remaining bogged down in minutia. Not surprisingly, this poses a threat to those who perceive power to be a function of seniority rather than a resource shared by those who possess the requisite expertise and positional responsibility. It is, however, a better way of utilising the professional resource that is the APS.

The traditional centralized approach to managing interdepartmental liaison and coordination is through the interdepartmental committee process. This model provides something of a comfort zone for public servants whose authority is positional rather than based on their ability to lead change. Committee decision-making ensures that it is difficult to ascribe accountability for policy to any particular area or person. Policy derived in the grey space between departments and agencies may have worked at a time when the pace of change was slower. Professor Shergold has shown that in today’s world poorly integrated policy and decision-making can have disastrous results.

Working through traditional committee processes does not reflect the actual pace of information exchange, nor the requirement for instant and persistent coordination. A professional model for the APS will ensure that it is more responsive and that the Service’s human capital is fully realised.

The good news is that recent years have seen substantial progress in achieving a more whole-of-government approach to policy development. Australian government departments and agencies are more willing to accept common principles that define their relationships.

Consultation between policy areas is substantially better than it was a decade ago. Improved coordination measures, such as interagency task forces, embedded liaison personnel, multiagency education and training and joint exercises are leading to a system of government that is more ‘joined-up’ than ever before. But as one departmental secretary recently observed: ‘whole-of-government merely means that we are all in the room together, integrated suggests that we are working together’. The next step in the professional development of the Australian public service is to start breaking down the stove-pipes that define the legacy public sector workplace and maximise our access to the human capital of the emerging workforce.

Recap

Technological change, particularly in the area of Artificial Intelligence, means that the APS needs to evolve into an adaptive, integrated public sector workforce.

Centralized command and control approaches don’t work, public servants need to work across institutional boundaries

We are witnessing a shift from a traditional centralised, rules-based public service culture to a more normative, principles and behaviours-oriented culture. Public sector leaders need to drive these changes, not simply react to them.

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Acquiring and maintaining the necessary skills and expertise to fulfil the APS’s responsibilities

No longer should we take people with no experience of an area or job and throw them in at the deep end because they have a gap in their experience. Gone are the days of the gifted amateur. Today’s world is too complex and demands are too high.

The Honourable Matt Hancock MP, Minister for the Cabinet Office, United Kingdom.

The historical context

The APS reflects the society from which it is drawn. From Federation to well after the Second World War, it was rare to find university-trained professionals within its ranks. Unlike the UK Civil Service, which traditionally had drawn on the universities for talent, Australia did not possess a large pool of university graduates. Initially, Australian universities mainly focused on providing graduates for the traditional professions and did not emphasise a broad, liberal education. Admittance to the early public service was by highly competitive examination. The state and Federal public services tended to attract the bright and upwardly mobile, whose families could not afford a university education. It was a time when without additional means or scholarships, the great majority of children left school at 14. As an austere model founded on hierarchy and gradual merit-based promotion it worked well, particularly as many public servants supplemented their early education with university night classes and other vocational qualifications. Like other career models of the time, it was founded on the reality of a long practical apprenticeship. Its strengths was the considerable subject matter expertise that public servants acquired over time, through conditions of relative (if grinding) career stability.

It was not a model that encouraged innovation as the Coombs Royal Commission on Australian Government Administration found in its 1976 report. From the 1960s the APS shifted to a generalist model of recruitment. By this time the recruitment culture had changed as the much-expanded university system was graduating large numbers of graduates – many with non-professional generalist science, commerce and arts degrees. The APS sopped them up, as it had never before had access to such a large cadre of educated staff. Over the next 40 years, considered a golden age by many long-term public servants, staff rotated through jobs, generally within the same department at an ever more rapid rate. Mistakenly or not, ‘box ticking’ rather than deep expertise or a sense of ‘job ownership’ became seen by many staff, as the path to career success. Non-expert managers replaced experts who were managers. One of the consequences of the accelerated rate of staff turnover is that public sector project managers may be replaced several times in the course of a project. It is difficult to track decision-making or ascribe responsibility for project failure under these circumstances.

One of the weaknesses of the model of APS employment that emerged after the 1970s was that fewer public servants than before could assert deep subject-matter knowledge on matters for which they had policy responsibility. While this generalist employment model did not result in what Huntington defined as a ‘professional’ service, this group are entirely capable of managing the service delivery and transactional elements of public sector business – at the same time as these functions are being automated and outsourced. Unqualified generalists are poorly suited to the business of complex policy development or crisis management when complex interconnections need to be made rapidly and accurately. In today’s APS the negative impact of this lack of expertise is exacerbated by rapid staff churn and loss of institutional memory. As Verona Burgess recently recorded:

The median length of service of ‘ongoing’ APS staff is now 10 years. Of 137,848 ‘ongoing’ staff, 47% have served for fewer than 10 years.

The shifting educational profile of APS entrants

This historical legacy of a generalist workforce, compounded by a shallow pool of expertise is partly counter-balanced by an increase in the number of professionally educated APS entrants. This has been a positive development in recent years. In policy areas it is notable how much better qualified junior and mid-level graduate entrants are than their seniors. Postgraduate qualifications have replaced undergraduate degrees as the base standard. In 2018 the Department of Foreign Affairs and Trade (DFAT) had the highest percentage of postgraduate qualified entrants at 42 per cent. It would be unusual for any of the other successful new-starters for this notoriously rigorous Department not to have a good honours degree as a minimum qualification. What is interesting is that DFAT is no longer unusual, 40 per cent of Department of Industry and Science and 35 per cent of Defence Department entrants had postgraduate qualifications. Across the APS 26 percent of new starters had two or more degrees. The number of entrants with honours degrees and in which disciplines is not known.

Many graduate-entry recruits have undertaken research within the fields they wish to enter and many have prior work experience in the private or non-government sectors, often overseas. In many policy areas, graduates who have arrived straight from university without industry or operational experience are considered non-competitive with their more experienced peers. Modern public services in other countries reflect this trend as legal professionals and postgraduates with degrees relevant to the more complex work of government are attracted to public service work as an employer of choice.

Competition for the more professionally attractive policy positions within government means that it is a buyer’s market for job selection panels. At the same time many public service leaders are concerned that the best potential Gen Y and Millennial public servants will not settle down to a career in agencies that equate seniority to hierarchical span of control, rather than ability to innovate conceptual and exert influence across boundaries. Having experienced a period of growth in the first decade of the century recent recruitment freezes and the stalling of enterprise-level salary negotiations combined to make the public service marginally less attractive than it was a decade ago. It is one thing to attract the very best, it is quite another to retain them, engage their interest and give them the experiences that will ensure that they remain innovators and not join the Borg collective.

Generalists and experts: public servants need to be both

The APS needs staff who are generalists, but who also possess deep and relevant professional expertise in some aspect of their work. The imperative to be able to work in horizontally constructed teams comprised of experts from outside traditional directorate, branch and divisional structure mean that these teams-of-teams need to start their work with a degree of credibility founded on the fact that most if not all of the necessary skill sets and expertise can be assembled to mount a policy task.

The United Kingdom’s Civil Service Workforce Plan 2016-2020 provides some indication of the adjustments that we need to make to our sense of what a public servant is. It is worth citing this in full:

To ensure that our people have the right skills to deliver our national priorities we need to create more opportunities for movement. This will allow civil servants to gain a more diverse and broad range of experiences from working across a number of different departments, agencies and in the wider public and private sector. It will also ensure we are able to respond to emerging priorities and can swiftly move people into, and across, the Civil Service to deliver key priorities.

Our people must also be able to work confidently with other sectors, and international organisations, as we share delivery of outcomes with external partners. Developing partnerships with other sectors will help develop these skills, and also increase secondment opportunities in and out the Civil Service, creating more opportunities for civil servants to spend part of their career in the private and other sectors.

Even today, people joining the public service are finding that they are being streamed, often against their will, into limiting career stovepipes (or ‘job families’) where career progression is as much dependent on meeting common public service selection criteria rather than demonstrated capacity for innovation. While many would deny it, and it is certainly not the intent, the reality of much public sector job selection and promotion is a system of implicit patronage. To rectify this departments have offered training in dealing with implicit bias. However, without embracing the more inclusive model that the UK Civil Service advocates, we are unlikely to retain access to the widest possible pool of professional expertise.

The future APS must make attracting deeper subject-matter experts a priority. It is still considered a badge of honour by some senior public servants to admit to having no professional qualifications or specific policy expertise in the policy area they are employed in. In some policy areas this has led to some extreme examples of group-think where an assertive policy maker can set a policy direction that is slavishly mimicked by non-specialist staff for decades – simply because that was the prevailing orthodoxy.

The current model of civilian graduate recruitment is not consistent across portfolios. Defence, a policy rich environment, identifies twelve career ‘streams’ – one of which is ‘generalist’. However, the Department’s website indicates that generalists may find themselves working in areas that include:

Strategic management in Navy, Army or Air Force

Tender and contract negotiations

Capability analysis

Strategic policy

Environmental issues

Corporate governance

Public affairs and media liaison

Project management

Contracting, program and project administration

International engagement policy

Long-term planning on future force structure and capability

In any other walk of life, notably the private sector, it would be expected that staff would have significant qualifications and generally, broad industry experience for employment in each or any of these areas. Where once familiarity with processes would have sufficed, the constantly changing work environment negates the advantage of time-in-service. As the Defence First Principles Review found in 2015:

‘Defence does not have a strategic workforce plan for its enabling workforce. Without it, Defence struggles to identify skills gaps across the agency and place the right people with the right skills in the right roles at the right time’.

Unfortunately in an environment characterised by complexity and rapid, often unpredictable, change any single agency workforce plan will struggle to stay relevant with the requirement to form constantly changing teams. We no longer require a semi-skilled labour force, we require holistic concepts of a workforce that embraces the mobilisation of teams of expert policy professionals.

The Department of Foreign Affairs and Trade adopts a different approach, which recognises the requirement to be able to source deep expertise from within its workforce. It identifies two employment categories — ‘generalist’ and ‘specialist’. The terms generalist and specialist are categories that dictate internal mobility restrictions attached to employment for staff (in other words – if an employee has been recruited to a ‘specialist’ role, they are not immediately able to seek a transfer to another, unrelated area of the department. These categories do not reflect areas of capability.

DFAT does not have streams within the department. Workforce expertise and capability (anchors) are required across the range of the APS work function family. In many ways DFAT represents the APS in miniature as it has to replicate many functions across the domestic sphere in the international context. Accordingly, DFAT requires expertise in: information communication technology, international security, economics (both trade and international development), international law, protective security, property management, multilateral relations, passport support and a variety of other functions. A key focus of the department’s five year Workforce Strategy is to shift the workforce towards a capability based workforce model rather than historical notions of streams of expertise.

We have come some way from DFAT’s recruitment materials of the 1990s which proudly asserted that the quality of the individual, rather than any explicit knowledge was what mattered. DFAT now emphasises the requirement for professional knowledge and expertise and has established:

Australia's first Diplomatic Academy on 25 May 2016 as a leading-edge learning and development hub for all staff working to advance Australia's interests internationally. The Academy enables a continuous, career-long investment in skills and capability for all DFAT officers around our global network. It provides training to Australian officials across the APS in international engagement tradecraft, including in areas such as advocacy, negotiation, forecasting and strategic planning. The Academy focuses on our agenda in the Indo-Pacific and is building collaborative links with foreign ministries and diplomatic academies in our region and globally.

Without the professional intellectual tools to develop new policy, innovation is impossible. DFAT’s outward-looking ‘adaptive’ approach provides a useful precedent for the rest of the APS. We need to focus on lifting the professional expertise of staff and broaden their allegiance from their own department or agency to a more mature sense of working in an integrated national enterprise.

This point was reinforced by Professor Shergold in his assessment of why so many high-profile policy initiatives had gone so badly wrong in recent years:

The importance of formal qualifications should not be underestimated. One of the best levers to mitigate risks associated with program delivery is to have properly trained and certified practitioners. It seems inconceivable that an agency would put an ‘unqualified’ manager (someone lacking accredited proficiency) in charge of a multimillion dollar program, but in fact this occurs regularly. Formal qualifications and demonstrated proficiency are a prerequisite for many professions that are given authority for financial and administrative risks inside and outside of the APS: consider, for example, lawyers, engineers, veterinarians, accountants and auditors. These professions have long-standing educational requirements which provide a degree of assurance to employers of the competency of the practitioner. The more senior the practitioner, the higher the level of qualification that is expected.

Recap

The APS require a Third Generation workforce. Its First Generation served long apprenticeships without significant Tertiary education. The Second Generation consisted of largely Tertiary educated generalists. The future public sector workforce must be a professional one.

The APS requires a strategic workforce plan to enable it to identify skill requirements and match the right people with the right skills in the right roles at the right time.

Like the UK Civil Service APS employees need to be adaptable, willing and able to work across portfolios and sectors. Their first loyalty must be to the APS, not any particular department or agency.

Formal qualifications matter, for this reason (as in the US) senior public service members resumes should be published on-line.

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Form must follow function in the Information Age workforce

If a professional is one who provides a bespoke solution to a singular problem, then the public service is most definitely a profession’.

Allan Behm, No Minister, 2015.

Agility is founded on the ability to rapidly assemble expert teams

Perhaps the single characteristic that distinguishes the Information Age, digitally enabled, workforce from our Industrial Age forebears is that we now simultaneously enjoy dramatically enhanced access to information and experience chronic data overload. The work of government, always complicated, is becoming more complex at an exponential rate – driven by the seemingly unlimited supply of information at our disposal. Our structures and systems are struggling to adapt. The traditional portfolio approach to government administration is founded on the expectation that policy formulation can be assigned to specific departments and agencies. Yet policy issues in a globalised world are increasingly characterised by interdependencies.

Discrete portfolios will still continue to be relevant in the simpler aspects of service delivery provision by government. Departments and agencies possess an essential ‘Raise, Train, Sustain’ function. But policy-making and coordinated government operations require different approaches to those that have sufficed in the past.

Where once the model of ‘generalist’ recruitment dominated, there has been a shift to require more highly educated and experienced experts. The debate about balancing between ‘hedgehogs’ (who know one big thing) and ‘foxes’ (who know many things) is an old one – dating back to the Greek poet Archilochus – but it is not an either/or proposition. The renowned strategist John Lewis Gaddis devotes his 2018 opus On Grand Strategy to demonstrating that it doesn’t much matter ‘who’ the experts are, or ‘what’ their accustomed thinking is. What really matters is ‘how’ they think – are they logical and critical thinkers with the professional tools to ensure that the result of their collective deliberations exceeds the sum of their individual parts?

A modern public service requires both staff who are single-minded subject matter experts as well as polymaths who can be expected to bring both professional expertise to bear and make the necessary connections with other portfolio experts. The balance has tilted away from the former to the later. More progressive workforce planning accepts that innovation is unlikely in a traditional public service portfolio construct. The Industrial Age human resources framework emphasises centralised expertise, focused authority and broad spans of control. Traditionally, it discourages the UK Civil Service Workforce plan, for example, suggests that it is undesirable for public servants to spend their entire career within the bureaucracy, much less within a single department.

To be effective members of interagency teams policy-makers need deep subject matter knowledge in the tasks they are responsible for. They must also have a broad professional understanding of the capabilities that their colleagues bring to common tasks. Perhaps most importantly, they need the ability to work effectively in teams assembled at short notice to undertake specific policy projects. Two out of three proficiencies will not suffice. To respond to the greater demands of a more complex era we must shift our notion of eligibility for a public service career from a generalist to a professional model.

In his darkly humorous and informative work No Minister, former senior public servant and Ministerial Chief-of-Staff Allan Behm argued that the public service is experiencing a crisis of confidence and that few public servants even saw themselves as members of a profession. To borrow the rather sharp observation of the Honourable Matt Hancock MP, Minister for the Cabinet Office in his speech releasing the UK Civil Service Workforce Plan we need a professional Service, not a gaggle of ‘gifted amateurs’. A public service founded on requiring more relevant qualifications and relevant demonstrated proficiencies is necessary to risk manage future shocks. A modern public service should not be an exclusive guild as some traditional professions have fashioned themselves. It should have all the characteristics of a true profession, what Samuel Huntington defined as the possession of a specific body of expertise, the exercise of responsibility and a corporate identity.

Without this corporate identity the APS will continue to struggle to provide the level of advice that Executive Government requires to deliver strong and workable policies. In part, Behm ascribed this to the media targeting the public service. He also blamed the negative comments of many politicians and ‘the fact that the public service is the whipping boy of choice for governments’. He concluded that ‘it is little wonder that the public service is insecure, defensive, apologetic and, very often, cowed’. Perhaps most sadly, he argued that:

The problem is more likely to result from the deadening effect of hierarchy and the absence of psychic rewards that good mentoring and professional direction create. As my good friend and former departmental secretary Paul Barratt once observed . . . ‘What institution, year on year, can recruit the very best graduates from Australia’s universities and, within a decade, render them totally unemployable?’

Professionalism – what needs to change

Professions are characterised by being self-regulating; by establishing and enforcing standards of behaviour; performance and ethics and by exercising control over the workplace application of an identifiable body of knowledge. The old public sector workforce was certainly bound together by the APS code of conduct and relevant legislation, but in all other regards departments and agencies tended to operate as independent city-states. People joined a department, not a service and movement across agencies, much less to the private or not-for-profit sectors was seen as a distraction to a career. In fact career(ist)s generally benefited from being seen as effective advocates for single-service priorities rather than national objectives. By contrast, the October 2009 discussion paper of the Advisory Group on Reform of Australian Government Administration identified the attributes of a professional public service as being:

mobility—ensuring that people can readily move into and across the APS to help build a richer base of skills, ideas and experiences at all levels, as well as enabling resources to be easily redeployed to high priority areas

continuous improvement—striving for continuous improvement in all areas of public administration, including business systems, agency management and culture

one-APS culture—fostering a better environment for cross-organisational collaboration, including between regulatory, service delivery and policy development agencies.

This objective is never going to be achieved in a siloed, Industrial Age workforce. It requires personnel who understand how to operate within a national public sector profession.

Recap

Departments and agencies possess an essential ‘Raise, Train, Sustain’ function. But policy-making and government operations increasingly need to be coordinated across portfolios. This requires the development of new and more flexible approaches to interagency coordination than the current committee and interdepartmental emergency task force framework allows.

In the Information Age no single department or individual possesses all the answers. Public servants and their organisations need to institutionalise the capacity to work effectively in teams assembled at short notice to undertake specific policy projects.

To most effectively serve Executive Government with frank and fearless advice the APS needs a cohesive, corporate, professional identity, expressly founded on its proprietorship of the delivery of public value.

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Competing demands for Public Service Capability

The notion of establishing a ‘tiger team’ is one that should be adopted. It would assist the APS to meet future challenges of government program delivery, particularly with new, large and complex initiatives.

Professor Peter Shergold .

National policy-making is bigger than any single portfolio

In 2009 the Advisory Group on Reform of Australian Government Administration suggested that ‘there is a concern that the policy capability of the APS requires strengthening, especially in terms of its ability to provide innovative and creative advice at a strategic level’. It suggested that there was a dichotomy between the work of routine service delivery by government, such as the provision of welfare payments, school curriculums and court systems and the need to provide long-term and critical strategic policy advice. That work requires strong institutions, clear and transparent processes and clear lines of accountability.

The work of making and implementing high-level strategic policy is very different from service delivery to citizens, institutional human resource management or facilities management. These functions are essential to government, but are essentially transactional functions. Policy, particularly strategic policy, cannot be constrained by arbitrary departmental boundaries. It requires collaboration, greater acceptance and tolerance of risk, longer-term focus and a highly skilled and experienced workforce.

Making coherent policy that is integrated with all aspects of the national project is hard. It is becoming harder as the pace of technological and economic change continues to accelerate exponentially, without adequate institutional and behavioural adjustments. To take advantage of the opportunities that digitisation presents, change agents must implement structural and behavioural adjustments to the APS. The APS needs to move from being an Industrial Age transaction-driven organisation to one that is increasingly responsible for coordinating and implementing Information Age policies, public programs and strategies incorporating civil society and private sector actors.

In his incisive report Learning from Failure, Peter Shergold, reflecting on a career that culminated as Australia’s senior public servant, observed that

The APS . . . is a brilliant creation, delivering a huge number of transactions every day in an efficient and ethical manner. Yet it remains shaped by its origins as an Industrial scale, command-and-control organisation. A century ago it mostly delivered letters: today, mostly welfare payments. Officialdom still weighs heavily on it. Bureaucratic processes, just as much as drawn-out political negotiation, can slow the way in which things are done. Innovation can be stymied.

Shergold advocates the use of interagency task forces drawing on subject matter experts drawn from across government (and from the private sector and civil society) as required. To do this requires a readiness for APS leaders to accept that they do not ‘own’ their resources. They are custodians of a capability that will be more effective and efficient if it is available to be task oriented, rather than constrained by notions of institutional hierarchy pioneered by the 19th Century scientific management principles of Frederick Winslow Taylor.

This approach was anticipated by the Advisory Group on Reform of Australian Government Administration which emphasised two criteria that were required if government was going to adapt to the complex demands of the Fourth Industrial Age:

policy integration – connected and integrated policy processes that can draw together all relevant areas of government, particularly service delivery agencies.

human capital – highly capable, skilled and professional policy officers, with the right balance of specialists and generalists, who can exercise sound judgement in the face of ambiguity and uncertainty.

Effective cultural change still requires that we continually reassess what human resources we can afford and the manner in which we can best employ them. The next section of this submission describes how we can apply the lessons of the recent past as well as approaches tried elsewhere.

Making adaptation work: Implementing the Integrated Approach to policy-making

Traditional departments will serve as guardians of standards, as centers for training and the assignment of specialists; they won’t be where the work gets done. That will happen in task-focused teams.

Peter Drucker.

None of this is new, there are precedents . . .

Closely associated with the issue of maximising access to the best human capital is the need to make the most of it in making policy. Adopting a style of government that combines horizontal connectivity, cooperative behaviours, deep professional expertise and experimentation is known as the ‘Integrated Approach’. This conceptual framework provides the basis for contemporary public sector reforms in the United Kingdom and is worth considering in the Australian context. It reflects the recommendations of recent Australian reviews of APS performance, structure and policy-making. These reports include the already cited Shergold Review, the Moran Review as well as the Lessons from Australia’s Whole-of-Government Mission in Afghanistan conducted by Mr Ric Smith, former Secretary of Defence.

The reality of the contemporary public service is that few public sector staff working in the policy domain will be working on only one issue. Most executive level staff will be playing different roles in multiple concurrent policy tasks. Senior executive staff will be involved in literally dozens of policy processes, most of which range across a large number of departments, agencies, private and not-for-profit service providers. There is a very great risk, often recognised, that no individual will possess the ‘band-width’ to juggle all of those policy responsibilities. It is foolish, and dangerous, to pretend that anyone can.

Accordingly, as Harvard Business School’s Henry Mintzberg has long argued, it is naive to advocate any single model for government policy-making. Government, he states ‘is an enormously eclectic system, as varied as life itself (because it deals with almost every conceivable fact of life)’. But Mintzberg recognised that the ‘complex, unpredictable activities of today’s governments’ require greater appreciation of the need for cross-institutional networking. He famously advocated the need for government to shift its emphasis from traditional departmental organisations to a national normative model. Writing in 1996, he concluded that:

agencies can still be isolated horizontally, but vertical control by the superstructure is normative rather than technocratic. The model allows for radically different microstructures: more missionary, egalitarian, and energized; less machinelike and less hierarchical.

Two decades on the social and technological imperatives for radical devolution and delegation have proceeded apace. A strong strategic centre needs to be balanced by radical delegation to the lowest appropriate level, reposing trust and authority in junior staff and building shared consciousness that allows leaders oversight and the ability to intervene if required.

If anything the APS is experiencing an opposite trend as authority for decision making is drawn increasingly to the centre. Senior executives and ministerial offices are driven by political pressure to micro-manage every aspect of their enterprises. This approach limits the range of creative and critical inputs into policy-making and ensures that the entire enterprise of government is invested in reinforcing the institutional ‘truth’ of the moment. It is the opposite of strategic planning.

The need for building feed-back loops into government policy-making was a key finding of the UK Government’s 2016 Iraq Inquiry (the Chilcot Report). This Inquiry found that Iraq had been a significant policy failure for the British Government. In broad terms, the report found that individual Government agencies:

Had a propensity for ‘group-think’ – when a group of people conform in their thinking to the extent that their decision making has an irrational or dysfunctional outcome – reflecting insufficient challenge and a lack of thought.

Suffered from multiple impediments to effective decision-making: structures and processes impeded the flow of information and evidence; strategy-making was weak and inflexible; and insufficient attention was paid to the capability required for the operation and to determining the resources required to ensure success.

The British recognition of the limitations of strategic policy-making in departmental stovepipes resulted in a novel and innovative approach to dealing with group-think. The Stabilisation Unit (a joint Foreign and Commonwealth Office, Ministry of Defence and Department for International Development agency) developed the Integrated Approach. It summarises the approach as follows:

Integration is forming a single multi-disciplinary and multi-departmental team to take on a task. The task may be planning, it may be designing a programme or it may be delivering a project. When asked to work together government departments generally look to liaise or coordinate, to retain their own teams whilst negotiating with other departments. Experience . . . has shown . . . this does not work. The transactional costs are too high.

Integration is primarily driven by the process of people from different institutions and different disciplines working side by side at several levels to ensure that their perspectives and activities reinforce each other. Integration requires low-level cooperation and mid-level coordination, supplemented by high-level alignment of overall strategic objectives. Integration should improve the flow of information, contribute to a shared understanding of stabilisation challenges and responses, reduce policy and delivery ‘silos’, and ensure greater effect on the ground.

The Integrated Approach should be adopted in Australia. In fact, it is identical to the Shergold Review findings on the failure of Australian domestic policy programs. Professor Shergold summarised the options between continuing as we always have and adopting a new policy culture in a striking table. It succeeds where pages of advocacy might fail.

BE AGILE: LEARN AS YOU GO

Traditional government

Adaptive government

Retain information

Dismiss opportunities to learn from the experience of others

Leave evaluation of ‘what works’ until the end

Work within the silos of bureaucratic demarcation

Base program design on what has been done in the past

Share information about good practice—and lessons learnt

Create stages/gates to allow programs to be modified on the basis of ongoing monitoring and evaluation

Learn continuously from doing

Encourage people to share mistakes and ‘near misses’ that can inform program design

Fully embrace whole-of-government cooperation

Imagine new ways of doing things

Peter Shergold, Learning From Failure, August 2015.

Recap

Contemporary managerial theory and the hard-won lessons of recent crises demonstrate the value of instituting both a whole-of-government strategic culture and practical measures to assure the Integrated Approach to policy development.

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Ensuring that our foreign and security interests are coordinated and well-managed

We need more enduring and better integrated arrangements for our domestic and border security. Arrangements that will preserve the operational strengths and independence of our frontline agencies, but improve the strategic policy planning and coordination behind them.

The Hon Malcolm Turnbull MP, July 2017.

We do not need to keep making the same mistakes . . .

We learn painfully, but perhaps most productively, from failure. Nowhere is this more evident than when Australia’s foreign and security interests are engaged. Investing in formal lessons analysis of the performance of whole-of-government is essential element in the Observe-Orient-Decide-Act decision loop that underpins effective government strategy. The conduct of lessons analysis and the propagation of lessons identified cannot be ad hoc, it needs to be understood as part of the ordinary business of government. Currently there is no explicit requirement that lessons analysis of whole-of-government operations be conducted and no agency possesses the resources to develop and sustain a standing lessons capability. Not surprisingly, there is little appetite across government for this form of evaluation and assessment. I submit that a modest commitment to developing this capability will be a game-changer for a more integrated APS.

Lessons analysis is not an audit, or an attempt to assign blame. It is not as objective as history – though it might constitute part of the first draft of history. Lessons analysis involves working with the participants in government decision-making to determine what went right and what can be improved. It is then essential to disseminate that knowledge to all stakeholders across government as a necessary corrective for future decision-making. It is a vital investment in dealing with complexity.

What we learned from our longest war

The report Afghanistan: Lessons from Australia’s Whole of-Government Mission was the result of extensive and frank interagency discussions which reflected a sense amongst the most senior decision-makers that Australia had been too captive to events in Afghanistan. Launched in the Federal Parliament in 2016, the report’s lessons were endorsed by the most senior elements of the national security community, the foreword being co-signed by the Secretaries of Foreign Affairs and Trade; Defence; the Chief of the Defence Force; and the Commissioner of the Australian Federal Police.

The report demonstrated the difficulty of complex planning across government when different departments and agencies have to prioritise competing commitments. In many ways policy planning for Afghanistan represented a perfect storm, demonstrating the limitations of Australia’s current planning framework for offshore conflicts. Operations in Afghanistan commenced at a time when policy-makers and planners were dealing with concurrent commitments in Iraq, Timor, the Solomon Islands and an array of disaster responses including the 2004 Boxing Day Tsunami, and Pakistan earthquake and flood operations in 2005-6 and 2010.

In those circumstances, the report concluded that it was difficult to focus on higher-level strategic objectives. Between 2001 and 2014 the unfolding pace of our commitment occurred incrementally and accordingly the national approach to policy formulation was sometimes ‘weighted unduly to operational matters’. The danger with protracted deployments is of behaving like a ‘frog in boiling water’. As anyone who has ever worked in government knows, ‘the urgent continually obtains precedence over the important’. What is more our analogue, committee-based policy planning framework ensures that this will remain the case. Without specific, diverse, full-time interagency investment in both policy and planning, events can get away from decision-makers in government.

Key relevant findings of the report were that:

Whole-of-government coordination needs to be achieved from the outset for policy direction and planning in every operational commitment;

International interventions require a strong policy base from which to maintain a strategic level of analysis. This policy base should be delivered by a task force led by a central-lead agency, staffed with senior and experienced people from appropriate departments and agencies;

A senior Interagency leadership group needs to supervise the direction of policy development to provide a high-level nexus with Cabinet and the Secretaries’ Committee on National Security;

The Australian Civil-Military Centre should be tasked to provide a standing, whole-of-government, civil-military-police lessons capability for overseas missions, including developing, storing and disseminating lessons to maintain whole-of-government institutional memory.

Foreign and security interests are no longer the exclusive province of a few central policy departments and agencies. Managing recent crises, humanitarian operations and conflicts has demonstrated that dozens of government agencies need to integrate their efforts and to align those efforts with international organizations, other governments, non-government organizations and the private sector. Integration cannot be left to chance, it needs to be informed by policy, practiced in education, training and interagency exercises and recognised as high-profile career opportunity.

Recap

Strategic and foreign policy is hard. It must be deliberate and evidence-based and founded on expert interagency collaboration.

Lessons analysis and dissemination needs to be supported by a standing capability, be adequately resourced and referred to in strategic policy development and implementation.

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Conclusion

Solutions to adaptive challenges reside not in the executive suite but in the collective intelligence of employees at all levels, who need to use one another as resources, often across boundaries, and learn their way to those solutions.

Ronald A. Heifetz and Donald L. Laurie, Harvard Business Review.

In an earlier paper, I argued that if the APS is to adapt to the challenges of 21st Century policy-making it needs to adopt the ‘Integrated Approach’ to joined-up government. This submission goes further and discusses the structural, organisational and cultural conditions that need to be met for this to succeed. From our perspective the good news is that many serving and former senior leaders of the APS are advocating change. The Fourth Industrial Revolution has become part of contemporary thinking, it cannot be ignored.

My first recommendation is the adoption of a whole-of-service workforce plan that reflects the principles-based professional approach adopted by the UK Civil Service Workforce Plan 2016-20. Over time, the APS has fragmented, militating against the sense of a national professional public service. Workplace cultures, conditions of service, remuneration and career expectations vary widely. This approach has prevented movement into, across and out of the APS. It has institutionalised departmental silos. It reinforces implicit bias in recruitment and promotion practices. All of these issues produce group-think in policy making and stifle innovation.

The second recommendation is that the APS has to commit to professionalisation. Once the production of policy was considered the preserve of the C-Suite (the suite of chief executive offices). The joke in the Department of Defence was that for major policy documents the relevant Deputy Secretary would withdraw into a locked office and be fed pizza under the door. Few of the policy documents produced by solitary executive inspiration survive the test of time. Now senior executives are reliant on their professional staff, often at junior level, to drive policy innovation. In January 2018, the then Australian Public Service Commissioner, John Lloyd, stated that in future, management hierarchies would become less and less relevant and that ‘authority does not so much come from supervisory authority but more from being a team whose members and leaders have different skills’. This is a clear statement of the Adaptive Approach advocated by Harvard professors Ronald Heifetz and Donald Laurie. It is no coincidence that the Australian Public Service Commission teaches it on their senior executive leadership programs.

The third recommendation is that the APS must invest in professional development for its staff that maximises on-the-job learning, sector-wide training courses and experiential learning. The APS needs to invest more effort in developing professional polymaths who are able to work across the public sector and with the private sector. Experiential learning must be supported by rigorous, realistic multiagency exercises that promote high levels of preparedness for unanticipated challenges. It is too late to learn-on-the job in the midst of a major crisis. Lives are at stake and the costs of delayed integration are too high. Public servants need to be life-long learners as the pace of technological change will rapidly render their initial knowledge and skills base obsolete.

The fourth recommendation is that the APS needs to invest in a skills and knowledge register. There is no current system to access the human capital already resident in the APS effectively and efficiently. Special purpose interagency task forces are becoming more common and generally do attract many of the best and brightest. But their establishment is generally accidental and subject to the willingness of supervisors to detach some of their best staff to task forces for which they will receive no credit. At the same time the losing agency usually has to cover the absence because the culture still favours hierarchical, permanent establishments. If adaptive government is to become a reality and the Integrated Approach realised, then Departments will initially need to be compelled to cooperate on national policy priority projects.

The fifth recommendation is that to be characterised as a professional public service, there needs to be greater opportunities for movement for APS members and for entrants at every level from outside the sector. This will entail breaking the monopoly on human resource management currently held within departments. While departments and agencies make their own rules and establish their own mini-professions, there can never be a strong public service professional culture. The Australian Public Service Commission, or some organisation exercising its functions needs to be a stronger repository of standards, behaviours and service wide conditions of employment.

The sixth recommendation underpins this submission. The APS should implement the ‘Integrated Approach’ to policy planning and operational execution. Departments and agencies should retain their ‘Raise, Train and Sustain’ function, but policy planning and operational execution will increasingly be the province of specific purpose multi-agency task forces. The APS must require sufficient additional leadership capacity to ensure that there are enough leaders and administrators to stand-up special purpose task forces as required. Ultimately, for this small investment in maintaining nascent capability these task forces represent a saving in personnel. Each agency will no longer need to replicate subject specific offices spread in stove-piped structures across government. The APS will reap the benefits of concentrating expertise.

The seventh recommendation is that the APS needs to invest in those agencies whose business it is to enable integration. Organisations such as the Australian Civil-Military Centre and the UK Stabilisation Unit that have the mandate of Cabinet to build interagency coordination are essential. They do this by developing preparedness through education, training, research and multiagency exercises; identifying whole-of-government best-practices; promoting tight lessons-learned loops to inform policy and providing the integrated institutional memory across departmental boundaries. These agencies provide the cement that holds portfolio government together and can provide the home for interagency task forces working on policy issues that belong to a variety of departments and agencies.

Finally, the sensitive issue of Ministerial/APS relationships needs to be reassessed. This recommendation falls within, but also extends beyond the terms of reference of this review, so it has not been explored in detail in this submission. However, it is clear that information overload occasioned by political and media pressures and an outmoded hierarchical structure are making the work of many Ministers impossible.

Ministerial workloads and the complexity of their portfolios continue to increase. Yet the flow of work to Ministers uses systems that are obsolete and which mean that consideration of many policy issues receives inadequate attention or is delegated to an (often junior) adviser. Minister’s offices have increased in size to manage the workload that flows to them, but the physical capacity of the Ministerial Wing in Parliament House has been exceeded. For over two decades we have been expanding the number of Ministerial staff rather than dealing with the root problem, which is that unrealistic expectations are placed on Ministers to be aware of every aspect of their portfolio and that the complexity of the APS does not cut through the fog and friction this situation creates.

Professor Peter Shergold has already made recommendations about the need for Ministers and the APS to come to a clearer understanding of the balance of their responsibilities and I refer the Review Panel to that excellent report.

Ministers need better assurance that ‘their APS will be ‘more open to outside ideas, learn from business, value community experience, sponsor academic research and ’crowdsource’ citizen proposals to develop or evaluate evidence-based policy’. Quite rightly, they are dependent on their relationships with their departments and the broader APS for robust and critical policy support. The APS has to hold up its side of the bargain. As Professor Shergold concluded:

If adaptation and agility are to become widespread practice, the roles of the public servant and the minister will need to change. Instead of controlling the whole process of implementation, they will act as stewards, shepherding the limited resources of government towards a successful result. Humility will be needed to accept that the shape of policy, or at least the way it is implemented, may evolve in unexpected ways in response to evidence and experimentation. This will be a challenging shift for those who feel more comfortable with a command-and-control style of leadership. The public servant of the future will be the facilitator of innovation.