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Kiah Consulting

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Kiah Consulting

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OUR COUNTRY

NEEDS P U B L I C S E R V I C E S , W E

J UST C A N ’ T A F F O R D

T O D AY ’ S P U B L I C S ERV I CE

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW
Thank you for the opportunity to provide a submission on the
future of the Public Sector.
Kiah assists organisations to execute innovative concepts, specialising
in initiatives across the public–private sector boundary. Most often
visible working on ‘concept to contract’, we are just as often utilised
in bringing business-like practices to the public-sector.
Kiah has been doing this work for over 15 years. Now a multi-
million-dollar consultancy headquartered in Canberra, we operate
across Australia and in New Zealand. Our principals have experience
in both the public and private sectors, bringing multiple perspectives
to the challenges and opportunities facing the Public Sector.
The approach most advised to commercial entities when providing
responses to reviews such as this one, is to take a safe and non-
confrontational position. That would serve our interests, exhibit
our name, but be of limited value to anyone else. I do not
believe in recklessness, but always ‘playing it safe’ doesn’t support
innovation and lacks courage. We are in the businesses of leadership,
and leadership takes courage.
I eschewed that advice and directed that our contribution was to
be thoughtful, considered and challenging. I hope this submission
provides value and I will be delighted to discuss any aspects
personally.

John Glenn
MD AND OWNER, KIAH CONSULTING

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 2
INTRODUCTION
The Department of Social Services public report Place-based approaches to disadvantage
identifies a town in Western Australia of 1400 people (Roebourne) receiving
around $59 million of government funding a year, providing 206 services through
63 different service providers. While every service delivery program reported that
they, individually, largely met their program objectives, over 15 years there has
been no discernible social effect.
We cannot afford this, and the public sector knows it.
The same report suggests a different model — place-based delivery. But it also
highlights that they first started talking about changing the service delivery model
to place-based services in 1973. That’s not change, that’s evolution, or extinction.
Some trials are now occurring around the same change that they were talking
about in 1973. In the same time the world has been revolutionised by the internet.
While the public sector is finally addressing ‘place-based service delivery’, the rest
of the world is talking about service delivery through ‘presence’.
In the same period Bill Gates founded Microsoft, built an unimaginable fortune,
and was thought by many to be the anti-Christ. Along with his wife and the
personally funded Gates Foundation, he has effectively eradicated polio. For
all the governments, for all the time, all the money, the United Nations, all the
meetings, air hours and diplomats, one man, one industry delivered the leadership
to transgress international boundaries, war zones and self-interest to make the
world a better place.
We cannot live without public services. They are literally the glue that ties the
nation together. The roads, the rail, the infrastructure. They provide the nation’s
security through border protection, the military and policing. They are the safety
net for the unfortunate and unwary: hospitals and medical services, emergency
services, social services and welfare. They provide for our prosperity through
education and the framework for development, innovation, and export and trade.
Unfortunately, we cannot afford the public service we have. It is the country’s
largest monopoly, exhibiting all the traits one expects of a monopoly: lumbering,
inefficient and arrogant. It effectively has unlimited resources. If it needs more, it
drives the country into debt and increases levies. The public is even without the
option to ‘go without’.
The Public Sector is in a pact with the Australian people and it is not meeting its
end of the bargain. Change is necessary: to adapt, innovate and lead. It needs to
do it at the pace of a contemporary world.

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 3
PERFECTLY DESIGNED TO DELIVER

AN INSIGHT INTO There are two elements to the Public Sector: the design of policy
supporting the government in its decision making, and the delivery

VETERAN’S AFFAIRS
of government policy — either directly or through third parties.
The Department of Veterans’ Affairs (DVA)
provides an easily understood example.
Our submission focusses on the second issue, leaving the concepts and
approaches of collaboration, expertise and inclusion in the development

Its stated purpose, inter alia, from

their 2016–17 Annual Report is: “…
of policy to others. We will comment, however, on the question of the

administers payments and services public sector driving innovation and productivity in the economy.
to eligible veterans … Its purpose is
Every organisation is perfectly designed to deliver the outcomes it

to support those who serve...through

enhancing and maintain quality of life…”.
delivers. It is self-evident, really. The corollary is that the existing
organisations are not designed to deliver new outcomes. It also follows

This seems unduly administrative

and internally focussed. An outcomes and
that culture defends culture. Those who have had a career within the

service centred approach might articulate public sector, who have helped design and build the processes over

that purpose differently: the past decades must be proud of the work they have done. They
“to ensure all veterans, past and present, have undoubtedly worked hard, contributed not just their time, but

are supported and commemorated to the themselves. We should not belittle nor ignore their efforts, but those

fullest extent endorsed by government and who will be prepared to tear down their history, to accept that their

allowed for by the legislation”. contribution no longer sustains the future, will be few and far between.
That would better reflect the stated
Defence provides a great case study on the success of reviews: Mortimer,
government intent as endorsed by the

Australian people. DVA’s strategy and Black, Rizzo, First Principles Review to name a few. Implemented

activities would then unfold differently, as by those who ‘operated the status quo’, governed by those who

would their performance reporting. designed it. While the leadership team may change, often those who

While their 2016–17 Annual Report were asked to leave are brought back under contract for ‘continuity’.
states that around 291,000 veterans Internal government audits of the implementation end loudly with

received entitled services in that period, self‑congratulatory claims of success.
there is no comment on what percentage

of eligible veterans in the community New organisations and structures are the camouflage of change, led

this represents. We understand that by those who know no other way. The key to change is leadership,
DVA doesn’t know. and the first thing that must change is the leadership if there is to be

The report goes on to describe the level of any chance of success.
activity and money spent, but no measure

of success or effect.
A better performance measure might

state “there are estimated to be X00,000

eligible veterans. By 2020, 95 per cent

will be registered in DVA and will

be receiving the services for which
Every system is perfectly designed

they are eligible”.
to get the results it gets.
With this, success would be measurable

and accountability clear. D E MIN G, ATTR IBUTIO N Q UE STIO N E D

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 4
WESTMINSTER GOVERNANCE —
A LITTLE BROKEN?
The convention of ‘Individual Ministerial Responsibility’ may operate in
theory, but less so in practice. In our experience, Minister’s actively separate
themselves from Departmental processes. Westminster government is
controlled by convention, and convention develops over-time. The scope of
activity, the complexity of administration and the challenges of conflicts of
interest overwhelm ministers such that they focus on setting policy but leaving
implementation and operations to the Department Secretary and staff.
The Minister’s desire for separation is understandable. The background of
the Minister is likely to be more political than performance, often without
experience in governance, leadership, management or execution in large
organisations, let alone in the domain complexities of the organisations under
their purview.
The introduction of a Board-like structure with independence and diversity
of experience and thought operating between the Minister as the owner
shareholder and the Secretary as the CEO would seem useful. The structure
would not mimic that of a commercial entity, but might take many lessons in
good governance from the commercial sector. We would think it would focus on
execution of policy rather than formulation, which properly resides within the
political sphere. Strategy, accountability, performance and compliance would be
hallmarks of governance. Independence and diversity of thought and experience
would immediately complement the public-sector experiences of the secretaries.

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 5
ANAO — AN ANACHRONISM

A recent ANAO review of the Defence It could be argued that the ANAO performance audit should provide

fuels procurement provides an example. the oversight, independence and advice to the Department. A review

The audit comments failed to form any of a few reports, and ones in which we have participated, indicate

view on value for money, only expenditure. the organisation has little to offer in its current form. The auditors

They posited a populist notion that too
typically have little experience outside of their narrow domain, of

much was spent on consultants without
delivery, of commercial execution. We have yet to see an insightful or

exploring why they were engaged or
comprehensive review that uncovers the heart of an issue. Too often

the outcomes of the work performed.
They missed that the ‘consultants’ were
their comments are populist, shallow and address a symptom out of

in fact practitioners from the oil and gas context. The recommendations are of little value.
industry assisting Defence to remediate a They are further weakened by process. Agreed terms of reference,
distressed program caused by a lack of often honoured in the breach, and findings that are pre-agreed with

experience in oil and gas, or the ability
the Department. Ostensibly reviewed for accuracy, the practice is to

for Defence to ever engage a sustainable
negotiate acceptable compromise positions.
knowledge workforce in that domain.
Their investigation and conclusions We need audit and review, but we need it to be independent,
could only be, at best, shallow. competent and courageous.

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 6
OUTCOMES, PERFORMANCE
AND ACCOUNTABILITY
Performance and accountability are two sides of the same coin. Neither can
be achieved if the outcomes are unclear or weakly stated — if there is nothing
solid against which to measure, then performance cannot be measured and
accountability fails.
In 2011, the Department of Defence, including the Defence Materiel
Organisation (DMO) as a proscribed agency, were unable to satisfy a
government directive to despatch an amphibious ship in aid to the civil
community, despite having been provisioned three suitable ships and having
a clear directive to ensure one was available in the cyclone season to support
the community. Defence didn’t deliver.
The failure gave rise to the Rizzo Review. Yet, the 2010–11 Annual Report doesn’t
mention the failure. It mentions only the remediation work to improve systems,
as if it were a departmental initiative, rather than a reaction.
Worse, the annual report was accepted, suggesting governance also failed.
There is no evidence of accountability flowing to any individual. There were
no apparent consequences for the Chief of Navy, Head of the DMO, Head of
Maritime Systems, Director General Amphibious Ships or any of the hundreds
of leaders and managers in those organisations. Great care was taken during the
Rizzo implementation to ensure that there was no suggestion that anyone or any
organisation had failed to deliver. Yet they clearly had.
The public-sector rhetoric of accountability, to date, has little substance.
A review of departmental strategies and annual reports quickly provides for a
conclusion that measures across the public sector are typically weak, structured
around activity not outcomes, administrative in nature and, as a consequence,
almost always achievable.
Department objectives and measures are designed for the avoidable, rather than
the achievable and accountable.

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 7
PERFORMANCE AND PEOPLE
“While serving under a High-performing teams are, of course, the answer to high performance. We don’t often

French general in Cambodia get to choose our teams, so the question of high performance usually falls to leadership.
I made a comment on how The essence of leadership is courage: the courage to set a strategy, develop a plan and

the Australian soldiers had give freedom to others to execute; and the courage to address weaknesses in the people,
performed beyond any process or plan.
reasonable expectation.
In our business, we have a saying: ‘Good clients have three attributes: a problem, money

He responded that in
and courage’. We can get two out of three easily.
his experience great

teams always had great There is no pact between the public-sector employee and the Australian people that

leaders. He was right. An provides for tenure. Ultimately, if an individual cannot deliver the required performance

extraordinary detachment standard or deliver the required outcomes, then the individual needs to be changed. We

had an extraordinary have rarely observed someone come to work who doesn’t want to do a good job; but we

corporal, a troop a have seen many not doing good jobs. The obligation of leaders is to the outcome and

lieutenant. Over the next to the members of the team who are performing, giving their all to the outcome. The

20 years it is clear to me obligation is not to the non-performer.
that extraordinary businesses The structure of recruitment, placement, and performance management is not simply

have extraordinary leaders. cumbersome, it is a millstone around the neck of performance. On the face of the public

The public service needs the numbers, recruitment and HR functions are extraordinarily well performing. The number

extraordinary, not the safe of reported separations due to non-performance or infringements is minor — tens, if that

and survivable.“ many. Recruitment mistakes and separations during an employee’s probation period seem
to be almost nil, as far we can discern from public reports.
JOHN GLENN,
M D KIAH CONS U LT IN G The concept of diversity is shallow. A diverse workforce is sought because it brings diversity
of views, experiences, thought and perspectives. We don’t suggest that the drive towards
greater gender and ethnic inclusion is inappropriate, we are supportive. But so too is a
need for mobility between public and private sectors, especially at the executive level.
Mobility between agencies is of low value. Moving from the Department of Finance to
the Treasury provides new perspectives through a very narrow lens. The Public Service
Commission makes proud of the fact that 62 per cent of the public service is located
outside of Australian Capital Territory (ACT) but makes no mention of which public
servants. The bulk of the senior executive would seem to be in the ACT. While the ACT
may be an attractive town, it in itself constrains diversity. Other than a few exceptions,
there are few businesses of substance headquartered in the ACT. The town comprises the
public service, businesses servicing the public service or businesses that service the town.
Even socially there is little diversity of thought and experience.
Exploring the Department of Veterans Affairs again, no senior executives have experience
outside of government. Of the 16 senior executives, 14 are career public servants. At the
Department of Home Affairs, 12 out of 14 are career public servants. Across all instances,
only two are identified as having moved from senior commercial to senior public service
positions, and none have moved more than once. Our numbers are not exhaustive and may
not be entirely accurate as public information is limited. But the trend is clear, diversity of
thought and experience is not sought after, and the preservation of the status quo results.
In the same way as there are diversity targets for gender and ethnicity, more sophisticated
approaches supporting mobility between the public and private sectors is warranted. We
suggest that a senior public servant without any commercial experience should be considered
a poor prospect for promotion — at least in roles charged with execution of policies.

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 8
CONTRACTING, CONTRACTORS
AND CONSULTANTS

We were assisting a It would be remiss not to comment on the current debate regarding contracting,
Commonwealth client to
contractors and consultants. In general, we find the conversations to be ill-informed.
prepare for an upcoming

tender — three years before CONTRACTING out an activity provides an immediate service and performance

the existing contract came to

an end. The early preparation management framework. This in itself is an advantage. If the service doesn’t meet

was laudable, but the existing standards, don’t pay for it. If a person is unsuitable, terminate the contract. Neither

contract had commercial of these measures are available within the public service.
weaknesses that could be

renegotiated. We estimated Procurement practices, however, are largely transactional. They destroy value rather
~$4m a year saving for three

years and we would forgo our
than create it by driving to the mediocre through tendering, evaluation and an

fee if we didn’t achieve that argument of terms. The public sector is unsophisticated in creating commercial

outcome. value. Public–Private Partnerships, for example, are most focused on providing
“Too difficult and not worth financing through operating costs and avoiding budget pressures than building

the effort”, was the response. self‑sustaining funding models driven by the commercial entities prowess in

A 1% reduction in last year’s customer capture and marketing.
new contracts would provide

every pensioner $250, ‘Deal making’ is seen as unhelpfully commercial and not worthy of the public

fund fifty thousand university sector. But it is strategic deal making — where addressing the others party’s interests

scholarships or establish ten to further your own — where long term value is gained. This is particularly relevant

specialist cancer units.
in the services rather than the systems procurement.
It is worth the effort. That fact

that the process was too hard, The Commonwealth Procurement Rules are not particularly constraining, simply

and that the executive was not demanding competition, value for money and equitable process — albeit in a wordy

interested is a public service
way. Department implementations and a fear of criticism are the most limiting

failure on many levels.
factors. Courage is again the key.
Hiring contractors is an expedient short-term staffing option. But it should be
short term, not a long term hiring model, both because of the cost and the lack
of ownership of corporate objectives. Use should be minimised.
CONSULTANTS are a mixed bag. There is definitely a trend to ‘revolving door’
surrogate resources who call themselves consultants. Unless they bring expertise
and experience outside of the norm and the public sector they are contractors
with a fancy name, and invoice. Retired public servants with no other experience
do not bring alternate views.
Consultants should bring value, synthesis and potentially scale. They should
challenge not agree. The public service needs consultants but too many, small
and large, are low value not worthy of being engaged.

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 9
INNOVATION
Innovation lies in industry. The public sector needs to learn how to harvest it.
This is not about new technologies per se but new business practices and new
ways of delivering services. Cloud Services is an example — fee for services, the
reduction in systems integration risk with the product developer responsible for
innovation, ongoing upgrades as a matter of being engaged. It is not enough
to write a decree from on high, the frameworks need to be in place to support
success.
Better governance to foster and mentor the innovation. Encourage don’t control.
New funding models such as the move of some capital funds to operating
costs — and mechanisms to reward Departments and their people for innovation
and ability to harvest the rewards.
Innovation is more than a Design Thinking Workshop and a new name for a
meeting room. The public sector can only be innovative if the leadership rewards
and fosters innovation. That is not evident today.

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 10
SUMMARY AND CONCLUSION
We see the public service as having two distinct ‘elements’ policy development and
policy execution. Our comments focus on policy execution and delivery as the
‘business and service’ end of the public sector. It is the country’s largest monopoly
and exhibits the traits of one: lumbering, inefficient and arrogant. The monopolies
are managed by an individual, without the same standard of governance and
performance we would demand of the private sector.
It, like all organisations, is perfectly designed to deliver the outcomes it gets.
Those outcomes are poor and do not meet the pact to spend the Australian
people’s money wisely, and to effectively deliver the services that are asked of it.
Change is masked by organisational restructure and cosmetic staff changes. Reviews
are superficial and bland, often drawing non-confrontational results. The ANAO
and internal audit staff have neither the experience or courage to properly challenge
activity within Departments. There is a lack of performance and consequence,
protected by a career model, a view of tenure, little support for mobility between
the public and private sectors, and a limited perspective on diversity giving rise to
group-think.
Structures that establish clear strategies and monitor performance are required.
Poor performance needs to be dealt with while innovation encouraged and success
rewarded. The answer lies in leadership and governance. The essence is courage.

A KIAH CONSULTING SUBMISSION TO THE PUBLIC-SECTOR REVIEW 11
t +61 2 6230 5347 e consulting@kiah.com w www.kiah.com

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