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The State of the Service

Connections Series Speech
12 July 2005

(download PDF of slides used in the presentation)

Introduction

I would like to thank the organisers of the Connections Series for inviting me to speak to you today, and I would like to thank Minter Ellison for making this venue available. My topic today is 'the State of the Service' - where to begin? Last year's State of the Service report was just shy of 300 pages. I am committed to producing a somewhat shorter report this year - but still, it is a big topic.

It is my intention to focus on the issues that were identified in last year's report as critical challenges for the Australian Public Service, and to offer my preliminary views about how we are travelling with respect to them. They are:

• Building and sustaining the capability of the APS
• Whole of government capacity
• Ensuring the diversity of the APS
• Ensuring an effective relationship between the APS, the Government and the parliament
• Embedding the APS values and the code of conduct

I would also like to share some of my views about the identity of the Australian Public Service.

1. Building and sustaining the capability of the APS

A number of issues were raised in last year's report about building and sustaining the capability of the APS:

• the continued ageing of the APS was identified as a particular challenge for managing succession to the future leadership of the APS.
• it was also suggested that we needed to review:
  • what it means to be a graduate public service
  • the importance of structured learning and development in a more open and mobile service
  • how we get the right balance between leadership capabilities, management skills and technical or professional skills as demands increase for both greater expertise and greater ability to draw together different expertise
  • how we ensure that the APS is an employer of choice, attracting and retaining the best.

I am pleased to be able to tell you that we've made some significant progress in relation to these issues. Most significantly, the Management Advisory Committee will release over the next few months its next report, Managing and Sustaining the APS Workforce, paying particular attention to graduate recruitment and career development. The draft report has several key recurring themes:

1. The growing people management challenge

·   the draft report responds actively to the growing diversity of career paths pursued by the APS workforce, particularly in relation to younger workers who may be less committed than previous generations to pursuing a lifelong career in the APS.

2. The need for a concerted focus on leadership development as the APS seeks to replace the 55 per cent of EL 2s and 70 per cent of SES who will be aged 55 or more by 2014.

·  The declining proportion of staff reaching leadership levels who have worked in more than one APS agency raises some concern about the breadth and depth of experience in Australian Government processes among the feeder group of potential future APS leaders.

3. The ongoing role of graduate programmes

·The MAC report on Connecting Government found that tertiary graduates are particularly likely to possess the skills and attitudes which would attract them to, and suit them for, the collaborative whole of government approach increasingly required from the APS workforce in the 21^st century.  The APS is increasingly a "graduate workforce": most new entrants (around 65%) to the APS now hold tertiary qualifications and graduate programmes remain strong in most agencies. But, these need to be supplemented by programmes which support the 13 out of 14 graduates who enter laterally, outside these programmes.

An issue that will get a run in this year's State of the Service report, is employee engagement. It is goes to the heart of our capability issues in the APS, and in particular, to attracting and retaining good employees as the labour market becomes increasingly competitive.

Everyone knows that having the right skills, experience and tools to do the job well increases staff productivity. We now also know that there are clear links between employee engagement and effectiveness which, in turn, affect productivity.   

Research by the Corporate Leadership Council suggests that organisational culture and leadership have a much greater impact on employee 'engagement' than non-cultural factors, such as financial rewards.  Engagement is defined as a composite measurement of employee commitment to their organisation, how hard they work, and how long they stay because of their commitment.   

Last year the Corporate Leadership Council surveyed 50,000 employees (including in Centrelink).  They found that the top five cultural traits that have the maximum impact on discretionary effort - contributing to engagement and productivity, are:

• communication
• reputation of integrity
• culture of innovation
• culture of flexibility
• customer focus

On the basis of their research the Corporate Leadership Council estimated that only about 10 per cent of employees are fully engaged - they are the 'true believers'.  Of the rest, more than ¾ are up for grabs; they are neither fully engaged nor fully disengaged and the rest are so unengaged that they probably should move on.

What the number up for grabs suggests is that there is huge scope for leaders to affect the engagement of their workforce - for commitment and for productivity. The message is that if we are to meet our productivity targets, there is no better place to start than increasing the engagement of our workforce. This may be more successful than pay mechanisms.

Australian research shows that public sector employees feel greater pride in working for their organisation than employees in other industries, and are less likely to consider quitting their job in the next 12 months.  This finding is attributed to the fact that they feel good about working in the public interest. Job satisfaction results from the State of the Service employee survey also suggest that cultural factors, particularly working relationships, are critical.  In this year's employee survey, I included some questions about how employees think and feel about the work they do, and I will speak more about that in a few moments.

Given what the research is suggesting about the impact of cultural factors on employee engagement, and in particular about the impact of perceptions of integrity in the workplace, there are some areas of concern for the APS. It is worrying that data from last year's employee survey shows that although the great majority of Australian public service employees are confident that their immediate managers and colleagues act in accordance with the APS values, they are less confident that their senior managers do so.  We only have preliminary data at this stage, but it looks like the results may be similar this year. Is the leadership of the APS less likely than those they lead to act in accordance with the APS values? That's one way of looking at the results, and if that is the case we have some major issues to address. But, it is more likely, in my view, that employee perceptions are affected by poor communication and engagement.

The imperative to get this right should not be underestimated.  If our senior leaders are seen to model and champion public service values, other staff in the organisation will actively engage with them.  Where senior managers are silent or indifferent other employees may treat the values as empty rhetoric.

2. Whole of government capacity

The State of the Service report identified our whole of government capacity as a challenge for the APS. The report didn't see whole of government as a major shift away from devolution. Rather, it saw it as highlighting the importance of a more agile and flexible public service to respond across boundaries where necessary, to find solutions and to deliver responsive services, as well as to meet the changing business requirements of individual agencies.

Apart from the capacity to work productively across agencies, the challenge also involves the capacity to work productively with other jurisdictions and non-government organisations (both private and not-for-profit), and to engage with citizens. Much of the Government's policy agenda (security, welfare to work, trade), requires this whole of government capacity - it is, then, an issue we can't afford not to address.

Whole of government working is, as I see it, part of a broader process of cultural reform that is happening in the Australian Public Service. It is, in part, about how public servants see themselves, and the work they do; whether they consider themselves as agency employees or part of a broader public service; whether they see themselves as simply delivering outputs or resolving national or international problems; whether their first impulse when confronted with an issue is to see processes or to see possibilities. Cultural reform is about a fundamental shift in the way public servants think about themselves and go about their work.

The sort of organisational characteristics that support a whole of government culture, and that I think we should all be looking to foster, include:

• readiness to think and act across agency boundaries
• effective teamwork
• organisational flexibility
• openness to innovation and creativity
• the ability to capitalise on windows of opportunity, tolerate mistakes and manage risk
• the capacity to build strategic alliances, collaboration and trust and to negotiate to achieve joint outcomes
• adaptability to changing circumstances
• persistence and resilience
• encouragement of the expression of diverse views, and awareness of different cultures and appreciation of their strengths
• a capacity to balance the tension between short-term and long-term goals
• effective knowledge management.

Leaders in the public service, and in particular the senior executive service, have an important role in promoting whole of government behaviours in the APS. In relation to the SES this role is set out at section 35 of the Public Service Act. People, even senior people, need reminding that cultural change won't happen on its own - a 'silo' mentality can develop in any organisation.

A positive move to support whole of government working in the APS was made with the issue of a joint communication from me and all of the 18 Portfolio Secretaries, titled 'Working Together'. You may well be familiar with the Working Together document, and I would encourage you to promote it in your agency. It is a really simple way that all of us can do something to promote whole of government behaviours without huge expenditure. The litmus test, of course, will be whether our organisations actually extend us beyond the rhetoric of whole of government.

This year's State of the Service employee survey included some really good questions about whole of government working, which, along with agency survey data, will give us a good sense of what's happening broadly, and how the Commission can best support agencies to build their capacity.

3. Ensuring diversity in the APS

Last year's State of the Service report identified two particular diversity challenges for the APS: Indigenous employment and the employment of people with a disability. It noted that both are in long-term decline, and that current strategies are not sufficiently effective.

In the Commission we have been particularly focussed on Indigenous Employment during this past year, and there are good reasons for that. Not only has there been a decline in the number and proportion of Indigenous employees in the APS (which I fear will continue this year before it improves), but structural changes in the public service - to the classification structure and to the education profile - may mean that there might be hidden barriers to entry to the public service and to the progression of those who do make it in.

Earlier this year Ms Pat Turner, the most senior Indigenous person in the Australian Public Service, took up a critical leadership role in the Commission as Aboriginal and Torres Strait Islander Employment Co-ordinator. Ms Turner is working with me to foster Aboriginal and Torres Strait Islander employment in the Australian Public Service by developing and implementing strategies to attract, recruit, develop and retain Indigenous employees.

Her appointment to the Executive of the Commission is significant as it comes at a time when the Government is undertaking major reforms in policy development and service delivery to Aboriginal and Torres Strait Islander peoples through the new Office of Indigenous Policy Co-ordination and Indigenous Co-ordination Centres. 

Prior to Pat and I joining the organisation, the Commission had started an Indigenous Employment Strategy to facilitate increased public sector employment of Indigenous Australians. While initially focussing on the APS, a number of State Government agencies have expressed an interest in participating in the strategy.

The strategy aims to redress the declining representation of Indigenous Australians employed in the APS and to identify why Indigenous employees leave the APS earlier and more frequently than non-Indigenous employees.

The strategy is a national initiative with participation by central and regional offices of the Commission and other Commonwealth agencies. It is supported by a senior level multi-agency steering committee and is based on extensive nation-wide consultation with Indigenous employees and employing agencies. It is managed by a small team of people within the Commission and is one of the Commission's key strategic priorities. We are working towards a major redevelopment of the strategy this year.

In relation to the employment of people with a disability, there are two relevant enquiries underway at the moment:

• The Department of Family and Community Services is undertaking an evaluation of the Commonwealth Disability Strategy, and
• The Human Rights and Equal Opportunity Commission is undertaking a broader enquiry to identify existing systemic barriers to equal employment opportunity for people with disabilities.

Both of these enquiries are expected to be finalised before the end of 2005. As well as that, I am the APS representative on an employer roundtable on the employment of people with disabilities, in response to the Government's welfare to work initiative.

Just last week the Management Advisory Committee decided that following it's forthcoming report on Managing and Sustaining the APS Workforce it will be looking specifically at the employment of people with a disability in the APS as its next major project. That work will be led by the Commission.

4. Ensuring an effective relationship between the APS and the Government and the Parliament

The State of the Service report confirmed the previous year's employee survey results showing that a wide range of employees have direct contact with Ministers and their advisers - about 20% in any one year and that of those with contact, 38% found the relationships challenging to manage. Personally, I don't find that surprising as managing most relationships is challenging and our dealings with Ministers and their staff are often on complex or tricky issues.

But, it does add further weight to the importance of public servants clearly understanding the APS values as they relate to working with the Government and the Parliament, and of the need for APS managers to build the confidence of our employees in these interactions. I fear that some of our people may think responsiveness to Ministers reeks of politicisation by them. It doesn't and it shouldn't. We are not the decision-makers - we are the advisers and the administrators - and we should be able to do that in a non-political, but responsive, way in working for the government of the day.

There is a particular role here for the APS leadership-agency heads and the SES. Having regard to the results from the employee surveys in both 2002-03 and 2003-04, the Commission conducted an evaluation of agency practices and procedures for staff who have contact with Ministers and their advisers. All large agencies provided copies of relevant protocols; and employees from five agencies took part in focus groups. We found that overall employee confidence in managing interactions with Ministers' Offices is enhanced by clear, documented protocols. Following on from this evaluation the Commission intends to issue a practical guide to help public servants manage their relationships with Ministers' offices, consistent with the principles of our system of government. It will be up to the SES and other managers to take their staff through the guide and help them make the challenging decisions that public servants have to make everyday.

5. Embedding the Values and the Code of Conduct

It was reported last year that considerable progress has been made in improving employees' understanding of the APS values and code of conduct, and their appreciation of the relevance of these to their day-to-day work. The challenge identified, and just as relevant now, is to ensure this continues, so that new staff are appropriately inducted, new leaders appreciate their statutory responsibilities to promote the values, and agencies have supportive management and assurance mechanisms.

A particular aspect identified in last year's report was the need for greater consistency within agencies in the handling of allegations of misconduct and in the imposition of sanctions where misconduct has been found to have occurred.

The Commission has done some evaluation work in this area in the last year, and is working on a good practice guide on managing breaches of the code of conduct.

The Commission has also developed a learning and development product, for release shortly, titled Being Professional in the APS-Values Resources for Facilitators, to provide information, materials and activities that are needed to deliver highly effective training programmes on the APS values and code of conduct. The materials have been developed for facilitators to tailor the activities and workshop programmes to best meet participants' needs, whether they are new to the APS or more experienced members of the SES.

I know all of this sounds like..just idle words, but I can't emphasise too much how important it is for public servants for have a good feel for the values. When things go wrong, it is sometimes the case that the public servants concerned have been so focussed on the business at hand that they have been operating in a way that the wider Australian community finds unacceptable. A bit more reflection and personal accountability, based on the values and the code, generally wouldn't have gone astray. I worry that we spend so much time on corporate governance and accountability issues these days that we may sometimes neglect to talk to our staff about their personal responsibility to do the right thing and to think carefully about the role they play. The fact is that our values should underpin all we do and how we behave.

6. Our identity

An issue not identified in last year's report, but about which I feel strongly, is the identity of the APS - how we see ourselves and how we are viewed by the community. This is a matter of considerable substance and impacts on the outcomes we are able to achieve. For that reason it deserves attention just as the other challenges we are facing do.

To that end, I included questions in this year's State of the Service employee survey about how our employees think and feel about the work they do:

• whether they are proud to work in their current agency
• whether they are proud to work in the APS
• how they identify themselves ( as a 'public servant' or in some other way)
• whether they regard themselves as a 'career' public servant
• whether they regard themselves as an employee primarily of their agency or of the APS

Without wishing to pre-empt the results, I can tell you that a sizeable majority were proud to work in the Australian Public Service.

I think it's important to remember that fact, given the flack we have taken in recent years for the children overboard issue, the problems at Defence, regional funding and so on. And, I fear it won't get much better when the Palmer Report into the Cornelia Rau and Vivienne Solon cases is released shortly. The standing and reputation of the public service is shaken by these events, a number of which has unfortunately occurred at a time of highly charged political activity.

I can't and won't excuse what has happened, but I do want to say that it's about time there was a bit more considered discussion of the reality of the modern day public service:

• while we might not be talking to the press as much as we once did, the public service is otherwise more open, accessible to business and the community, and more accountable than it has ever been, and is streets ahead of the private sector;
• while we make mistakes and even though there are problems and deficiencies in some areas, the overall quality of the public service and its ability to deliver is better than at any other time in our history. Our staff's level of education and skills; their openness to new ideas, adaptability and flexibility; their preparedness to work across boundaries to achieve better outcomes; and their efficiency has never been greater;
• the problems we face are those reflective of a wealthy and well educated nation - we have to get information out almost as soon as it is received (due to press and community interest); the community wants far greater quality services than ever before but remains reluctant to pay more for them; the answers to the really tricky problems facing governments today are not easy (challenging our best researchers and policy makers) and are usually multi-faceted with long lead times to take effect, but are introduced at break-neck speeds not experienced in the good old days of the public service;
• today's agency heads run their organisations' finances, budgets and employment arrangements and are responsible for delivery of the outcomes specified by the Government, whereas once, their every move was controlled from the centre and they were largely free from the pressures facing managers in other sectors of the Australian economy;
• it is important that we provide robust advice to the government of the day and this may not always be welcomed by Ministers. It's part of being responsive and apolitical. But, this is in the context of providing advice on how best to achieve the Government's policy objectives; being non-political doesn't mean thumbing your nose at the policy position of the government of the day; and
• yes, we are more responsive to government than we were before. The Coombs Royal Commission recommended in 1975 that we needed to be more responsive in order to better deliver on governments' policies and to meet community expectations. I make no apology for that, but I will say that we have to be careful how we do it. The art of responsiveness is in supporting the government of the day to deliver its mandate, but not crossing onto the political realm. In this context it is important to remember that views on crossing the line and politicisation can sometimes blind us to looking at some real issues of shortages in skill and culture. We don't always get it right and we need to learn from experience. Being apolitical comes best with experience, with knowledge and understanding of the values and the code of conduct, and with maintaining a bit of distance from the policy and an open mind about it and its administration. One of the best lessons a public servant can learn is to stop and think before they act.

It isn't surprising then, that we can be our harshest critics. This is because public servants hold fast to our core values and worry when any of our number is seen to have crossed the line - this is healthy. But, sometimes I think our people can be reluctant to give their colleagues the benefit of the doubt and this is most often the case if they do not personally support the policy. We can be pretty unforgiving, and that's not very healthy.

Senior APS managers have a vital role to play in establishing a supportive and professional culture and showing how to balance the values like responsiveness and apolitical. It will in the end be much better for us to consider what has happened in any given situation and to work out how to avoid it happening again in a systematic way. The lessons from the Palmer Inquiry will be a good place to start.

But the process of learning lessons must be made positive, in the case of the Palmer inquiry or any other review of public service activity, internal or external. What is at stake is not only the adequacy or inadequacy of systems: the review process itself should become part of building employees' trust in their organisation and internalising its values. This is because "trust" is linked intrinsically to how organisations and people behave - their competence, honesty, whether or not they work in the public interest, keep promises, listen to others' views and learn from their mistakes.

It's critical that we listen to each other rather than just pass judgement, and that we work together frankly and constructively to resolve conflicts and get the best outcomes for the government of the day. In this way the review process itself should become part of building commitment to their organisation and its goals. In this way we can be sure that the goals themselves are clear and widely understood, and therefore that the organisation is accountable.

How can we expect citizens to trust us if we do not trust each other? Citizens expect public servants to serve the public interest with fairness and to manage public resources properly on a daily basis. Where citizens suspect or perceive that this is not being done in one part of the public sector, they are likely to expect it in other parts. They are not even choosey about what jurisdiction is to blame -and become justifiably impatient when the public servants in different jurisdictions blame each other for failures in service delivery.

'What does it matter what people think of us, so long as the job gets done?' you might ask. Well, the point is that it does affect how well we can get the job done. It affects how employees feel about working in the public service and in their agencies; it affects the readiness of the community to embrace government programmes and initiatives; it affects our international reputation; and it affects our ability to recruit quality people. I could go on, but the point is that our identity and reputation are matters of substance.

As Public Service Commissioner, I see my role as responding to issues of public trust in the bureaucracy by fostering the right kind of leadership, providing credible evaluation and benchmarking to underpin strategic responses, and by celebrating public sector achievements.

In practice this means that we are giving priority to redeveloping our leadership, learning and development programmes. I expect to unveil a new suite of programmes for the SES and new programmes focusing on the business of programme management, regulatory business, service delivery and policy development by the end of the year. Senior managers have a vital role to play in establishing a supportive and professional culture and showing how to balance values like responsiveness and apolitical professionalism. These programmes should assist to build up both the professional competence and integrity of the public service, both of which are important to building public trust.

I am also using the State of the Service report to provide credible evaluation and benchmarking to underpin strategic responses to issues of public trust in the bureaucracy. These responses include good practice guidance I have already referred to on handling interactions with Ministers offices and on managing breaches of the code of conduct.

And we are celebrating our achievements. The reality is that Australia compares very well against most measures of government/public sector performance, and in some areas we are world leaders. This is true in areas including:

• Microeconomic reform and the economic management more generally
• Settlement and migration arrangements (despite some well documented problems with immigration detention policies and practices)
• Bankruptcy policy and regulation
• Social policy
• Public sector governance and public sector reform

This year's State of the Service Report will canvass some of our achievements in the last financial year.

As a senior manager in the APS, I would be kidding if I said that there aren't many times when things go wrong. But I think it is also important to acknowledge the things that we do well - and that doesn't have to involve glossing over our mistakes. I don't want to labour the point, but I think it needs to be said, and more often than has been the case of late.

I hope that this year's State of the Service report will continue to provide an excellent overview of how the APS is progressing against key criteria, and I hope that its celebration of our key achievements gets some wider coverage. And, importantly, I hope that it will be a useful resource - for all of you here today, as you and the agencies you work for, or care about, respond to the challenges that I have spoken about today.

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