Chapter 2: Adapting to change

The APS needs to evolve and adapt amidst constant change. Old ways of doing things need to be challenged and, if necessary, disrupted.

- The Hon Scott Morrison MP, Prime Minister of Australia²⁶

Change is not a foreign concept to the public service—the APS has always needed to evolve to keep up with the world around it. However, external change is taking place faster than ever, characterised by advances in technology, societal and geopolitical volatility, and heightened expectations of the Australian community about the services it receives from government. The evolution of the APS has not kept pace.

As outlined in Chapter 1, for the APS to adapt in the years ahead, significant change is required—fundamental adjustments to strategy, mindset and culture. At the same time, the identity and purpose of the APS must remain at the centre of reform processes. One factor that will not change is the importance of an apolitical public service that is effective and efficient in serving the Government, the Parliament and the people of Australia.

Several reviews into the APS have highlighted the need for transformational change and the role of leaders in managing change effectively. Adopting a mature and proactive approach to risk, ensuring strong and clear communication and supporting the workforce to positively respond to change, are also key components of a system where change is ever-present.

Perceptions of change management

The 2019 APS employee census captured employee perceptions on various change-related questions. Just under two-thirds of respondents (65 per cent) reported they had experienced major workplace change in their immediate workgroup in the previous 12 months, a decrease of 9 per cent from 2014. Figure 2.1 demonstrates the top five changes experienced by APS employees in the previous 12 months.

Figure 2.1: Top five types of change experienced by APS employees

Note: As respondents could select more than one option, percentages may not total 100 per cent. Source: 2019 APS employee census

These responses are relatively consistent with previous years, but it is worth noting that the workplace changes described are largely transactional in nature—exposure to structural and staffing changes are a routine aspect of most public service careers. In the 2019 APS employee census only 39 per cent of respondents agreed that change was managed well in their agency. This result has remained consistent over time (Figure 2.2) and could suggest that the APS consistently struggles to manage even routine, transactional change effectively.

Figure 2.2: Proportion of APS employees who agreed change was managed well within their agency, 2013 to 2019

Source: APS employee census

Transformational reform will require more significant changes in mindset and culture with more complex and interconnected challenges to navigate. There is clearly much work to be done to ensure APS agencies can navigate the change the future requires.

Readiness for change

It is generally recognised that the ability of an organisation to implement change successfully depends on positive engagement by employees in the change process.

The engagement of the workforce in change processes takes on greater significance in the public sector. The Government and the community have high expectations that the APS will adapt and change to meet future needs while continuing to deliver stability and continuity in policy advice and service delivery. Ensuring the workforce is equipped to perform and adapt in the face of reform will be key to successfully implementing lasting change and driving a culture of high performance.

People do not look to government for surprises, and politicians do not expect the Public Service to deliver the unexpected. They want to have confidence … that core government services, activities and frameworks are going to remain relatively consistent.

- Organisation for Economic Co-operation and Development²⁷

Employee turnover is one factor that has the potential to destabilise the workforce and compromise delivery of outcomes. A recent report from the United Kingdom Institute for Government investigated mobility in the United Kingdom civil service and found that as well as creating additional expense, overly high rates of turnover negatively impacted on policy development and implementation. The report went on to suggest that ‘staff turnover in the civil service is not healthy but debilitating’.²⁸

In this context, the 2019 APS employee census data was analysed to explore the relationship between respondents’ experience of change and their intention to leave their agency. The analysis revealed that negative experiences of change and negative perceptions of change management were both significantly associated with increased intention to leave. Conversely, respondents who had been affected by major workplace change and agreed that change was managed well in their agency were more likely to indicate they wished to stay working for their agency for at least the next three years.

Employee attitudes to change are also part of an organisation’s overall change readiness. APS employee census questions relating to perceptions of organisational change did not elicit overwhelmingly positive responses, as indicated in Figure 2.3. However, it is worth noting that a large proportion of respondents selected ‘neither agree nor disagree’. This could suggest a general lack of awareness relating to the benefits and/or purpose of change initiatives or a general disengagement from change processes.

Figure 2.3: APS employee perceptions of change
 

Source: 2019 APS employee census

Research and lived experience across the public and private sectors emphasise the importance of effective communication during change processes. Consistent with 2018 data, analysis of the 2019 APS employee census data confirms a significant association between positive employee perceptions of change management and effective internal communication, employee consultation and SES communication.

Analysis of APS employee census data also highlights the importance of ensuring that employees understand their roles within the broader APS context. Employees who believed strongly in the purpose and objectives of the APS, or who understood how their role contributed to achieving an outcome for the Australian public, were more likely to agree that change was managed well in their agency.

Leaders play a critical role in managing change in any organisation, and the APS is no different. ‘Committed leadership’ and ‘clear prioritisation of reforms’ were identified by Priorities for Change as common elements required for a successful transformational change agenda.²⁹

Analysis of 2019 APS employee census data demonstrates the importance of SES employees articulating the direction and priorities of their agencies, being sufficiently visible and working as a team to navigate change in a complex and ambiguous operating environment. It is also noteworthy that when respondents disagreed with the SES-related statements in Figure 2.4, perceptions of change being managed well in their agency also decreased significantly.

Figure 2.4: APS employee perceptions of whether change is managed well in their agency against perceptions of SES actions

Source: 2019 APS employee census

The future APS reform agenda, informed by the Independent Review of the APS and led by the Secretaries Board, will rely on a readiness for change across the service. It will be important for leaders to allocate time and resources to change processes, as well as building skills and capability to respond to change. This requires an APS-wide culture that supports the workforce to effectively deal with the demands of change.

Cultural change—Australian Bureau of Statistics

The Australian Bureau of Statistics (ABS) launched a transformation program in early 2015 with a focus on refreshing its culture. The importance of this work was highlighted through external reviews which found that elements of organisational culture impacted on the planning and risk management of the ABS.

To drive cultural change, a systems approach was adopted which included:

• defining ‘culture’ and creating a common understanding of high performance and customer service
• benchmarking existing and desired organisational culture
• applying organisational design principles to identify the levers to most effect desired culture change
• building leadership capability and changing leadership behaviour
• improving risk and issues management, communications and Agile work practices.

In 2017, the ABS undertook the Australian Marriage Law Postal Survey, putting its cultural changes and performance to the test. The success of the survey (99 days, 79.5 per cent response rate and $40 million under budget) demonstrated a focus on concrete action, reflecting the culture the ABS desired, specifically one featuring:

• communication and collaboration, with partners, staff and customers
• changed work processes, including user-centred design, flatter decision-making structures, better issues and risk management, and Agile practices
• development of a sense of community and positive workplace behaviours, championed by senior staff.

Recent internal surveys and the 2019 APS employee census provide indications of positive changes in elements of desired culture such as customer focus, collaboration, agility and accountability. These cultural elements foster and support high performance, enabling the ABS to further develop its ability to deliver vital data and statistics to inform Australia’s important decisions.

Innovation and risk

Innovation is critical for maintaining Australia’s high standard of living, ensuring its ongoing international competitiveness, creating jobs and ensuring future economic prosperity.³⁰ Citizens are demanding better outcomes and services from government. Agile and effective responses to these demands must be underpinned by new thinking, new ways of working and new ways of interacting with and delivering for citizens.

The OECD Declaration on Public Sector Innovation, adopted on 22 May 2019 and to which Australia adheres, establishes five principles, each with associated actions, that the public service can use to promote innovation:

• embrace and enhance innovation within the public sector
• encourage and equip all public sector servants to innovate
• cultivate new partnerships and involve different voices
• support exploration, iteration and testing
• diffuse lessons and share practices.³¹

One key element for promoting innovation is organisational culture—how organisations treat risk, and whether employees feel empowered to experiment and learn from their experiences. If staff are afraid to fail, they are unlikely to take calculated risks and be innovative. Similarly, if an organisation is unclear about its risk tolerance, it cannot expect innovation.³² Risk is discussed in further detail later in this chapter.

Try again. Fail again. Fail better.

- Samuel Beckett, Irish novelist and playwright³³

A culture of openness, of learning from errors, and of collaborating across silos and sectors is central to embedding innovative thinking and practices in the APS. The OECD Declaration on Public Sector Innovation emphasises that it is increasingly important to encourage and equip all public servants to innovate. In practice, this means that:

• permission is given to take appropriate risks and to explore and engage with new ideas, technologies and ways of working as part of core business
• clarity is provided on responsibilities for innovation so public servants know how they can participate or contribute
• recognition is given that innovation requires and involves a diverse range of skills and capabilities, as well as motivation
• support structures, processes and working conditions are developed that more easily allow the public service to innovate, and established routines are continuously assessed to ensure they do not unnecessarily hinder innovation.³⁴

Clean Sport app and virtual reality experience—Australian Sports Anti-Doping Authority

The Australian Sports Anti-Doping Authority (ASADA) has won several awards for its cutting edge approach to clean sport education. This includes being awarded the 2019 Public Sector Innovation awards for Citizen-Centred Innovation for their virtual reality doping control experience and their Clean Sport app.

The virtual reality experience guides athletes through the doping control process to demystify it. The Clean Sport app helps athletes to determine which supplements may contain banned substances to prevent inadvertent doping.

ASADA Chief Executive Officer David Sharpe says that ‘one in five supplements you can buy has an illegal substance in it under the World Anti-Doping Code’.

ASADA has also worked with former and current elite-level athletes to develop an innovative, engaging and forward-thinking education program that is presented by athletes themselves. The intention is to help aspiring athletes understand what is clean, fair sport and how they can reduce the risk of testing positive.

Using new, innovative technologies is key to engaging and educating athletes. ASADA will deliver even more unique approaches to educating athletes about their rights and responsibilities in future.

Promoting innovation

The 2019 APS employee census addressed innovation through a series of questions, including five items that contributed to an index score. This innovation index assessed if employees felt willing and able to be innovative, and if their agency had an enabling culture for this to occur. The 2019 overall innovation index score for the APS was 66 per cent, an increase of two percentage points from 2018.

Each of the five index items showed an increase in the percentage of respondents agreeing compared to 2018 (Figure 2.5). This is reflected in the overall innovation index increase. It is clear from the results that individual employees and their supervisors understand the value and importance of innovative approaches. Similar to 2018, however, questions on the extent to which agencies inspire or support innovation scored low in absolute terms, and attracted a large proportion of ‘neither agree nor disagree’ responses. This suggests that a greater whole-of-agency emphasis on innovation is needed.

Figure 2.5: APS employee perceptions of innovation, 2018 to 2019

Source: APS employee census

Further analysis of APS employee census data (Figure 2.6) shows a significant disparity between SES and non-SES respondents on perceptions of agency support for, and realisation of, innovation. While this difference in perspective between SES and non-SES is common throughout the APS employee census results, two points stand out from this comparison:

• SES officers take seriously their responsibility to lead by example in looking for ways to innovate in the workplace.
• More needs to be achieved to ensure that recognition for innovative approaches flows down from SES to employees at all levels.

Figure 2.6: SES and non-SES perceptions of innovation

Source: 2019 APS employee census

Innovation is taking place across the APS. In the 2019 APS employee census, more than two-thirds (70 per cent) of Executive level (EL) and SES staff reported that their immediate workgroup had implemented innovations in the previous 12 months.35 Almost 60 per cent of these innovations related to process improvements, with the main impacts relating to improved efficiency and service delivery. These findings suggest that the majority of APS innovations are resulting in incremental but nevertheless measurable changes to the way in which the service performs its core functions.

Head to Health—Department of Health

In response to the National Mental Health Commission’s Review of Mental Health Programmes and Services, the Australian Government, through the Department of Health, committed to delivering a new digital mental health gateway. Head to Health (www.headtohealth.gov.au) makes it easier for people to access a range of free or low-cost Australian-based phone and online mental health services and supports most suited to an individual’s needs.

Tackling mental health has proven to be a challenge for governments worldwide. The Department of Health prioritised innovation and user experience and, in partnership with Speedwell and Liquid Interactive, sought to provide Australians with an online self-service portal that would contain a list of, and recommendations for, quality Australian resources, and connect with users in a meaningful way. The portal contains professionally curated evidence based information and advice, a decision support tool, and underpinning service catalogue.

Using Agile methodologies, a Minimum Viable Product was released in 2017 and extensive user testing took place. The department worked closely with a broad range of end users to make sure Head to Health would be a valuable resource and used to its full potential. Users can filter digital resources by format (for example, an app, online program, online forum, phone line, information website, email, or web chat), target age, or population group to source the most relevant information.

The site has been very well received and attracts an average of 1,200 sessions each day. The department continues to iterate and enhance the site based on user feedback. Head to Health has won several awards including, most recently, the 2019 Best in Class Award from Good Design Australia.

‘Evidence shows that for many people, digital interventions can be as effective as face-to-face services. Head to Health provides a one-stop shop for quality digital services and resources delivered by some of Australia’s most trusted mental health service providers. It provides a place where people can access support and information before they reach crisis. It will continue to grow with additional services, a telephone line as an alternative access channel, and further improvements to ensure it continues to meet the needs of the Australian community.’

The Hon Greg Hunt MP, Minister for Health.

Barriers to innovation can include risk aversion, leaders not embracing innovation, resource constraints, lack of direction and measurement, policy conflicts, hierarchical structures and silo mentality, legislative limitations, accountability concerns and resistance to change.³⁶ The top three barriers identified by EL and SES respondents in the 2019 APS employee census were insufficient time (71 per cent), insufficient resources (66 per cent), and information and communications technology (ICT) issues (53 per cent).

A positive risk culture

We need to lift our game by promoting a positive risk culture, walking the talk, making risk management a core part of doing business, articulating entity appetite and tolerance for risk, encouraging sharing of information with others.

- Jane Halton AO PSM, former Secretary, Department of Finance³⁷

The Commonwealth Risk Management Policy and Section 16 of the PGPA Act set out a framework that encourages Commonwealth entities to engage with risk and establish and maintain appropriate systems of risk oversight and internal control. As outlined in the Independent Review of the PGPA Act, effective risk management and engagement underpins strategic and operational success.³⁸

Appropriate behaviours and attitudes to risk are fundamental to driving effective engagement with risk and strengthening confidence and trust in the ability of the APS to deliver for government and the community. A positive risk culture exists when employees understand the risks facing their agency and consistently make appropriate risk-based decisions. Such a culture is likely to include these attributes:

• leaders, managers and supervisors consistently and positively demonstrate and discuss the importance of managing risk appropriately
• the agency’s risk management framework is integral to its operating model, where employees understand and agree on the need and value of effective risk management
• employees are comfortable talking openly and honestly about risk, using commonly understood risk terms and language
• employees own and manage complex shared risks with others and incentives reinforce appropriate risk-related behaviour
• the agency has a supportive environment for escalating risk issues with the senior executive.³⁹

Managing risk—Independent Parliamentary Expenses Authority

The Independent Parliamentary Expenses Authority (IPEA) was established in April 2017. In a politically sensitive environment, IPEA raised awareness of inherent risks by building a strong and practical, pro-governance culture. IPEA created:

• a Risk Management Policy aligned with the Commonwealth’s Risk Management Policy
• a Risk Management Framework that provides the foundation and organisational arrangements for embedding risk management into IPEA’s culture and day-to-day activities
• four staff-led working groups to tease out the consequences of policies and risk tolerance.

An Audit and Risk Committee assists the Chief Executive Officer and independent members of the Authority in their risk oversight functions. The committee provides assurance and advice, guided by a charter.

The IPEA has established a culture of integrity and risk awareness in the organisation. Regular Curious Conversations translate agency priorities into concrete discussions and actions for staff. Curious Conversations involve short, 20-minute stand-up meetings to discuss a scenario on a key priority area. The scenario is emailed to staff the week before and staff, individually or collectively, return email their comments, solutions and/or options. The comments are collated and presented at the stand-up meeting. Further discussion is encouraged, which draws connections between the issue and identified IPEA risks. To keep the concept fresh, external subject matter experts are invited to present a Curious Conversation on a relevant topic.

Staff have found these discussions highly valuable as they share and learn from each other in a way that connects with their everyday experiences. They have greater clarity and develop better decision-making skills when dealing with unique questions in their work. Now, when confronted with a risk, staff understand the framework they are working from and feel confident to raise concerns with supervisors and team members.

Staff rated the agency’s risk management approach and risk culture highly in the 2019 APS employee census, achieving a greater proportion of positive responses compared to the APS as a whole, in all eight risk-related questions.

IPEA’s first internal audit focused on compliance with legislation and sought to confirm that the new agency has a mature approach to risk management. IPEA was awarded an Honourable Mention in the Enterprise-wide category of the 2018 Comcover Awards for Excellence in Risk Management.

Shared risks

Moves to increase collaboration across the APS demand a deeper understanding of shared risks—those risks that do not have a single owner—within the Commonwealth. Shared risk is a crucial element of program and policy delivery and failing to identify and manage these risks often impacts a broad range of stakeholders, including within the wider community.

The Commonwealth Risk Management Policy (established in 2014 to support the PGPA Act) outlines that each entity must implement arrangements to understand and contribute to the management of shared risks. Guidance is focused on sharing information so that risk is visible, and responsibility for impleme

nting and managing risk controls is allocated across a number of agencies.

Comcover’s annual risk management benchmarking program involves public sector agencies completing an annual self-assessment survey that measures the maturity of their risk framework against the nine elements of the Commonwealth Risk Management Policy. It is encouraging that understanding and managing shared risk across the Commonwealth has seen the largest improvement in maturity out of the nine elements, with a 29 percentage point change over five years.⁴⁰

However, understanding and managing shared risk was still assessed as one of the least mature elements of the policy. Fifty-eight per cent of public sector entities participating in the 2019 benchmarking program indicated that the accountability for managing shared risk was not clearly understood. Less than half included details of shared risks in their risk management reports.

There is a clear need for APS agencies to work with stakeholders to better understand common threats, shared vulnerabilities and enhance their collective ability to mitigate and respond to emerging risk.

Risk culture

The 2019 APS employee census aligned its risk culture questions with the assessment of risk culture across the Commonwealth through the Comcover risk management benchmarking program. Figure 2.7 shows APS employee perceptions of risk management in their agency.

Figure 2.7: APS employee perceptions of risk management in their agency

Source: 2019 APS employee census

There has been a decline in positive responses to these questions since 2018. The largest increase in negative responses (four percentage points) related to risk taking being rewarded by the agency.

A large proportion of respondents also selected ‘neither agree nor disagree’ for risk culture items. This was particularly the case for items relating to the perceived benefits from time invested in risk management, agency-level attitudes towards risk taking, and the attitudes of supervisors when risk taking leads to failure.

General research suggests that risk culture is often hindered by a lack of communication from senior leaders, resulting in lack of staff awareness around expectations for risk management. Analysis of the APS employee census data tends to confirm this within the APS context: there were substantial differences in positive perceptions relating to risk culture between SES and non-SES respondents. This is no doubt partly due to SES employees having greater exposure to and engagement with risk, but it may also point to poor communication about appropriate risk taking and management.⁴¹

The Independent Review of the PGPA Act found that risk practice across the Commonwealth was still relatively immature. The review suggested that significant work was required to embed an active engagement with risk and to have APS employees at all levels appreciate their role in identifying and managing risk. The 2019 APS employee census results suggest that agencies still have significant steps to take to instil a positive risk culture.

Engaging with risk to respond to citizen needs

In late January 2019, tropical Queensland received an extended period of heavy rainfall as a result of an intense slow-moving monsoon and tropical low, known as the Queensland Monsoon Trough Event. Thirty-nine local government areas were affected by flooding, covering 56 per cent of the state. Some locations, including Townsville, exceeded their average annual rainfall in less than a week, with more than 2,000mm of rain.

Federal, state and local government agencies, along with the Australian Defence Force, were mobilised during the event, working together in an unpredictable environment to respond to community needs. Agencies worked collaboratively across all levels of government to deliver resources, provide financial assistance and emergency relief funding and facilitate referral to housing services and health providers.

In particular, response efforts were empowered by a positive engagement with risk that enabled decision makers to take immediate localised action to address major issues. For example, the Australian Defence Force was provided with ‘freedom of action’ to undertake priority and time critical operations in support of the Event response, and local knowledge and decentralised decision-making saw critical infrastructure, such as railways and roads, reopened as quickly as possible for the community.

The 2019 Monsoon Trough Rainfall and Flood Review by the Queensland Inspector-General Emergency Management highlighted that this ‘freedom of action enabled quicker response to on-the-ground issues and a more efficient supply of services to those most in immediate need’.⁴¹

Relationship between risk and innovation

… an over-reaction to things that go wrong … does not help to create a more mature approach to risk management in the Commonwealth. To the contrary, it reinforces risk aversion and stifles innovation.

- Elizabeth Alexander AM and David Thodey AO⁴²

General research suggests that positive engagement with risk is more likely to encourage an environment that promotes innovation. The 2019 APS employee census results showed that positive perceptions of risk culture were associated with significantly higher innovation index scores (Figure 2.8).

Figure 2.8: APS employee innovation index score against perceptions of risk

Source: 2019 APS employee census

Governments and the community value stability and continuity in their public sector institutions, and this has certainly contributed to a cautious approach to risk and innovation across the APS. The potential outcomes of policy or program failure have likely also been a more influential factor. Learning from Failure highlighted that ‘[public servants’] circumspection is based on the knowledge that the rollout of major national programs is fraught with danger … it is uncertain exactly what policies will work, or how they should be delivered in the most effective way’.⁴³

Learning from Failure also emphasised the benefits of experimentation, however, and there is no doubt that a positive risk culture can foster innovative approaches. This in turn has the potential to lead to policies and services that are more inclusive and better targeted to the needs of citizens. The APS can and must improve its approach to risk management.