Speech of Head of State Services and State Services Commissioner Iain Rennie at the Institute of Public Administration New Zealand (IPANZ) State sector legislation launch, 30 July 2013
First of all I would like to thank Dr Coleman and his colleagues for their support of this legislation.
Ministers have been very supportive and have allowed us to take up quite a considerable amount of scarce Parliamentary time to get this legislation through.
The fact that at the third reading of the Bills 95 of Parliament’s 121 MPs voted in favour underscores the high degree of political support and therefore the high likelihood of political durability of these changes.
A clear mandate for change – not a hardwired vision
If I have a message for the Public Service and wider State services today it is we are never going to have more mandate than we have today to do the kind of changes that we need to make.
We have been provided with the tools that we need to create a world leading State sector. I certainly see it as my job to work with other leaders through the system to get on and use these tools.
Fundamental to understanding the new legislation is that it provides permissive tools that will assist change.
This is not about hardwiring a vision for State services that may be appropriate in 2013, but which won’t meet the needs of 2023 or 2033.
Our State services need to be able to adapt and change quickly to different needs and demands.
Therefore how these tools are used has to be placed in the context of where we start from, the drivers for change, and what we want our State services to look like in the future.
A State sector to be proud of
We have a strong base to build from. We should all be proud of working in a really good State sector. New Zealand consistently leads the world in terms of strong trusted institutions. Just a few illustrations of that fact:
The satisfaction expressed by New Zealand in its public services is very high against international benchmarks.
New Zealand is a world leader in terms of perception of the absence of corruption in government.
The World Bank rates New Zealand as fifth highest in terms of government effectiveness – ahead of many of the countries against which we traditionally benchmark ourselves for example. Australia 10th and the UK at 15th.
From good to great
However we can and must do better.
The State services of the future need to operate much more as a system than a collection of fragmented individual agencies.
The public and government expect government services to be designed and delivered around the needs of New Zealanders, not around organisational boundaries.
The State sector workforce is much more in demand today than 15 or 20 years ago from both private sector and international employers. People are demanding opportunities for more varied and deeper career development than individual agencies can provide.
The long term fiscal outlook will require the public sector no matter who is in charge of the Treasury benches to generate significant ongoing productivity gains over the foreseeable future.
A three pronged approach to success – results, leadership, and stewardship
To meet these challenges successfully the New Zealand State services over the next few years has to do several key things.
We have to focus on the issues that really matter to New Zealanders by focussing money, people and information where they are needed to tackle the causes of problems - not just the symptoms.
Secondly, we will develop leaders for the State services system, not just of individual agencies.
This means less reliance on the “spot market” for talent. We will move towards a system of stronger management, leadership development, bench strength and deeper technical mastery in those areas that are critical to creating superior performance for the long term.
We will place much more importance on our stewardship role - this means building capability and resilience into our State services for the benefit of current and future New Zealanders
Achieving this new “state of the state” will require three key shifts – one towards a result focus, one towards system focussed leadership and a third towards stewardship.
The fact that complex problems must be solved by genuinely collaborative enterprise of multiple agencies is an insight that our frontline staff already know.
Dealing with the underlying causes of big problems, as opposed to addressing the symptoms, can’t be done by one agency working on its own.
Nor can the State services do everything.
We need to focus on what matters most and know how to mobilise community and private sectors to achieve change
In the connection the Better Public Services results are a world leading innovation – owned and driven by both ministers and chief executives - they are driving the shift from agency silos and agency outputs to focus on achieving results.
Focusing on results means being clear about what you are trying to achieve – the result comes first and defines how best to bring relevant capabilities together for success.
New legislation helps us achieve this.
Public Finance Act
For example, in the area of funding, the joint funding tools such as multi-category appropriations, enabled by the changes to the Public Finance Act, will be of material benefit.
Crown Entities Act
Similarly we need to engage much more actively beyond the public service with our Crown Entity colleagues
Crown Entities in many cases focus on delivery to the community and we need to engage and enrol more State services organisations to support a wider result focus.
Despite a promising start in the shift towards a much more results focus we have to recognise that this is really challenging and that we will have to work quite differently to get durable real gains.
And this will include better partnering with community and private sector capabilities. For example, moving from contracting for just outputs and services towards contracting for results, and using greater contestability to drive innovation
To be more effective we also need to improve bottom line performance of our agencies in a way that frees up chief executives and agencies to focus on results. We have huge opportunities through the new functional leadership models around property, procurement and ICT, and real opportunity with the current Optimise HR and Optimise Finance projects, to realise gains in the finance and HR areas. The amendments to the Crown Entities Act, on whole of government directions, will assist us drive change across the State services.
Central to enabling a results focus is a focus on leadership development. That means leaders must focus on the objectives of the State sector as a system rather than just individual agencies.
People are at the heart of what we do as a State sector. So to mobilise the community, private and wider state sector to achieve results we need leaders who have the system in their DNA.
Recently I went to Singapore to talk to our colleagues and one of the things that struck me is that it has built, and invested over time in a cadre of leaders who have a view of themselves as a system and have an ability to agilely move and adjust as priorities changes.
State Sector Act
The recent statutory amendment adds to the role of the State Services Commissioner as Head of State Services so that it now includes explicit responsibility for the performance of the State services as a whole.
Probably the second person who has a similar sharp degree of accountability is Colin MacDonald as the GCIO. Government has put in place some very stretching and clear expectations around ICT performance across the system, and around Colin’s role in terms of visible assurance and leadership of the system.
Over the next couple of years we will see demonstrable change in the leadership that our professional leaders will have in the system.
For example, I expect the Secretary of Treasury in his financial management leadership role, and the Solicitor General in his leadership of the legal profession, to be much more active in developing their professions, - to set standards, build communities of practice, and recognise excellent performance in these professions right across the State services.
But a system focus for leadership isn’t just about what happens at the top. It has to be deeply embedded right throughout our system.
Over the next several years I expect to see a number of initiatives that will begin to grow that system focussed leadership.
Spotting and developing leaders - the future face of the State sector
At the moment the State sector is not attracting enough of the excellent graduates who are leaving universities.
To address this we will establish a State services graduate programme that will encourage graduates to come into the State services and work in a number of different agencies in their initial years.
The programme also will get greater reach into communities and leaders that we are not well represented by with within the State services - in particular Maori and Pasifika leaders.
We need to engage and invest in our emerging leaders. These are people probably in their late twenties, early thirties who are in their first or second management jobs and are showing real potential.
We need to nurture those people to get them working as a cohort to put them on an accelerated track so that they are credible candidates for senior leadership roles inside a decade.
In terms of our senior people, senior tier two roles and some of the large tier three roles, I’m encouraged by what I see. I see people taking more opportunities to develop their credentials as leaders and move around the system. People are seeing the needs of the new system and seeing the opportunities for them as leaders.
A more developed leadership – get out to get on
We need to enrol a greater number of our leaders in this new vision and we need to be very honest that senior leaders, whether they are tier two or chief executives, are going to have to demonstrate a much broader range of experiences than they have to date.
For example, I will want to see short listed chief executive candidates who can show they have worked in an operational agency, who have the capacity to work in agencies with different cultures. I will want to see that they have taken the opportunity to work in a system-focussed agency such as a central agency or a functional leadership role.
To those people there’s a very clear message “get out to get on”.
And that is a message that I will be making increasingly clear to leaders through the system.
Chief executives to public service chief executives
The legislation permits the Commissioner, in consultation with ministers and of course with the agreement of the CE, to move existing chief executives into vacancies as they arise.
This is an important change because if chief executives move their identity from being a chief executive of an agency, to being a public service chief executive who at any particular time happens to operate at any particular agency, that style of system focussed leadership will percolate through the agencies that they lead.
In the short term I don’t expect that people will see widespread use of that provision. Over the past two years most chief executives have taken up their current positions so it’s not appropriate to see much change for now. But over the next three years I expect we will see that provision used.
The final point I want to make is that system leadership is not only a Wellington issue but it’s a regional issue as well.
Recently a couple of senior Auckland public servants approached the Commission wanting an approach to talent management and development in the Auckland area.
Auckland is an area that the sector has struggled with in terms of competition from the private sector. Senior leaders in that area want an opportunity to manage development and think about career paths not just across the State services but also Auckland local government.
That’s a great initiative and it’s the kind of behaviour that we want through this broader programme.
Stewardship – future proofing
Over the past few years, through the PIF, we’ve developed a very comprehensive diagnostic about what our State services are good at.
We are very good at responding to the demands of ministers in the here and now
We are very good at responding to crisis and mobilising response.
We are much less good at thinking about the long term and the various dimensions of that.
We are much less good at making sure that we are focussing on policy issues that our government will have to grapple with in five to ten years so we are able to support that government address those issues.
We are not good at issues like succession management and talent management.
We are not particularly good at long term capital management.
So in the context of a world class State Service, a shift from the short term to the long term is fundamental.
So how do we do that?
First, performance expectations of chief executives will be increasingly geared towards stewardship. Each year Cabinet will endorse the stewardship obligations which the Commissioner will give chief executives.
It means active planning and management. It means building in resilience so initiatives like Optimise HR and Optimise Finance are fundamental to make sure we get real resilience and quality improvement in key professions.
It means thinking about stewardship in a very different way.
Information is a key issue for the State services and it warrants probably a separate speech on a different day. But key to shifting the way we think about information is to think about information as a strategic asset.
We need to be very clear around our responsibilities and open with the public around the information that should be available to them in a free way
It also means we need to be very mindful about the information the public gives us that we need to care for and protect.
Trust and integrity
It is fundamental for us to have high levels of trust and integrity. It is both one of the biggest opportunities to transform the State services but also one of our biggest threats to our standing as the trusted State sector.
So that is why, for example, in the past few months I’ve made increasingly explicit in chief executive performance agreements the expectations around information security and privacy.
All this adds up to significant change for the State sector in the years to come. But it is not what that we usually associate with State sector change. This is not a vision about widespread amalgamations of agencies, super ministries or the like.
Indeed I expect that over the next three to five years we will continue to have many of the same agencies that we have today, but what happens within the agency will be radically altered.
Agencies will focus on the absolutely critical capabilities that they need to deliver their business and which they can sustain over time.
Increasingly they will look to partner with professional leaders across the system, community and private sectors using the new delegation opportunities to support and deliver the services that they are required to get the job done.
Diagnosis is over - time for action
Over the last few years you’ve had a lot of diagnosis around the state of the public services.
As I said, the PIF finds us with a very clear idea about what we’re good at and what we’re not so good at.
We’ve had the intellectual debate about the kind of philosophical shifts in the Public Sector system that are reflected in the legislation.
The diagnosis and debate is now over - we are into the hard graft of implementation and change.
One of the important challenges that I put to everyone in this room today is this is not change that can be delivered from Number Two, The Terrace, or indeed from any chief executive’s office in any agency.
This is change that has to happen at a number of levels. It’s about change that’s centrally led in collaboration with the system.
It’s about partnering opportunities with individual sectors, groups and unions.
It’s about a set of permissions for people to do things in different ways.
New Zealand has a strong tradition of ground breaking reform in public management and these reforms continue our push to be at the leading edge of innovation and excellence in State services.
You as a State servant
There’s a lot in this reform programme from the point of view of the state servant.
It’s about making it easier for you to work across the State services and beyond and build really exciting and diverse careers.
It’s about the things that you can do to get the result for the community that you’re trying to service.
It’s about focussing the skills and knowledge and experience where they can make the greatest difference to New Zealand.
And it’s to help us shape the State services of the future the State services that you can all be proud to work in.