Summit 2016: Spearheading public sector reform

There is a growing recognition at the highest echelons that governance changes are required in this area.

In his 25 years in Australia, Professor Göran Roos has seen public service organisations become more reluctant to innovate and more fearful of innovation. Speaking at the session Public Sector: Innovative Models of Governance he said that budgetary constraint, political restraint and fear of exposure in the media have all played a role in creating this reluctance. In many cases, innovation has become a standard response to a crisis. In others, it is driven by one person and, when that person moves on, things inevitably return to the way they were.

“I see a lot of talk but very little action,” he said. “[The television comedy] Yes Minister is still alive and well in Australia.”

Principal barriers

He listed a number of barriers to innovation in the public service including inadequate strategy, a short-term focus, lack of relevant metrics, and organisational and cultural elements such as risk aversion and limited incentive for change. He also pointed to a generally restrictive approach to collaboration with industry and within the organisations themselves.

Dr Marlene Kanga FAICD, a director of Sydney Water Corporation, said that when she started her own high-tech small business in 2001 she frequently collaborated with Australian universities. Now her interns come from Europe.

“We would love to work with Australian PhD students and researchers,” she said. “The main reason we can’t is that universities have legal departments that are so risk averse they insist on owning the 0.0001 per cent of intellectual property [IP] that the student might create. That mucks us up because all of the value in our company is IP. They also want indemnity against anything that might happen, which is impossible for us to provide. We don’t have the resources and there is no insurance cover.”

Kanga added that IP has been identified in the UK as well as Australia as the main barrier to collaboration between universities and businesses. She compared this with the United States, where they have what is known as open innovation. She gave the example that, when two PhD students developed an idea for Google, Stanford University took the view that the people who owned the IP were the ones most likely to make it work. If they did, the university would benefit in other ways.

Steps in the right direction

But the news is not all bad.

Erma Ranieri, Commissioner for Public Sector Employment, Office of the Public Sector, described the reform program in South Australia.

“We’re changing the way the public sector does its business – by stealth in some areas,” she said.

The challenges range from red tape and regulation to issues such as domestic violence, where they have been considering how multi-agency approaches might save lives.

“Government doesn’t have all the answers,” she said. “In some cases government needs to make way for the private sector, not-for-profit organisations and anyone else who has a contribution to make.”

Ranieri has also pioneered the 90-day project concept which aims to achieve concrete changes to services, engagement, productivity or organisational performance within a three-month period.

“A lot of our issues need more time than this but we’re dealing with them in sizeable chunks and getting an outcome,” she said. “Over the last three years we have completed 70 complex projects and saved billions of dollars in the process.”

Andrew Balmaks MAICD, chairman of the Noetic Group, pointed to positive changes such as the Public Governance, Performance and Accountability Act 2013 which has shifted the emphasis from financial accountability to overall performance. Jane Halton, secretary of the Australian Department of Finance, is also driving governance reform.

“There’s recognition that transformation is required around governance reform, so it’s not all doom and gloom,” she said.

Roos concluded by noting that very few countries have as much potential as Australia. He sees a need for civic leadership.

“In my opinion, the way the government in Australia could have most effect is not to hand out money, not to do regulation, but to set clarity, direction and expectation for the rest of society. I think that presents a huge opportunity.”