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Role in Driving State Sector Reform

In the 2013 Review we observed that just as individual agencies can no longer deliver results in isolation, the Commission needed to work more effectively with The Treasury and DPMC to deliver the necessary reforms for sector and system-wide transformation. In ‘Getting to Great' [1]  it was stated that “a more cohesive and effective head office is also critical if we are to build strong and enduring public institutions”.

This collaboration is working effectively in some functions and not in others. The three agencies appear to have a much better understanding and working relationship in dealing with special projects and government priorities, such as the BPS Results. Also the collaboration on PIF Reviews and Four Year Plans has been effective.

The Executive Board of the Corporate Centre has been disbanded and redefined as the State Sector Reform Leadership Group, with a wider membership of nine Chief Executives. It is supported by the State Sector Reform Action Group which is made up of Tier 2 leaders from the Central Agencies who set the Agenda for the Leadership Group and are expected to implement and deliver the reforms.

This approach to leading the reform across the State Services does appear to have more traction. As well as involving more of the Chief Executives and Tier 2 leaders who can influence the outcomes, there are more connections across agencies. The improved BPS Results are offered as evidence of their impact. There are evident improvements in collaboration across the sectors but this is not enough. Value needs to be demonstrated in more tangible ways and some of the Chief Executives I spoke with considered that structural change may also be needed to drive greater accountability.

Other activities, such as the work of Performance Hub which combined analysts from both the Treasury and SSC, have not worked as planned. The Performance Hub did not achieve traction and the analysts have now been relocated back into their respective agencies. Many of the stakeholders, both Ministers and Chief Executives, consider this to be a missed opportunity.

There is general disappointment that the Performance Hub, which was set up to act as the analytical engine and the architect for development and reform of the State sector, has been discontinued. The reasons why the Performance Hub didn't work as a joint Treasury and SSC initiative and how these objectives will be progressed instead do not seem to have been effectively communicated within SSC, or to Ministers and other agencies.

Ministers regard State sector reform to be a priority for the Central Agencies (particularly SSC and the Treasury). SSC is expected to have the specialist HR and OD knowledge and skills needed to assist agencies to change culture and transform their businesses and operating models. Some Ministers question whether SSC is doing enough to drive these reforms and ask whether the pace of progress is too slow. In order to give effect to these changes, risks must be taken and SSC and the Treasury need to empower Chief Executives accordingly. However there is a feeling that the agencies are both too risk-averse and focussed on monitoring rather than enabling.

For example, one question raised was whether the process of exercising delegated authority needs to be reviewed and streamlined, so that service can be provided and actions can be taken more quickly, where they are needed - not always driven from Head Offices but closer to the customers. New tools such as data analytics are now available to provide evidence to support these actions and reforms. Has SSC got the right skills to drive these new tools, which are different from the policy analytical skills it may traditionally have relied on?

Further thought should also be given as to how progress on performance towards State sector reform can in fact be measured. Is there a need to create a better measurement framework to assess performance (including joint performance across the Central Agencies)?

Several interviewees questioned whether SSC in fact relies too much on policy skills and thereby effectively undervalues operational skills and experience. A common question raised with me was whether SSC has the ability to implement the planning and strategies that it designs. Being able to design implementation plans and tools is not sufficient without the skills to ensure that they are actually implemented and deliver results.

In the 2013 Review we noted this weakness and it is not yet clear that SSC has the right balance of operational experience to oversee the delivery of effective change management for the system reforms it is seeking. The appointment of an experienced operational leader as Deputy Secretary for State Sector Reform has been a positive step, but more is needed to reach the operational tipping point. Experienced change management specialists are needed. SSC does not need to employ them directly, but it does need to ensure that they are engaged and are effective.

There is also a perception that SSC does not really understand the perspective of their ultimate customers - the New Zealand public. Can SSC lead the far-reaching reform that BPS requires without speaking with and understanding the people that these services are intended to benefit? SSC is reaching beyond Wellington with the recent appointment of a senior public servant as a DC to be based in Auckland, which is an excellent pro-active move. But could SSC (and the other Central Agencies) improve their understanding and connections through more effective communication with, and use of, the ‘operational' agencies who have traditionally had networks across the country?


  • [1]Part One – by Murray Horn and Debbie Francis 2013.

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