Parkinson: stop flogging dead cats and take innovation seriously

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Australian Public Service head Martin Parkinson celebrated some of the year’s wins but also warned against complacency in the face of disruptive forces, in his annual address to the IPAA last night.

I’m a great believer in celebrating success, acknowledging failure and recognising where we can do better. So to me it’s important that we come together to reflect on the year that has been. Especially in a climate of such rapid change here in Australia, but perhaps even more importantly overseas.

So I’ll start by taking an opportunity to thank everybody for their contributions over the past 12 months, when you think about the year that’s gone we can divide it into the pre and post-election, and of course that bit in the middle.

Prior to July we were busy implementing policy of government and preparing a budget that bore the stamp of a new prime minister — our fifth prime minister in six years.

As for every election, we headed into the polls uncertain about the outcome and how it would affect our work. The elongated caretaker period brought with it a new set of challenges, but in my view the APS supported the work of the government professionally.

For some, post-election was business as usual. For others, like so many elections before, and I suspect into the future, there was an adjustment to be made, either to a new minister, or to machinery-of-government changes. Subsequent to the election, we had to navigate the dynamics of the new cross-bench. Many in the service already have that experience from the Gillard minority government days.

Like all second term governments, the focus of this administration is different from that in its first three years. In this second term the focus is on the domestic agenda of boosting investment and jobs and growth. Since its re-election the government has progressed reforms such as vocational education and training, superannuation, industrial relations and the ending the perfectly preventable mess that has been VET-FEE HELP. It’s initiated the Finkel Review into the security of the national energy market. And it’s continued to deliver real momentum in its campaign against domestic violence.

Its second term has also been characterised by a sharp focus on implementation of existing commitments. This covers the massive — potentially game-changing — investments that have been made in the National Disability Insurance Scheme, the National Broadband Network, the National Innovation and Science Agenda, and in cities and infrastructure. And I haven’t even mentioned naval shipbuilding, where the intention is not just to build naval ships but to build a naval shipbuilding industry capable of holding its own against global metrics.

These are huge projects with absolutely enormous impacts on Australia, and the challenge of delivery cannot be underestimated. The shipbuilding work alone will see government investment in capital of around $89 billion over the coming decades.

Think of the cost to Australia in foregone opportunities. Think of the opportunity cost, in other words, if we get the implementation of that wrong.

This all occurs against the backdrop of the increasing urgency to restore our fiscal position. On current plans, we return to surplus in 2021 — over a decade from after we slipped into deficit and eight years later than when we first projected a surplus back in 2012-13.

Now it’s really easy to blame this on the Senate. But Australian governments have rarely controlled the Senate. You’ve got to go back to 2004-2007 or you go back to 1980-1983 to find a period where we had a government that controlled the Senate.

So to me the issue is not the control of the Senate, it’s the fragmented vision of Australia’s future that causes the biggest difficulty that we face today. It’s that fragmentation of our vision for Australia that is being reflected in the composition of the Parliament. Efforts to return Australia to fiscal health are hampered by the unwillingness of the community to acknowledge the risks Australia is taking. But if the community will not acknowledge it today, how will they attribute blame if the rating agencies remove our AAA credit rating?

Globally, economic growth remains sluggish. In many developed countries, inequality is risen and the public feels as through the social compact is broken. That’s leg to a backlash against free trade, against globalisation, against foreign investment, and against immigration. Yet despite the superficial attraction of such attitudes if Australians want a resilient economy, we need a serious commitment to productivity growth and a fundamental openness to trade and investment that bring with it the new jobs and competitive firms that we’ll need in the decades ahead.

Complacency still too widespread

The Prime Minister has been absolutely forthright in his belief that the generation of ideas is the key to our economic success, and that we must make innovation and disruption our friend if we are to keep pace with the world.

We’ve heard that phrase many times: “disruption and innovation”. I’ve talked about in speeches in the last couple of years, I’ve talked about what it means for our economy, and our organisation — the APS. I’ve espoused it on panels where I’ve robustly suggested that APS staff embrace it.

I’ve realised recently that I’ve never really spoken in detail about what it means for the APS. And that’s why I shouldn’t be surprised by my conclusion when I look back over the course of the year.

In my first year as head of the public service, I’ve been very impressed by a whole range of things that I’ve seen, but one thing that’s surprised me has been complacency – and I don’t use that word lightly. I really do mean complacency, which many in the public service have in regard to the disruptive forces that are operating around us and operating on us.

Disruptive forces like the fundamental shift to public expectations of government; consumer directed demand for government services; and the ever-changing capacity of technology to support and improve service delivery are certainly not unique to the public sector. They impact on our work as much as they impact on the work of the private sector.

Despite this, it seems that many in the APS think that disruption is something that is happening to other people. Conversely, we have a view that innovation is either a buzzword or something that is nice to have.

I want to be clear, that’s a false reality, and a dangerous one. It feeds into a concern I’ve expressed previously that we in the APS are at risk of a fatal combination of ignorance and arrogance.

So what do I mean when I talk about innovation in the APS, what does it look like on a day-to-day basis for a graduate doing a rotation, for an EL2 in HR, for the secretary of the department?

First, we have an organisation that stops working at the word ‘failure’. I know we’ve had it ingrained in us for so long that failure is inexcusable, that we’ve either risk managed the life out of decisions, or we’ve simply refused to admit when we are taking risks.

Look at our reality: we’re an organisation with some incredible high profile failures. I’ve already mentioned VET-FEE HELP, which was entirely preventable. We knew the lessons to be taken from some of the other programs, such as the home insulation program, e-Health, this year the Census, for failure to effectively de-identify health records.

We know, but we keep making the same sorts of mistakes and we have to keep asking ourselves why. What is it that about the way we think about doing things that’s leading us to repeat these issues?

Acceptable level of failure

There is an acceptable level of failure.

I’m not suggesting to anyone that you go rogue and you go out and adopt the ‘rather seek forgiveness than permission’ mantra. Because that’s often just an excuse for poor preparation or a disregard for due process. We have to do our due diligence. We have to base decisions on a solid evidence base and we have to operate within some kind of structure.

But if we’re truly going to create a safe space for people to innovate, take risks, we need to create better frameworks to test ideas.

Better still, to emulate General Electric, we should be able to fail fast and then decide to persevere or pivot. That is based on data analytics, and clear-eyed judgement. Did we make a mistake at the outset and this is not something we can rectify? Or is this something that if we take a step back and fine tune it, is this something we can continue and persevere with?

We have to learn and we have to recognise early what are we seeing. Is it an unacceptable level of failure or a situation where something is absolutely OK and rectifiable if we do a bit of fine tuning of our project?

Our weak capacity to evaluate potential success and impending failure suggests to me we’ve got a capability gap. The fact we keep repeating this does seem to me that we’ve got some problems around project management capabilities. We’ve got some weakness around risk management. And frankly, we’re not being sufficiently open in putting on the table what we see as the real risks around an issue.

So how do we deal with that? First thing, we need to be honest. Honest analysis. Honest ability to assess risk and development of risk mitigation and minimisation strategies. They have to become core skills for us if we’re going to successfully venture into this brave new world of disruption and innovation. We don’t have any choice. We’re going to be dragged into it whether we want to do or not, so we’d better arm ourselves.

Yes, innovation can take courage. But increasingly it’s going to be expected of everyone in the service. I’ve got a Prime Minister who is an early adopter of technology and puts a lot of stick into its ability to transform the way in which we work.

Mastering the brief

In its own way, the PM&C Incoming Government Brief team rose to that as we were preparing for the post-election briefing. The IGB team took an idea that had been developed in the Department of the Communication and the Arts under the Prime Minister when he had been minister. And we worked with our own IT and security colleagues to develop a new and user-friendly way of delivering the IGB electronically.

Anybody who has worked on an IGB knows how diabolically difficult a process these things can be. But this was more than just an app, it was an entire new way to thinking about how we gauge the Prime Minister, thinking about how we engage him as the client and asking what is it about this client, about how they operate, that we need to tap into it? I have to say it’s been a resounding success. It allowed the Prime Minister to ask questions, receive answers and make decisions on briefs in real-time and remotely. He’s very keen that we roll this approach out more generally. We’ve already started doing it for QTBs (Question Time Brief) and we’re already doing it now for our international briefing.

So in a situation where he’s travelling internationally, his briefing is all done in the way of the IGB pack, it’s all done remotely, he’s asking questions interactively and its product-evolving in front of his eyes as he’s on the run.

Why do I mention that? Not because we deserve a particular pat on the back, but because we asked ourselves the question how do we deal with this particular citizen, this particular client, how do we make life easier for them, rather than thinking about how we’ve traditionally done things.

I’d suggest that it might be useful to ask the same question, is there a way you can take our idea here – which as I said was originally a Department of Communications idea – or ideas that other departments are doing and ask how you can use that in your department, to serve your minister, your team. How can you build on the ideas of other people?

I keep saying plagiarism is a sin in academia, but it’s a virtue in public policy. We’ve got to get better at not having every single one of us re-invent the wheel.

Steal shamelessly

Innovation is not just confined to technological change. The APS have to think completely differently when it comes to policy development and implementation.

This year, Christian Porter, the Minister for Social Services announced a trial of the Australian investment approach to welfare. The provision of income support is by no means a new policy, but through the investment approach, he’s trying a totally different data-driven approach.

Rather than providing a series of short term fixes, he’s using big data and data analytics to draw on actuarial analysis by 15 years’ worth of social security, ABS and longitudinal data to identify which groups in our community are most likely to be long-term recipients of welfare. And to ask where is the best point to intervene to help those people to break welfare dependency. This evidence base, which had not previously been compiled and so never had the capability to access it, allows funding to go to specific groups at specific times within their individual lifecycle where the data suggest has the greatest chance to breaking that welfare dependency.

One of the groups most vulnerable to dependency is the 11,000 young carer payment recipients under 25 years-old. Just to put this in context, that data that Minister Porter had available to him when all this was put together, suggested to us that over the next 70 years a minimum of 40% of that 11,000 Australians under 25 can be expected to access income support arrangements. On average those 11,000 young carers are expected to be on income support at some point in each year for 43 separate years over that life. We’ve got young people, who if we don’t try to intervene will be essentially confined to have 43 years of their life where they’ll be dependent on income support payments. 16% of that group of 11,000 will access income support each and every year of their life.

So we are adopting a fresh approach, combining the right data and the right analytics capacity, and that’s giving you a remarkable instrument to improve the effectiveness of our social security interventions. It’s a data-driven targeted approach to payments. What do we get out of it? Yes, government gets a better outcome in terms of spend, but the biggest win is those vulnernable people are likely to have greater control over their lives and are likely to lead more worthwhile lives because they will not be consigned to that particular echelon of our community.

The staged implementation of the Australian investment approach is also, I think, a fantastic example of small scale policy testing. That is, creating a framework in which to test the merits of a policy idea while accepting that it might not work. The $96 million Try, Test and Learn fund exists to innovate ideas from experts in and outside government on different types of interventions to target these different groups. How can we do things differently to try to achieve the investment approach goals and rigorously evaluate these pilots before we roll them out for full-scale implementation.

This is a phenomenally important structural reform. If we can do this, it won’t just be an approach that apply in a social welfare space, it could be applied all over policy. We should be thinking of this as one of the potentially great structural reforms of this decade.

I mentioned about plagiarism, so I should be up front … the Australian investment approach, much like Crowded House and pavlova has been borrowed from our Kiwi cousins. But like the successful Aussie pav, we gave it a bit of a twist. We did that because it made sense to change it slightly to fit with our circumstances.

So I really encouraged you to think of these sorts of things as opportunities for innovation. But remember, innovation is not the same as invention. Neither of those two examples are somebody sitting in white coat in a lab mixing chemicals in beaker or basically having a brain wave and says I’m going to change to utterly, completely different.

Only very occasionally are the ideas behind innovation truly original. Most of the time, innovation is simply the result of the adoption or adaptation of an existing idea. So we shouldn’t be too scared to think of it as something that it’s not that scary, but we’ve just got to be more open minded about.

The tools we need to make our working lives easier or more productive already exist, we just have to take a step back and ask ourselves a ‘what if’ question. What if I ask my teammates or my department, or even more scary still, perhaps the community for their ideas. What if I make all roles flex in my department? What if I stop flogging a dead cat and looking differently at a persistently difficult policy question?

So I think there are many ways we can recognise disruptive forces and choose to innovate and embrace them rather than playing catch-up or being left behind as citizens’ or businesses’ needs evolve. There is only one certainty in the current environment and that is simple: if we don’t embrace innovation, if we don’t recognise the disruptive forces around us, if we don’t get on board with the ethos that the Prime Minister has espoused, the APS will be left behind. And if we’re left behind, we become irrelevant and as Fiona Stanley said, what is the point of getting up each day to be mediocre?

Failure intolerance needs adjustment

Without a doubt doing things differently comes with a level of emotional discomfort and resistance, including at times from ministers. And if failing fast is to be part of our ethos, ministers and the ANAO need to be more realistic about what that entails.

The ability to recognise and be comfortable with ambiguity is a key skill, in my mind, of high performing leaders in the APS, no matter what level.

Leadership is not about what you know, but how you act. It’s about your values, your behaviours, the environment you create, how you respond to failure, the message you send. In times of uncertainty and change, quality leadership is more important than ever. We’re living in a world of great uncertainty and change. We, as leaders of the APS, need to be able to lead through those times when we’re not sure what the outcome will be, and yet still keep our teams calm and focused.

My colleague Finn Pratt has led the secretaries’ talent council in identifying five key attributes for what we think are required of our most senior APS roles over the decade again. These attributes are capabilities to:

1. Be visionary – to be able to think about what’s happening in the world
2. Be influential – it’s not good enough to have an idea if you can’t communicate them in a way that’s going to get people to understand
3. Be collaborative – because none of us now are sole agents in terms of what we produce
4. Be enabling – help people, build them, create capability in them so they can do things
5. Be entrepreneurial

I spoke earlier about the importance of due diligence to back-up innovative thinking. I think building the evidence base for new ideas is the sure-fire way to mitigate against some of our emotional discomfort associated with approaching things in a way differently than we’ve done previously.

So how we do this is critical to developing a successful ideas ecosystem across the public service. That concept, an ideas ecosystem across the service, is something I’m quite passionate about. To me, that translates to our ability to generate and prosecute new initiatives. I spoke earlier about some settings we need to do that: a rebalancing of our risk appetite, and inclusive and respectful environment in which to test ideas and a commitment to back our ideas an evidenced base.

A successful ideas ecosystem also requires each of us, as leaders, to invest in ourselves, to read widely about current affairs and policy, to look beyond the scope of your own designated policy area, to develop and invest in practice, to share and learn in new ideas.

Our Prime Minister is incredibly invested in initiatives implemented successfully and unsuccessfully overseas.

So I’d say the way to deal with it, is to be bold, to be curious, to be engaged with your work, and have the courage to act to realise outcomes where you think they can be improved. Don’t do something because we did it that way yesterday, if you’re going to do something, do it because you think it’s the best way we can do something.

Deficit of diversity, naked self interest

Another question I think we need to ask ourselves as a service, is if we’re bringing in the right people to help achieve these objectives. I think there are a couple of areas we need to focus on. One is diversity. In short, we have to stop picking people like ourselves. Looking around, most of us are like one another.

The race discrimination commissioner, Dr Tim Soutphommasane recently released a publication where we spoke to the APS200 about called Leading for change: a blueprint for cultural diversity and inclusive leadership. It showed that of the 120 federal and state department heads, only two came from a non-European heritage — that’s has halved since Peter Varghese retired – and only one had an indigenous background.

Across all the state and Commonwealth public services, 82% of us have an anglo-celtic background. So we’re less diverse than the ASX200 CEOs, less diverse than the federal parliament. That’s why the secretaries board has established the quality and diversity council to drive initiatives to breakdown the formal and informal barriers to staff, no matter what their background or circumstance, from reaching their potential.

There’s also an issue of gender diversity. A key focus of the council is delivering the APS gender equality strategy, which is a mandatory set of requirements for all departments and agencies. More people have heard about the talent council than about the gender equality strategy, and I think that reflects the power of naked self-interest. So go back and look at the five attributes the council identified and think about where you might line up about those and think about naked self-interest.

My challenge to you

The Prime Minister, when he spoke to IPAA last year, he spoke about the “clay layer” as he called it, that can stunt progress in an organisation. It’s usually those who are not digital natives and refuse to embrace technology out of fear or stubbornness, or being in powerful position can impact on its uptake in an organisation. I hope I’ve made clear it’s not just an ability to engage with technology, but our capacity to come up with new policy ideas and how ability to be influential in prosecuting those ideas that is really innovation.

We need to ask ourselves, where is the clay layer that is obstructing our innovative thinking and our opportunities inherent in the environment that is developing around us. It must not be because, as they say in the classics, resistance is futile. It’s not only futile, it’s foolish.

Innovation starts with every one of us, no matter what level we are, no matter what department or agency. We all need to ask ourselves the question, how can we do things better. Not just because we want to do things differently, but how can we do things differently so we can do them better.

As public servants, I firmly believe we deal in creation, implementation, and assessment of ideas. So we are the natural home for innovation and blue sky thinking.

My challenge for you for 2017 is to be bold and creative in your thinking, take a wider view of the world around you and create a working environment where your colleagues feel valued and safe in bringing different ideas to the table and promoting collaboration.

This article is based on Dr Martin Parkinson’s annual address to the APS, hosted by IPAA ACT in Canberra on December 6.