Strategic government requires a strategic centre: and a note on

program reviewL21 Public Sector Conference

13 May, 2010

Associate Professor Joanne KellyDirector, ANZSOG (NSW)

University of Sydney

Strategic government requires

a strategic centre

1. At present, the centre is not strategic

2. In response, the centre is reverting to deliberative control-based approaches to strategy making; this approach will not succeed.

3. A strategic centre must

A) Perform the role of facilitator, co-ordinator and network manager across and within these domains.

B) operate within three distinct (often competing) strategic domains of political, policy and operational; and

C) recognise differences in logic, mandate, span & capacity within each domain

D) ensure domain are internally robust to ensure capacity and balance between domains (program review is one such tool).

Not a strategic centre….

At present, the centre is a loose conglomeration of agencies; most

suffering institutional identity crisis; mistaking power & muscle for strategy; highly competitive; often cause more

harm than good; undermine line agencies.

Common structures, evolved historically

Table 1: Central Agencies in New Zealand and Australia (at April 2009)

Jurisdictions Central Agencies

New Zealand Department of the Prime Minister & Cabinet

State Services Commission

The Treasury

Commonwealth of Australia

Department of the Prime Minister and Cabinet

Australian Public Service Commission

Department of Finance & Deregulation

The Treasury

New South Wales Department of Premier & Cabinet

The Treasury

Victoria Department of Premier and Cabinet

State Services Authority

Department of Treasury & Finance

Western Australia Department of the Premier & Cabinet

Public Sector Commission

Department of Treasury and Finance

Queensland Department of the Premier and Cabinet

Public Service Commission

Queensland Treasury

South Australia Department of the Premier and Cabinet

Department of Treasury and Finance

Tasmania Department of Premier & Cabinet

Office of the State Service

Commissioner

Department of Treasury and Finance

Northern Territory Department of the Chief Minister

Office of the Commissioner for Public

Sector Employment

Northern Territory Treasury

Australian Capital Territory

Chief Minister’s Department Department of Treasury

Built to perform 5 key functions; clustered differently

0

500

1000

1500

2000

2500

3000

Composition of "the centre": Australia and New Zealand (FTE at June 2008)

Treasury &Finance

PSC /SSC

DPC/DPMC

Variation in relative size & composition of centre

Historically derived conglomeration of agencies that perform five functions

of varying importance

What are the three key strategic challenges facing your organisation

over the next 5 years?

Strategic challenges facing your organisation?

0

20

40

60

80

100

120

140

160

180

200

Neither a strategic centre...

Suffering an identity crisis ….unsure of mandate or operational or political capacity

a collection of loose affiliates rather than a cohesive whole with a unifying purpose and set of organising principles

result is vagueness, tension and conflict around roles, responsibilities and organisational boundaries.

rather than pulling together in pursuit of a common set of objectives, too much energy is spent on power games, managing personalities and sheer duplication of effort.

Nor a ‘strategic’ vision? .

Political

Policy

Operational

The notion of a strategic centre is appealing….

It suggests an ethos that is selective, creative, responsive, future-directed, and provides the basis for “whole-of-government” direction and

policy making...

...and governments are trying to move in this direction

“….one of the biggest challenges for the three central agencies in this place is the fact that we have lost the sense of what

our responsibilities are”.

“we can issue guidelines and we can do tool kits but we’re only ever going to change

behaviour …if we come up with a different form of relationship between our agencies

and the central agency.

The really challenging thing within government is to work to forward plan… to

predict as far in advance as possible the demands on government and then to adjust one’s priorities and activities to

meet those changing expectations.

But the centre should not formulate

“the strategy” because...

Three preconditions for deliberative strategy

1. neutral internal political environment;

2. a knowable and stable external environment; and

3. highly centralised and uncontested power structure, typically a single person running a simple organisational unit.

Strategy is viewed as an ongoing process of constant learning experimentation and risk taking. It is an adaptive incremental and complex learning process in which the ends and means are combined and often specified simultaneously

And government operates And government operates across different strategic across different strategic

domainsdomains

Central paradox is that…

....centre agencies must operate simultaneously across different strategic domains but cannot

become maker of the strategy or adopt a top down deliberate

approach...

What to do? 1. A strategic centre must organise itself to operate in three

strategic domains: political, policy and operational

Defining role & mandate of the strategic centre

The three strategic domains reflect the functional groupings that already exist within the centre, albeit across different organisational structures.

Therefore existing structures provide the basis for moving toward a ‘strategic centre’ through evolutionary reform & adaptation within the specifics of different jurisdictions.

Organisational entity

Functional Specialisation

Primary Strategic Domain

Political Domain Department of Premier and Cabinet

Policy Domain

Departments of Treasury & Finance

Public/State Services Commissions

Operational Domain

Specialist Policy Analysis (DPC)

Managing interface between

political & bureaucracy

Human Resources

Budget Office

Economic Analysis of

Policy

Aligning organisational form and strategic function

What to do? 1. A strategic centre must organise itself to operate in three

strategic domains: political, policy and operational

2. Domains have different logics/actors, timeframes... so must be sufficiently robust to ensure internal capacity and balance between domains.

Current emphasis?

Political

Policy

Operational

0

500

1000

1500

2000

2500

3000

Composition of "the centre": Australia and New Zealand (FTE at June 2008)

Treasury &Finance

PSC /SSC

DPC/DPMC

Current emphasis?

What to do? 1. A strategic centre must organise itself to operate in three

strategic domains: political, policy and operational

2. Domains have different logics/actors, timeframes... so must be sufficiently robust to ensure internal capacity and balance between domains.

3. Develop new instruments & tools; skills; and employ different staff

a) The role of the centre is less about analysis & control; b) more about facilitation, co-ordination & synthesis; c) relationship & network management skills increasingly important.

Traditional tools of central agency coordination

Political domain: cabinet process v ad hoc intervention;

Operational domain: budget process (finance); direct delivery v regulatory (HR)

Policy domain: either professional expertise (Economics); personal patronage/power; hand of

www.anzsog.edu.au31

Hollowing out’ refers… to the way the state has been eaten away and fragmented by the

consolidation of market-style policies initiated in the 1980s: privatisation, the contracting out of

services and the setting up of qangos and quasi-

markets.

Network management

www.anzsog.edu.au33

Dimensions of network management Elements of each dimension

Game Management: managing interactions within the existing network

Network activation

Network arranging

Brokerage: someone in the network has to bring together participants, problems and solutions. Requires political entrepreneurship.

Mediation, arbitration and facilitation

Network Restructuring: building and changing the institutional arrangements of a network

network analysis:o understand existing network structures within the

policy area/domain and how they shape the capacity to deliver programs; and or the paradigms within which policy solutions are developed and understood.

network re-organisation: the changing resources, relations and rules that govern the network

network reshaping: changing culture, perceptions & behaviour of participants (influencing; narrative)

Program Review is part of the answer

Re-defines “policy” work away from “new policy” development to include questions of policy implementation, evaluation & adaptation;

Provides a mechanism to link the three strategic domains of government: Issues and priorities defined in the political domain; Is the current policy setting right? Are they achieving

their desired ends? Who is/should be responsible? Are delivery agents sufficiently resourced to perform

these mandate – money, people, technology...

Real answer... put a moratorium on all “new policy” for the next five years…

Conclusions

Strategic government requires a strategic centre

At present, the centre is not strategic

….trying to tame the ‘strategy’ problem by adopting deliberative models of strategy making (tactical & ad hoc interventions; imposing strategic plans etc). Basically a return to command and control….

But the complexity of government – organisationally & in policy terms – means this approach will not succeed

What to do? 1. A strategic centre must organise itself to operate in three

strategic domains: political, policy and operational

2. Domains have different logics/actors, timeframes... so must be sufficiently robust to ensure internal capacity and balance between domains.

3. Develop new instruments & tools; skills; and employ different staff

a) The role of the centre is less about analysis & control; b) more about facilitation, co-ordination & synthesis; c) relationship & network management skills increasingly important.

4. Program review is a co-ordinating mechanism that enables the centre to operate strategically rather than incrementally, and to link the three strategic domains.