By Matt.Ross

21 Feb 2013

As governments worldwide wrestle with shrinking budgets, increased volatility and a tide of open data, Matt Ross learns how public service leaders from different countries are meeting the challenges of an ever-changing world

“While different countries have different contexts, there’s much that connects and unites public service leaders and the challenges in the world today,” says Iain Rennie, New Zealand’s head of state services. “We’re all facing some degree of fiscal constraint; we’re all facing an expectation from governments and communities that we’ll change the way in which services are delivered; and we’re all facing a bewildering array of new and emerging technologies, which offer significant opportunities but some real challenges for the public sector.”

Rennie’s comment offers a neat summation of the thinking behind Civil Service World’s Global Public Service Leaders’ Summit – an annual event, held for the second time late last year, that brings together top leaders from national governments and global corporations to share their experiences of, and the solutions to, emerging economic, social and environmental challenges. Hosted by Singapore’s civil service chief Peter Ong and facilitated by former UK cabinet secretary Lord O’Donnell, the informal, two-day meeting was attended by very senior representatives from the civil services of both New Zealand and Canada, plus public services specialists from the sponsors McKinsey, Ernst & Young and Visa. Though the discussions were held under Chatham House rules, CSW grabbed most of the key individuals for on-the-record chats during breaks – enabling us to bring you an insight into the concerns, fears, hopes and ambitions of this cross-section of global public service leaders.

The backdrop
After 2011’s inaugural summit in London, at which the eurozone crisis loomed large in the debates, the event’s relocation to Singapore was bound to change its perspective – and O’Donnell was struck by how distant Europe’s economic troubles seemed from the tower blocks of Singapore. “As you come out East, it feels like you’re moving towards where the economic weight of the world is going. You’re going from the slow- to the fast-growing area.” he says. People in the Far East “look at the eurozone and think: ‘Oh, poor Europeans’. Here the problems are of growth, not of stagnation.”

The eurozone has proved more resilient than many commentators had anticipated, delegates pointed out in the debates, but Europe remains uncompetitive; the global economic balance is, noted one, shifting back towards the pre-1850 status quo, when Asia represented 60 per cent of the world’s economy. This increases the pressure on western governments to increase their public sectors’ productivity: “Public service consolidation is a key part of our competitiveness as an economy,” says Janice Charette, Canada’s associate secretary to the cabinet.

Meanwhile, eastern governments have their own problems – most obviously corruption, weak banking systems, poor infrastructures and environmental degredation. But most challenges are common to both East and West: among the biggest, delegates said, are youth unemployment, income inequality, rising public expectations, the short-sighted nature of much national politics, the ever-increasing pace and appetite of the media, and the failure of international bodies to tackle “global commons” issues such as nuclear proliferation, free trade and climate change.

Reforming services
As governments struggle to manage ever-more complex, fast-paced and volatile situations, civil servants in both East and West are rethinking public services – and though the drivers vary, many officials are reaching similar conclusions. In New Zealand, says Rennie, the Christchurch earthquake forced frontline workers to work closely together across organisational boundaries – sharing premises and information, for example – and to use the web to coordinate action and channel demand to surviving service delivery centres. The government had already been moving to strengthen cross-departmental working and empower frontline staff when the earthquake struck, but the disaster has helped reforms to break through the institutional inertia and vested interests that, delegates noted, always stand in the way of organisational change.

Meanwhile, the Canadian government has long experience of austerity-induced reform, having made big cuts in the 1990s and launched a ‘renewal initiative’ in 2006. Charette took delegates through the story of Canada’s reforms, many of which have strong echoes in today’s UK: in shared services, for example, the government is channelling all of its commodity services purchases through a single body. “We made it a mandatory move, even for departments which had concerns that they were different or special,” she says.

The Singaporean government, for its part, has developed a reform programme built around concepts that will be very familiar to regular readers of CSW, and introduced it with considerable success – though it was clear when O’Donnell kicked off a debate on behavioural economics and ‘nudge’ theory that, in this field at least, the UK is still leading the way. In other areas, it shares many challenges with its peers – and the western officials aired frustrations that reform programmes can be hampered by ministers who, in an attempt to gain more public support for budget cuts, criticise their civil services – thereby fostering staff resistance to change and undermining their own reforms. “Civil servants understand the need for deficit reduction and to make sure public services don’t bear the brunt of the cuts,” comments O’Donnell, “but in return, they expect support and encouragement from above.”

The UK and other western governments, it was agreed, also share a need to engage frontline professionals in reshaping services, and to overcome the caution of middle managers. “In many organisations, middle managers have a very important role in managing risk, and we certainly need to keep some of that,” says Rennie. “But we also need to think about how some of those approaches to risk can be eased to allow services to be delivered in a different way and to give people at the frontline greater discretion”. Finally, public service leaders must find a way to reconcile their staff with a new world of continuous change: “There’s a bit of change fatigue, but the changes never stop,” says Charette, pointing out the importance of good communications to “explain not only what’s happening, but why it’s happening and what the destination is.”

The info on data
If at the 2011 summit the biggest single topic was the European shortage of cash, in 2012 it was the global abundance of data. Publishing more public sector data can help drive economic growth, facilitate new kinds of services, and improve the public sector’s efficiency and effectiveness. And besides these push factors, there are pull dynamics too: Uschi Schreiber, the global leader of Ernst & Young’s Government and Public Sector Centre, notes that there’s “an expectation from citizens for greater transparency” – not just in the West, but also “in parts of the world where people don’t necessarily expect that to be a big theme: the Middle East, for example.”

If public bodies can bring together the data they hold, delegates said, they’ll be able both to better understand policy outcomes, and to more accurately target preventive interventions, anti-fraud operations, ‘nudge’ techniques and the like. And if governments share data internationally, they could more easily attack tax avoidance and cross-border crime. But currently many governments are ill-equipped to handle the tidal wave of raw data, lacking the kind of regulatory bodies that oversee land assets, for example, or legislative tools able to keep pace with changing technologies. Delegates were also concerned about the risks that criminals might combine datasets to ‘de-anonymise’ data, or that governments or private companies might misuse data to control or manipulate populations.

Publishing data, delegates noted, is a one-way ratchet: you can’t ever stop publishing information, so governments must understand the likely outcomes before the info is put out there. When the UK Cabinet Office published data on civil service pay in an attempt to put downward pressure on salaries, O’Donnell says, it created quite the wrong outcome: relatively poorly-paid officials demanded a raise to match their peers’ incomes. “We spread unhappiness, and if anything we’ve created more upward pressure on pay,” he says. “You need to think through how real people are going to respond to the data you’ve put out there.”

Turning data into services
Delving into the various ways in which digital technologies can turn this data into better public services, McKinsey’s global leader of public sector practice Andrew Grant trotted out a lengthy list. Improved communications networks can improve governments’ capabilities; websites can enable citizens to ‘co-create’ services by providing or receiving information; better data can help target delivery, closely matching supply to demand; citizens can be better engaged and informed via dynamic, responsive online info; fast-developing computer systems can improve planning and prediction by gathering and analysing data; robust, dispersed disaster response systems can be built around communications tools; and simply publishing raw data for re-use by others can help identify efficiencies and foster the development of ‘apps’ that reduce the demand for public services. Turning to specific technologies, Visa Worldwide’s regional director for enterprise and government solutions, Olivia Leong, highlighted the potential of payment cards. Used to distribute benefits, she said, they can help tackle the grey economy and limit alcohol purchases; other delegates noted their use for making government purchases, and their potential to cut fraud and payment times whilst improving spending data.

Data clearly has enormous value as governments attempt to identify future risks and predict social and economic changes – but as the delegates discussed their governments’ ‘horizon-scanning’ capabilities, it quickly became clear that the Singaporean government is far longer-sighted its Western counterparts. “I’m really impressed by the amount of time and attention that the Singapore public services have been able to devote to thinking through their long-term orientation,” says Charette (see also news, 5 December 2012).

The fact is, delegates said, that many governments have allowed their strategic and forecasting functions to deteriorate – either because an increasingly complex and unpredictable world was undermining their efficacy, or because they kept raising awkward issues with which politicians were reluctant to wrestle.

There’s a danger here, of course: in the wake of the banking crisis, it looks particularly foolish to stop scouting out potential risks. But Singapore seems to have found a way round it – as have other Far Eastern countries, including China, which maintains a huge horizon-scanning team. Determined, as Ong puts it, to “rise above the noise of the public today”, Singapore created a stand-alone unit charged purely with thinking about the long-term; some way down the line, the results include a massive engineering project designed to end the country’s dependence on imported water.

The next generation of public leaders
These evolving challenges – and the complex solutions to them – demand a new generation of public sector leaders. And one important element of success here, Schreiber argued, is increasing the proportion of women in top jobs – producing management teams that “provide different inputs into the decision-making process”, with more of the communications and persuasive skills that are increasingly important in leadership roles. Presenting research carried out for E&Y by CSW, Schreiber noted that the proportion of women amongst public sector leaders varies around the world from zero to 45 per cent, with Canada leading the pack.

The ways to improve those figures will vary, Schreiber says, but “you need leadership, you need CEO commitment: we know that makes the biggest difference”. Charette agrees: Canada has had the right mentoring schemes, a healthy attitude to diversity, robust gender monitoring systems, and good equality legislation, she says – but “it goes beyond that: there’s been a history of public service leaders saying: ‘We want the best people for these jobs’.”

Under Chatham House rules, delegates were able to raise some other gender issues. Many of the female pioneers in the traditionally male-dominated corridors of power actually preferred to be surrounded by men, they suggested. Only when enough time had passed for new female entrants to be seen as protégés, rather than rivals, could the numbers of women grow rapidly. And even now, while maternity leave and flexible working are gaining ground, working cultures at the top of many organisations still demand lots of travel and networking – creating hard choices for women with children.

The next generation of public leaders should also, of course, be more ethnically diverse; though here, the delegates were less confident of the answers. Some minorities prefer not to be labelled as such, suggested one delegate; other groups tend to leave big organisations for lives as entrepreneurs after a few years, said another. But none had a clear answer as to why public sector recruitment processes designed to be purely meritocratic and colour-blind are, in most developed countries, producing leaders almost overwhelmingly drawn from the majority ethnic group.

Building capabilities
There was more certainty about public sectors’ weaknesses in capabilities: an ageing cohort of leaders, wedded to an orthodox, ‘utility maximising’ model of economics and lacking the skills to rethink business models, is struggling to grapple with open data, digital services, increased volatility, shrinking budgets and more demanding populations. Low government salaries and generous pensions combine to restrict interchange with the private sector, where these skills are more abundant. To some extent, the public service ethos and the availability of interesting, fulfilling jobs compensates for low pay levels – but as O’Donnell says, “if the pay gaps get too large, it’ll become a problem”.

Meanwhile, internal recruits need more experience of real-life crisis management – perhaps via secondment to disaster control operations – and frontline work, plus better training. On this latter point, O’Donnell identifies “slightly worrying” falls in spending on training in Canada and the UK. “People hope these reductions are temporary, but they’re definitely going to have long-term impacts that aren’t good,” he says.

Performance management and appraisal systems also need strengthening. Rennie, whose government operates a system of fixed-term, objective-setting contracts for leaders – a system in which UK ministers have expressed great interest – applauds the clarity that these bring to the relationship with ministers, but warns that “all the levers in the system must work together”. Western nations are all “grappling with the need to take a set of system settings that largely incentivise working within organisational boundaries, and changing them to focus the system on some really hard issues that have to be dealt with across government, not in an organisational silo”. The risk, then, is that a set of written objectives agreed with a departmental minister may not focus officials on the cross-departmental work so essential to making policies work in our complex, interconnected societies.

Finally, public service leaders need an international perspective: after all, many of the challenges facing them are increasingly both global and shared. As Schreiber points out, at the top levels of each country’s civil service, people’s closest peers may be their counterparts in other countries – creating “a need for a way to connect internationally, to talk with people in similar roles”. And CSW’s summit helped build that international mindset: “You can read all about what people are doing in other countries,” she says. “But it’s a totally different experience to hear people talking about how they’re fulfilling their roles.”

“Public leaders aren’t very good at sharing experiences across boundaries,” says Rennie. “But many of the issues we’re facing are global in nature, and some need to be tackled on an international basis; so it’s very important that senior practitioners have the ability to talk in a free, frank way about the challenges they face.” Top civil servants spend plenty of time abroad – but almost always at tightly-controlled summits, where they’re charged with representing their country; or alongside elected leaders, when their main aim is to achieve political objectives. In Singapore, though, they were able to spend two days learning from each other about how global dynamics are playing out in different locations – and how public sectors are responding.

“It’s so easy to get on with the day job, to get your blinkers on,” comments O’Donnell. “Every time I come to one of these I’m reminded that the world is becoming ever more global, and the problems we face – and the solutions we need – are ever more global. We don’t spend enough time learning from each other; but here, the interchange of ideas is fantastic.”

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