Tuesday, April 29, 2008

Mr Rudd and a dreadful sense of deja vu - Managerialism and systemic failure

Driving to work this morning, I was thinking that I should follow up my post Mr Rudd and a dreadful sense of deja vu with a post on some of the methodological underpinnings that triggered the post. Then in a comment on that post, Kymbos asked:

When you say that the "supporting systems are simply not there to support the level of activity proposed", what do you mean exactly?

Can you elaborate on what you mean by the managerial approach?

These are fair questions. In fact, they are wonderful questions because Kymbos is asking me to explain myself. So I thought that I might answer them, beginning with the second question since this links to the first. The views that follow are of course partial. Do feel free to correct me.

Managerial Approaches

This, often referred to as managerialism., refers to the transfer into the public sector of ideas drawn from the private sector and from management writers. Some of the key features of this approach are:

  1. The requirement that all agencies including Departments of State have their own plans and objectives.
  2. The replacement of Departmental Secretaries by CEOs and senior executives on performance contracts.
  3. The substitution of the word "policies" by "strategies".
  4. Hierarchical approaches with centralised controls.
  5. An emphasis on Governance, risk management and risk avoidance.
  6. An emphasis on what can be measured at organisational, strategy and individual level, reinforced by cascading performance agreements.

Without debating details, the overall effects have been quite pernicious. The problem lies not so much in the techniques and philosophies themselves, they all have a place, but in their wholesale application independent of circumstance.

A week back on a plane I was sitting by a new Canberra staffer. We got chatting about the early days of the Hawke Government. It was a social conversation, so I did not get too serious. I did make one serious suggestion, although I am not sure that he understood.

I said that if you want new ideas and initiatives from your Department, look at its information structures. If you find that advice to the Office and Minister have to go through a complicated hierarchical decision process, then you are in trouble.

I gave as an example a NSW agency where each piece of paper going to the minister required a formal four level clearance, assuming of course that it did not require consideration by Divisional or Departmental Executive.

I contrasted this with my role as an SES level two with direct reporting. If one of my junior staff came up with an idea, then it required vetting by the section head and then me. From there it went straight to the minister.

Of course there were rules about clearances. But so long as I did not stuff up, I had great freedom. If I needed to get clearance, I had a chat with my Division head, Deputy Secretary or Secretary.

There were no formal rules in the name of Governance requiring me to prepare briefing papers for consideration by Governance bodies at various levels. I just did.

Today we can go through 32 drafts of a piece of paper before it even gets to the Minister or his office. Compare this to just twenty four hours, I have a case in mind, between an idea of a junior staff member and a change in direction of Government policy. This was a special case, but it makes the point.

In talking to the ministerial staffer, I could point to a way of diagnosing a problem. But I really could not give him a solution, beyond suggesting that if the type of problem that I was talking about existed, he needed to build his own contact base in the Department in order to work round the problem.

I suppose that I could have given him a broader solution, but that would really require direct ministerial action. I do not see that happening.

I will continue this post briefly in the morning if I can, dealing with Kymbos' second question.

Weaknesses in Supporting Systems

As I write, Mr Rudd has been talking about restoration of the Westminster System with its tradition of public service independence. This is one of the steps required to move our administrative systems in new directions.

There has also been public recognition of the load placed upon our Commonwealth Public Servants as they struggle to deliver the new Government's agenda. This links directly to the point I was making when I said that the supporting systems were simply not there to support the level of activity proposed.

We can think of the challenge here along three dimensions, people, information and decision processes.

To do things, you need people with the knowledge and skills required to help develop and then implement the ideas. The CPS is a very large organisation. It has lots of people. Yet, in reality, the number of people available to do new things can be quite small.

The CPS operates across a vast span of activities. Further, most people are tied up in doing existing things. So when you drill down in any portfolio looking for the people doing the actual work on a topic, the large numbers drop away to a branch, a section, or even a few key individuals. Go sideways into other agencies including the central coordinating agencies with an interest in the topic and you will find the same pattern.

We need to remember this when we think about the range of new things that the Government is trying to do. These can be thought of as a huge inverted pyramid whose pointy end bears down on just a few people. Make the pyramid, the range of activities, too large and the weight can become crushing.

Information is the second challenge.

Policy development is not an abstract art. Those involved in the development and doing require access to information to guide their thinking. Again, we are used to thinking of the Commonwealth with its huge information systems, its data matching capacity and its various research bodies as information rich. The reality can be very different.

Problem one lies in the fact that much data is at an aggregated level, lacking the detail required so support policy development targeting a specific issue.

Problem two lies in the data sets, the definitions used in collecting and presenting data. These reflect past needs. New policy development generally requires new ways of looking at things. Past data sets may not provide the information required to ask and answer new questions.

Problem three lies in the inability of information systems to interact with each other. This is usually thought of in IT terms. In fact, the biggest problem in cross-topic or cross-agency work often lies in differences in data sets between agencies linked to the original purpose for which the data was collected.

All this may sound a bit abstract. However, to illustrate my point, take the previous Government's Northern Territory intervention.

My understanding is that this really struggled to get underway because neither the people with the required skills nor the required information were readily available.

Decision processes is the third challenge. I dealt a little with this in my discussions under managerialism. Since I wrote that section, I received an email from Bob Quiggin, an old colleague of mine. I quote:

Changing the subject entirely, I also wanted to comment to you about governance. I think the point that many miss, especially the top echelons of today’s public service, is that true governance requires decentralisation of power, not only flatter structures. The more bits you control, the less you can be aware of anything except the broadest outlines. And the devil, for governance, is in the detail.

Bob is right to my mind.

Each decision point from Cabinet down can be thought of as a choke point. The increasing centralisation of power and decision making once led me to liken Cabinet to a constricted pipe down which was forced an ever increasing volume of water. And very dirty water too, a senior colleague dryly remarked!

With increased centralisation of the system, new ideas have to get through an increased number of choke points. Each requires preparation and refinement of briefing papers. Each requires time to get things on agendas for scheduled meetings, while the now very busy people involved have to find the time to seriously consider the issues raised.

The problem is most acute where different jurisdictions are involved. One side-effect of the expansion of Commonwealth activity, control and power has been a rapid widening of such areas.

The COAG (Council of Australian Governments) process is, by its very nature, complex.

From the ministerial councils, the structure cascades downwards through supporting high level administrative committees to supporting committees, sub-committees and working groups.

Whether the Commonwealth should in fact be involved in all the things it is, I would argue not, is a different story. The Commonwealth is, and must therefore take the COAG system into account. Now here we have a whole hierarchy of COAG processes, matched by a hierarchy of decision processes in each jurisdiction that must also be involved. Is it any wonder that it takes so much time to get things done?


If you look at both managerialism and the nature of weaknesses in all the supporting systems, you will see why I am concerned that the sheer breadth of the things that Mr Rudd wants to do is likely to out-run the capacity of the system to deliver.


Anonymous said...

Thanks. Looking forward to hearing the rest of your thoughts on this.


Anonymous said...

Thanks for your elaboration, Jim.

I'm not sure I agree on a couple of points. Not knowing your background, I assume you have more experience in the Commonwealth Public Service than I do. However, in my short (only a few years) experience, there are many employees in different subject matter areas who perform their function but find room to develop ideas on how policy could be directed more effectively. However, given the hierarchical nature of the public sector, input to policy direction is limited. This is especially so when the Government of the day accepts limited input from Departments. A prime example is Treasury and water. The $10bn plan for the Murray Darling Basin was policy on the fly in which Treasury was permitted limited or no input despite having some valid ideas.

The suggestion that the indigenous intervention was rendered more difficult because of Departmental incapacities is complicated by the fact that the idea didn't come from the Department, but from the politicians themselves. Indeed, Departmental staff may have considered the idea a bad one. Implementing policy you disagree with is rarely well done - speak to anyone in the Immigration Department about mandatory intervention.

The perception I'm starting to develop of the Rudd Government is of one trying to do too much without an idea of how much is achievable in a given time with given resources. I don't think this necessarily opposes your view. I still am yet to understand what their overall goals are and what their overall strategy is. They may yet move beyond symbolism, but surely they have some clear ideas of their own that don't require yet another committee or working group to "bring everyone together" and "talk with all stakeholders". Apart from repeal of Workchoices and the introduction of emissions trading, I don't see much.


Jim Belshaw said...

Hi Kymbos. Very thoughtful comments. You have the advantage on me in that your inside knowledge is more recent - I necessarily now write as an informed outsider.

I don't think that I would disagree with anything you said. However, I think that some of your points are worth amplifying.

You wrote: "there are many employees in different subject matter areas who perform their function but find room to develop ideas on how policy could be directed more effectively. However, given the hierarchical nature of the public sector, input to policy direction is limited."

I completely agree with you first point. Those who are doing or advising in a subject area can be a powerful source of new ideas.The only qualification is the danger of capture, the way our views are formed by what we do. This can make it hard to look outside the box.

That said, my experience has been (and not just in the Public Service) that some of the best and quickest gains come from empowering the enthusiams of existing staff.

But here we come to your second point, the same one Bob Q made,the hierarchical nature of the public sector. I argue of course that this has got far worse because of managerialism. I have been beating a drum here for a while, and have still to work out the best and most graphic way of getting this across.

Your point about limited input, one that Ken Henry picked up in his now famous speech, actually lies at the heart of some of the Howard Government's failures.

This also links across to one of your points, that implementation of policy you disagree with is rarely well done. There is a professionalism issue here about the true role of the Service, but the point is still an interesting one.

More broadly, if Mr Rudd can genuinely reinstate some of the core ideals of the Westminister system and in doing so reinstate a somewhat declined Public Service professionalism, then that of itself will be a major long term gain for his period.

The first point in your last para about overload does mirror what I was saying. But your other points actually deserve another methodological response.There are techniques that can be used to test your concerns in a reasonably rigorous and objective fashion.

Thank you again fort he comment.

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