Public sector innovation: why it’s so difficult, why it’s so important


Here is Peter Shergold’s full speech delivered at the Public Sector Innovation Show in Canberra on 26th March 2019.


As an enthusiast and occasional spruiker for public sector innovation, I am delighted to have this opportunity to present a keynote speech at the 2019 Public Sector Innovation Show.

Conversely, as someone who has witnessed so much creative thinking founder on the reefs of risk-aversion, political indifference, insufficient planning and/or inadequate project management, I worry that I should have recused myself from the opportunity. Perhaps, in the words of Samuel Johnson, it represents the triumph of hope over experience?


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It will not, perhaps, surprise you that retention of my optimistic aspirations is firmly based on a belief that we need to learn from failure. I remain firm in my conviction that it is vital that we identify the risks to successful implementation of initiatives, whether they represent new policies, new organisational structures or new applications of technology. It is imperative that the anticipated benefits of innovation are embedded in practice. The focus should be on achievement.

We need eyes wide open to identify and manage the plethora of risks that might prevent our ambitions being translated into action. We need to study and learn from past mistakes just why our best intentions so often fail to get delivered. The unarguable truth is that far too often innovations in public policy design and delivery do not meet the expectations that public servants (or their political leaders) initially create.


READ MORE: Learning from failure and success


In such ways are enthusiasms dashed. There is a danger that the customary language being used to couch the focus of this Public Sector Network event – ‘continuous improvement’, ‘organisational agility’, ‘transformative change’ and ‘enhanced delivery’ – may, outside this venue, arouse scepticism not only amongst rank-and-file public servants but (worse) the public that they serve.

Too often, the perceived manifestations of ‘managerialise’ fail to live up to the hype. Too often, there is a discernible gulf between rhetoric and reality; a chasm between the energy and ambition of the speakers we will hear from today and the day-to-day reality of the public sector workplace that most of you will return to tomorrow. In such instances the words that we employ to convey innovation become hollow: the language of organisational innovation, lacking genuine substance, becomes merely a litany of tired clichés.

Oh, Nadia…

We have seen one vision of this future, and her name is Nadia. Nadia, you will remember, was to be the online virtual assistant, the chatbot with the beguiling voice of Cate Blanchett, the intelligent and self-learning avatar that (or who) was meant to be the exciting new face of the National Disability Insurance Scheme (NDIS).

Unfortunately, Nadia’s appearance has been repeatedly postponed on the basis that she’s not quite ready. The recent Senate Estimates hearing was told that “there needs to be a lot more testing with the technology before it can be unleashed on the public.” The public explanation suggests that Nadia was promoted before speech-recognition technology was sufficiently mature. Well, perhaps, except that one wonders why that has not prevented the appearance of Nadia’s sisters, Siri, Alexa and Emma (the computer-generated virtual assistant, fluent in both English and Spanish, who answers questions on behalf of the US Department of Homeland Security).

The failure, I can only suspect, is not just that of technological obstacles but of risk-aversion or administrative incompetence: this, I understand, is the view of Marie Johnson, one of Nadia’s creators, who argues (according to The Mandarin [see below]) that “the project was actually a huge success that social services bureaucrats just didn’t understand.”


READ MORE: Nadia: the curious case of the digital missing person


But here’s the unvarnished truth. Success requires implementation. So, let us say, at the start of this show, ‘No More Nadias’. We cannot continue to disappoint.

Let us make this a conference in which we have our eyes wide open not just to exciting possibilities but to how often they fail to eventuate. Whether we are talking about the application of digital technology or behavioural insights, let us direct public attention to what we hope to achieve only when we are confident that we can deliver innovations to the timeframe and scale that we publicly espouse.

Let us be more willing to experiment and demonstrate success at a pilot level before seeking to roll-out new approaches at scale. Let us, remembering Nadia’s disappointing history, under-promise and over-deliver, rather than the opposite. If we need to adapt our approach, let us do so iteratively on the basis of ongoing evaluation. If we need to fail, then let us do so early and systematically examine what went wrong in order to inform our next attempt.


READ MORE: We know WHAT we need to do. Will someone tell us HOW?


Three examples of results not living up to ambition

This, of course, was the underlying ethos of my 2015 report to the Commonwealth Government, Learning from Failure. In that instance, my focus was on the tragic debacle that was the Home Insulation Program. But I continue to worry about other examples of public administration in which innovation has failed to deliver its anticipated benefits.

Let me present just three instances.

Last year (with Bronwyn Weir) I prepared a report for the Building Ministers Forum, entitled Building Confidence. Our starting point was the bold performance-based approach to building requirements which allows unique ‘performance solutions’ to be applied to each individual situation. Intended to be flexible rather than prescriptive, the National Construction Code is based on allowing architects, designers, builders and developers to exercise engineering creativity. Yet the abject failure of governments to properly regulate compliance with the code, including the processes of training, registration and certification, threatens to undermine the good intentions of the legislation: the fire generated by combustible cladding at the Lacrosse building in Melbourne and the partial collapse of internal walls at the Opal Tower in Sydney bear testimony to the gulf between regulatory innovation and outcomes.

Then, earlier this year (with Kerrin Benson and Margaret Piper), I submitted a report to the Commonwealth on improving refugee resettlement. I am inhibited in what I can say this morning because it has not yet been released for public comment. But I can tell you how shocked I was to discover that the most crucial program for the delivery of English language training to migrants, the AMEP, is vastly underutilised. Entitled to an initial 510 hours of English language support, most recipients fail to access their full publicly-funded entitlement. On average, only 289 hours is used and only 7% of participants have functional English at completion. Here, in my view, is a spectacular example of an inability or unwillingness to co-design and deliver AMEP to meet the particular lives and needs of the clients it is intended to serve.

Let me give a final instance. Amongst my roles I am Chair of Opal Aged Care, Australia’s largest provider of residential care for elderly. In that capacity I conscientiously read summaries of the evidence being presented to the on-going Royal Commission. One aspect that already stands out is the widespread level of dissatisfaction with the Commonwealth’s online MyAgedCare site. Clearly it is not giving to those families seeking advice the level of assistance that they require to make fully-informed decisions on aged care. I have heard it argued that as far as government sites go it is really not too bad and is progressively being improved. That’s clearly not good enough to meet citizens’ expectations. Their comparison, after all, is not with many other rather mediocre government sites but with Tripadvisor, Airbnb or Booking.com. Senior citizens and their families cannot understand why choosing a care provider or selecting a residential aged care home isn’t as easy as selecting the right accommodation for a holiday. It’s a fair question.

I need to emphasise there are many successes in public administration. These we should celebrate.

The two qualities that lead to project success

Better still, we should carefully assess what factors account for the wide variations in how well we bring innovation to life.

For me, two key elements are necessary to provide public administrators with the greatest chance of meeting the sometimes-inflated promises that governments make to their citizens.

First, both in the design and delivery of new services, programs and delivery mechanisms, we need to embrace active cooperation — not just by building links across bureaucratic and jurisdictional demarcations but through forging partnerships with business, not-for-profit organisations and academia. Cross-sectoral collaboration can widen access to the experience, perspectives and enthusiasm that generate inventiveness.

Second, we must fully embrace the working ethos of human-centred design. By that, those who are the objects of the exercise, the public that the innovation is intended to benefit, need to be actively engaged as clients. Behavioural psychology has alerted us to the fact that human beings often behave in unexpected and even ornery ways to government initiatives. We need to test ‘solutions’ with them in designing innovation or face the consequences.

In short, innovation extends beyond the greater application of technology to the development and delivery of public policy. In essence it requires the public servants to use their situational authority to facilitate effective dialogue between governments and their publics (on the one hand) and between the public, private and social sectors (on the other). They need to evince a shared sense of purpose in the creation of public benefit. Indeed, it is this approach to decision-making that might represent the greatest innovation of all.


READ MORE: Is workplace technology holding back Australian innovation?


What I wish to convey in my concluding remarks is just how important it is to try and get this right.

Of course, innovation has utilitarian value. It can, in all its diverse manifestations, improve the quality, efficiency and service standards of public administration. New approaches to design and delivery can building the capacity and capability of public services, both at an organisational and individual level.

But what is presently at stake is far more significant than Public Sector Management 101.

The crisis of confidence in democratic governance

The world of public service has changed profoundly in the 30 years since I entered the APS to establish the Office of Multicultural Affairs. Indeed, it has altered significantly even in the 10 year since I left my position as the Secretary of the Department of the Prime Minister and Cabinet. I think I had it easier –which means, of course, that you have it harder.

The challenges facing Australian governments, as in so many other liberal democracies, are today greater.

I discern an increasing crisis of confidence in democratic governance. Citizen expectations are increasing faster than the capacity of governments to respond, not least because those expectations are usually not matched by a willingness to contribute the level of public expenditure that would be required to deliver on them. The need for governments to balance budgets (at least rhetorically) means that most public administrations feel, the rigours of austerity. Many electors want to receive more but to pay less.

The problems faced by society seem increasingly wicked in their nature. Their long-term character (such as demographic transition, communications technology, infrastructure development or climate change) far exceeds the relatively short elected terms of democratic governments.

There appears to be increasing electoral support for populist leaders who can offer avowedly simple solutions to complex problems. Underlying much of their appeal lies an authoritarian impulse, reflecting the frustration that many citizens now feel about the inability of democracies to get things done quickly.

In the words of Robert Kagan, the strongmen are fighting back.

Meanwhile, minor parties, which will never have to deliver on their extravagant promises, are becoming more significant (and often making it more difficult for governments to implement their policies).

The danger of 24/7 social media to political processes is often portrayed in terms of the propagation of ‘fake news’. Perhaps even more significant is the fact that people now increasingly read, watch or listen only to views that broadly coincide with their existing political perspective. Sometimes this is through their own choices but often it is because of algorithms designed to feed people the online information that most accords with their interests and persuasions. The danger of such curation is that we create digital ghettoes that make it ever-harder to recognise or understand how it is that others hold markedly different views.

In many instances, the middle of the political spectrum seems to be fragmenting. Civilised discourse appears to be under threat. There is a rising tribalisation of politics. The words of William Butler Yeats, written in the aftermath of the First World War, carry a new resonance a century on: “Things fall apart; the centre cannot hold.”

Are democracies slouching towards Bethlehem? As Deborah Richards has suggested in a recent article in Company Director, citizens are becoming restless: “Democratic systems around the world face a rising tide of disaffection and toxic public debate”. Polls and surveys tell the story, suggesting the emergence of ‘democratic fatigue syndrome’.

In Australia, significantly less than a fifth of respondents have trust in politicians (Roy Morgan, Image of Professional Survey, 2018.) Faith in democracy as a preferred political system is at low levels, especially amongst younger voters (Lowy Institute Poll 2018).


READ MORE: How the APS can build trust by adopting institutional integrity


A 21st Century public service

This is the challenging environment within which public services not only have to survive but – the greatest innovation of all – make themselves over. Becoming fit for purpose in the 2020’s will not be easy.

The Westminster-style civil service is very much a creature of mid-nineteenth England and, in a way perhaps not even Stafford Northcote and Charles Trevelyan fully anticipated, evolved as a cornerstone of emerging democratic governance. By the time Graham Wallas wrote in 1908 it had become more apparent that “the real ‘constitutional’ check in England is provided… by the existence of a permanent civil service, appointed on a system independent of the opinion and desires of any politician”.

Today its Australian manifestations continue to subscribe to an ethos of meritocratic professionalism, with public servants offering successive governments equal commitment in the provision of apolitical, non-partisan support. The tradition, founded on implicit assumptions of civil discourse, public debate and regular political change, is more important than ever. In a profound manner, public services are the institutional backbone of democratic governance. But they can play that role effectively only if citizens appreciate their value and believe that they can wield their powers in ways appropriate to changing circumstances.

That will require not only an investment of time and resources but a powerful narrative of purpose. Effective implementation will depend on public administrators helping the governments they serve by fully embracing cross-sectoral collaboration, involving citizens in the co-design of programs and enabling ‘consumer-directed control’ of the publicly-funded services that are provided to ‘customers’ for their support and assistance. It will require a greater willingness to experiment, more flexibility to deliver at the level of place or community, and a stronger drive to demonstrate, evaluate and modify new approaches before bringing them to scale.

Such agility cannot be over-engineered or heavily-prescribed. Learning by doing – learning both from success and failure – should be extolled as a virtue.


READ MORE: What are the lessons of flawed corporate and institutional cultures for the APS?


I subscribe enthusiastically to the ambitions espoused by the Minister for Infrastructure, Michael Keenan, in opening this conference: namely, to use the armoury of augmented intelligence and digitalisation to help governments listen to their citizens and deliver to them in personalised ways.

But the greatest innovation of all will be in creating the organisational culture that can turn these exciting technological possibilities into real-world benefits.

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