Systemic challenges for digital public sector reform


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THE PIA REVIEW: PIA ANDREWS This is a Public Sector Pia Review — a series on better public sectors.

I’ve been working with and in public sectors for 20 years, primarily in functions that deal with technology and data. When I was in the private sector I did tech support, solutions architecture, deployment and other ICT functions for departments. As a public servant I’ve focused on data, tech, digital, transformation, and innovation functions, always trying to bring about better public outcomes from that fascinating intersection of tech, government and society. I’ve noticed a number of repeated patterns of issues that it got me thinking about what systemic challenges — present and emerging — block our ability to do digital transformation of public sectors? It is only by exploring this question we can better understand where things seem unusually difficult, and we can better prepare for predictable issues in our day to day work.

We can also choose to address systemic challenges through digital, change or reform programs. Given the substantial investment happening in digital transformation programs around the world, it is useful to consider systemic challenges and how these change programs could address systemic barriers to progress, a rare opportunity.

This article looks at some of the systemic challenges I have experienced working in public sectors, with a focus on intrinsic challenges (like capability issues, directive leadership styles, etc) rather than extrinsic (like changing pressures from social, technological and global economic change). I will follow up with another article about the unintended consequences of New Public Management that we also need to address, like the issues created by competitive functional segmentation and the impacts of a business imperative on public services. I also highly recommend you look at the detailed report on system changes required in the New Zealand government to enabled digital transformation

Responding to continuous change and exponentialism

Transformation is occurring all around us and changing the way we work, live and learn. The rapid pace of technological change and widespread uptake of digital technologies has changed public expectations of government can and should provide services, and has also expanded the possibilities for how government can deliver better outcomes to community. We also face increasing and exponential growth of complexity, speed, change and global competition, so it is imperative that our public sectors evolve to be more resilient, responsive, and effective at meeting changing needs, or an exponential needs gap starts to occur. Vertical accountabilities naturally leads to siloed efforts, siloed policy and siloed systems unless there is a specific effort to the contrary. Too often people in public sectors are driven to continually narrow the scope of their efforts and teams to stay within budget and ‘minimise risk’, but we end up with gaps emerging between functions at the cost of whole programs or policy intent realisation. How often do you hear “that isn’t our responsibility”? My simple question in response to that is “well, whose is it?”. If there is a clear answer that is great (if they are being effective), but increasingly there isn’t, especially when looking at things holistically. For instance, who is responsible for looking at the changing future of work? I know some teams are looking at it from the perspective of their particularly domain of expertise (impact of AI on manufacturing, the changing public sector workforce, etc), but who is planning what it means for the entire society, what the opportunities and challenges are for quality of life, the impact for workers and employers and what good and bad would actually look like? You can expand the example to any complex or wicked problem, and you quickly find that the gaps between functionally divided teams and vertical lines of responsibility create a systemic barrier to holistic program or policy delivery.

We need to commit to genuine transformation of the culture, practices, infrastructure, funding approaches and policy landscape of our public services to be fit for purpose and continually adaptive for the 21st century. This would include embracing and planning for change in all programs, taking a more Agile approach to all work (not just implementation), and putting persistent and holistic measurement systems in place that can both measure for impact and change (at a whole of government and at a program level, not just a service delivery level). This would also mean building proactive systems for taking action when change is detected.

We need holistic all of system (not just whole of government) teams whose purpose is to look for patterns and to do something that purposefully bridges the gaps across public sectors (and indeed across sectors) to create continuously evolving systemic responses to continuously changing systemic challenges. This would require purposefully horizontal programs, capabilities and delivery teams that are mandated to work holistically with all agencies, but also to implement at a horizontal level. You can’t expect change to happen through policy alone, whole of government efforts require active delivery of things that are not naturally done by any one agency on behalf of everyone, such as all of government service analytics, policy measurement, exploring and developing policy futures, life journey programs and digital standards.

We also need to integrate participatory governance into the everyday work of public sectors, because if the people and communities we serve are involved in the process, they will help ensure that the public sector is truly able to be responsive to their changing needs.

Finally we need to train public servants on differentiating between symptomatic relief and addressing causal factors. If we continue to develop linear responses to exponential problems, then the gap will itself become exponential. It is critical we prioritise efforts that scale impact, rather than hoping to scale resourcing. We can only find new ways that work by prioritising innovation and purpose based transformation programs that take a whole of government approach, so they don’t become subject to siloed portfolio capture.

Inhibitors include ways, means and mandate to effectively monitor for change and trends, a substantial lack of multi-disciplinary or open co-design of policy, a lack of public engagement in the day to day work of public sectors, and means of proactively and holistically responding to change as it occurs. The biggest inhibitor is the reactivism many public services have developed in response to pressures such as crises, political, budget constraints, public expectations, or any of the other systemic pressures that have been building in recent decades.

Holistic service integration

Another challenge with vertical accountability is that service delivery naturally becomes siloed. The people and communities we service shouldn’t have to understand or learn to navigate the complexities of government to find the right services, especially in a multi-jurisdictional landscape where the lines of responsibility aren’t obvious. This also leads to duplication of effort and inconsistent approaches to service delivery across the board. Service improvement efforts often are limited to improving the processes and transactions within the scope of the agency, but this doesn’t improve the end to end experience of the person trying to navigate the service in the broader context of whatever they are trying to do. In the case of any basic life journey, like having a child, moving, starting a business or dealing with the death of a loved one, obviously an individual has to traverse multiple organisations, jurisdictions and sectors, so it is incumbent upon us in the public service to make our part of that journey as easy, dignified and integrated as possible, whilst maintaining public trust, explainability and user control over their own experience.

We need to do a few key things to enable holistic services:

  • Implement horizontal service design and delivery programs, like the wonderful life journey based approach which has been led globally by our colleagues in the New Zealand government (see this video for Life Journey lessons learned from NZ). This work in New Zealand was informed strongly by a pivotal report called the Result 10 Customer Research, which showed clearly the need for a life events of life journey based approach to service reform across government, as well as a need for user-centric approaches to design and delivery.
  • Create an all of government approach to measuring the impact and user journeys of government services. Agencies will be more naturally motivated to act holistically if they are measured holistically. If every agency measures their own services, then they are systemically motivated to move problems out of their span of responsibility. For instance, bring together, in a deidentified way, the service analytics like website and app stats, telephony, transactional logs, helpdesk statistics, etc. This would help have visibility of the entire system to design better services, identify areas in need of attention and investment, and help ‘institutionally nudge’ the departments towards all of system behaviours (which is a great but largely unrealised application of behavioural science techniques). A real example I saw (I won’t name the jurisdiction) was an agency claiming they had saved copious dollars by reducing 50,000 calls a month, for us to then find a phone number had been shut down and those 50,000 calls were simply being subtly redirected to another department that couldn’t help them. The ‘customer experience’ for those people was much worse, the receiving department was suddenly hit with a spike in service delivery, but the original department got to claim the savings as an efficiency. These kinds of behaviours are completely predictable (and to a degree, understandable) under constant financial pressures, so we need to design the right measures, incentives and transparency systems that drive a genuinely better and holistic approach to service delivery.  
  • Engage independent perspectives in your governance. When you include non-government organisations in your governance arrangements, particularly ones that are systemically motivated to represent the genuine needs of citizens, you have a better chance of keeping everyone aligned around the genuine needs of the ‘customers’ of those services. It helps provide a counterbalance to reactivism, and also provides a great way to get domain expertise into the room, particularly if you design representative diversity into your advisory group. 

Traditional funding models

Traditional funding and governance models inhibit the delivery of citizen-centric services, and creates systemic barriers for sharing infrastructure or working collaboratively to take a holistic outcomes focus for delivery. Funding models based around large annual funding allocations incentivise agencies to make larger than needed, project-based, one-off funding requests; smaller requests are expected to be absorbed by limited allocated agency budgets.

This approach often hasn’t effectively enabled public sectors to retain key digital skillsets (as project teams are ramped up and down based on funding approval timelines), seize opportunities posed by emerging technologies in a timely fashion, create space for experimentation and innovation (as traditional funding models require a high degree of certainty and detail), or fund strategic prototyping and testing of new digital solutions to limit implementation risk and enable the scaling of tested solutions.

Service delivery and infrastructure costs are projected to rise at a faster rate than revenue. This is a real and important challenge to address, and it won’t be addressed by streamlining or throwing more money at existing approaches or systems. ICT expenditure continues to grow but the value and capacity delivered is increasingly not sufficient to meet the need. Four and five year funding bids for technology based projects create a significant problem for technology strategy lock-in, where agencies are asked, unreasonably, to predict every single cost years ahead, locking them in to these predictions and stifling agile delivery methods.

We need to differentiate between establishing new or replacement capabilities (projects), and continuous improvements of existing infrastructure (business as usual, or BAU) to ensure that both are appropriately funded and that there is a healthy transition from establishment to BAU. We need to realise that ‘BAU’ is not and should never be just ‘keeping the lights on’. The moment your technology infrastructure stops improving, it goes into decline, creates technical debt and loses the agility needed to stay fit for purpose for the rest of the department. When ICT operations (BAU) are funded through the principle of continuous improvements (which is successfully embraced by many great IT teams I’ve seen) then you can ensure great ICT infrastructure and great technical capabilities to respond to changing needs over time. Meanwhile, funding new or replacement capabilities requires a nuanced, high expertise and agile approach, not just to the implementation, but to how they are funded.  

A contemporary and agile funding approach to ICT systems is needed urgently to avoid unnecessary cost and reduce risk, and more importantly, to ensure a flexible, responsive and extendable technological foundation upon which all the work and delivery of government is based.

The NSW government is actively exploring this idea at a whole of government level with the Digital Restart Fund, which could provide a useful model moving forward. But even within the existing frameworks, agencies could choose to fund their own digital projects in a more agile and sustainable way. It would mean recognising that technology is not something to buy, set and forget, but rather a powerful vehicle for delivering all public sector functions.

Finally, when we measure value and success in purely financial terms, we see a perverse incentive towards reduced cost and increased productivity at the expense of better services and policy outcomes. In simple terms, we see money valued above people, and this is particularly counter-productive in public sectors which can be such a force for genuine public good. So the final thing we need to do is review how we prioritise funding such that quality of life measures are considered just as important as economic indicators. I think the idea of ‘what’s good for the economy is good for the people’ has proven to be necessary, but not sufficient to ensuring sustained and good outcomes for society, especially in countries where we care about fair and equitable living. To improve things we could adopt explicitly human outcomes success measures like the Living Standards Framework in New Zealand, or the NSW government Human Services Outcomes Framework.

Getting the right solution

How do you ensure you get the right solution that solves the problem? How do you avoid shoehorning problems into a product specification? Agencies often increase risk by bringing in vendors whilst underinvesting in their own expertise, leading to uninformed engagement with the market without internal skills to work with. Getting the right solution involves taking a service and system design approach before committing to any solutions, having enough expertise to engage expertly and to determine what to buy, what to reuse and what to build, and having the confidence to do delivery in the public sector where things most sustainably deliver value when done outside of the profit imperative of the private sector.

There is a constant pressure to buy now and get the cheapest immediate option which creates major challenges for longer term assessment, benefits realisation, and incurring technical (and administrative) debt by taking a solutions oriented approach fueled by rapid delivery. Everyone is looking for the ‘low hanging fruit’. But in my experience, quick wins usually lead to long losses.

The article on procurement reform covers some of this ground, but in brief, the most important mechanisms for getting the right solution in my experience are:

  • Establishing (or developing) a clear understanding of the problem or opportunity you are trying to address.
  • Doing some service and system design prior to choosing solutions.
  • Ensuring a Government as a Platform approach is taken, including modular architecture so that you have technical, functional and strategic flexibility moving forward.
  • Ensuring you have good technical and design expertise internally to inform and run the initiative till end of life of the service, including ongoing continuous improvement. Even when vendors are engaged, you need expertise engaged in the project. Technology projects are more like buying a cat than a car in that no matter how many services you might choose to buy to make life easier, the day to day responsibility and care still sits with you.

Organisational culture and embedding a digital mindset

What are the core competencies of a public servant in the 21st century? Not just someone working in the ‘digital’ space, but all public servants? Arguably, a ‘digital mindset’ means to adopt modern tools and methods but also to embrace new paradigm shifts in our everyday work, so arguably a digital mindset, when combined with great policy expertise, or social services, taxation or regulation could provide new and better ways of serving the public good. My first suggestion is that public sectors everywhere need to clarify what a 21st century public servant looks like, in a way that everyone can see the path for themselves. It is not about everyone becoming a designer or programmer, but rather defining the core competencies that everyone should have the basics of to bring about an agile, responsive, values driven, participatory, extendable, apolitical, holistic and evidence based public sector, regardless of what they are working on today.

Being open by default and collaborating outside of traditional organisational barriers requires new ways of working and thinking. Culturally, public sectors will need to focus simultaneously on internal evolution, on meeting community needs, and on serving the government of the day: a tricky balancing act. Core skills and competencies in design, digital and delivery will be required across the public sector workforce to achieve change. Digital government also requires new ways of attracting, developing, and retaining top talent whilst also working collaboratively with people across all sectors. I have seen extraordinary talent unleashed from inside and outside the public sector when departments and senior leaders create opportunities for people to make a real difference. Uplifting digital skills within government means innovation will be easier, with better delivery, better purchasing decisions and more confidence and willingness to cooperate across departments. We will reduce wastage of time and resources and will create the kind of integration, sharing and transparency that is critical to achieving our priorities. Executive support is critical, so integrating ‘servant leadership’ into senior executive training would be a major enabler for culture and organisational evolution in public sectors, and for unleashing excellence at all levels of the public sector. After all, expertise, creativity and innovation is found at all levels.

Digital government efforts around the world are using a ‘customer first’ lens to re-think ‘digital’ and redesign services to be better for people. A ‘service culture’ is quite a natural fit for a workforce driven by public service, but I have seen great and positive change when service and customer approaches have been explicitly applied to areas that haven’t traditionally considered themselves service providers, like regulators, legislators, intelligence functions, or even finance functions. Aiming for the best possible end user experience creates quite a compelling way to shape more dignified services and indeed, more dignified policies from the public sector.

But the best examples of digital government also see a strong internal investment in people, culture, clear strategies and purpose, and internal digital, technical and design capabilities. Research into the exemplars of digital government transformation reveals several trends. Their digital strategies focus on the needs of the user, developing common and core services of government, and developing advanced and reusable digital public infrastructure and internal capability.

Long-term planning throughout political cycles

Public sectors hold a special position in society and interact with more people in many more ways than any single business ever would. This means that digital transformation for government takes on special significance and takes place under different conditions that in other sectors. But if we only invest in short term digital initiatives, we end up essentially building castles on sand. We need to be careful to avoid building shiny new versions of legacy systems when we urgently need to be building the digital foundations that will last now and into the future.

Public servants struggle to maintain a sustained program of delivery in the face of changing Governments that increasingly insist on disestablishing anything associated with the previous Government. This, perversely, makes successful projects just as risky as failed ones for public servants, as successful projects attract attention that can be then re-branded as a political win, and immediately draw the ire of oppositional politics. Therefore, planning for longevity means, as best as possible, maintaining a balanced, evidence based approach that delivers demonstrable value to society. It is critical to demonstrate regular fast delivery, but also to maintain a proportion of resources around the long term projects that deliver substantial value (and credibility) when they punch through to delivery.

A mentor of mine used to joke that IT was bipartisan because no one really cared, but nowadays with digital and transformation programs considered more important, it can make it harder to establish and implement the best possible and long term plan for digital transformation with bipartisan support. It would require a genuine and persistent digital or technology strategy that wasn’t tethered to the political or policy agenda of the government of the day, but rather a foundational strategy that acted as an enabler for changing policy positions. This is one of the great opportunities and strengths of the Government as a Platform approach and of having an existentially confident and high capability public sector.

Learned helplessness

One of the most fascinating systemic challenges I’ve noticed is a kind of learned helplessness by public servants, at all levels, who believe it is all too hard, to set in stone, and that they have no way of making things better. So they do their very best every day whilst they wait for things to get better or a leader to come along they can rally behind.

The weirdest learned helplessness that I’ve witnessed is in the senior executive level. I’ve been in rooms of Band 2s and 3s who have believed themselves to have nothing meaningful to contribute or span of control, including discussions about ‘what could we possibly do when we are already working overtime and can barely scratch the surface’. I have given many talks about how to enable collaboration, or scale impact through transformation, or reimagine government service delivery, and it is always my senior executives colleagues who say ‘I wish I could do that but I can’t get any money for innovation’.

For my part, I have made a point of learning new techniques to slow things down, stop running on the spot, and establish meaningful, high impact work programs where all the staff are working reasonable and sustainable hours within a culture that enables them all to bring their entire selves to the work, and when these techniques are applied, we have found capacity within budgets to innovatie. Innovation is, and I can’t stress this enough, necessary to achieve better delivery, be it services, policy or any other function, so to treat it as a ‘nice to have if and when we get new funding’ is one of the biggest barriers to better public sectors.

I have worked for and with some magnificent leaders in the public sector and good leadership shouldn’t be rare. Every time we reward or accept bad or even mediocre leadership, we further entrench it as the norm and as a systemic barrier to achieving better public sectors.

I can understand people feeling helpless. We have all seen highly competent public servants punished for trying to do the right thing at some point. Whether it is in ignored research outcomes (when they are counter to a directive), the shutting down of good or long term programs at the cost of short term priorities, when internal expertise is ignored to listen to consultants, or when great people who are moved on because another staff member has behavioural issues. We have all seen bad behaviours rewarded which makes it sometimes scary to push back. But the behaviours we accept are the ones that will persist. We should all expect more of each other, more of our leaders and more of the public sector. When things go wrong, when public sectors don’t act as genuine vessels for genuine public good, if we don’t call it out and contribute to change, then we implicitly accept it.

We each need to always model the way of great public sectors and the good behaviours we want to see. To accept helplessness is to accept things going wrong as ok. Every public servant has a duty to do their part in being a high integrity, trustworthy and genuine force for good, every day. After all, systemic change is just another way of saying people collectively making a change. Be the change you want to see.

Final word

These have been some of the systemic challenges I have found working in the public sector, but I refer you again to the detailed report on system changes required in the New Zealand government to enable digital transformation as it goes into much greater detail, recommendations and principles for public sector reform that is well worth reading. Thank you very much to brilliant people like Nadia Webster, Michelle Edgerley and others who created that invaluable piece of system research for public sectors.

I hope this article has provided some helpful ideas and strategies for you to consider the systemic barriers in your work. Although I hope it helps you to understand and work better in spite of them, I hope that it also inspires you to seek and address systemic barriers as you find them. After all, many eyes make all bugs shallow.

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