Michael Pratt wasn’t long home from Shanghai, after three years as an executive with Standard Chartered Bank, when the call came from Barry O’Farrell: how would he like to fundamentally reform government customer service?
Pratt had climbed to the top of the banking tree: CEO of the Bank of New Zealand, a senior executive at NAB and Westpac, a sweeping role across north-east Asia on consumer and business banking at Standard Chartered. Why take on what must have seemed like a poisoned chalice? Pratt needed to know the then-New South Wales leader and then-Premier and Cabinet secretary, Chris Eccles, were serious. “The last thing I wanted to do is go and do something where there wasn’t a commitment for it,” he told The Mandarin from his Sydney office earlier this month.
Pratt was convinced the commitment was there; staff in the premier’s office backed the idea that “if government did something about this in a serious manner it would really resonate with citizens” and convinced the premier to move. In July 2012 Pratt was named the state’s inaugural customer service commissioner, a corporate executive tasked with wrangling the public service to improve the interface between citizens and government services. In two years the project has become perhaps the Liberal-led government’s biggest success story — and there’s plenty more reform to come.
“The way we put it together was, first of all, to be the voice of the customer in government, so to be a provocateur if you like, of what citizens are thinking and saying, and what they want. Secondly, to really lead a lot of the digitisation thinking in government because, as you’d appreciate, a lot of the answers of these challenges lies in … technology. Thirdly, was to really bring together a whole customer strategy across government, of which the first stage of that has been the design, development and implementation of Service NSW. That’s pretty much how we got here.”
The role is unique in Australia; there was no template for reform let alone a job description. “The benchmark was certainly low,” he said. At one level, it was about improving the transactional level — getting a driver’s licence, a marriage certificate, etc. But it was also technology shift and culture change. Pratt uses “citizen” and “customer” interchangeably; it was a “mindset change in the way that bureaucrats, ministers [and] others thought about you and I as customers rather as citizens”.
Along with direct customer feedback, Pratt looked globally at what governments were doing — 30 case studies on good practice around the world. That was compelling evidence for ministers — “they all want to know how they rate against their peer groups in other states, or overseas, etc”, Pratt says.
There were some easy wins: 64% of those surveyed said they hated talking to a computer; Pratt scrapped the interactive voice response systems on the phone lines and put people through to real humans. The result, he says, has been “hugely powerful”. It came at a financial cost, but the department has been able to invest in customer service by removing waste elsewhere. “Government has been so inefficient, and has certainly not stepped up on digital or a whole range of issues,” he said.
“A large part of the focus in my work has been, not only [better customer service], but getting significant cost out of the system. That goes in the whole range of things. I sit on the ICT board for government, so areas of procurement, for example, how we procure with key vendors, core services of government. In many cases, and still in a number of cases today, we procure those down the vertical of an agency, rather than a deal across government.
“If you take major technology providers, telcos etc, we should have one view of those contracts across government, rather than being ticked off down the silo. That’s a classic example. I’m not for one moment suggesting to you that we’ve addressed all of that, but we certainly made a lot of progress.”
Some 102 contact centres across government are being consolidated into two facilities, in Parramatta and Newcastle. The footprint of 400 physical offices is being re-examined and eventually sold off. “We’ll lease back what we need, but we’ll realise the capital value and then I’ll release that back into the government, or we’ll use some of that for ongoing investments,” Pratt said. He was attracted to the idea of freeing up government money for real service delivery like health and education.
Meanwhile, Service NSW has created 18 service centres across the state — one-stop shops combining agencies and customer service points. The Minister, Dominic Perrottet, has announced 10 more and says 36 will be in operation by June next year. Service NSW now incorporates some 850 transactions — with more to come.
Just as importantly, the digital infrastructure is increasingly sophisticated. Self-service is the ultimate goal. Of the 24 million transactions a year, a quarter are done online. “I’ll be moving to increase that percentage quite significantly over the next couple of years,” said Pratt. Getting the technology mix right has been key.
“We haven’t implemented this by going out to a big implementation house and bringing in a big piece of software and then hard-coded stuff everywhere. We’ve taken a real nimble approach to using software as a service and buying only what we need. That way, we’re really nimble about how quickly we can change.
So what will it look like in 12 months?
“More transactions, more availability by channel, and an increasingly strong focus on digital delivery. So if you go forward 12 months, there’ll be a lot more available on your mobile. This is true mobile capability … It’s actually adapted to any device, be it an iPad or mobile.
“If you look at the UK … they have done what I call ‘digital by default’. We’re doing what I call ‘digital by design’. What I mean by that is any new product we bring to market as a government must first of all be designed for the digital channel, and then also available in the physical channel, etc, if appropriate.
“You’ll see there’s some more stores, but not over-investment in that because … from my banking days, you know I went through the ’90s to early 2000s when banks were closing lots of branches, I don’t want to open too many. We’ve got the opposite challenge.”
Working with the public service
So what would a banker know about customer service anyway, let alone how the public service operates? Pratt knew there’d be cynicism.
“I obviously realised very quickly if I came in as the subject matter expert telling career and lifelong bureaucrats about how to do their job, I was probably going to have a short lifespan. What I did have that they didn’t have was a set of skills that they really needed.
“That revolved firstly around understanding what is the really modern approach to customer delivery. Multi-channel management is a key part of that. Secondly, a lot of technology background, which most senior people in government do not have, and then add to that, given my banking background, I brought a real commercial approach as well. I could look at not only the customer outcome but I could look at things from a commercial point of view around payback on investment and so on. What I discovered pretty quickly is when you put those in combination, it presented a set of skills that government really needed. I then used those skills in a way that was clear to directors-general and their teams I was there to help them, not to show them up and expose them in any way.
“I had to build relationships first, and so I spent quite a bit of time getting to know some new people. Getting their trust, not only in the bureaucracy, but in the cabinet as well … The first six months for me was basically active listening, and during that period they started to design what I thought was a set of solutions.”
Pratt is clear on the two biggest skills lacking in government: technology and finance. He says Graeme Head, the reforming public service commissioner, is on the case.
“Work is under way in that regard, but I think frankly that’s where government has fallen over in many cases. The rigour of business cases has not been there to the extent that you would see in a big corporate … the accountability aspect is not as strong as I would’ve been accustomed to.
“Not all the skill sets are bought, and my approach has been to really work with agencies through a lot of consultation and not use positional power. I mean, I can honestly say to you that not once have I used the premier’s name, or the you’ve-got-to-do-this-or-else approach, because I just felt that would not work. My approach to work largely has been influencing power, not position power.”
Pratt reckons the public sector needs more people like him — “coming in with fresh ideas, and new ways to do things”. And business would benefit from the experience of the bureaucracy, too.
“Certainly, what I’ve seen in NSW not only under Barry [O’Farrell] but also under Mike [Baird] now is a real desire for that to happen. The good thing about this is that at that senior level, both politically and also at the secretarial level now in the bureaucracy, there is absolute acceptance of the need for that to happen. That’s a good start. The challenge will be attracting people like me in numbers.
“In the United States, this is quite a common model where people move between academia, government and [the] private sector. In some ways, from a personal point of view, I’m modelling my own approach on this because I’m also deputy chancellor at the University of Western Sydney. I’ve got a senior role in academia, in government, and then I’ve got some private sector board [experience]. That’s providing me with some great input across all those sectors.”
Other states — and even other countries — are watching. “I mean, the Queenslanders came down and said, ‘we’ll take everything but the logo back with us’,” he said. What advice does Pratt give them?
“Well, I think a couple of points. The first one is that I have absolutely no doubt that if they do the sort of research I have done, they will find out that their citizens are demanding it off them. So the first point would be do your research and understand customer need, because it’s absolutely there. The second point would be you must build a multi-channel environment, but get the investment balance right … [And] in terms of execution, you’ve got to get the right people.
“I’m stating the obvious, but the two things that have made all the difference in terms of the implementation we’ve done are the people that I’ve brought in. Most of them are ex-bankers because they’ve done it before. They know what to do, but then all the people that have come into our service centres — 60% of them are actually from agencies already, but what we have done is put them through a really rigorous assessment process around customer DNA.”
Ultimately, there’s one number that speaks to the success of the massive project: Pratt cites a customer satisfaction figures of 98% — a figure he could only dream of in the banking industry.