The Australian Public Service is moving to flatter management structures with increased spans of control on the recommendation of the National Commission of Audit, but it is not an exercise in cost-cutting, according to the APS Commission.
Instead, an implementation guide published by the commission says the new “APS Framework for optimal management structures” aims to improve decision making, accountability and communication, and make it easier to maximise resource use, encourage innovation and support change.
While savings are expected to come from doing away with the current “expensive” structures, the guide stresses this is not the main reason for the new framework. It is a management revolution, aimed at addressing the criticism that the service is far too top-heavy.
All agencies must now run a self-assessment process of their existing management structure and develop a three-year plan to optimise it based on the new principles by 2018. The APSC will report annually on progress to the Secretaries Committee on Transformation, but progress reporting by agencies will be voluntary until the end of 2016.
The new framework was developed by the Deputy Secretaries Efficiency Working Group “following an initial review of current research and practice” and recently approved by the Secretaries Board headed by Michael Thawley (pictured top). It describes agencies divided into a small number of organisational layers, each containing a range of classification levels, with less managers and more staff reporting directly to them. The APSC guide explains it is based on five principles:
- Vertical design:
Only as many organisational layers as absolutely necessary — ideally between five and seven — with multiple job classification levels grouped within each layer. “Layers should reflect decision making and accountability in line [with] management reporting arrangements.”
- Accountability and decision making:
Decisions made at the lowest practical level. “Control mechanisms will be consistent with appropriate risk management. They will suit responsibilities, be economical to implement and motivate managers.” Decision-making power devolved but employees and managers also held more closely accountable for outcomes, with the aim of improved decision making and faster response times. More staff who directly report to a manger but not too many; that can “leave employees feeling disengaged and removed from both management and organisational objectives” and lead to decision-making bottlenecks.
- Relative complexity of tasks:
More “direct reports” — staff directly reporting to managers — in areas where work is routine and standardised, often within well-defined parameters. “Fewer direct reports may be appropriate where work requires specialist capability and close oversight of complex tasks with high risk. Different types of work will be undertaken in one agency and the optimal number may vary within an agency.” The guide describes four categories of APS work ranging from highly specialist policy development, requiring the least direct reporting, to high volume service delivery, which requires the most. Larger agencies will also have more than smaller ones.
- Innovation and adaptability:
The new structure also intends to improve communication. “There are fewer levels for information to cascade through. Fewer direct reports and more vertical layers can promote the development of silos that restrict an agency’s ability to recognise the need for, or implement, change. Improved communication of agency goals encourages an organisational perspective to problem solving and innovation.”
- True work value:
All APS jobs classified consistently and according to work value. “Job classification requires an assessment of work value against work level standards which apply consistently across the APS. The objective is to have: the right jobs designed to meet priorities; jobs classified according to work value; and the right people doing the right jobs.”
The new framework aims to create organisational layers with less hierarchical relationships between staff of different classification levels within them. As organisations grow larger, more complex or open new regional outposts, they may need more layers, but the APSC guide explains a typical scheme for grouping staff.
The top layer is overall strategic and industry or sector leadership, followed by cluster leadership, which is responsible for running specific parts of the organisation and delivering on major, complex projects. Next is the functional leadership layer, the lowest level of strategic thinking where systems are designed, built and fine-tuned. Functional leaders also provide guidance to team leaders where no precedent exists.
The bottom two layers of the proforma scheme set out by the APSC are team leadership and team members respectively. The former is focused on supporting and enabling teams, tactical decisions, as well as output, quality and improvement, and might suggest new approaches to the next layer up.
According to the APSC, the new flatter management structures with wider spans of control should:
- streamline decision making by bringing top executives closer to those with detailed understanding of the issues
- encourage innovation by reducing the number of layers through which an idea must progress
- enhance accountability by removing management duplication and making individual roles and responsibilities clearer
- support the appropriate management of risk: decisions are made closer to where information is held
- improve communications and change management: there is a more direct route for receiving and relaying corporate messaging
- promote employee engagement by allowing a more direct line of sight between leadership and front line workers. Employees can be more aware of—and engaged with—the priorities of the agency
- maximise resources by ensuring that tasks are performed at the most appropriate level and work is not duplicated.
The public service commission’s guide also outlines some of the capability agencies will need to renovate their organisations along these lines and offers advice on how to get there:
“Agencies will need to have—or develop—capability in strategic workforce planning, organisational design and change management to support effective change. They may need to consider development and training focused on these three areas. Capability can also be developed through sharing ideas and expertise with other government agencies and the private sector.”
The guide also offers comprehensive albeit optional advice on developing an implementation plan and taking a project management approach to the implementation, as well as change management and potential risks arising from moving to the new framework.