You only have to spend a short time working with Martin Parkinson to know he is a smart guy. And a good economist — which is what the new Prime Minister, Malcolm Turnbull, is really looking for in his new secretary.
Someone who can bring to life the economic reformation program, everyone now agrees is needed to generate the next wave of growth and opportunity.
The tag line for this program is innovation and comes as Australia really struggles on a whole suite of indicators to be competitive against our global competitors. Next month Turnbull will lay down his grand plan for the $9.7 billion spend the Australian government currently puts behind Innovation, R&D and science.
The working title for this plan is the very bureaucratic: “The Innovation and Science Agenda.” A key component is the public sector play where Government will be pitched as an exemplar, not simply sitting on the sidelines, but actively reinventing itself to drive innovation and growth.
Assuming he is Turnbull’s pick to lead PM&C, Parkinson will know from his own reading of the national accounts that government drives around 30 per cent of our economic activity — and much more if you include the rules that impact so many of our leading brands and companies. So any serious play to lift productivity, innovation and growth has to have a very solid rethink of how government is performing.
To date government has been largely immune to the disruptive features of the modern technology driven world, comfortable with its broadly guaranteed income and with little competitive or other influences to drive any change.
In many ways the public sector model is much the same as it was 60 years ago when the post-war mandarins put in place large, hierarchical, bureaucratic departments and agencies to deliver a swathe of services and policies. Walk through any government agency and spend time dealing with the layers of decision makers and tortuous processes — and you know the current way of doing things is not working.
It might feel differently in the big secretarial offices of Canberra, but down in the engine room staff will tell you it is like wading through treacle to get anything done. Beyond the anecdote there are countless audit reports, functional and efficiency reviews, and capability reviews which attest to the same basic point, the Whitehall model we inherited from the British is in desperate need of reform.
Lots of reasons for this state of play and various attempts to fix it. But the reality is this is the leadership issue for whoever is the next secretary of PM&C and is a critical piece, if as a nation we are to successfully pivot and move beyond our century-long reliance on primary resources.
For someone like Parkinson — a true product of the Canberra intelligentsia — the challenge is to be able to craft a model that looks very different from the one he and many of his public sector generation grew up in — and if Laura Tingle’s thoughtful Quarterly Essay is a guide — still long for.
If there is a lesson from the sectors that have been disrupted, this new model needs to be much more radical and uncomfortable than a simple shuffle of the deck chairs. A touch more competition for the public sector a la Harper, a bit more provider economy commissioning, a few more open innovation platforms and a switch (finally) to outcomes based delivery are in the right direction. But the reality is there has been a paradigm change in power to the citizen/consumer and our current governmental system is failing to adapt. (Ditto the political class, most notably former PM Abbott.)
The noise around this watershed shift is in the raw social media activity that has so befuddled and stymied Parkinson’s baby boomer generation of leaders, anxious to get clear air for considered policy reform. But the bigger point is this power shift makes government a participant, rather than the ring master the post war model assumed.
You don’t have to scratch Canberra’s top bureaucrats too deeply to reveal a very patrician culture — leaders who know better than the rest at how to run a country. There is much to be proud of what this largely econocratic class has delivered over the post war period, but drinking your own kool aid can be delusional. The challenge is to deeply rethink how the public sector can be relevant and effective in a truly global world of highly empowered citizens.
Some of the principles for this new order are already obvious. As a true participant government must open itself up to the wider world, so innovators, suppliers, providers and those directly affected by government activity, become true collaborators. The NSW Child Story program example of completely rethinking how to care for vulnerable children is a poster child for daring to think outside the traditional bureaucratic approach.
The point is not to open up government for mere transparency reasons, but rather to open government so it can tap energy, ideas and innovation of the ecosystem that works around the public sphere. Public agencies themselves are never going to be a hub of radical, high energy creative activity — people join the circus if they want that type of career — so the trick is to exploit that zeitgeist of change by collaborating with the providers that work with government.
It is textbook managerialism to be good at what you are good at and use others to do the rest. Government agencies are just not built for fast, consumer facing, highly creative service delivery. So the model should accept that public facing activity is best done by non-government players such as NGO’s, small business and corporates who have the culture and capability to deliver a far better result.
The capital take away for our public leadership is to resist at every stage being the people who do. That can range from a web site to stop child bullying, to a multi billion dollar program to deliver high speed internet.
This of course means a very different skill set, one which brokers and understands what the provider economy can (and can’t) do.
It also requires a much more analytical and data driven approach to decision making. NSW is leading the way with dashboards and data in the premier’s office and lead agencies that begin to track in real time outcomes and performance. Making these public and then responding to the data creates a very powerful paradigm for tracking how users and stakeholders are really engaging.
At a technical level it also assumes a statistical problem solving capability that is well beyond most public servants skill and comfort. Again this is where working with big players like say BHP — which is rigorous in its use of data — can be used to ramp up the empericism badly needed across the entire public sector.
Data is a powerful game changer for government and opens up a radically different model of government — where the public sector becomes a platform of data and providers innovate off that data layer — in much the same way app developers work off say Apple’s operating system.
This model demands that governments decide where they want to play and the remit of their agencies. This can be challenging; do we really need a federally funded parcel delivery system, aka Australia Post, for example?
For Parkinson and his mandarin colleagues this implies a far more rigorous review of what the value return of government activity is. We have for instance large regulators who look like dinosaurs at a time where social media peer review technology is delivering far more effective behaviour change than any statutory rule book. Moreover to the extent they are charged with maintaining a set of incumbents that no longer need either oversight or protection, these regulators have perversely become blockers of investment and growth.
Another big challenge for central agencies and their leaders is the whole design of the public sector. The system is highly hierarchical, deeply atomistic, with agencies fiercely reluctant to collaborate beyond mere window dressing. The world is getting more complex and community problems don’t come neatly packaged to fit with the government directory and portfolio structures and demand a far more cross portfolio approach.
This requires much more cross disciplinary approach, with a broader end game, than simply economic growth. Well being is a concept now gaining popular acceptance and offers huge opportunities to bring to life the twin goals of income growth and strong and sustainable communities. We are now in our 24th year of continuous GDP growth, something Parkinson et al can be justifiably proud of, and shifting those goal posts to a broader set of goals will take real intellectual effort in a town heavily influenced by ANU’s neo-classical economics school.
There is also the deep cultural issue which is best described by the expression that if all you have is a hammer everything is a nail. Crudely put government is one big rule factory and this means problems are inevitably framed around solutions that typically are about laws and enforcement. Hence why we continue to pump out statutes, despite so called red tape reduction programs.
The director of the Designing Out Crime research centre at Sydney’s UTS, Professor Kees Dorst uses the example of alcohol fueled violence in Kings Cross. Dorst says the response to this problem was framed as a licensing and curfew problem and so the solution was tough lockout rules and heightened police enforcement. The response has arguably worked in Kings Cross, but at major cost to the local economy and in many ways has simply shifted the problem to other suburbs.
In his book Framing Innovation Dorst says if the problem was seen as akin to a managing 30,000 young people at a pop concert you would have come up with a far richer set of solutions. This design approach is very different to the crude legalistic responses the governmental system often instinctively — and arguably lazily — reaches out for in a populariser effort to be seen to be doing some thing.
The final observation is that in a world were the internet of things is coming at us like a tsunami, the core capability to effectively work in this era will be much more an engineering view point, than a policy head space.
The internet of things means EVERYTHING gets connected and engineers are naturally good at understanding how to do this best. This can be creating the new digital cities of the future, or building road systems for driverless cars. Apart from a much needed injection of new DNA, getting our gaggle of great engineers into government would begin to drive a system wide view of public policy and programs, the current atomistic architecture of government thwarts.