The Australian Public Service is full of number-crunchers with skills in finance and accounting but to make the most of them, executives need to unite the different professional tribes, according to a senior Commonwealth human resources leader.
Speaking at the recent CPA Congress, deputy Australian Public Service commissioner Stephanie Foster acknowledged the obvious — financial management is critical to any large organisation — but said finance teams should be more integrated with other areas and vice-versa.“Too often, there isn’t a genuine partnership between the numbers people and the strategists.”
She confessed to the room full of accountants, most of whom work in the public sector, that financials were not her forte; if the intensive Advanced Management Program at Harvard Business School had required students take a straight accounting exam, she would have failed it.
But the human resources leader took away an important lesson from Harvard’s “CEO boot camp” nonetheless: financial management must be integrated closely with strategy, execution and art of managing personnel. During the eight-week course, Foster said she was struck by the way accountants go on with their work despite not having all the real numbers in front of them.
She observed that not only do assumptions and estimates play an “enormous role” but they are usually made by financial staff, which means the “critical market information” possessed by operational executives is left out of decision-making.
“It left me wondering how well we are doing this in the public sector,” said Foster. “I can certainly think of times in my public service career when we developed strategy or policy without a strong understanding of the financial impacts, or without detailed financial analysis.
“Too often, there isn’t a genuine partnership between the numbers people and the strategists – and an insufficient blending of the two – accountants and finance experts need to be integral to strategy development, and strategists and policy wonks need to love numbers and data.”
There is too little communication in “the relationship between the numbers people and the ‘people’ people,” said Foster, “even though they will often sit side by side.”
“I can’t tell you how many executive meetings I’ve attended, for example, where the data from HR and the data from finance was different. So rather than make the tough decisions we needed to, based on sound data, we would argue pointlessly about the validity of the data.
“Corporate finance areas are doing something right. CFOs have a seat at the table. Executives live and breathe budgets, expenditure, income and revenue — by necessity if nothing else. HR can learn from Finance — how to provide actionable data that informs decision making.”“Accountants and finance experts need to be integral to strategy development, and strategists and policy wonks need to love numbers and data.”
Joined-up business cases are one way of breaking down the barriers, helping executives understand returns on investment in the workforce, changes in productivity or the “true cost” of recruitment, turnover and employee engagement.
“HR strategies need these financial foundations. Equally, financial propositions need to take account of people, and amorphous concepts like motivation and aspiration,” Foster commented, adding that both need to do more besides.
They should be working together, “spotting opportunities not seen by the line areas as well as responding to what they propose, articulating not only risks but innovative responses to those risks, in fact embracing risk and experimentation, genuinely being prepared to fail, having first planned to manage the consequences of such failure.”
Often, the problem is financial and non-financial staff are talking different languages so neither side is totally clear about what the other is saying. “Building those connections is becoming ever more important in a world where boundaries are blurred, where value is created by open access and sharing, where hierarchies are increasingly irrelevant or counterproductive,” said Foster.
Public service in the flexible future
The APSC’s second-in-charge used a quote attributed to early 90s cyberpunk author William Gibson — the future is here, it’s just not evenly distributed yet — to illustrate the point. The nature of work is evolving, the pace of that change is ramping up, and the “increasing complexity, volatility — all the buzzwords” apply to public servants as much as anyone else.“You might work for one department for months at a time; another will require you for two hours to consult on a particular strategic financial issue.”
Foster noted the national workforce is ageing, growing more culturally diverse, moving towards equal participation between men and women and increasingly spread-out, but remaining connected through communications technology.
Technology trends like big data, the internet of things and artificial intelligence are bringing new waves of social change with them, making some jobs obsolete and creating other new ones. Less stable, more individualist forms of work like freelancing are on the rise and becoming the “norm” in Foster’s view.“Today, you’re sitting next to a start-up FinTech business, an NGO and a freelance investigative journalist.”
The public servant of the future doesn’t work for one department, she told the CPA Congress.
“In fact, you work for several departments, as well as freelancing on the side. You might work for one department for months at a time; another will require you for two hours to consult on a particular strategic financial issue.
“In one of your jobs, the skills you bring to the table are complemented by someone with different skills who works the hours you’re not there. In another, you were recruited as a team — not as an individual — to work on a specific project.”
Working from an office is so irrelevant in this vision of the future that agencies might be able to get out the rental market altogether, she suggested, with staff working from home or perhaps “a shared workspace with people from a range of other industries and organisations” instead.
“Today, you’re sitting next to a start-up FinTech business, an NGO and a freelance investigative journalist. You’re exposed to other businesses and ways of working. Opportunities for cross-sector collaboration, mentoring and innovation abound.
“You rarely see your colleagues in the flesh. In fact, your colleagues are spread out across the country. You’re connected to them via the cloud. You share a virtual workspace; you can see what they’re working on, talk to them in real-time through your mobile device.”
Public servants would then be “engaging with a greater number of people in more meaningful ways” to crowdsource solutions, test ideas and recruit specialists, Foster said. Front-line roles in call centres and basic data entry work will be taken over by artificial intelligence.
Agility, adaptation and allowing freedom to flourish
It’s often said the best response to change is to adapt to it, and as change speeds up, organisations must be able to adapt faster and faster. Agility, as they say.
“Agility means being able to move quickly towards new opportunities, or when things aren’t working. It means testing and adapting ideas and interventions and learning as much, or more, from what didn’t work as from what did,” said Foster.
“Fundamentally, it means not knowing the answer but asking the right questions and finding the best solutions. This is a huge shift from the days of old where knowing all the answers and being right was a measure of your value. There’s a saying that captures this shift: ‘The smartest person in the room is the person with the smartphone’.”
The APSC’s April WorkHack brainstorming event, and three of the ideas that came out of it, are all part of a plan “to build a workforce that thinks differently, is savvy, creates and innovates — from the top down but also the bottom up”.“All of us need to reset, to rethink what it means to work in this fluid, flexible environment.”
One winning idea, the Operation Free Range mobility trial, aims to emulate the gig economy — where people flit between short-term jobs. Another, a revamped digital staff directory, can hopefully function as an APS-wide “a capability register, a resource allocator and a social communication channel” while job sharing should be easier to arrange, Foster enthused, through a winning proposal compared with the online dating app Tinder.
And at the very least, one of the winning ideas from GradHack in September demonstrates a good understanding of branding and the way the wind is blowing. The new and improved two-year grad program was christened the Australian Government Integrated Learning Experience (AGILE).
The skills practiced in the hackathons — collaboration, networking, problem-solving, critical thinking and iterative policy development — are what the APS needs “to excel in our complex, changing, competitive world [and] to optimise Australia’s prosperity”, according to Foster.
The deputy APS commissioner acknowledged that thinking about the future actually isn’t nice, fun or exciting for everyone, a feeling she linked to growing “extremism at all ends of the spectrum” around the world — but also to the “more mundane” phenomenon of change fatigue in the public service.
“In my view, all of us need to reset, to rethink what it means to work in this fluid, flexible environment,” she said, sharing some of her own “rude awakenings” that led her to question her own role near the top of the hierarchy in a very fundamental way.
The message of the anecdotes was that senior leaders need to keep loosening their grip on the reins and delegating responsibility, as they increasingly recognise areas where their own personal expertise and experience has little value.
“So I’m having to rethink what my role is in a flatter world, where technology that I didn’t grow up with is pervasive and I’m not really at the pinnacle of any structure, but kind of floating around a loose conglomeration, full of ambiguity, trying to do my best to support it from underneath, protect its flanks from attacks by the old guard, provide context and linkages at the top — in short, to provide a framework in which freedom can flourish.”
“In a world like this, where traditional proxies of measuring our value are changing, I think knowing ourselves, our strengths and our limitations, and what really drives us, becomes ever more important.”
Correction: an earlier version of this article incorrectly stated Stephanie Foster was the APS merit protection commissioner, a role that is in fact held by Annwyn Godwin.