Thank you for inviting me here today.

This is a very timely opportunity to talk with you about the public sector reforms that are under way, and the focus they have on public sector accountabilities and measurements. In other words, making sure that what we do matters.

It is in all our interests to have a well-performing public sector. In order for that to happen it is critical that the public sector evaluates and measures its performance. That in itself is only half the job – the true benefits of that exercise then come from taking action as required, and when required, to raise performance.

By and large this country has a public sector that does perform well and does deliver a high quality of service, with efficiency and an extremely high level of accountability. New Zealand is acknowledged internationally for its freedom from corruption and its high standards.

And generally New Zealand’s public management system is also well regarded by international comparisons, showing that individual agencies tend to perform well within their responsibilities. However, the lack of collaboration around, or ownership of, the bigger challenges that cross agency boundaries is an ongoing source of challenge.

One reason for this state of affairs is that the strongest incentives in the system are vertical/top down when it comes to funding and delivering objectives controlled by individual agencies. T his occurs at the expense of working horizontally/across other agencies. The system does not have absolute barriers to collaborative behaviour, but offers few incentives through lines of accountability, reporting requirements, chief executive performance expectations or budget allocations.

The public management system we have today, shaped in large part by the changes in the 1980s and 1990s, and less extensive changes since, in some ways hold back our abilities to raise performance. It does this by supporting:

  • time-consuming and duplicative interests and processes

  • a large number of varying priorities across government which distract from clear priority outcomes

  • issues that no one is responsible for

  • cross-agency working which is too often exclusively dependent on the personal commitment of chief executives (and sometimes Ministers)

  • barriers to priority and resourcing discussions from a whole-of-government perspective.

During the last 20 years there have been a number of attempts to shift the New Zealand system towards a greater focus on outcomes, and the prioritisation of these. Attempts have included:

  • the Chief Executive Forum – launched in 1993 as a platform to promote a strategic, longer-term outcome perspective

  • Key Result Areas (KRAs) – set at departmental level and, as such, belonging to the prerogative of the chief executives

  • Managing for Outcomes – where the focus of accountability was moved to the outcomes that the agency intended to achieve, with particular result areas being assessed against the wider outcome of government, and

  • more comprehensive sector reporting.

A more sustainable solution lies in more clearly defining a set of priority results, but also aligning state services around the achievement of these.

The public sector reforms that are under way now, through the Better Public Services programme, aim to create a public sector that can respond even more effectively to the needs and expectations of New Zealanders. After all, that is what we are here for. To do that the public service has been set challenges and accountability for achieving them.

Some of the ways the Better Public Services programme will achieve this are:

  • government agencies working more closely together and organising themselves to produce results that make a difference to New Zealand

  • sharing functions and services, purchasing goods and services, and developing systems together

  • a greater use of technology and a shift to digital channels, so New Zealanders can access government services more easily

  • agencies improving how they measure and report on performance

  • a greater responsiveness within the public sector to the needs and expectations of New Zealanders, and a commitment to continuous improvement.

As part of the Better Public Services programme the Government has identified ten key priorities for the next three to five years – areas where we need to do better. Delivering good results on these requires groups of agencies and sectors to work together in different ways from how they currently operate, as well as publicly reporting on their progress towards achieving these goals.

Towards the end of last month, targets for all the result areas were released. These are listed on the Better Public Services site at www.ssc@govt.nz. If you haven’t already seen them then I urge you to take some time and have a look.

Result areas

The five result areas are:

There is work under way across a number of agencies to achieve the targets they have set for themselves and this information is published in Result Action Plans (RAPs) which sit on relevant agency websites.

These targets will not be met without changes to what we do and to how we do it. We need to work smarter and faster by changing our thinking about the way we do things, and being more innovative. Make no mistake, achieving these targets will require a high degree of stretch – it won’t be easy. But aiming for constant improvement is essential if we are going to provide a public service that improves people’s lives.

Making this sort of change requires a substantial shift in performance, and that is going to touch on everything we do.

Measurement, and measurement of what really matters, is critical to achieving this. To get better service, better results and to meet targets, we need effective measurement across the State sector to drive performance. Measurement is not an end in itself, but when it is used along-side self assessment tools that drive results, then it becomes a powerful mechanism for effecting change and positively influencing our culture to always be working towards making things better.

One such tool is Kiwis Count – a regular nationwide survey that asks New Zealanders what really matters to them. It also asks people whether they are satisfied with the way they experience our public sector. This information is available on the State Services website for anyone to view and use for making improvements that drive us to deliver the best possible outcomes.

Kiwis Count is part of a different approach to driving change, if that is what is needed, to make life better for New Zealanders. It is part of a performance culture that identifies what is important. It works across the sector to take effective action and is responsible for ensuring accountability and transparency throughout the process. Two objectives to improve the accountability system are:

  • to use the results focus and information on results to more effectively manage the performance of leaders, and

  • ensure that each agency reports in a way which makes sense (to the organisation and to Parliament), given their role.

These objectives support the building of a performance culture that measures what matters. And use an improvement lens rather than an accountability lens.

This focus on improvement is already a large part of the Performance Improvement Framework reviews – also known as PIF. These reviews assist chief executives to improve the performance of their agencies, and are a system for reviewing agencies on the delivery of both government priorities and core business. The PIF ensures agencies are clear about where they need to improve, and what they have to do to achieve results.

The PIF supports continual improvements and evolves to include enhancements such as improving the quality, responsiveness and value-for-money of State services. Continuously finding better ways to deliver value and improve PIF products and services is a priority. A recent enhancement is the integration of five key ideas:

  • value-for-money

  • innovation

  • contestability in provision

  • impact of the Crown’s balance-sheet (not just the agencies) and

  • a view of long term (not just 3-5 years, or even whole-of-life, but life-cycle decisions).

The improved efficiency and effectiveness measures in the PIF reviews are an opportunity to align with other performance improvement programmes, evaluations, aims and imperatives. This is an evolution of the PIF, and a strengthening of the evaluation process.

Other benchmarks for performance include the Benchmarking Administrative and Support Services programme known as BASS. This cross-agency programme provides an annual administrative and support (A&S) service, benchmarking service to larger government agencies to support value for money assessments, target-setting, and tracking of improvement over time. It also provides a picture of each function across agencies, including larger cross agency improvement programmes, and it advances opportunities for cross-agency collaboration. These are all initiatives designed to make it easy for New Zealanders interacting with the government. In turn, some of the result areas within the Better Public Services programme involves agencies looking at ways to help New Zealand business. These include:

  • having a one-stop online shop for all government advice and support needed to run and grow their business, and

  • making it easy for New Zealanders to complete their transactions with the government easily in a digital environment.

Consistent performance information across agencies gives transparency over a significant area of expenditure and provides an evidence base for assessing performance.

One part of delivering better public services is ensuring money is not unnecessarily spent on administration, when redirecting it to public facing services would yield better results.  By tracking changes each year, we can see if investment in Administrative and Support services change programmes are delivering results. We will be better able to learn what works and what doesn’t.

This willingness to learn and to adapt and to evolve is critical to achieving an improvement in our performance, and in better public services. It is seen at all levels – and needs to have this wide visibility.

CE Performance Process changes

Both ministers and agencies are asking the State Services Commission for stronger system leadership to help improve performance, particularly during a time of fiscal restraint, that includes a sharper focus on leading, advising and supporting chief executives to achieve results. As a result a new expectations setting process has been established. One where we are going to focus on the top priorities that require focused leadership attention. Over the next four years these expectations will be focused on achieving the results that matter and will be clear and measurable. This approach will be supported by continuous engagement throughout the year that concentrates discussion on the critical issues and provides real-time review and feedback.

The proposed process is centred on five main elements:

1 A new approach to agreeing measurable, results-focused expectations

2 Structured annual engagement plans

3 Chief executives to complete an annual reflective self-assessment focussing on expectations and demonstrate the delivery of results

4 Online 360 feedback (as required) to evaluate the chief executive’s system-critical leadership behaviours

5 Ministerial feedback on the chief executive’s achievement of results against expectations.

The key changes to this approach support our chief executives to achieve and provide them with meaningful real-time assessment. It enables conversations that focus on the critical issues, reflects agency performance while focusing more on results than on process. This approach is designed to empower chief executives to demonstrate achievement of expectations by introducing flexibility so that specific needs and situations can be accommodated throughout the performance management cycle, ensuring better alignment with government priorities and a strong focus on measurability.

This approach is called Functional Leadership, and when fully implemented it will be seen as:

  • Modern: reflecting global best practice in chief executive performance management

  • Efficient: adding value to chief executives and utilising system resources in a cost-effective way

  • Credible: providing useful results that all stakeholders (including New Zealanders as a whole) have confidence in.

The decisions of functional leadership affect all departments. By sharing functions and services (like the purchase of goods and services), developing systems jointly and demonstrating more contestability in how the public sector selects its service providers, we will be better placed to ensure better value for money improvements are delivered across the State sector. By working together and leveraging off each other’s strengths we can deliver a public service that is agile, world class and does the best for New Zealanders.

Much of this work is supported by ensuring my position as Commissioner heads the State services. And it is my privilege to have this role.

Amendments to legislation

Amendments to the Public Finance, State Sector and Crown Entity legislation, coupled with spearheading the Better Public Services programme give further support and legitimacy to the Commission, which highlights our critical role.

The Commission, along with the wider public sector, has an opportunity now to demonstrate innovation and agility; it is an opportunity to own, use to inspire, mobilise and ultimately deliver on what we say we will.

Conclusion – summary and future direction

The Better Public Services programme is a marathon, rather than a sprint, and will take approximately three to five years. But kiwis have a great worldwide reputation for endurance sports, and being innovative thinkers when it comes to managing a well respected public service. So it isn’t a huge stretch to think we can change our game to deliver a GREAT public service.

We and the rest of the public sector will keep New Zealanders engaged in these reforms and this massive change programme throughout the journey. Results will be reported on regularly and there will be a yearly snap shot so you can see how targets are tracking against the result areas we have identified for improvement.

This is a big reform programme which will impact on the whole state sector. It is a challenge but a very exciting one to be part of.

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