Chapter 10 - Organisational capability

Organisational capability covers a broad range of concepts relating to an agency's capacity to achieve its business outcomes. It is the combination of people, processes, systems, structures and culture that contribute to high performance. In recent reform initiatives the Australian Public Service (APS) has embraced the concept of continuous improvement to provide a focus for constantly deepening organisational capability across the service. In this way organisational capability contributes not only to an agency's ability to meet current requirements but also to plan for and build capability in response to emerging needs. Agility and flexibility are increasingly critical to achieving these objectives.

Following the findings in Ahead of the Game: Blueprint for the Reform of Australian Government Administration (the APS Reform Blueprint), the Australian Public Service Commission (the Commission) has implemented two methods to assess organisational capability.

The principal method is the capability review program which covers 23 departments and large agencies. A capability review is a forward-looking, whole-of-agency review that assesses an agency's ability to meet future objectives and challenges. They focus on leadership, strategic and delivery capabilities.1 These reviews are conducted by a team of three senior eminent reviewers with extensive experience in public administration. They are often past secretaries or have held high-level positions in state public services or private enterprise. Reviews have been an important vehicle for promoting organisational renewal and capability development.
The program and its outcomes are discussed in more detail in the first section of this chapter.

The second and complementary method was to ask all agencies to assess their key organisational capabilities against a capability maturity model. This seeks to place organisational capabilities into a standard and comparable structure that allows an agency's senior leadership to assess the maturity of a particular capability area to establish priorities for improvement. In 2013, agencies were asked to assess their agency against eight organisational capabilities, reflecting the areas broadly identified in the capability review program as systemic issues.

These two methods provide different perspectives on APS and agency capability. Direct comparisons between the two are difficult because the methods themselves are different and they assess different aspects of organisational capability. Preliminary analysis conducted by the Commission, however, has found that where the capabilities are clearly defined or bounded—for example, with project management and performance management—the correlation between an agency's assessment of their current capability and the final capability review report ratings for an agency, is strong. Consequently, both methods are complementary and, when combined, reliably assess agency capability.

This chapter provides an overview of the strengths and improvement opportunities that have emerged from the capability reviews conducted to date and updates the program of work. The capability maturity model is then used to examine eight of the 10 key themes identified by the capability review process to determine the maturity of these capabilities across the APS. This chapter also examines the extent to which a culture of innovation and the technologies of social media are enablers of organisational capability. Finally, this chapter assesses how the efficiency agenda has been addressed in the APS.


1 A full outline of the capability review model and the review process, including rating criteria, is at Appendix 5 of the State of the Service Report 2011–12.