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Building the sustainable organisation

The Hon. Dr David Kemp MP
Minister Assisting the Prime Minister for the Public Service
Opening Address to Human Resources Week Conference
Canberra, 26 August, 1998

Thank you Helen and may I say how delighted I am to open this conference today.

I would like to commend the Public Service and Merit Protection Commission and the Australian Human Resources Institute for sponsoring and organising this event. I am delighted to see this partnership making a significant contribution to both the private and public sectors. It is also an opportunity to consider some of the best available information from each sector and to consider how that will enable you to improve the performance of your organisation.

The theme of HR week, "Building Sustainable Organisations", and the theme for today "Leading for Performance" are particularly appropriate for the challenges facing Australia at the present time. This focus on Human Resources is critical in all of our industries, public and private.

A high performance APS

We are all becoming increasingly aware that creating the environment in which the people in our organisations can contribute to their maximum is critical to achieving high performing organisations.

On coming to power, the Government set out to provide the conditions necessary for Public Service agencies to perform to their maximum while reaffirming their sense of public purpose. Reform of public administration has been a key part of the Government's micro-economic reform agenda.

Australia faces great challenges in the global economy, and getting the role and organisation of government right is key to meeting these challenges and securing the future of our country.

Structural reform, including labour market flexibility, has been crucial to achieving high sustainable economic growth. Australia has demonstrated remarkable resilience in the face of the most difficult external conditions. The Government is committed to removing barriers to innovation and other hurdles that inhibit economic growth, helping our major industries become more flexible and adaptable to meet the challenges they confront.

At this venue a little over three weeks ago I spoke at length about the Government's agenda for microeconomic reform and more particularly about the steps the Government is taking and preparing to take to bring about change in the Australian Public Service so as to provide the conditions necessary for public service organisations to achieve high performance. The foundations have been laid. Through devolving decision-making to agencies, significantly reducing layers of prescriptive controls and providing much greater flexibility for the improvement of workplace relations, the Government has made high performance possible.

Public sector organisations, through their strong performance culture, are now seeking continuously better ways of achieving their aims of providing value for money to citizens, delivering responsive services to customers and clients, and high quality advice to governments. They are increasingly seeking to become high performance organisations - that is, organisations which are:

customer focused;
have clear directions and strong, committed leadership;
exhibit and promote a strong strategic vision;
continually benchmarking and improving their performance;
values-based, rather than rules-based; and
see themselves as public sector enterprises, judged by results, operating in a competitive environment.

People who work in high performance organisations understand the business and the environment that they are working in. They feel a sense of ownership of changes occurring within their organisation, and are committed to the external success of their organisation. This sense of ownership, and commitment to success, leads to a motivated and innovative workforce. High performance organisations are, as a result, more satisfying places in which to work.

You are uniquely placed to help your organisations perform better. The pressures for higher performance will continue to apply to all our organisations and it is you here today who have a special role to play in ensuring that enterprises and indeed governments are flexible and adaptable to emerging challenges and opportunities.

Equally, I appreciate that those of you who work in the area of people management are feeling particularly challenged. You have been challenged over the last few years to change the focus of your work.

Moving to being business partners - advising your organisations on how best to improve performance - has I realise been a major change in role in all industries. You have been required to learn new skills and take on new challenges. In the case of the APS, learning to use the new agreement making arrangements and becoming competent in areas which were largely the preserve of central agencies has required a significant shift in skills. Developing new performance and pay systems and moving the focus of them onto organisational performance has put you at the forefront of the change process.

I believe that the response to this challenge has been very positive; we must now sustain and extend that.

The Conference themes

Leadership

It is entirely appropriate that leadership should be the first theme to be addressed in this conference. Leadership is perhaps the ingredient which separates high performance organisations from others. Committed, robust leaders who can establish a shared vision and sense of purpose, and inspire, coach and enable the achievement of their people are increasingly essential.

The demands on leaders are becoming increasingly complex. It is clear that leadership in the new millennium will require much more than simply repeating the behaviours of the '80's and '90's. Focus, fiscal discipline, a commitment to continuous improvement and individual charisma are no longer enough. Leaders must be willing to be clear about the values which underpin their organisations. To be clear about the behaviours which reflect those values, and in that way build the commitment of their staff. Leaders must be able to work at the level of the culture of their organisation and establish the environment where staff can clearly identify what must be achieved, how it must be achieved and be empowered to achieve it.

Strengthening the identification and development of leaders is a major priority for the Government, for the Public Service Commissioner and, I know, for the heads of APS agencies.

Already many agencies have realised that executive development is most effective when linked closely to the achievement of corporate goals. Several APS agencies are now developing leadership centres or programs. Agencies are testing a wide range of approaches to improve the quality of strategic people management throughout their organisations.

A critical development for the APS over the next two years is to strengthen and accelerate the development of our future leaders.

The Public Service Commissioner in collaboration with agency heads has embarked on a major upgrading of leadership development within the APS. This development has four key elements:

the identification of the capabilities required of high performing APS leaders;
the alignment of leadership development programs with those capabilities;
the review of selection and assessment processes to ensure integration of the capabilities; and
the identification and communication of good practice in leader development and succession planning.

This work will be done collaboratively with agencies. It will only succeed if it reflects the real experience and needs of agencies and provides those agencies with information and tools which enable them to make choices which advance their business needs.

The changing economic conditions, the emergence of new workplace structures and a more highly educated and more diverse workforce present challenges to existing leadership practices and styles. In this environment the demands on leaders in both public and private sector organisations will increase. High performance will depend on leaders being able to motivate their people to the extent that they shape the vision and values of the organisation and are thereby committed to being responsive, innovative and highly productive in a changing environment.

Future leaders will have to be able to operate in a less certain and faster changing environment. Their intellectual flexibility and ability to learn and communicate, their maturity and judgement to operate in circumstances that are not familiar will be critical. There will be much less tolerance for leaders who do not practice what they preach. Leaders must be passionate about the purpose of their organisation so that they generate the levels of energy to enable real change to take place.

Leaders must be able to influence people and cultures.

Performance Management

While leadership is critical, so too is planning and managing organisational and individual performance if we are to build sustainable high performance organisations.

The question of organisational performance and sustaining high performance in organisations must be approached strategically.

When I spoke to the equivalent of this conference last year I set the context for performance for the APS

service to the Australian public - our 'customers' and 'clients' - that provides the best value for money within a framework of enhanced accountability;
the most professional advice to Government - frank and fearless, certainly, but also innovative and imaginative; and
the improvement of organisational and individual performance in the APS through the creation of workplaces which recognise and reward those staff who are creative and change-ready.

In the modern global economy, organisations have no option but to perform to their maximum, regardless of whether they are public or private. Economic competitiveness is the only guarantee of security and prosperity. In the public sector, the need of government to have access to the best advice and to use the community's resources to the best possible effect has created very great pressures for performance.

The new Financial Management Act provides the framework for understanding and assessing the performance of the APS. The discipline of identifying, agreeing and reporting on outcomes and outputs for each agency provides a framework for achieving, and measuring performance. The achievement of those objectives, of course, depends on the performance of people at all levels in organisations.

There have been very major achievements in the area of performance management in the APS. When surveyed in 1994/95, very few agencies indicated that they had performance management systems in place. Now, most organisations are in the process of implementing systems that link individual pay and performance. There is more to be done however to complete the links between these elements and the broader issues of performance against corporate objectives.

Conclusion

Over the course of the next few days you will hear how a range of industries are responding to the challenge of improving Australia's performance and competitiveness.

There can be no question that people like you, throughout our economy, are in a position to make a very significant contribution to our country.

Australia must improve its competitiveness, no less so in the public sector than in the private sector.

High performance depends on the contribution of our people - in all our industries. You can help maximise that contribution. You can create the environment for high performance.

I have no doubt that you can achieve this. Others have. The tools are not complex. The foundations are in place. What is essential is a strategic focus and a willingness to work at the underlying issues, the culture, that will deliver sustained high performance.