Building Better Governance

Part Three—Departmental Case Studies

Department of Industry, Tourism and Resources—case study one

How a diverse department with critical stakeholder relations successfully integrates measurement, monitoring and review of stakeholder satisfaction into its departmental governance framework. The department achieves this by paying close attention to identifying possible risks and implementing good reporting, analysis, compliance and accountability systems to ensure that it meets its statutory obligations and business objectives.

The department

The Department of Industry, Tourism and Resources (DITR) aims to foster the increased prosperity of all Australians through internationally competitive and sustainable business in the local and the growing global environments.

The department does this through:

enhancing the development of internationally competitive and sustainable business through excellence in policy formulation and implementation
excelling in business programme design and service delivery
remaining a respected source of knowledge through its understanding of the business environment and business networks.

The department has around 2 000 staff in its central office in Canberra, state capital cities and some regional centres.

The challenge

In October 2001 the department conducted its first stakeholder satisfaction survey. The decision to undertake a survey came about due to the need to judge whether the department was making appropriate use of resources in delivering its business outcomes.

This first survey was designed to align with the department’s outcomes/outputs framework; to help the department meet its obligation to report on stakeholder and customer satisfaction; and to assist in the development of a client service charter.

The department does not have a monopoly on the provision of industry policy and programme implementation, which was one of the reasons for the decision to develop the survey. Departmental staff needed to be fully aware of their successes but also any circumstances in which the department’s performance could be improved. In this context, an issue of significant importance to the department was the need to address the risk to the department’s reputation as an industry player of integrity and probity.

The system

The department’s stakeholder satisfaction surveys obtain views about how well the organisation is performing in a range of areas, particularly relating to policy development, programme implementation, and staff service. The surveys also identify opportunities for improving the department’s relationship with key stakeholders.

Stakeholders surveyed include industry peak bodies, professional associations, state government departments, local government bodies, academic researchers, and business leaders.

Measurement of stakeholder satisfaction is an integral part of the business of the department. The Strategy and Communications Branch within the Corporate Division manages the surveys and is also responsible for business planning and overall governance issues in the department. If a survey shows a deficiency in a particular area, the branch will provide a report to senior management, but will also alert the division to a possible risk area which needs attention, and provide support and advice if appropriate.

What was done

The department’s highest level governance committee, the Executive Committee (comprising the Secretary and three Deputy Secretaries), made the decision to implement the DITR Stakeholder Survey in 2001.

The department’s surveys have all been conducted by independent research consultants, selected following open tender processes—with contracts generally running for two survey years. The Strategy and Communications Branch has managed the activity in this way to ensure that a professional and independent approach is followed and, through retesting the market every two years, ensuring that value for money is achieved.

In addition to conducting the survey and reporting on results, the consultants have also been responsible for designing the survey instrument, incorporating draft questions developed by Strategy and Communications Branch in consultation with all divisions. The core questions have remained largely the same since 2001 to ensure reliable longitudinal analysis and identification of trends over time.

A total pool of 1 600 stakeholders is identified by divisions each year. From these, the consultant randomly selects a sample of about 600. Each division is set a quota of stakeholders to ensure statistical reliability. Only stakeholders who have been in contact with the department during the previous 12 months are contacted to take part in the survey.

Information included in the stakeholder list allows the identification of the specific division and sub-activity relevant to the stakeholder. This facilitates focused responses to questions and allows divisions to identify and deal with possible areas of poor performance or risk.

All of the 1 600 stakeholders in the pool are contacted by formal letter (via email) advising thatthe survey is being undertaken and seeking their cooperation if contacted by the consultant. This initial contact assists in the achievement of a final 80–90 per cent response rate.

Surveys are conducted via telephone interview which typically take about 15 minutes. Stakeholder response to the survey is voluntary. The department insists that if multiple people in an organisation are interviewed, the consultant ensures that the same interviewer speaks to them all.

The department requires the consultant to provide reports containing data and analysis at a departmental and divisional level, with comparative analysis of trends from previous years. The survey results are provided to the Executive Committee and all divisions so that planning or follow up action may be taken. In addition, a summary of key survey outcomes (at the departmental level) is provided to all 1 600 pool stakeholders.

DITR has also reviewed, streamlined and refocused its committee structure, resulting in a governance framework where the principal decision-making body is the Executive Committee, which comprises the Secretary and Deputy Secretaries. The Executive Committee meets each week to make key decisions, review risks and set strategic directions. To assist the Executive Committee’s decision making, the department has also established three key committees to focus on specific areas of organisational management: Audit, Strategic IT, and Security. There is also a variety of consultative committees at the divisional and cross-divisional level.

Monitoring

The survey process itself is a review of performance and the outcomes are closely monitored based on internal and external feedback.

While the results of the first survey were used to develop the department’s Client Service Charter, subsequent results will be used to inform a review of the charter in 2007–08.

While the survey has generally been undertaken on an annual basis, in 2004 the department piloted a biannual survey approach to enable a more rapid response to any emerging concerns identified by stakeholders. This biannual pilot was not continued in subsequent years, partly because no new issues were identified, but also to reduce the imposition on stakeholders. Over the years, the executive and divisions have provided feedback to Strategy and Communications Branch requesting improvements to documentation of the survey. They also requested a change to timing, since the survey was initially conducted during the Budget process. Similarly, stakeholders requested a change to the timing of the survey to better match their business processes.

Each year the survey methodology is reviewed to ensure that it reflects departmental requirements. However, due to the need to benchmark information over time, questions and methodology have remained largely the same since the first survey. The major exception is the inclusion in 2007 of a small number of division specific questions.

A more formal internal review of the process may be undertaken at the end of the 2007–08 financial year to determine whether the department’s needs are being met effectively through the current approach.

Benefits

The survey results provide:

Executive Committee with valuable information about high risk pressure points in the department
divisions with information or tools they need to build improvements into their business plans
the department with feedback to assist staff in enhancing their dealings with stakeholders and customers.

The survey process, and the results produced, assist the department to meet statutory obligations and business outcomes. As a result, the survey is considered to be a valuable component of the department’s business and governance improvement process.

Key messages

Surveying stakeholder perceptions of departmental performance provides information which encourages improved business outcomes and enhanced service delivery.
A stakeholder survey should only be considered if you are serious about building the survey into the department’s business planning and delivery framework.
Management of a stakeholder survey is best located in the same business area that has responsibility for other strategic and governance matters so that any necessary remediation can be dealt with immediately.

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