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Capability reviews - status and findings

The APS Reform Blueprint recommended that the Commission implement a program of periodic external reviews of agencies' institutional capabilities. In 2011, the Commission began this program of reviews for each department and three major agencies (Australian Taxation Office, Australian Customs and Border Protection Service and Australian Bureau of Statistics).

Capability reviews assess an agency's ability to meet future objectives and challenges across the dimensions of leadership, strategy and delivery. A tightening fiscal environment has given further impetus to the need for capability development. As APS agencies are called upon to do more with less, capability improvement provides an opportunity to realise productivity and efficiency gains.

The strategic objectives of the capability review program are:

  • agency capability assessment—conduct independent reviews of key agencies to assess their ability to meet the government's objectives
  • agency capability improvement—work with individual agencies to ensure review findings are translated into explicit capability improvements over time
  • APS-wide capability building—develop a view of capability across the APS and contribute to the development of whole-of-APS solutions to systemic issues by sharing better practice.

The intent of the program is to build capability within individual agencies and across the APS. It supports efficient and effective policy development and service delivery through more productive use of resources within and across agencies.

Progress in assessing agency capability

In the last 12 months, significant progress has been made in delivering the schedule of 23 reviews. Seventeen agency reviews have now been completed and two are in progress— Australian Bureau of Statistics and Department of Veterans' Affairs. Four reviews remain to be completed in 2014: the Department of Communications; Attorney-General's Department; Department of Defence; and Department of Health.

Capability reviews are conducted in collaboration with agencies and provide an independent evidence base for further targeted change. Before a review begins, agencies undertake a self-assessment process that familiarises them with the capability model and review framework.

Following the completion of a review, the agency prepares an action plan detailing how they will address the findings to achieve positive capability outcomes. This plan is agreed between the agency head and the Australian Public Service Commissioner (the Commissioner). Agencies then report quarterly to the Commissioner on progress against their plan. To date,

12 agencies have completed action plans and another five action plans are under development.

The final phase for an agency involves a health check, conducted no earlier than 12 months after the completion of the initial review. The first health check started in July 2013.

Review reports are published annually, concurrently with the State of the Service report.

Four reports were released in November 2012, with another nine to be released in 2013.

With the concurrence of the Prime Minister of the day, the Australian Customs and Border Protection Service (ACBPS) report was released as an exception outside the regular publication cycle in July 2013, to support the agency's broader reform agenda.

Senior reviewers have highlighted the value being delivered by the program and the review process is also providing valuable development opportunities for employees within agencies

and for APS executives within the senior review teams.

Department of Immigration and Citizenship (DIAC): The value of the review to the department

The capability review occurred at an opportune time for DIAC—some major transformation programs had been finalised and the review provided independent guidance on focus areas for the department to continue its improvement efforts in key areas. The whole-of-department assessment against future challenges provided a unique perspective on key capabilities to develop or embed throughout the department that was quite different to other APS reviews previously undertaken.

A particular initiative that DIAC is proud of relates to business planning. The capability review found that the business planning processes were viewed as a compliance exercise rather than a meaningful opportunity to plan work for the next 12 months. The department developed a new process for the 2013–14 planning year that gave business areas greater control to tailor plans to suit their business lines. Feedback has been very positive, and the new process and format has resulted in greater engagement by employees and the development of more meaningful plans. These plans enable employees at all levels to understand how their work fits with departmental priorities and how it is aligned to the strategic intent.

Figure 10.1 summarises the results for the reviews undertaken to date. As can be seen, there are marked variations in scores for different agencies across the various capabilities.

Table 10.1 Agency capability assessments
  Strong Well placed Development area Serious concern
Source: Capability review program
Leadership Set direction - 10 6 1
Motivate people 2 11 4 -
Develop people - 5 10 2
Strategy Outcome-focused strategy - 3 13 1
Evidence-based choices 3 9 5 -
Collaborate and build common purpose - 9 8 -
Delivery Innovative delivery 2 9 6 -
Plan, resource and prioritise 2 5 8 2
Shared commitment and sound delivery models 1 9 7 -
Manage performance 1 5 10 1

Looking across all the reviews conducted to date, agencies have viewed their capability a little more positively than the assessment given in the findings of the final reviews. Agency self-assessments and final reviews have been most closely aligned on delivery and most disparate on strategy capability. Agencies generally rated themselves much higher on their assessment of outcome-focused strategy than the reviews ultimately did.

Emerging capability review themes—strengths and areas for improvement

Cumulatively, the capability reviews will provide an APS-wide view of capability by identifying systemic development opportunities and areas of strength. A number of themes have begun to emerge from the reviews conducted.

Strengths across the APS

  • High levels of employee commitment to the public service—the APS has a motivated workforce, dedicated to service delivery and improving the wellbeing of Australians.
  • Ability to articulate the government's policy agenda—agencies have a strong commitment to evidence-based advice and decision making and are highly responsive and agile in meeting the needs of government.
  • Strong commitment to consultation—agencies consult extensively with stakeholders.
  • Innovative delivery—many examples of innovative delivery exist across the APS, which can be used to further develop agency and whole-of-service capability.

Areas for improvement

  • Leadership to set and translate vision/narrative into organisational culture, in an environment of increasing change—a clear, well-communicated vision and narrative helps unify employee work efforts and position the agency externally.
  • Forward-looking, strategic risk management to inform executive boards—the importance of systems that support executive teams to assess risks and consider future scenarios when making strategic choices and undertaking business planning activities.
  • Frameworks for prioritisation and resource allocation—more effective alignment of systems and processes can support existing agency operations and further improve efficiency and productivity.
  • Strategic business planning that delivers outcomes (clear line of sight and effective engagement with stakeholders)—the importance of alignment between strategy and business unit plans to drive day-to-day operations.
  • Managing information and using knowledge to maximise efficiencies and leverage expertise—opportunities exist to share approaches across agencies more effectively to inform analysis and decision making.
  • Measurement of effectiveness in delivering organisational outcomes—reviews to date and the pilot Australian National Audit Office audit of key performance indicators2 demonstrate that some agencies could better understand and measure how effective their operations are in achieving strategic outcomes.
  • Considering the efficiency and effectiveness of governance frameworks—adjusting approaches to decision making and delegation of authority to develop and empower employees and improve operational efficiency.
  • Consistency in the establishment and use of effective workforce management frameworks (recruitment, workforce planning, employee performance management and learning and development)—agencies can benefit from a greater focus on their current and long-term workforce needs, with consideration to evolving business requirements, shifting demographics and succession planning.

Capability review program: external perspectives

The capability reviews offer, for the first time, the chance to reflect on a more comprehensive view of the state of the service from an external perspective. The review process includes feedback from central agencies, key stakeholders, ministers and others. More than 20,000 individual comments were recorded from reviews completed. The high-level observations below are those of senior review teams after considering these comments and testing them within agencies and with external stakeholders. In some cases, senior reviewers were able to draw on departmental stakeholder surveys where they existed.

The delivery capabilities of agencies were generally perceived as effective both domestically and overseas.

Most external observations related to the process and effectiveness of stakeholder engagement. Observations were generally positive in relation to agencies' technical expertise and industry knowledge. However, there was an overriding theme that agencies should take a more agency-wide approach to stakeholder engagement. Sub-themes for this included:

  • being more open to external expertise, input and perspectives
  • shifting from a mindset of stakeholder management to stakeholder engagement
  • engaging earlier at a strategic level and regarding changes to agency priorities and operational practices
  • increasing transparency of consultation outcomes
  • the benefit of agencies speaking with ‘one voice’ on key issues
  • developing practices to more seamlessly transfer the management of relationships between employees, particularly as a result of employee movements
  • extending stakeholder bases where appropriate to cover the full breadth of policy and regulatory issues.

Another theme that emerged from stakeholders related to the degree to which agencies were seen as proactive and forward looking. Examples of observations articulated by senior review teams where improvements were needed included:

  • enhancing capacity to identify future risk and respond with new policy ideas
  • preparing to adapt to respond to future issues when required, rather than just managing for today
  • strengthening policy leadership to develop new ideas and frameworks
  • increasing collaboration within the APS to develop ideas relating to Australian Government policies, for example, those with an international dimension
  • embracing more emerging technologies and encouraging fresh thinking, including through support for greater mobility of people and ideas between the private and public sectors.

Agency responses to the review process and outcome

All agencies that have completed reviews welcomed the review process and the insights generated through it. Most acknowledged the fiscal and other challenges, as well as the opportunities they expect in years ahead and the benefit of a forward-looking assessment of capability in this context. Many commented on an approach which was as much about recognising strengths as identifying areas for improvement.

Specific benefits of reviews noted by agencies included:

  • senior reviewers able to share their extensive experience, expertise and observation through the process
  • fresh and helpful insights from within agencies and external stakeholders
  • an engagement process that some saw as valuable in itself (for example, it was not just about the final report)
  • opportunity to put organisational reforms already in place under an independent, external lens and integrate these perspectives with continuous reform efforts.

All agency responses included the commitment to take action on review findings.

APS-wide response to review findings

The model used for capability reviews creates a common framework and language within and across agencies. As such, it facilitates whole-of-government collaboration. This is supported by an APS Capability Network, established to bring together representatives from agencies that have been reviewed, agencies being reviewed and agencies scheduled for review.

The Network enables representatives to share their review experiences and lessons learned to support ongoing refinement of the program, assist agencies starting or shortly due to start a review, share examples of best practice and create opportunities for cross-agency collaboration. Working groups have been established to progress consideration of specific capability issues. Agencies exchange information on measures being implemented to improve capability. Examples include streamlined business planning processes, establishment of enterprise portfolio management functions and workforce transformation.

Next steps for the capability review program

The success of the capability review program in identifying capability gaps and assisting agencies to address those gaps has led to a number of additional agencies expressing an interest in voluntary capability reviews. One voluntary review has been agreed and discussions are ongoing with other agencies.

Through 2014, the four final mandated reviews will be completed. During this period, health checks of reviewed agencies will be undertaken, agreed voluntary reviews will occur and the Commission will continue to facilitate and coordinate the APS Capability Network to support ongoing knowledge sharing across agencies. In addition, case studies will be developed in collaboration with representatives from reviewed agencies, describing how practical measures have been implemented to improve capability, providing other agencies with a clear and concise resource to support their initiatives to lift capability.

Footnotes

2 Australian National Audit Office, Pilot Project to Audit Key Performance Indicators, Report no. 28, 2012–13, Commonwealth of Australia, Canberra, (2013).