We know the world is complex – Misha Kaur wants policymaking to reflect this
At the beginning of this year, few could have imagined we’d end up hoarding toilet paper and spending months in our houses.
Or that entire industries could almost completely dry up.
No-one had heard of social distancing, and the idea of walking in a wide arc around neighbours on the footpath would have been deemed insulting.
This all offers a clear lesson in just how complex and unpredictable the world can be — that the transmission of a virus reportedly from wild animals to market-goers in Wuhan can lead to falling rents in Melbourne a few months later.
Yet despite knowing how complex the real world is, policymaking often assumes it works in linear and ordered ways, says Misha Kaur, Assistant Commissioner for design at the Australian Taxation Office.
Keen to ensure government better reflects the complexity of the real world, Kaur is heading up a nine-month-old multi-disciplinary capability push within the ATO.
Her branch brings together expertise in systems thinking, design thinking, behavioural insights and foresight to better understand the complexities in areas like tax and superannuation and work out how best to embed new practices in those complex systems.
Recently this has meant thinking through the implications of the pandemic, as well as considering how workforce planning and interactions with small business could look in the future.
Systems thinking, she explains, is “a recognition of the circular or messy nature of the world, and an awareness of structure, our own values and mental models, and how these things come together in the conditions we face.”
The ATO, for example, naturally views its clients through the lens of tax.
But to understand how an individual sees the tax system, it’s necessary to get a full picture of the overlapping layers of support, regulation and tax at different levels of government. Then there might be health or employment issues occurring in that person’s life. On top of this, there might be problems of cognitive load, or social norms around how a tax return should be filled out.
Understanding all these factors means the agency can better meet individuals’ needs, and better redesign services for all.
It’s about balancing pragmatism and idealism, Kaur argues.
“It’s really helping us be innovative, strive to reimagine how we do things … while being very pragmatic that we are in an imperfect world that doesn’t work in the predictable ways some of our models might imagine.
“… In government the complexity of the challenges we face is huge, and we need to recognise we can’t just pull the system apart — the patterns of things happening within the system need to be considered as a whole to identify interventions that might shift the behaviour of the whole system.”
Human relationships is one field where complexity rules.
The ATO has been considering workplace culture through the lens of systems thinking.
“The culture of my branch is not present without the relationships between people that sit within it, the meetings, the rituals, the practices,” Kaur says.
“We need to think about what behaviours, what structures, what mental models are giving rise to the culture we have?”
How we support learning and improvement is another area that needs to be carefully thought through.
Everyone realises learning and development are closely linked with capability and with recruitment, but typically the people working in each silo are tasked with their own slice of the problem, and aren’t always incentivised to work together. Without the structures and practices to encourage the different parts to work as a system, it’s likely the organisation will underperform.
Flexibility is also important, especially during times of crisis. In performance management, for example, many of the targets set before the pandemic are impossible to reach now, through no fault of the person in charge.
“Fixed target operating models may not always be effective because of the volatility right now,” she explains.
“So how do we build some uncertainty — in a safe way — into the way we design our organisational structures and change, how we deal with strategy and operating models that aren’t static and can deal with uncertainty?”
Taxes and nudges
Behavioural insights is another key part of Kaur’s branch.
She cites one “very successful nudge” from a few years ago. After lodging through MyTax, a lot of people would call up to ensure it had been received.
“As individuals we look for certainty in the system, and we struggle with uncertainty,” she says.
So the ATO started sending out SMSes to confirm when a tax return had been received. Giving this confirmation “really helped” meet that need for certainty “and stopped them following up and calling.”
You may have also noticed nudges when claiming deductions — something that will likely be important this year with so many people working from home for the first time.
“With MyTax you see other examples in terms of comparisons. ‘You are claiming X, but most people in your occupation or a comparable group are claiming Y, are you sure this is right?’”
Applying these ideas elsewhere
Systems thinking is best viewed as a philosophy, says Kaur, so is not easily reduced to a set of tools — the world is too complex for that.
Organisations need to think about how to equip leaders and staff to think systemically.
She urges managers to get better at “being comfortable with discomfort and letting go”, and ask themselves: “what does that mean for risk appetite and how you deal with uncertainty?”
Creating space for reflective practice is important too.
“Making time to understand what we’re seeing and how that contributes to the broader system. Understanding how a change that has occurred might be shifting the behaviour — or not — of a system.
“How has that made us feel? How do we think about risk and accountability in different ways? How does it feel to be working with more people in a space where it felt like it was easier or faster just to do it ourselves?”
It can be difficult to convince colleagues of the need to embrace these ideas, but as the pandemic shows, we can’t avoid complexity.
We know from behavioural economics that resistance to change is often driven by the fear of losing what we already have.
“So one of the things to think about is, if we don’t change, this is what we stand to lose as well.”
On the plus side, while the pandemic has demonstrated just how disruptive complexity can be, it’s also shown how adaptable government can be. Changing the way we work is often a lot easier than we expect.
“We’ve had over 11,000 staff working from home, very quickly,” she says.
“This shows that the tax office as an organisation is willing to change when we need to. Sometimes these examples aren’t shared enough.”
This article has been republished with permission from The Mandarin.