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Leadership and change

The demand for the APS to be more agile and more flexible in developing and delivering public policy is growing. Meeting this demand in a tight financial environment requires APS leaders to constantly manage change in all aspects of the agency's culture, structures, systems and processes.

Unfortunately, the evidence is that change management is rarely managed well. One leading researcher noted, ‘most change processes do not attract universal acclaim’.12 Others have asserted the ‘brutal fact is that about 70% of all change initiatives fail’.13 Despite this, there is also persistent evidence that leadership styles and behaviours influence the success or failure of organisational change initiatives.14

This year, the capability maturity model approach was re-introduced to assess key organisational capabilities across the APS.15 APS agencies were asked to indicate their current and required16 positions on a five-level maturity model17 for key agency capabilities, including change management. The capability maturity model is discussed in more detail in Chapter 10.

Table 2.1 shows there has been little change in the assessments agencies made of their capability to manage change between their first assessment in 2010–11 and this latest assessment. The majority of agencies continue to assess they need to be one or two levels above their current capability. These agencies aspire to a strategic approach to change management where formal program and project management techniques are applied to the process, and change is championed by senior leadership. However, the agencies assess that while the current desire for change has been well communicated and there are pockets of good practice, overall change is managed inconsistently.

Table 2.1 Change management capability maturity, 2010–11 and 2012–13
  2010–11 (%) 2012–13 (%)
Source: Agency survey
Agencies at a change management maturity level that would enable them to achieve agency goals within the next three years 26 23
Agencies that need to be one or two levels above their current change management maturity position to achieve agency goals within the next three years 69 68
Agencies that need to be three or more levels above their current change management maturity position to achieve agency goals within the next three years 5 8

 

In the past year, 71% of employees reported being affected by some kind of change in the workplace. However, Figure 2.14 shows that more than one-third of all employees are not confident change is managed well in their agency. SES employees show the greatest confidence in change-management processes and EL employees the least. This has been a consistent set of findings for many years.

Figure 2.14 Employee perceptions of change management, 2013

Source: Employee census

 

Figure 2.15 shows when employees perceive change is managed well it is associated with substantially higher levels of employee engagement.

Figure 2.15 Effectiveness of senior leader change management and employee engagement, 2013

Source: Employee census

 

These findings are consistent with other Australian Public Service Commission (the Commission) research that has shown that APS employee perceptions of the effectiveness of change management improve when their senior leaders:

  • encourage innovation and creativity
  • demonstrate an ability to learn and adapt
  • align change to organisational outcomes
  • give time to developing talent
  • are personally active in efforts to improve diversity
  • encourage learning and development.

These six capabilities might be seen to fall into two categories. First are capabilities relating to the way in which senior leaders model and communicate the importance of change through their own behaviour, for example, the way they encourage innovation, are open to learning and supporting others by aligning change to organisational outcomes. Second are senior leader capabilities that model and communicate a commitment to change through a focus on the employee, for example, in the way they develop talent and encourage diversity or learning and development.

Broader research shows that positive leadership styles influence the success or failure of organisational change initiatives—in particular when those behaviours contribute to a sense that not only are employees involved in the change process but also a pattern of leadership behaviour over time has established a positive predisposition to change among employees.18 It may be these six senior leader capabilities are the expression of this finding in the APS.

The positive role of senior leaders in effectively communicating change is a recurring theme of organisational research. Thirty-eight per cent of APS employees agreed communication between senior leaders and employees was effective and 44% of employees agreed they were consulted about change at work. Other preliminary research by the Commission found that agencies with high levels of employee engagement reported using different communication strategies compared to agencies where employee engagement was lower. Agencies with higher engagement levels reported using communication strategies that were specific, targeted and personally involved senior leaders in delivering the message. It may be that applying these approaches to communication more generally, and to the management of change specifically, will improve employee perceptions in both areas.

In summary, the majority of agencies have identified the need to improve the systems and processes used to manage and monitor change implementation. Employees do not have positive views about the management of change but when they perceive senior leaders manage change well it is positively associated with employee engagement. Similarly, senior leader capabilities that model an acceptance of change and those that encourage those same behaviours in employees are positively associated with employee perceptions of how well change is managed. Finally, it may be that targeted change communication showing how leaders are personally involved in delivering change is likely to have a positive impact on how change is perceived by employees.

Decision making and delegation

Capability reviews (Chapter 10) have highlighted concerns about the elevation of decision making in the APS. The review teams agreed that centralised decisions led to ‘an excessive reliance on the risk-scanning intuition of a small number of senior people’19 and noted ‘feelings among some staff that they are not trusted and valued by the senior leadership, which can be demotivating’.20 Review teams also agreed that a more devolved approach to decision making would result in ‘freeing up senior officers time’, ‘giving junior officers more authority’21, along with the ability to develop their ‘leadership qualities, in making strategic resourcing decisions and in assisting to better articulate departmental strategies to staff and stakeholders’.22 Related concerns were also identified during the development of the APS Leadership and Core Skills Strategy. This work found decision making needed strengthening and the re-development of the APS learning and development programs will place a focus on addressing this issue.

A corollary of the reduced opportunity for middle-level managers to make decisions is that decision-making knowledge and experience becomes concentrated in more senior levels. This could lead to a cycle that reinforces decision-making behaviour that could ultimately reduce APS responsiveness and effectiveness.

The negative perceptions EL employees have of change management noted earlier is an important finding in relation to the observations made about the possible centralisation of decision making. A recent study of the role of middle managers in delivering change argued that middle management participation in change is constrained by senior leadership behaviour.23 A lack of empowerment is seen as a source of change failure because middle managers are not able to effectively fill the gap between senior leadership and employees at lower levels. The employee census did not specifically focus on the empowerment of middle managers in relation to change management. However, these findings suggest there would be value in reporting this issue in the future.

The delegation of decision making is a key component of agency governance arrangements. In 2013, decision-making delegation was included as a capability in the five-level maturity model assessed through the agency survey. This capability was included to test the extent to which agencies were confident that decision making was delegated to the appropriate level and that relevant information on decisions was communicated back to managers.

The majority of agencies (51%), employing 58% of the APS workforce, reported they are at a maturity level that would enable them to achieve agency goals within the next three years. Of these, most indicated they have a governance framework in place that is efficient and enables managers to delegate responsibility for decision making to appropriate levels. The other 49% of agencies reported they need to be one or two levels above their current maturity position to achieve agency goals within the next three years. The 49% of agencies that indicated they needed to be one or two levels above their current maturity levels were predominately small (36%) and medium (36%) agencies, with large agencies making up 28%.24 The majority of these agencies indicated that while a clear governance framework was in place for defining decision-making responsibilities, they were less confident that the responsibility for decision making was at the appropriate level.

Figure 2.16 shows employee perceptions of the extent to which they have autonomy to make decisions and their level of control over how work is completed.

Employees in specialist, smaller operational, regulatory and policy agencies reported higher levels of control in deciding how to do their work than autonomy in decision making. This result was particularly evident for specialist and policy agencies. In relation to specialist agencies, this finding may reflect the technical and professional nature of these agencies, whereby risk management frameworks require decision making to be delegated to a specific qualification or position. For policy agencies, the nature of work may result in decision making being undertaken at a higher level to offset the less clearly defined parameters of work. Employees from larger operational agencies, however, reported slightly higher levels of autonomy in decision making than choice over how they accomplish work tasks. This result may reflect more tightly prescribed work conditions that, because of articulated boundaries of authority, facilitate decision making within well-established parameters.

Figure 2.16 Employee perceptions of decision making autonomy by agency function, 2013

Source: Employee census

Footnotes

12 AM Pettigrew, ‘Linking Change Processes to Outcomes: A Commentary on Ghoshal, Bartlett, and Weick’, in Beer, M and Nohria, N, eds., Breaking the Code of change: Harvard Business School Press, Boston Mass, (2000).

13 M Beer and N Nohria, ‘Cracking the Code of Change’, Harvard Business Review, (2000), vol. 78, no. 3, pp. 133–141.

14 M Higgs and D Rowland, ‘All Changes Great and Small: Exploring Approaches to Change and its Leadership’, Journal of Change Management, (2005), vol. 5, no. 2, pp. 121–151.

15 The capability maturity model was introduced in the 2010–11 State of the Service agency survey and is discussed in more detail in Chapter 10.

16 Required positions are the maturity levels assessed by agencies as necessary to achieve their goals within the next three years.

17 A maturity model is a set of structured levels describing how well an agency's practices and processes can reliably and sustainably produce required outcomes. The five maturity levels for agency capabilities are in Appendix 6.

18 M Higgs and D Rowland, ‘All Changes Great and Small: Exploring Approaches to Change and its Leadership’, Journal of Change Management, (2005), vol. 5, no. 2, pp. 121–151.

19 Australian Public Service Commission, Capability Review: Department of Immigration and Citizenship, Commonwealth of Australia, Canberra, (2012), p. 9.

20 Australian Public Service Commission, Capability Review: Department of the Prime Minister and Cabinet, Commonwealth of Australia, Canberra, (2012), p. 19.

21 Australian Public Service Commission, Capability Review: Department of the Prime Minister and Cabinet, Commonwealth of Australia, Canberra, (2012), p. 12.

22 Australian Public Service Commission, Capability Review: Department of Infrastructure and Transport, Commonwealth of Australia, Canberra, (2012), p. 31.

23 JD Raelin and CG Cataldo, ‘Whither Middle Management? Empowering Interface and the Failure of Organizational Change’, Journal of Change Management, (2011), vol. 11, no. 4, pp. 481–507.

24 One extra-large agency (more than 10,000 employees) was included in this group.