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Managing risk

Similar issues occur in respect of risk management. Tools are abundantly available. Expectations have been rising since the late eighties that the APS would manage rather than avoid risk. Yet both external and self-assessments of APS practice suggest that too often risk management is seen as a compliance exercise rather than a way of working. Again, the HIP Royal Commissioner's observations are informative. It is to be hoped the requirement in the PGPA Act that agencies develop and communicate a ‘risk appetite’ will prompt a mature dialogue between public servants and Ministers that will permit and require productive cultural change. This is often a difficult conversation for Ministers and officials to have because the public's appetite for what they might perceive to be mistakes can be low and they require failure rates in the public sector to be much lower than are acceptable in the commercial world. Recent research has argued that a traditional risk-mitigation strategy employed in the public sector has been to ‘use time as a resource to reduce uncertainty in a way that the private sector cannot’.15 A tendency towards more compressed implementation timetables may have eroded the efficacy of such a mitigation strategy, the HIP possibly being a case in point.

Both political and public service leaders will have a role to ensure that discussions about risk appetite and implementation timetables are mature. Ministers can more confidently engage in such a dialogue if they believe that risk management skills in the service are well-honed. In some respects there is circularity at work. Ministers and officials need to know that they each share the same appetite and capability to manage risk. Possibly they fear they do not at the moment. If so, these issues are deep seated and may not be easily resolved.


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Footnotes

15 Kay, R & Goldspink, C 2012, What public sector leaders mean when they say they want to innovate, Incept Labs, Sydney, p. 1.