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Part 3: Summary assessment

At the time of publication of this report, the integrated Department of Human Services as established under the Human Services Legislation Amendment Act 2011 is slightly older than one year.

This integrated organisation—comprising Centrelink, Medicare Australia, the Child Support Program, CRS Australia and the pre-existing Department of Human Services into a single department of state—has successfully delivered to the Australian community an expanded array of critical payments
and services during a period of extraordinary change.

Its success in doing so is testament to the resilience and commitment of its people and its leadership.


DHS

is an organisation of many people (36,977 at 30 June 2012), comprising almost a quarter of the APS. It is an organisation of many strengths. Amongst these are:

  • The exceptional performance and reliability of DHS day after day in the delivery of activities of extraordinary scope and scale.
  • A significant crisis response capability—for example, the department's response to the 2010 and 2011 floods, Cyclone Yasi and the Western Australian bushfires saw over 2,500 employees come together to assist more than 2 million people—which has earned the department the respect
    of its peers in state and local governments, and across suffering and traumatised Australian communities.
  • The successful implementation of changes over its first 12 months, which has placed the organisation in a good position to take its next steps; this has included integrating five major entities into one while undertaking major service delivery reforms.
  • Exciting and innovative practices, such as Local Connections to Work, Case Coordination, Customer First and Baylink', which have scalable potential for delivering better outcomes for government and customers.
  • A workforce who operate with conviction and commitment, for whom public service has special meaning reflective of their personal daily exposure to the needs, aspirations and hopes of the department's customers.
  • A highly capable Secretary, who is widely respected and well skilled to lead the department into a challenging future.

These strengths place

DHS

on a very strong footing to perform both now and into the future. The department faces a future that will look markedly different from the present day.

Seeking to allow a greater share of able customers to manage their own affairs, whilst providing more intensive services to those who need them, constitutes a major shift in focus and approach—one that few Australian Government agencies have had to face.

The customer relationships that

DHS

will establish will be dynamic and often intimate or personal. They will shift the focus of the skills demanded from staff. They will require new forms of leadership and engagement with partner agencies. They will demand greater effort in seeking out innovative ways of doing things. They will necessitate
the deployment of new technologies and the harnessing of the department's knowledge for strategic purposes.

In the opinion of the review team, and recognising that the evolution of the department has reached a 'fork in the road',

DHS

can choose a way forward and extend its capabilities to meet its future challenges by prioritising the following areas for focus.

Leadership, teamwork and communication

The success of any large organisation is contingent not just on the quality of its individual leaders but the ability of that cohort to work together as a team. The bringing together of five agencies with different cultures and ways of working is a huge challenge and one which takes time.

DHS

has put a number of building blocks in place to achieve this. A key requirement for success as the organisation goes forward is the cohesion of the leadership group combined with highly visible activities by the leadership team directly linked to the core business of

DHS

.

In the 2012 People Survey, overall satisfaction with the Executive leadership group, which for the purposes of the survey was defined as the Secretary, Associate Secretary, Deputy Secretaries and General Managers (Band 2

SES

), currently sits at 38 per cent. This provides feedback from staff that they are looking for that team to actively demonstrate at the top the behaviours and teamwork required in

DHS

as it goes forward. These behaviours will need to be supported by effective two-way communication and staff feeling valued through having opportunities to contribute and being listened to, as will transparency and fairness of decision-making. In the 2012 People Survey, satisfaction declined in each
of these areas, to 33 per cent and 32 per cent respectively.

There is a clear message from staff that they are looking for the Senior Executive Service (SES) officers, at each level and collectively, to focus their effort on these areas.

The

DHS

Executive—Secretary, Associate Secretary and Deputy Secretaries—must operate, and be seen to operate, as a high performing team. This means working in a highly collaborative way where relationships are characterised by mutual trust, confidence and respect and the diversity of the team's
membership is valued.

A unifying organisational culture

Throughout 2011–12 the department rightly focused on 'getting to go' in the sense that it has successfully carried out the technical aspects of integration of multiple agencies with separate systems, processes and approaches. In this respect, a deliberately cautious approach has been taken to
achieve a 'merger' of the five agencies rather than risk the perception of a 'takeover' by any one of them.

The success of the merger is reflected in the 2012 People Survey rating that shows 70 per cent of staff understand how their role fits into the ' bigger picture', and in the degree to which employees are now identifying themselves as employees of the new department and not its predecessor agencies.

The

DHS

Executive, in the view of the review team, has an opportunity at this point in

DHS

's maturity to clearly present a 'new order' to the workforce. The Executive also needs to empower the middle management of the department to communicate and 'live' this new order. In particular, the focus needs to go on to building a simple, unifying

DHS

culture.

To support the formation of a new organisational culture, the review team suggests that the

DHS

Executive adopts a more formal process to build and embed a new culture that is 'shared and owned'. The team suggests that this process includes defining the behaviours required to deliver the departmental mission—such as being responsive, and acting professionally and collaboratively—communicating
and modelling those behaviours, reinforcing those behaviours at every opportunity, and aligning the organisational infrastructure to support those behaviours. In identifying the desired behaviours, the department might ask itself the questions 'When we are at our best, how are we behaving?' and 'What
additional behaviours do we need to display to achieve our mission?'

A service design map and customer focus

The department undertook considerable work in establishing its vision, which culminated in the release in May 2012 of its Strategic Plan 2012–16. This has been complemented by considerable next-level planning in the areas of

ICT

, human resource management, financial management and governance.

In the opinion of the review team, the next logical step for the department at this stage of its evolution is to develop a 'map' that translates its vision into concrete form. This will need to be both accessible and understandable to

DHS

employees, in particular those at the front line, who have made clear they are looking for 'something they can grip on to'. Doing so will help address the frustration recently expressed by staff over the direction of service delivery reform in the 2012 People Survey results, which indicates that staff
are looking for a concrete view of the future, their role in it, and how they will collectively move to this new model of operation.

Importantly, the customer needs to be placed at the centre of the service design and a clear and deep understanding of the various demographic cohorts serviced by the department needs to be properly reflected in the design. Whereas the customer base of the individual predecessor agencies was relatively
homogenous and understood by each agency, the integrated department must cater for the diversity of the whole in its service design.

A service design map will also provide a point of reference for the next level of planning (e.g. workforce plans, people plans and

ICT

strategies) and allow for the efficient allocation of scarce resources across a diverse customer base with differing needs and expectations of

DHS

.

Workforce transformation

The shift in skills and approach required of the workforce to achieve the

DHS

vision is arguably without precedent in the APS. It will involve the practical translation of workforce planning into recruitment, development activities, training, job design and work level standards. It will involve new models of work and new ways of thinking about work. Moreover, this transformation
must be achieved at the same time as the usual, yet complex, business of the department is carried forward.

The department has done significant planning for transforming its workforce from one that manually processes transactions on a large scale to one that is focused on developing relationships with clients and within the community and using those relationships to make connections and achieve outcomes
for people. Research shows

DHS

staff desire to 'own' customer interactions end to end, which is positive for the change that needs to happen. The planning for this transformation is to be commended.

Moving forward, the department can build on the good start it has made to meet the workforce needs of the future. In the opinion of the review team, the introduction of a concrete service design map will give renewed life to these people transformation efforts and will bring a level of granularity
that will allow the planning work done to date to flow through the organisation at all levels, including into customer-facing roles.

Change coordination,

ICT

and Risk management

The department has been subject to extraordinary changes since integration, and there are more to come. These changes are not simply related to the technical aspects of integration of the department but are evident in policy design, programming, governance and resourcing activities. They are also evident
in the reconfiguration of

ICT

architecture and business processes, and within the workforce, as mentioned above.

There is good management control of each of these streams of reform individually but there is no high-level process and/or function that brings together these various change efforts and coordinates them within a single unified view across the entire enterprise. The creation of such a function or process
will ensure that change is aligned, sequenced and managed against the capacity and resources of the department.

Technology is fundamentally changing the way society and business operates, and it is driving the public's expectations of government and the way people expect to be able to interact with government. As such,

ICT

is critical to the operations of every department, but is particularly critical to

DHS

, as its IT system encompasses more than just the department's own operating system, but is a key component of its service delivery mechanism. This is an area of activity where proper alignment is paramount. Changes with respect to the department's

ICT

must be driven by the business and the business must be accountable for delivery. In this sense,

ICT

is an 'enabler' that should be accountable to the business, while the business must hold and exercise decision rights over it. Notably, the most common suggestion from staff in the 2012 People Survey was that in order for the department to perform more effectively it needed to improve and update the
its IT systems, and the planned rollout of new systems, including the common desktop, will be a milestone in the integration of the department and more generally in service delivery. The plans for the common desktop also need to be clearly communicated to staff.

Furthermore, it is now proven that mobile devices are the single biggest factor driving change and innovation in the digital economy. This has a significant bearing on how

DHS

will need to transact with its customer base in the future.

While all

ICT

decisions are approved by the

ICT

governance board and the

DHS

Executive, there is a perception that

ICT

has moved ahead of the business in some areas. With the introduction of the service design map, this dynamic can change. In making such a shift, it should also be clearly articulated that the program areas of the department are the owners of the business and that the appropriate decision rights and
accountabilities rest with them. Equally, the Secretary may wish to consider taking the chair of the governance board for a period of time to drive this realignment of roles while complex strategic issues relating to the legacy

ICT

systems are worked through with government.

The Chief Information Officer and his team have developed a clear strategy for the maintenance and sustainability of the department's existing legacy systems, based on an 'evolve to replace' philosophy. The review team considers that the approach taken is appropriate and commendable.

Existing legacy systems have significant costs in terms of customer compromise, elevated costs and reduced flexibility, all of which damage

DHS

's ability to deliver faithfully to government expectations. Given the constraints the legacy systems impose when the government wishes to change or implement policy or programs and the increasing cost of both this and maintaining the systems, it is now imperative that

DHS

starts to build a shared understanding with central agencies and government of the need for change and how that might be managed and funded. A multi-year, sustainable funding pathway is required, built on a broad-based consensus and commitment of key actors, not least the government. This pathway will
require new investment by government and contributions from

DHS

itself based on achievable internal efficiencies and other cost reductions.

The process of risk management around change coordination must also involve a step forward by the department along the maturity curve. The department has made positive steps in identifying a common set of strategic risks but it appears that risk management activity is often 'crowded out' by other competing
priorities. Strengthened internal fraud and business integrity efforts are equally to be congratulated but the review team does not feel the department can be confident it has a satisfactory 'fix' on the issue at present. The time is right for the department to clearly define its risk appetite and to
build an assurance framework, both of which should be clearly communicated throughout the organisation.

At one level the organisation as a whole needs to develop its 'nous' in managing political and reputational risks. In this sense there is a need to establish a workforce that is properly 'skilled' in reading risks and responding appropriately on sensitive matters. At the business and operational levels,
there is a need to make the risk management systems that the Secretary has been championing 'real' to staff, and to embed those systems and a risk management philosophy throughout the department. Clearly communicating the department's risk appetite throughout the organisation will enable a culture that
recognises how to deal professionally and proactively with 'bad news'. Similarly, adopting a stronger assurance framework, given the magnitude of the business that is conducted by

DHS

, will assist the department to drive this behavioural change and reduce costs while providing a stronger first line of defence. Doing so will mean that risk is seen not simply as a threat but as something that will, if managed well, actually provide an opportunity for the department to strengthen
the integrity with which it operates.

Engagement with policy partners and stakeholders

As noted in the report Ahead of the game: Blueprint for reform of Australian Government administration those involved in policy development and service delivery within the APS need to work together as one.


DHS

can be a significant contributor to good policy outcomes given its comparative advantage in looking holistically at customers and its potential to identify synergies in implementation and flaws in design. The Blueprint for reform places the citizen at the centre of policy design, noting that their
feedback is particularly important in connecting front-line service delivery to policy designers.

DHS

's becoming a more active contributor in policy development will potentially lead to better outcomes for both customers and government, and to more cost-efficient delivery options.

To support

DHS

's move to contribute more strongly to policy development, the review team suggests that the department actively develop the depth and breadth of its skills, expertise, knowledge and evidence to engage in policy processes with partner agencies and government. In doing so, the department needs to earn
its place at the table by consistently demonstrating that it can add value to the process.

At present, the department gathers lots of transactional data which is used for 'performance management'. However, this data is not aggregated in a useful way for strategic decision-making nor is the department gathering outcome-related data systematically. This fundamentally limits the department's
ability to contribute at the policy table and needs to be addressed through a more systematic approach to information management and end-to-end processes that link in with the data capabilities of partner agencies and that adequately incorporate feedback from the

DHS

Network.

While

DHS

needs to work up and out across the APS in the policy arena, it also needs to recognise that every Australian is effectively a stakeholder in the organisation. Ordinary citizens are engaged with the department either through the service experience or through the media. In respect of the media, the
department is more than competently represented and consequentially is held in generally good regard by the public. At another level, the department's Minister, the central agencies and policy agencies are key stakeholders, as are the various non-government organisations, advocacy groups and peak agencies
with which the department regularly interacts.

In terms of stakeholder engagement, the review team has seen various practices along a continuum from best practice where there is genuine co-creation, respect and understanding, through to consultation that occurs after decisions have been made.

The department can shift its stakeholder engagement practices towards best practice by displaying stronger leadership in this area and creating more consistent processes that share knowledge horizontally across the organisation. This should involve some form of regular, independent stakeholder surveying
which is acted on and communicated.

Overall, the department is well placed to move forward from this point in its evolution and integration. In doing so it is important that this be done expeditiously and with purpose so that

DHS

can continue to deliver for government, its partner agencies and, most critically, the Australian people.