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Section 4: Public sector performance

The Hon John Lloyd PSM
speech to the Institute of Internal Auditors Conference
3 August 2015

Key points

  • The APS relies on a combination of people, processes, systems, structures and culture to deliver services to the Government and the Australian public.
  • Capability reviews demonstrate that the areas of public sector performance where the greatest improvement is required are talent management, workforce planning and innovation.
  • Digital transformation and innovation are areas of focus for the APS in improving organisational capability and performance.

Organisational capability

Previous State of the Service reports focused on two mechanisms for measuring organisational capability in the APS. One was the program of capability reviews and the other was agency self-assessments.

Capability reviews provided independent, forward-looking reviews of the leadership, strategic and delivery capabilities of agencies. Twenty-five have now been completed. Each review was led by three eminent senior reviewers, two external to the APS and one at deputy secretary level, or equivalent. The deputy secretaries were seconded from an agency outside of the one being reviewed. Insights from the reviews, along with an overview of the APS service delivery capability, are provided by two reviewers below. Similar to agency self-assessments, capability reviews found that the area where the greatest attention is required is talent management. This is followed by workforce planning and innovation.

The program of capability reviews has now been completed. The observations of two of the most experienced external reviewers shed light on the findings and implications of the reviews.

Capability reviews—external insights from two lead reviewers

Rachel Hunter and Akiko Jackson are two of the most experienced of the senior capability reviewers. Both agreed that the most important challenges for governments are:

– Digital disruption

– Rising public expectations particularly in relation to healthcare, welfare and security

– The impact of social media on how citizens can form and communicate their views

– Uncertainties arising from globalisation.

Rachel Hunter

Challenges facing the APS will test its capability, which is firstly a product of its leadership. The new age of public administration calls for resilient leaders who are intellectually/emotionally intelligent; politically astute; and outcomes and people-focused.

A thorough reading of the reports reveals diverse capability and practice amongst agencies—some leading and others lagging. Leading agency practices included an investment in 'high-powered' analytical capability, co-designed activities which engaged a broad audience in genuine 'intractable' problem-solving and 'business' strategy which encouraged innovation and a sensible appetite for risk. Of concern is that no agency was identified as having strong people development capability.

The APS is in competition with other lead organisations in the public and private sectors for the 'brightest and the best'. Reviews revealed a consistent need across agencies for more investment in attracting, developing, retaining, and rewarding high performers. The areas requiring the greatest improvement are talent management, followed by workforce planning and innovation.

Ms Rachel Hunter held a number of senior roles during her Public Service career including leading a number of Queensland government agencies. She has participated in or led four capbility reviews.

Akiko Jackson

It is critical for the APS to develop capabilities to deliver better services to the Australian public in a quicker, easier and more cost-efficient way. I have been struck consistently by people who are intrinsically motivated and work hard to do the right thing to serve the Australian public. The depth of knowledge and experience of staff where expertise is required is extraordinary.

There are three key development opportunities that many service delivery departments could focus on:

– To create performance-oriented cultures where targets are set, both at the organisational and individual levels, and performance is assessed objectively and communicated professionally.

– To focus on fewer priority initiatives and delivering them well.

– To unleash the power of collective knowledge and scale by working across agencies and leveraging each others' strengths.

Ms Akiko Jackson is a private sector senior executive with significant financial services experience and a background in management consulting. She has participated in or led five capability reviews.

Digital transformation


The Australian Government has embarked upon an ambitious, challenging, but necessary agenda, to improve the way services are delivered to the Australian public. The 2015 agency survey assessed APS agencies' digital transformation readiness and identified a gap in capability. Results demonstrated that the majority of agencies recognise the need to make greater progress. This is reassuring, however, agencies feel under-equipped to meet the challenges of digital transformation. It follows that there is a need for comprehensive digital planning across the APS.

Agency digital transformation readiness was assessed using a similar framework as for other agency capabilities. The majority of agencies reported that their current level of capability was relatively low. To meet future requirements, most agencies reported that their digital transformation capability would need to be enhanced across the whole organisation and include a regular evaluation component.

The lowest rated capabilities related to digital transformation were strategic planning and workforce capability, with 30% and 31% of agencies rating these capabilities respectively as 'in development'.

The 2015 APS employee census asked respondents three questions relating to their access to, and use of, digital technologies in the workplace. Results demonstrate that 62% of APS employees use their agency's suite of digital technologies to carry out tasks and interact with colleagues. Eighty-three per cent of APS employees reported that digital technologies improved their productivity by giving them better access to information. Likewise, 78% of employees reported they improved productivity by enabling the completion of tasks. However, 35% of APS employees reported that they had not received or undertaken any formal digital skills training in the workplace.

The establishment of the Digital Transformation Office (DTO) is important. The APS has a clear path forward, a roadmap for the steps to take, and strong government support for the changes that need to be made. The DTO's mission is to provide the Australian public sector with the expertise, the tools and the impetus to seize opportunities as they are presented.

The DTO has worked with APS agencies to develop Digital Transformation Plans. The plans will outline the current state of play, set out the strategic vision of the agency and help identify the services, or aspects of services, that are the best candidates for transformation. The DTO is collaborating with project teams in some agencies to trial the best ways to deliver rapid and robust service transformation. These early experiences will be shared to benefit local, state and federal governments. The DTO will also be working to ensure employees APS-wide have the digital knowledge and capabilities to deliver and sustain digital transformation.



The APS operates in the same fast-changing environment as the rest of the Australian economy. Against this background, the APS needs to engage with citizens, businesses and partners in different ways. Many long-standing policies and practices have to be refreshed. Agencies need to not only respond to change, but also to respond in new ways.

The APS has a long tradition of developing clever responses and ways of working. Recent examples include:

  • simpler, faster tax returns through myTax
  • converting important but complex consumer information into something easily accessible with Energy Efficiency Labels
  • reconsidering how aid and development funding is provided at innovationXchange
  • providing businesses with the information they need at the time and in the form they need it, through Business.gov.au.

Many agencies are looking at how they can innovate and ensure they are delivering new ideas and new strategies. As with any organisational capability, innovation requires support, commitment and practice. An example is the 'Reinventing the ATO' work at the Australian Taxation Office. This change program is based on the following concepts: 'We are changing the way we work. We want to give our clients, staff and stakeholders the best possible experience with the tax and super systems'3.

According to the agency survey, the majority of agencies reported that practices to encourage and support innovation were in use across part of the organisation. The majority of agencies, however, indicated that to meet organisational requirements in the next three years, they required agency-wide adoption of practices to encourage and support innovation.

The lowest rated individual capabilities related to innovation were strategic planning and workforce capability. Specifically, over 50% of agencies reported that while their agency recognised the need for innovation to feature in strategic planning, this had not occurred or was only covered in part of the agency. Similarly, most agencies had not yet identified the knowledge and skills that their workforce needed to support innovation. Some agencies, however, were addressing the issue.

In this period of increasing change, disruption and digital transformation, it is more important than ever for agencies to learn from each other and to have a more collaborative approach to innovation.

Actions to enable innovation

The need for change has been recognised by the leadership of the APS. In July, departmental secretaries approved a number of initiatives to support and strengthen the Public Sector Innovation Network, and to strengthen the innovation 'supply chain' for the public service. Specific actions include support for:

  • SES level Innovation Champions within each portfolio department
  • the annual Innovation Month series of events and activities
  • the Public Sector Innovation Network, including locations outside of Canberra
  • a trial of a multi-agency collaboration platform for staff to share ideas
  • the development of an 'incubator' for promising but untested ideas
  • the establishment of a set of annual APS innovation awards to be run by the ACT Institute of Public Administration Australia.

Innovation Champions will help share lessons, model and emphasise behaviours that support and encourage innovation, and facilitate collaboration between agencies on selected initiatives. This will demonstrate how innovation is an essential part of the core business of the APS.

Such initiatives build on existing work, including the Public Sector Innovation Toolkit and Showcase, led by the Department of Industry, Innovation and Science and supported by other APS agencies. This work will continue to connect with and support other improvement agendas, such as digital transformation and the Public Sector Data Management Project.

The Public Sector Data Management Project aims to improve service delivery and the effectiveness of government by improving data sharing and integration across the public sector. It will also make more government data available to the public.

1 This section has been adapted from a State of the Service website update written by Mr Paul Shetler, CEO of the Digital Transformation Office.

2 Thanks to the Department of Industry, Innovation and Science and IP Australia for their contributions to this section of the State of the Service report.

3 Australian Taxation Office 2015, Reinventing the ATO—Program Blueprint, version 7, p. 6, viewed 2 November 2015.

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Last reviewed: 
5 June 2018