All change, pressure on the public sector

west portal station : muni trains, san francisco (2013)

This article first appeared in the April/May 2014 edition of Government News.

Pressure to do much more with far less is increasing from all sides for the Public Sector. As big changes and reduced budgets come down the line, the dominant challenge is how to form strategies that adapt to ambiguity and exploit new opportunities as they arise. Julian Bajkowski takes a fresh look at those not afraid to grasp the nettle.

Steve Sargent might not seem an obvious champion for the value the public sector and its army of employees bring to the community and the national economy, but he’s certainly not afraid to fly against prevailing political winds when it comes to proving a point.

On a muggy Thursday morning in March, the President and Chief Executive Officer of GE Australia and New Zealand is addressing an auditorium filled with senior public service executives at Canberra’s National Convention Centre on how to prepare and get match fit for a series of major disruptions to work, service delivery and infrastructure now starting to drop and that will continue for at least the next decade.

Sargent’s presentation is far cry from the average vanilla PowerPoint presentation on how government can work better with industry. He’s not that kind of guy. It’s more like a blaring alarm that public sector management – federal, state and local needs to start thinking a lot faster than their political masters if they want to keep Australia in the game and stay relevant.

Australia is GE’s third biggest market outside the US and China. We might not buy their nuclear reactors (yet) but we do buy almost everything else. Sargent has a vested interest in growth. Train locomotives, LED streetlights, wind farms, gas power generation turbines and the jet engines for the RAAF’s frontline fleet of Hornet fighters are just a few of products and services his company now has on the ground and in the air. And if you wind up in hospital, you’ll probably be hooked up to or put under GE’s battery of medical scanners and sensors.

Yet behind the catalogue, Sargent’s message is a sobering one. The unrelenting pace of change, largely driven by technology enabled efficiencies, is now starting to produce the phenomenon of ‘jobless growth’ where there are big gains in productivity that do not quickly or automatically translate to the creation of new employment.

“We are getting strong economic growth but not strong jobs growth. That’s a real challenge. It’s top of mind,” Sargent says.

Put more bluntly, as everyday processes and systems are automated, fewer people are required. New industries that benefit from reduced barriers to entry will create jobs – but can be a lag of around 10 years and that has to be carefully managed.

Viva Paranoia
One of Sargent’s first questions from the audience at the Australian Information Industry Association’s Navigating Analytics Summit is how management culture at GE stays on top of the constant imperative for change. “Paranoia,” Sargent says without irony before spelling out the litmus test that must be applied to management culture.

“When the external environment is changing faster than your internal environment, you are gone,” he says. “There’s definitely a culture of constant unease.”

A big part of GE’s present agenda in terms of delivering for its customers and shareholders is being able to derive a ‘big picture’ view of how its assets and services are performing in the field in almost real time and use the detail to make accurate predictive models. A prime example is the use of millions of cheap and normally reliable sensors that send data and alerts back to a control centre if an event that could take plant out of service occurs. Sargent notes that today’s wind turbines automatically switch off when wind speeds are so high they can damage either turbines or blades.

But if the cheap sensors fail, the turbine also shuts down. To get around this, a turbine can now automatically take a read from its surrounding peers to determine whether there is actually a gale or just a blown sensor. If there’s no gale, the generator keeps running, eliminating costly downtime and the immediate callout of a maintenance crew to a remote location.

Sargent also notes that increasingly trains and planes are automatically driven and he is confident cars will eventually be so too, joking that a rough touchdown is usually an indicator that a human is flying rather than software. The potential increases in capacity and efficiency for public transport, freight and roads are so huge they are impossible to ignore – and that’s before robots are factored in.

“We are on the cusp on an incredible change, and are we ready for it,” Sargent says.

“There are incredible opportunities before us.”

But he adds that organisational leaders have to be far more open to innovation and “getting ideas from everywhere.”

“It is going to take very different leadership. Leadership in government, business, communities to really capture the benefits,” he says.

Matrix Unmanagement
The staid culture of management consultants and the human resources industry peddling rehashed organisational models and charts are also clearly in Sargent’s crosshairs.

“Gone are the days when you would have the dual matrix organisation – [a] hard-line report to here and a dotted-line report to there. That was created in 1957 by McKinsey [& Company]. Who thinks work has changed since 1957? Those days are gone, but for some reason our HR departments make sure I have a dotted line here etc.” Sargent argues leadership must now be “multidimensional.”

That means being prepared to accept that work is going to be performed in multiple locations, around the world, around the clock. The challenge for the public sector will be how its own internal culture responds to keep up with external pressures and expectations that arise from this. However Sargent is clear about the most pressing aspect of change. The prospect of and consequences jobless growth will have to be managed immediately.

“The way we offset that is that we need to create the jobs in the new sectors quicker than ever before,” he says.

A good start is looking at how the research and development sectors can develop industries of their own in the same way that universities like Stanford pioneered the technology sector, often with the backing of government.

Bracing for Impact
If GE’s Sargent has a satellite view of what’s coming down the line, the Australian Institute of Management’s Executive General Manager Tony Gleeson has firm grip of what’s now happening on the ground.

When the AIM surveyed its members in public sector middle management, 47 per cent rated the issue of dealing with change management as either important or very important. In private enterprise it was 40 per cent. Moreover, under the benchmark of ‘corporate endurance’, just 28 per cent of government staff had strategies in place to retain talented people versus 41 per cent in the private sector.

That may not be a surprise given the scale of public sector cuts, but it’s far from encouraging if the best and brightest public servants, who are easily re-employable in the private sector, are grabbing redundancies with both hands and racing for the exits.

“There is a lot of change [especially federally where there is] certainly a different perspective on dealing with revenue and taxes in terms of where the money going to go and how it’s going to be influenced,” Gleeson observes.

To rise to the challenge, public sector managers need to develop a skill set that clarifies goals, roles and responsibilities as well as developing strong communication skills. When it comes to clear accountabilities, Gleeson contests that regardless of whether it’s the public or private sector, it’s critical to get to the point and be able to productively contest and validate ideas.

“It’s the ability to have a genuine conversation, to have fierce conversations. It doesn’t mean that you’re aggressive [it means] a good clear debate,” he says.

A healthy management and workplace culture that can deal with change issues is one where it can be a challenge to other people’s views “without stepping over any boundaries.”

“You are allowed to express ideas. It’s very difficult in most organisations,” Gleeson says.

Buzzword Compliance
While Gleeson is adamant there needs to be more innovation, he cautions managers against claiming to be innovative overnight for the sake of buzzword compliance.

“You can’t just say ‘let’s have innovation today’. It’s got to be an ongoing process and embedded in people’s minds who are allowed to express their ideas [which can be] digested by leadership and by staff themselves,” Gleeson says.

“It should be coming from the top down.” Just as importantly he says there has to be “a process to collect the ideas.”

“Everyone has an idea that’s going to make [or save] $10 million. Collect it and analyse it. It can be an innovation group [but it has to be more] than a suggestion box.”

One area where few contest the public sector is in for a rough ride is around performance management. While it is sometimes difficult and drawn out to manage or let go under performers, Gleeson says effective managers and leaders are up front in outlining expectations.

“Measure things. Be very clear about what you are trying to achieve,” he says.

“But also create a platform for change – something that’s going to be time driven.”

Gleeson is adamant that clarity of purpose and communication should avoid so called ‘weasel words’ that try to obfuscate or neutralise actual intent –like coating staff reductions as ‘rightsizing’ or ‘workforce rebalancing’.

Citing politicians as the worst offenders, Gleeson nominates a gem of butchered language not to be used: “The world is full of opportunities both inside and outside an organisation. It’s our right and duty to make sure you explore every opportunity inside and outside the organisation.”

For those moving from the public to the private sector, Gleeson advises that a strong focus on what is output of quality is achievable in a tight timeframe can go a long way.

“There’s an expectation in the private sector that even if you don’t like each other, you are going to work together. That’s an underlying tone. “It’s living in ambiguity and still being able to produce a quality output.”

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