Making systems thinking work

A recent report developed in conjunction with Oxford Economics examines how public sector organisations can reshape their strategies to best serve citizens amid disruption, writes Chris Peck.

From COVID-19 testing to business stimulus programs, quarantine measures to training schemes, many citizens who may rarely be aware of the government’s role in our lives have become much more so over the months since the coronavirus pandemic hit Australia.

Chris Peck

The government has been forced to respond quickly to a multitude of challenges as the reality on the ground changes fast and almost all of us have felt the impact of its initiatives in one way or another.

The pandemic has been an extreme example of how quickly disruption demands action. But it won’t be the last time the public sector is forced to adapt. SAP wanted to explore the impact of disruption and find out what underpins the most successful responses by public sector agencies and teams.

In our August 2020 report, developed in conjunction with Oxford Economics, The Public Sector Transformation Imperative: Serving Citizens through Connections, Transparency and Purpose-led Leadership, we examine how public sector organisations can, and are, reshaping their strategies to best serve citizens amid disruption.

The research paper is based on a global study by Oxford Economics of 3,000 senior executives, including 300 from the public sector. Oxford Economics also conducted in-depth conversations with a handful of executives from the private sector about their progress toward applying systems thinking and lessons learned along the way.

Interconnection integral to effectiveness

The results of our research show that an interconnected approach to management – known as systems thinking – can increase effectiveness as organisations navigate uncertainty. Public sector agencies must focus on engaging employees, improving collaboration with internal and external stakeholders, and upgrading technology. Underpinning this are three priorities that are the key to success:

  • Simplify processes to reduce complexity
  • Prioritise experiences for employees and citizens
  • Boost secure data-sharing across government and private-sector partners

Systems thinking involves an organisation, including external partners and customers, using real-time insights from high-quality data to make decisions and solve problems.

However, although an interconnected approach to management can increase effectiveness, only a small subset (six per cent) of respondents in the research survey qualified as leaders in applying systems thinking.

Most also still have work to do when it comes to collaboration and data-sharing. That’s despite such initiatives being likely to make the effective sharing of limited resources easier, by improving decisions and efficiency, reducing fraud and abuse, and enhancing citizen and employee experiences.

The good news is that for those who have taken the lead on applying systems thinking in their organisations, their efforts pay off in several ways. Our research found that those who are leading in this area are more likely to have done the following, each of which make strategic action by public sector organisations more achievable:

  • Integrated communication and data-sharing processes across the organisation
  • Achieved greater transparency in their operations
  • Broken down organisational silos and invested in collaborative technologies.

The experience and transparency gap

For the citizens the public sector serves, trust is a huge component of their satisfaction with public agencies. Yet we found that while some public sector organisations have implemented measures to address transparency, fraud, and more – with those who are leaders in systems thinking most likely to have done so – 13 per cent of organisations admit to having taken no steps at all to improve transparency in their organisation.

In terms of employee experience, the research makes clear that the public sector places significantly more emphasis on this than their private sector peers. Over half say employee satisfaction has the greatest influence on organisational strategy. However, while many believe improving employee experience would advance their reputation and have created feedback systems as a result, a much smaller proportion have made decisions that would improve their employee experience in response.

Seen in light of another strategic challenge for the public sector – a shortage of skilled talent to meet strategic change initiatives, highlighted by 61 per cent of respondents – this is clearly an area worthy of increased attention. More than half (54 per cent) of public sector respondents say improving employee experience would advance their reputation as an industry leader.

While the public sector has in many cases made a herculean effort in response to the coronavirus pandemic, leaders in this sector are showing just how much more effective it could be.

In a sector often faced with legacy systems, inflexibility, and funding constraints, a cohesive, adaptable approach that focuses on improving collaboration with internal and external stakeholders, along with engaging employees and upgrading technology, can turbocharge the public sector’s impact.

Public sector agencies should work to increase transparency and improve trust, boost secure data sharing with public and private sector partners, and prioritise HR integration to better motivate employees. By doing so the public sector can deepen its impact amid disruption.

Chris Peck is the Executive General Manager of the Public Services at SAP Australia.

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