Mark Steel

(A copy of Mark Steel's powerpoint presentation is available in PDF format here (88k).

Meeting the Needs and Expectations of Future Owners

Introduction

I am a member of the senior management team in the Ministry of Economic Development. I joined one of MED's ancestors - the Department of Trade and Industry - in 1985 and I've stayed with the organisation, working in a wide range of policy oriented roles since then as it has metamorphosed first into the Ministry of Commerce and then more recently into the Ministry of Economic Development.

My perspective - so you know my biases - is therefore one shaped by policy work and a more continuous organisational experience than some in the audience. It has nevertheless been one of regular change in organisational form and functions.

What I say this afternoon will also view the future of the New Zealand public service from an outward looking perspective that thinks about what New Zealand's position in the world means for the public service over the next twenty years. The needs and expectations of our future owners will be shaped to a significant degree by what happens outside of New Zealand. New Zealanders already look to other developed countries in setting their aspirations for standards of living and the quality of public goods in New Zealand and will continue to do so.

The Needs and Expectations of Our Future Owners: Challenges That We Share With The Public Service in Other Developed Countries

I think it's useful therefore to start by touching on some of the challenges we share with the public service in other developed countries. Three of the more important are:

Building Understanding

A recent SSC Working Paper noted that confidence and trust in New Zealand Government, in common with most Western democracies, has been declining for many years. This is in spite of a government performance which by the great majority of objective measures has improved a good deal over the last twenty years. Cheryl Barnes and Derek Gill observe that open government and intense media scrutiny mean that citizens know a great deal more about what the government is doing, but may not be that much wiser about why government is doing certain things.

If this is correct, it suggests that a central part of our response to the needs and expectations of 2020 will be markedly improving the quality of communication, consultation and implementation processes so that the development of policy and the delivery of services takes place in a more sophisticated discussion of what government can - and cannot - achieve.

Dealing with Complexity

At the same time, the public service here and in other countries is, and will continue to be asked to address complex, cross sectoral issues - dealing with at risk families, designing tertiary education policies in an international market for skilled labor, responding to climate change with an economy wide strategy. These issues require responses that aren't obstructed by traditional boundaries between departments and agencies, or between public and private sector.

An important part of this complexity is the range of perspectives that is required of us. There is a now a demand for intensely local action and focus and global perspective at the same time. For MED, activities such as regional development are now conceived of as a series of partnerships with local communities to enable them to make the most of the distinctive resources and strengths of each region. We are also developing policies and programmes that can respond to needs of the individual firm. At the same time, we are participating in the development of global frameworks for competition, intellectual property protection, ecommerce and many other aspects of the business environment.

Internationalisation

A particularly important dimension of this increasing complexity is the internationalisation of much of the public service policy and regulatory environment. This reflects growing global economic interdependence and human linkages. Choices made by one country or group of countries affect many others. An increasingly large group of issues - not just traditional security and market access issues- require collective action by countries if any one country is to achieve its policy objectives. Even larger countries increasingly need cooperation from other countries to achieve their public policy goals. Examples include:

• Environmental damage;
• Intellectual property protection;
• Organised crime and terrorism;
• Financial markets regulation and responding to financial failure;
• Public health and biosecurity;
• Anticompetitive behaviour;
• Consumer protection;
• Taxation; and
• Family law issues.

An important part of our response to the needs and expectations of our owners will therefore be the way that we participate, build relationships and exert influence in the international community. The public service does a lot of thinking about what it means to be a citizen of New Zealand. We now have to think about how this relates to the idea of international citizenship which is beginning to emerge. While New Zealand is a small player we will have influence if we contribute quality ideas.

New Zealand's Unique Position

The special challenge I see for the New Zealand public service arises from something about us that Austin Mitchell identified in his recent revisiting of the pavlova paradise. Mitchell observed that New Zealand is the smallest country in the world that tries to do everything - by which he meant all of the infrastructure of a modern state, including the full array of regulatory functions, an extensive portfolio of social services and active participation in the international community. This is reinforced by geography (we're a long way from anywhere); a position which is reduced but by no means eliminated by information technology. Distance isn't dead yet.

What Does This Require Of Us?

"The essential qualities of the coming era are of swiftness and lightness, exactitude and multiplicity, that may contrast sharply with the slow, heavy, standardising bluntness of so much government and administration of the last century". Italo Calvino, quoted in the introduction to the Review of the Centre.

In short it means we must do everything better than the rest. In many areas we already have. In our adoption and use of technology we are as good as anyone in the world. We have pursued cost reduction very effectively. Some examples I'm familiar with from my experience in MED:

• The first fully on line system in any country for the registration of securities over personal property;
• One of the best company registration systems in the world;
• We deal with applications for patents and trade marks faster than any other jurisdiction in the world; and
• We are viewed as a model in the WTO for the speed and rigour of our trade remedies investigations.

These examples can be replicated across the public service. So we are very competent technocrats. We are building the connections with the rest of the world that we will need to cope successfully with our small size and geographical isolation.

What we will now need to successfully respond to the demands of 2020 is not to just keep being more efficient in the conventional sense of "doing things right". We will need to make very discriminating choices about what we do and don't do and find imaginative ways of undertaking those things we do decide to do, ie do the right things. We will need to develop people who think outside the square. We will need to grow people who are good enough to have influence in the international processes that will be increasingly significant in many areas of government activity over the next twenty years. Public service managers will need to be entrepreneurial not just in relation to service delivery or technical management, but in relation to ideas.

Achieving these goals will require strategic capability more than anything else. This is hardly a new idea. It was one of the key themes of Professor Allen Schick's review of the New Zealand State sector management framework published in 1996. It remains critical if a high performance public service is to exist in 2020.

What are we doing to achieve this?

• Investing in strategic capability across the public service
  In order to improve our strategic capacity MED has created a Medium Term Strategy Group, reporting to the Chief Executive to deepen our understanding of what drives economic development, and promote whole of organisation perspectives. The recreation of the economics group in MFAT has the potential I believe to bring similar kinds of benefits to that organisation. We also need to invest in training that will teach public servants broad strategic and conceptual thinking as well as specialisations or technical skills. This will encourage innovation as well as strategic thinking. I understand that Victoria University is thinking about ways in which its public policy and public management programmes can be augmented to meet this need.


• Focussing on how we can become more innovative
  What will make us readier to take opportunities and intelligent risks? We are starting to have more open discussion of the ways in which both the structures of public sector management and the political consequences of failure make us risk averse. Progress on all of the preceding responses will improve the climate for innovation in the public sector, but the attitudes of Chief Executives to intelligent experimentation and risk taking that doesn't work out will be crucial.


• Emphasising values
  MED is at an advanced stage in a process of redefining its vision and values that we have called "Creating the Future". This has reminded me that in the public service we can offer people values based activities and careers. Many of my staff are in their jobs because they are looking to make a difference, or because they enjoy the stimulation and intellectual challenge of policy work - or both. This can be a point of difference and advantage for us in recruiting and retaining good people.


• Recognising the Importance of Culture and Heritage
  The other reason that talented New Zealanders will continue to stay in the country and work in the public service will be because they value a strong sense of distinctive identity. Other things that people value are available globally; this one isn't. Initiatives which establish stronger linkages with New Zealanders overseas will help us take advantage of this. For the public service this is another dimension of thinking globally and locally at the same time.


• Creating a culture of internal and external cooperation
  Success in the future will depend on the capacity to bring together coalitions and networks of countries, agencies, institutions and individuals. Last year's Report of the Advisory Group on the Review of the Centre emphasised the importance of:
  • establishing networks of related agencies to integrate policy, delivery, and capacity building; and
  • accountability and reporting systems that put more emphasis on outcomes and high level priorities.

The Ministry of Economic Development is itself a response to the demand for a more cohesive and outcome oriented public service. We have defined a key part of our purpose as working across the public sector to advise on, coordinate and align activities that stimulate sustainable economic development. We wouldn't have come up with this kind of description of our purpose a decade ago. The changes in name for my organisation reflect more than just cosmetic; they say something about the changing context for and expectations about our work. 'Trade and Industry' suggests a focus on an activity (trade) and a sector (industry). The Ministry of Commerce was a consolidation of a range of related functions around the regulatory environment for business. The formation of the Ministry of Economic Development is consistent with a change in focus from 'means' (a good regulatory environment) to "ends" or outcomes (economic development and prosperity). The presence of policy and operations units inside the same organisation in MED has also made some of the cooperative behaviour that we need easier.

The good news in relation to cooperation is that we may be able to exploit something distinctive about New Zealand. Colin Campbell Hunt of Otago University in a paper colourfully entitled "Bugger the Boxing: Keep Pouring the Concrete", which reflected on his and colleagues research into the attributes of successful New Zealand businesses, observed that one of the themes emerging from the stories of successful firms was an openness and breadth in social interactions which allows New Zealanders to assemble and operate diverse teams more readily than larger, stratified societies. I think that the public service already makes use of this to some degree, and there is no reason why we can't make more use of it.

• Bringing the outside in
  We're more effectively using the talents and expertise of those who continue to work outside of the public service, by providing more choices than working in the public service or consulting on a project by project basis. This requires flexibility around employment relationships and effective management of conflict of interest issues. In our department, for example we have employed economist Arthur Grimes on a two day a week basis in its medium term strategy group while he continues to work for the Institute of Policy Studies, and barrister David Goddard three days a week to work on international regulatory coordination and business law issues.


• Looking outward
  It's important to provide career development opportunities that expose public servants to as wide a range of experiences as possible. We strive to offer staff engagement at an early stage of their work with experts in New Zealand and abroad and key parliamentary and international processes. We have also developed a group of scholarship programmes in MED which provide training and development opportunities in New Zealand and overseas for both managers and staff, with a special focus through Chief Executive's Scholarships on people with standout potential.

Waltzing with Matilda (Good Neighbours Make Good Friends)

A key part of our response to the challenges of 2020 will be the development of our relationship with Australia. The first expression of our position as "citizens of the world" will be our participation in a trans-Tasman economy and community. The recent reintegration of Hong Kong into China while retaining a high degree of economic autonomy was described as "one country, two systems". By 2020 the relationship between New Zealand and Australia might come to be characterised as "one system, two countries."

Far from compromising our independence, this integration is likely to help us maintain it. It will offer us choices in the development of regulation and services which enables us to set priorities about where we use scarce resources and retain consistency with New Zealanders expectations, values and aspirations. Our ability to retain voice and influence policy is likely to be greater in a trans-Tasman environment than any other international context. The public service is already working on the creation of trans-Tasman processes and institutions which will enable New Zealanders' needs and aspirations to be recognised.

Our relationship with Australia offers the public service and New Zealanders a bigger pool of talent, expertise and specialised inputs than we would otherwise be able to obtain. We are already benefiting from a flow of public service skills across the Tasman, in the form of senior management appointments such as Bryan Pink at Statistics, Barry Carbon at the Ministry for the Environment, David Butler at IRD and Jane Diplock as the Chairman of the Securities Commission. The flow of skills is two way, with New Zealanders taking up positions in Australian State public services.

In the next few years we should be thinking about closer cooperation not only in policy development, service delivery and areas of public good like science, but in building public service skills and capacity. The formation of an Australia and New Zealand School of Government as a joint venture between the two governments, Victoria University and several Australian Universities announced last week is an important step. It makes sense to build the concept of a trans-Tasman public service by better integrating training in public policy and public sector management. We should seriously consider the possibility of further enhancing the two way flow of skills by urging Australia to remove the citizenship requirement that inhibits participation by New Zealanders in the Australian Federal Public Service.

Some may be concerned that integration of this kind will cause us to lose our best and brightest. I believe it will increase the chance that some of the best and brightest will be around to contribute in 2020. It is most unlikely that they will stay just because we fail to exploit the opportunities offered by our relationship with Australia.

Conclusion: Drawing on Our Strengths

Being the smallest country in the world that tries to do everything creates some real risks for the public service. We may be tempted to try to do more than our resources - especially people - will permit, no matter how creatively they are used. The good news is that in a small system the opportunities for talented and dedicated individuals are correspondingly large. We don't have the resource base of our counterparts in other developed countries but neither do we have to work with the deadweight of large institutions.

Some also argue that opportunities are more limited because change is less likely to be radical than in the circumstances of the 1980s/early 1990s. I disagree. The changes of the last fifteen years have laid a sound basis for effective management of the public service, and we can be proud of levels of honesty and transparency that are second to none in the world, but we now have great challenges to meet in being influential and effective at every scale from global to local.

While the public service will have to be innovative and set new directions to meet these challenges, this isn't entirely new for us. The New Zealand public service has a tradition of making a difference by contributing more than its share of ideas. New Zealand has played a leading role in the development of welfare state policies and institutions over a long period. New Zealand diplomats made important contributions to the development of new international institutions after 1945. More recently we have led the way in reforming public sector management. To be better than the rest we now have to rejuvenate and extend that tradition of innovation.

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1. Barnes, Cheryl and Gill, Derek, Declining Government Performance? Why Citizens Don't Trust Government; State Services Commission Working Paper No.9, February 2000
2. Report of the Advisory Group on the Review of the Centre, November 2001, p10
3. Schick, Allen, The Spirit of Reform:Managing the New Zealand State Sector in a Time of Change, State Services Commission, 1996
4. Colin Campbell-Hunt, Address to the Changing Gear/Social Dividend Conference, Wellington, December 6 2001

New Zealand State Services Commission