Transformation challenge for New Zealand public sector

New Zealand’s public sector must continue to improve the way it manages change in order to meet the expectations and entitlements of tomorrow’s citizens, according to a report released by PwC New Zealand today. 

The 2016 Insights into transformation - Seven lessons for the public sector report highlights some of the key challenges and considerations for transformation in the public sector. The report, which is based on interviews with 15 chief executives and transformation leaders from 13 public sector agencies, is the first such study to provide insight into the experiences and lessons learnt around large scale change in New Zealand government.

The New Zealand report follows the Australian Insights into transformation white paper, which was released in 2008. At that point, transformation in the New Zealand public sector was largely in its early stages. 

PwC Partner Phil Royal says, “The New Zealand report demonstrates a better understanding among public sector leaders of the need for transformation, and a readiness to take it on.

“The public sector, like most industries, is in a significant period of change. Government needs to remain innovative and attuned to the expectations and demands of citizens, staff and other stakeholders. To do this is likely to result in a period of constant change and transformation, and transformation in the public sector environment has some unique challenges.

“Large-scale government change programmes can be likened to undertaking ‘transformation in a fish bowl’, due to the level of scrutiny of transparency required and the number of stakeholders involved,” adds Mr Royal.

Those chief executives and change leaders interviewed for the report agreed that transformation was much harder to execute than expected. Indeed, a significant shift in the way our public sector chief executives and transformation leaders think about transformation was one of seven lessons highlighted by the report.

“It’s important to distinguish between transformation, which should have a clear beginning and end point, and change, which is focused on keeping up with the needs and expectations synonymous with today’s fast-paced environment. One of the things to come out really strongly was a considerable fatigue with the term ‘transformation’ and a preference for other terms that citizens, staff and stakeholders might interpret more positively,” Mr Royal says.

The importance of having a clear vision was another point that came across strongly. Those interviewed believed it was crucial to know right from the start why large scale change was being undertaken, and what the end goal was, even if the way to get there wasn’t immediately apparent.

The report also highlights the importance of leadership to successful transformation. 

“Our public sector chief executives must be resilient, forward thinking, and not afraid to take chances – to try and to fail, fast – or to make the tough calls. To do that the right conditions need to be set from the highest levels of government. They need to understand the drivers for change intimately and they must surround themselves with the right people,” Mr Royal says.

Ensuring organisations had the right team leading the change, and making tough calls early, particularly in relation to senior management, was another common point made by chief executives and transformation leaders in the public sector. It was also one shared by those interviewed for the 2008 Australian white paper.

Managing transformation 'in-flight' – or running today’s business alongside tomorrow’s – was another particular challenge for government, where citizen interactions were typically around needs or entitlements, as opposed to wants or nice to haves, as is more common in the private sector, Mr Royal says. There was also little formal measurement of transformation benefits or successes.

“Documenting benefits and successes both during, and on completion of, the transformation journey would help to provide visibility of where projects are succeeding or failing and allow public sector organisations to take appropriate, well-timed action.”

Despite the challenges identified, one of the really positive takeaways from the report was the almost unanimous focus on transformation delivering better interactions with government for the citizen - an area that government departments are only just beginning to scratch the surface of the potential for. 

“In order to really deliver on this promise of a better citizen experience, transformation has to occur across departmental boundaries, through the lens of the entire citizen journey, not as purely insular agency transactions. This change will require buy-in not only at an agency level, but also by ministers.

“There are some initiatives already happening across many layers of the public sector, but there is more that could be, and needs to be, done in New Zealand’s public sector to ensure government departments can deliver the level of service citizens, staff and other stakeholders not only expect, but deserve. This report should provide a catalyst for some of that thinking to happen,” concludes Mr Royal.

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