A good thing about Business Council chief executive Jennifer Westacott's speeches on Australia's public services is that they are infrequent. It is now two years since she dished up a cliche-rich sermon of ill-conceived prescriptions to the Institute of Public Administration Australia.
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She did that again in a speech last month at a conference sponsored by the Australian and New Zealand School of Government.
As it isn't easy to know where to start with Westacott's latest effort, it is probably best, in a number of senses, to take a cue from the king's advice to the white rabbit in Alice's Adventures in Wonderland and ''begin at the beginning''.
Westacott says that ''never before has the public sector faced a more complex set of challenges''. It's as if she's not heard of the ''challenges'' of: setting up the Federation, World War I and its long, severe, economic aftermath in Australia; the 1930s Depression; World War II and postwar reconstruction; the existential threats of the Cold War; the seemingly intractable difficulties of ''stagflation'' in the 1970s; and so on. Beside these ''challenges'', those of the present, for all their difficulty, are not nearly so complex.
It's not just that Westacott is talking historical nonsense. She has based her recipes on a false premise and she neglects the history and current circumstances of the Australian Public Service as well as the fundamental differences between the public and private sectors.
So what is her game? She says she wants ''to share nine insights from business on how to instill an innovation culture'' in the public sector. These are ''focus on your core mission'', ''understand your customers'', ''learn from others and copy the best'', ''create an innovation ecosystem'', ''unblock the flow of information and knowledge'', ''take risks'', ''share successes'', ''cultivate the right capabilities'' and ''collaborate''.
Of course, these are not so much ''insights'' as modern management aphorisms; they're about as useful as such things usually are. Their consideration is not helped by the number of blunders Westacott makes in elaborating them. For example:
- She says: ''As the Treasurer has said, governments have run out of money.'' Self-evidently they have not: just look at how the Abbott government is spending up big.
- She says public servants ''should always be asking ourselves: what is our role''. That's a waste of time. The role of public servants is unchanging: it is to provide the best policy advice to governments and administer authorised programs effectively and efficiently.
- She rightly says ''your customers are not the ministers who oversee your portfolios'' but cruels the point by adding ''they may be very important stakeholders''. Ministers are not ''stakeholders'' (people affected by an agency's actions) - they are the leaders of their departments and responsible for getting the money they need, setting their overall goals, directing them on a day-to-day basis and accounting for what they do.
- She asserts: ''Hierarchies are the enemies of innovation.'' The fact is that many major ''innovations'' have been hatched in hierarchical organisations. The US Defence Department can take much of the credit for the internet and the Australian Defence Science and Technology Organisation can be thanked for bringing forth modern photocopying technology, which Xerox got hold of and the rest is history. Moreover, if hierarchies and innovation don't mix, why would Westacott exhort the technique on the public sector, which will inevitably remain hierarchical to a significant degree?
- She tells public servants: ''Yours is not a culture of learning from mistakes.'' That's bushwa. Political imperatives, among other things, mean that mistakes in the public sector are typically more thoroughly raked over by parliamentary committees, royal commissions, other committees of inquiry and other means, and their lessons applied to a much greater extent than in the private sector.
Westacott tries to give better meaning and coherence to her aphorisms by wrapping them in what she calls ''an innovation mindset''. She says: ''Innovation will enrich your culture and cement your intrinsic value and relevance … [and will] create new sources of demand'' - a mixed blessing, perhaps, for an Abbott government trying to reduce demands on governments in the new age of ''the end of entitlement'', whatever that unexplained Hockeyism might mean.
While Westacott defines innovation in her terms, it would have been less confusing if she stuck to a dictionary definition: ''bring in new methods … make changes''. In these ordinarily understood meanings, innovation is essentially neutral and its results can be good, bad or indifferent. Its dominant characteristic is newness and its process is disruption. It is prone to failure and it can be very costly. And it is likely to be more useful and relevant to private businesses, where making more money through the invention of better mousetraps is more valued than in most of the public sector.
Harvard University history professor Jill Lepore wrote recently on innovation in The New Yorker magazine. She convincingly picked apart the writings of her fellow Harvard professor and innovation advocate, Clayton Christensen.
Of Christensen's case study on disk drives, Lepore says: ''In the longer term, victory in the disk-drive industry appears to have gone to manufacturers who were good at incremental improvements, whether or not they were the first to market the disruptive new format.''
Lepore remarks on the consequences of modern innovations in financial markets - sub-prime mortgages, collateralised debt obligations and mortgage securities - that made such ignominious contributions to the 2008 financial crisis. ''Like the bursting of the dotcom bubble, the meltdown didn't dim the fervour for disruption; instead, it fuelled it because these products of disruption contributed to the panic on which the theory of disruption thrives.''
In a more general sense, Lepore says: ''Innovation and disruption are ideas that originated in the area of business but which have since been applied to areas whose values and goals are remote from the values and goals of business … Doctors have obligations to their patients, pastors to their congregations, curators to the public … obligations that lie outside the realm of earnings, and are fundamentally different from the obligations that a business executive has to employees, partners and investors.'' What can be said of doctors, pastors and curators can be said of public servants. Innovation, Lepore concludes, is ''transfixed by change, it's blind to continuity. It makes a very poor prophet.''
This is not to say that innovation is something to be avoided in the public service. It hasn't been. The Commonwealth has an entire organisation, the CSIRO, devoted to it and the APS has been at the forefront of management innovation, leading the country in, for example, the use of computers and related technology since the late 1950s, workforce professionalisation, the employment of generalist graduates, equal employment opportunity, and the banning of smoking in workplaces - there's a long list.
The point Westacott overlooks is that the boundaries of innovation and risk for public servants should be defined by their ministers. There's no point in urging an ''innovation mindset'' on officials if that's not what their political masters want. Quite apart from the natural aversion ministers have for risk, at the moment the signs are they don't want their departments to go wild about innovation:
- The CSIRO is being chopped back.
- Education Minister Christopher Pyne is threatening to cut university research funding.
- There is apparently a growing tendency for departments to clear draft cabinet submissions with the Prime Minister's Office before circulating them for coordination comments. Would there be much point in departments bringing an ''innovative mindset'' to coordination comments if they know that draft cabinet submissions have the imprimatur of Peta Credlin?
- Ministers have given all sorts of indications they want as much service delivery as possible to be ''outsourced'' because they have a ''belief'' this can be done more efficiently by the private sector. That's the same kind of ''belief'' that led to the disastrous ''outsourcing'' of many IT services under the Howard government.
- At the end of her speech, Westacott gives prominence to a Business Council proposal to ''offer senior public servants highly structured, highly meaningful secondments'' in the private sector to ''facilitate more effective collaboration''. This is not an innovative or novel idea. In the 1970s, the Public Service Board established a program providing temporary interchanges of personnel between the APS and the private sector. It was meant to be a two-way street in which private sector people had a go at being public servants and vice versa. For the moment, that possibility doesn't seem to have occurred to the Business Council; a reflection, perhaps, of the impression it gives that the private sector has little to learn from the public one.
If the council reviewed the working of the 1970s interchange program (it is to be hoped that, in the claimed best traditions of the private sector learning from experience, it has done so), it would have found that it withered because private firms were insufficiently prepared to allow their staff spend time in the public service, and some ''poached'' public servants who took part in the program despite understandings they would not do so.
A staff-interchange program is not a bad idea but it will only work if it is a two-way street involving high-quality employees. Until these prerequisites are satisfied, the Business Council proposal should be kept in a cryonic state.
So far as Westacott is concerned, she should think more deeply and carefully before she next presumes to advise on ways in which the public service should be organised and how its staff should behave. Most importantly, she should avoid urging the transplantation of business-world methods into the public sector in ways that fail to take into account its different and particular operating circumstances and environment.
On his deathbed, it's alleged that George Washington said: ''Beware of innovation in politics.'' That's a paradoxical observation from a person who helped bring forth one of the greatest changes in modern government, but it's yet another thing Westacott should think about.
Paddy Gourley is a former senior public servant. pdg@home.netspeed.com.au
