Mondelēz International's Vice President Australia, New Zealand and Japan
There’s little doubt many Australian government organisations are operating in a challenging environment, being asked to do more with less while trust in government continues to fall (according to the Edelman Trust Barometer).
This is a scenario not unlike the one facing many CEOs in the private sector: sluggish global growth, cost constraints, a fight for talent, rising competition and changing customer expectations.
And while 43% of Australian CEOs are very confident of growth in the coming 12 months, only 34% of global government respondents are very confident.
Yet Australian CEOs and government secretaries and agency heads have similar concerns regarding what could restrict growth; over-regulation, uncertain economic growth, geopolitical uncertainty, and social instability.
So, what can government leaders learn from their business counterparts, and vice versa? What should public sector CEOs be focusing on to ensure their organisations keep improving and delivering, now and into the future?
One of the biggest challenges facing private sector CEOs, is responding to changing customer behaviour. But the same dynamics apply to the public sector: every citizen is a customer.
Smartphones, peer-to-peer platforms and social networks have given consumers - and citizens - more choice, customised experiences and transparency than ever before. This equals more power as the competition, as well as commenting or telling your (bad) story, is only a click away.
Customer experience is the business CEOs main priority and Business CEOs are responding by reorganising their businesses around the needs of their customers: 79% are concerned about changing customer behaviours, and 77% say they take a customer-centric approach to R&D.
For private companies, the need to innovate to stay relevant to their customers through the current cycle of disruption is as great as it’s ever been.
Just as customers’ expectations of business are changing, so too are citizens’ expectations of government services who are seeking the digital delivery of services.
No longer are customer expectations set by the organisation, be that government or otherwise, that they are dealing with. In today's ‘Experience Economy’ the bar is set by the best; amazon, Facebook, hotel experiences. The bar has risen.
While citizens might not be able to shop around for public services, they can and do make their views – positive or otherwise – strongly felt. There is value in getting customer service right.
Department heads, the ministers they report to and all the departmental staff know that getting it right means the difference between meeting and exceeding citizen standards and not delivering to expectations.
So what does being citizen-centric mean in practice? Putting yourself in the citizen’s shoes to solve the citizen’s problem.
For example, when designing a new service delivery system, are you prioritising the needs of the citizen or the needs of the organisation? Are you thinking about how the citizen would like the service delivered or what’s easiest to implement? Would the citizen have a consistent experience across different agencies or will they have to familiarise themselves with many different interfaces and processes? Can citizens receive the same level of service across various channels: online, over the counter, etc?
Bringing about such a radical change requires a different mindset. Citizen experience needs to permeate everything the organisation does: how it measures and evaluates success, how it communicates, how it develops policy, and how attracts and nurtures its talent.
Businesses are reshaping their entire business models for customer solutions. Government agencies should do the same for the best citizen solution.
Both private sector CEOs and Government leaders realise that the profession and function of HR has changed little over the past few decades. Seven out of ten Australian CEOs say they are now rethinking HR in their organisation, with Government leaders similarly focused (72%).
A key driver behind this shift is the need for cost reduction and technologies such as automation, robotics, machine learning and artificial intelligence being implemented to enable change.
But rather than see these new technologies as a threat, progressive business leaders are taking the opportunity to rethink and redesign the way they employ, manage and interact with people.
This means adopting a less process-oriented view of talent, and stepping back and asking where the value lies in their organisation’s human system. As a result, CEOs are prioritising a refined set of human skills: adaptability, analytics and problem-solving, leadership, emotional intelligence and collaboration.
This refined set of human skills alongside technological advancements will enable CEOs to move much of the time and effort still spent on transactional work, to strategy and execution. The progressive datafication of HR means that practitioners will increasingly need to collect, extract and analyse data and use this to inform business decision-making. This is both an opportunity and a challenge for CEOs as the skills and capabilities required to take advantage are difficult to source or develop.
The need for human skills right now appears to be a blind spot for Australia’s business leaders, Global government leaders feel the exact opposite - they put the availability of key skills as a number one concern.
Australia has no particular natural advantage over other developed countries when it comes to the availability of human skills. The government is competing for talent in this environment and government leaders are right to be concerned that key skills could be at a shortage.
To combat this shortage companies are turning to internal training and leadership academies to grow the talent they need themselves. Australian CEOs (75%) and global government heads (68%) both agree they are adding digital training to their learning programs.
Growing internal capability is one part of the battle. To be fit for the future needs a departmental head needs to ask ‘where is the real value generated in our workforce?’ and focus on cultivating this more.
Once it’s known where value is generated from the workforces, government leaders should examine performance and talent analytics to help drive better behaviours and vice versa.
The survey shows 81% of Australian CEO’s agree they are changing their people strategy to reflect the skills and employment structures they need for the future. Global government results also show promising results with 72% changing their people strategy for the same reason.
While people join the public service for a variety of reasons, many high performers are driven by the opportunity to work on issues of national or social significance. So in order to retain and develop top talent, departments and agencies should continue to focus on how they can provide their workforce with opportunities to work on complex and challenging issues that need solving. This piece could be enhanced through improved inter-agency mobility so that the most capable resources are more easily orientated to the most complex problems.
To get and keep the talent they need, private sector CEOs are also focusing on seeking out the best talent regardless of demographics or geography and exploring the benefits of humans and machines working together.
Cyber security is an ongoing challenge for private sector Australian CEOs and for government secretaries and agency heads. However, 80% of Australian CEOs say cybersecurity is a concern, while only 58% of global Government respondents are concerned.
When it comes to how breaches of cyber security and data privacy will impact trust levels over the coming five years, Australian CEOs are more prepared to address any risk of breaches. Only 43% of global government respondents are addressing cyber security concerns to a large extent, compared with 58% of Australian CEOs.
What can Government learn from business CEOs, as hacks and breaches will continue to impact Information Technology systems?
Also, CEOs and government secretaries and agency heads will need to be aware of a new and emerging area of risk: cyber threats from automation and robotics.
Over the next decade, with the growth of digital service delivery, robotics and the internet of things – sensors and machines linked to the cloud – there will be billions of potentially vulnerable devices, connected to government and corporate IT networks. Both the motivation and opportunity for malicious attacks on business and government will soar.
As an example, in 2015, the records of 22.1 million US government employees (both current and former), security clearance applicants and relatives were stolen in a cyber intrusion into the US Office of Personnel Management that lasted for more than a year. The data stolen included security-vetting records going back as far as 15 years, including 5.6 million fingerprints.
So what can public sector agency and departmental heads do to stay ahead of cyber security in this increasingly complex environment? Ultimately, they must accept ownership of cyber security across the whole of their organisation, including Information Technology, Operating Technology and third party providers.
As the range of technologies that government organisations use continues to expand, and as their network of connected suppliers and stakeholders grows, leaders need to take a much more holistic view of cyber security.
One of the drivers is the increasing interdependence between the public and private sectors. Take for example the supply chain where there are hundreds of different vendors all integrating with various departments not just here at home in Australia, but other countries as well.
Potential hackers looking to breach the sensitive data of companies, look for weaknesses in suppliers and vendors. If you don’t impose the tough security standards of your own systems on your suppliers and vendors, they will look for the weakest link to access sensitive data.
No longer can an organisation consider itself an island: they are all part of a larger cyber ecosystem. In the new era of automation and collaboration, the term ‘cyber risk’ should disappear and simply become ‘risk’. Just as ‘digital strategy’ is now considered part of ‘strategy’.
In fact, it’s collaboration that can help government agencies and departments to address the risks that have risen, paradoxically, as a result of increased collaboration.
Greater collaboration between senior leaders in the public and private sectors can create better and faster solutions, save both time and money, and build on existing expertise rather than duplicate effort.
An area that could benefit from greater collaboration is innovation. In an era of digital disruptions, tightening budgets and changing expectations organisations needs talent that can novel and innovative perspectives to the table.
Yet innovation is often a fraught issue for public servants, who may be concerned about appearing politicised if they champion a particular idea or approach, or may focus on probity or procurement rules at the expense of taking up unique propositions from the private sector.
Increased dialogue, knowledge sharing and even secondments between public and private organisations can help strengthen the ties between the sectors and help bring about the innovative ideas that Australia needs to meet the challenges of the 21st century.