Incremental reform: The impressive impact of interrelated initiatives – Canadian Government Executive

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RenewalThe Last Word with David Zussman
March 25, 2013

Incremental reform: The impressive impact of interrelated initiatives

Too often those implementing change in the public sector can get caught up in details of one specific initiative. Taking a thematic view to a series of initiatives is important to identify the relationships between and impact of each. This helps put initiatives into a strategic context, and can accelerate benefits by leveraging the successes and failures of previous similar projects.

The Canadian federal government has seen significant change over the past 23 years. Starting in the early 1990s and motivated by the New Public Management (NPM) movement, it has introduced a series of transformation initiatives. In recent years the rapid pace of technological innovation has forced a change in how government administers and delivers services to citizens. At the same time, taxpayers have been demanding additional transparency around government spending, increasing the role of government oversight.

To address these demands, there have been many initiatives undertaken to transform the federal government. When looked at individually, each initiative may appear to be a one-off without being particularly innovative. When we look back at the initiatives together, however, a set of natural groupings appear as four overall streams of reform. These four streams reveal an impressive set of interrelated initiatives that have driven real public sector management reform in Canada.

1) Modernizing management practices
Starting with the Public Service 2000 initiative in 1989, the public service has been adopting a number of management practices typically seen in the private sector. The overall trend has been toward decentralization, supported through implementation of formal systems of reporting and oversight to drive individual accountability. While the Management Accountability Framework was introduced 14 years later, in 2003, it built on those principles of decentralization with appropriate oversight and accountability based on reporting on 10 key criteria.

The downside of decentralization is the resulting difficulty in performing horizontal management when a “whole-of-government approach” may be beneficial. Recently, the introduction of Shared Services Canada has reversed this trend, leveraging the modern practice of centralization of certain functions to a shared service area. It is still to be determined how this move from a more decentralized model impacts individual departments’ accountability and decision-making authority.

2) Deficit reduction
There have been a number of different approaches to achieving deficit reduction in the government, starting with program review in 1994. The objective was to determine which activities the government would continue, which would change, and which would be cut. In this instance, the public service came up with its own plans, which were then tested against six key questions. Overall, the effort reduced spending by over 10 percent over only a few years. The Strategic Reviews in 2007 were different in nature, as they were designed to assess the relevance and performance of programs on a cyclical basis, and intended to re-allocate spending from lower performing programs to high priority programs.

The Strategic and Operating Review of 2011, although similar to Program Review, was much more inclusive in its approach. Departments were given specific targets and asked to provide their own plans to meet them. Also unlike Program Review, an external advisor (Deloitte) was engaged to provide an independent third-party assessment of the proposed savings, and to identify and advise government on additional areas where savings could be found.

Most recently, the government decided to form the Cabinet Committee on Government Administration to consider proposals on whole-of-government opportunities for improved efficiency and effectiveness. While the outcome of this review is ongoing, this is the second time that Canadians have seen the cycle of one-time reductions followed by ongoing reviews to manage costs. This suggests the need for a cultural shift in the public service to increase the focus on cost management.

3) People management
Most organizations point to employees as their most important resource and make investments in recruiting, developing and retaining the best people. The public service has undertaken significant reforms in the area of people management. In essence, the reforms were related to managers and executives taking more responsibility for managing people, in exchange for more direct authority. This started with the Task Force on Public Service Values, which resulted in the creation of the Values and Ethics Office and established a set of public service values, which became one of the pillars of the Modern Comptrollership initiative.

In 2003, the Public Service Modernization Act created four pieces of legislation, with a focus on modernizing labour relations and training, as well as clarifying the roles and accountabilities by transferring authority to deputy ministers. Most recently the Public Service Renewal in 2007 looked at ways to modernize the public service, and resulted in centralization of the HR functions and the creation of a new Chief Human Resources Office. Together, these efforts have started to transform the way government looks at and interacts with employees. However, further effort is needed to fully achieve the intended reform.

4) Transparency and reporting
Canadian citizens demand transparency from their government, and the government has been steadily working toward improving transparency and reporting. The Results for Canadians initiative undertaken in 2002 created a framework for management and set out a clear agenda for change. Following on this initiative, the Financial Information Strategy of 2001 aimed to increase the strategic use of financial information and improve transparency of financial reporting through adoption of accrual accounting. The Federal Accountability Act and action plan significantly strengthened accountability and oversight of government operations, through creation of new roles including the Parliamentary Budget Officer, the Office of the Privacy Commissioner, and the Public Sector Integrity Commissioner. The Policy on Internal Audit took this further, by establishing the Chief Audit Executive position and external independent, departmental audit committees, with a focus on management oversight and advice.

Overall, successive governments have been working toward increased external reporting and oversight of government results.

Lessons learned
Together, the four streams of reform tell a much stronger story of transformation than any one individual initiative. Maintaining this momentum will be key to further improving the way that Canadians interact with their government. To maximize the value of each future initiative, leaders should look at each stream and determine how they can both leverage past successes and build on lessons learned from past failures, to continue to drive change.

For instance, Canadians generally accept that the government and government institutions are essential to a well-performing society. There has been a growing shift, however, to services being delivered by other organizations, including not-for-profits and those funded through social finance activities. Continuing with public sector reform will require an examination of the evolving role of government in service delivery, and how that may change in the very near future.

A well performing public sector requires both a strong policy capacity and a modern service delivery function. This public sector must be high-performing, professional and non-partisan in delivering their advice, and executing the government’s operating requirements. Investing in identifying, developing and retaining this talent is crucial in supporting any long-term transformation.

Identifying required reforms is only one part of the equation; actually implementing the change is often the more difficult task. To drive change, a combination of leadership and commitment is required from both elected and appointed officials, as well as senior public servants. This commitment and attention should be supported with hard targets and timelines to meet, and formal processes for reporting on progress against goals. Setting the tone from the top provides guidance throughout the public service, and this supports alignment between the public service and politicians. A shift in culture will also be required toward one that embraces broad changes and works outside of departmental silos to make government-wide improvements to systems and processes.

David Zussman holds the Jarislowsky Chair in Public Sector Management at the University of Ottawa (dzussman@uottawa.ca). Robert Phillips is a manager in the Strategy and Operations Consulting practice of Deloitte.

About this author

David Zussman

David Zussman

David Zussman is a senior fellow in the Graduate School of Public and International Affairs at the University of Ottawa and is a Research Advisor to the Public Sector Practice of Deloitte.

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