Chapter 4

Leadership strength

The NSW Government is committed to creating more agile leaders who can deal with the public sector's increasing complexity, strengthen its customer focus, and collaborate and innovate with the private and not-for-profit sectors.

The foundations are already in place; workforce reforms to create a leaner and flatter executive structure are well underway. The NSW Leadership Academy will build on these reforms and grow leadership strength in key areas by targeting high-potential executives and people managers. An increase in the number of women in senior executive roles will further strengthen leadership for the future.

Executive structures

The Schott Commission of Audit recommended that the Public Service Commissioner "Present reform proposals to the Government regarding the executive structure of the NSW public service (SES, SO and other executives) to establish a separate structure for cluster Directors General, and create a new executive structure combining the SES and the Senior Officers classification and, as appropriate, other executive groupings".14

In 2013, the NSW Government endorsed a number of key design principles for the public service executive structure, namely:

  • broad bands, to reduce layers
  • correct sizing, to improve spans of control and reduce the number of individual contributors
  • consistent remuneration, so that work-level standards determine which of the broad bands an executive role fits into
  • mobility of executives
  • capability assessments for all senior executives.

The GSE Act and its regulations and rules form a statutory framework that enables the delivery of these key design principles.

The new executive structure has four levels:

  • Band 4 – department secretaries
  • Band 3 – deputy secretaries
  • Band 2 – executive directors
  • Band 1 – directors.

The titles for the bands will be appropriate for almost all senior executive roles in the NSW public service.

During 2014–15, the sector made substantial progress in implementing the executive reform program. The Public Service Commissioner endorsed a total of 74 high-level implementation plans, and approved more than 90 senior executive implementation plans. Early indications suggest that these new executive structure design principles are being applied across public service agencies. Almost 20% of executives across the sector have transitioned to the new structure (see Figure 15). The split of numbers across the four bands is shown in Figure 16.

Figure 15: Number of executives transitioning to the new structure, June 2015

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Transitioned Will transition in the future Total executives
384 1,642 2026

Source: NSW Workforce Profile 2015

Snapshot – Transport for NSW

In March 2014, Transport for NSW developed a consistent strategy for leadership development for all its agencies, called DriveIt.

The strategy focuses on developing leaders who are values‑led, deliver results and are capable of leading change. Prior to DriveIt, there were different approaches to leader development across Transport for NSW.

DriveIt aims to efficiently deliver practical and impactfocused leadership development across all leadership levels. It is aligned with the PSC Capability Framework.

DriveIt includes offerings for transition support between different leadership levels (core programs), for high-potential people and to address specific capability development needs.

The core learning principles underpinning DriveIt include:

  • strong alignment with business drivers
  • collaborative learning so that participants learn from each other's feedback and experiences
  • leader-led development, where all leaders actively contribute to their team's development
  • accountability for impact resting with the participants and their managers
  • the 70-20-10 approach, which emphasises the importance of learning on the job and 'learning as you work'.

Figure 16: Number of executives transitioned at each level

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Total
384

Senior Executive Band 4 Senior Executive Band 3 Senior Executive Band 2 Senior Executive Band 1
Secretaries (7) Deputy Secretaries (45) Executive Directors (100) Directors (232)

Source: NSW Workforce Profile 2015 – public service headcount

In larger departments, initial reviews, restructures and determinations focused on the strategic design of Band 3 leadership teams – and some Band 2 roles – in transitioning to the new structure. Many of the smaller agencies reviewed their executive structure and implemented the reforms in a single-stage process.

By the end of 2015, more than 1,000 executive roles will have transitioned to the new GSE Act employment arrangements, representing approximately half of all executive roles covered by the Act.

Leadership capabilities

The Reform review reveals variable leadership capability in different public sector agencies, especially regarding structural transitions under the GSE Act. Employees and people managers want leaders to play an active and visible role in the organisation, especially when it comes to implementing workforce reform. The review identified a number of areas where leaders could improve, including mentoring, communication and change management skills. This is in line with previous People Matter surveys, where employees' said there was room for improvement in their leaders' communication and change management skills, but noted that communication was improving.

The 2015 Agency survey showed that most agencies (80%) had experienced significant workplace change over the past 12 months, including organisational restructures (60%), changes in the agency's work priorities (40%) or a change in the head of the agency (22%).15

The survey asked a series of questions around initiatives for dealing with change. The results were generally consistent with those reported in 2014, with minor increases or decreases for most initiatives. The overall results for the three types of initiatives – communication, planning, and monitoring and assessment – are shown in Figure 17. The clearest overall difference is the lower results for monitoring and assessment initiatives.

Figure 17: Agency management of change initiatives

Diagram of 'Figure 17: Agency management of change initiatives'

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  % Highly developed % Developed % Basic % Recognised % Not recognised
Planning: 96% implemented 24 55 17 3 1
Broad-based communications: 93% implemented 18 51 24 6 1
Monitoring and assessment: 78% implemented 4 35 39 18 4

Source: Agency survey 2015 – responses to 12 questions grouped into three categories

Most agencies had well-developed strategies for face-to-face communication by senior managers (81%), multidisciplinary committees (80%) and project plans (79%). Far fewer agencies had formal mechanisms for determining success (30%), assessing managers for success at the local level (30%) and ensuring the accountability of local managers (47%).

These last three activities are critical for leaders in a sector undergoing significant change. The transition from planning and broad-based communication to locally based and targeted change management may well be the biggest challenge facing senior leaders.

The transition from planning and broad-based communication to locally based and targeted change management may well be the biggest challenge facing senior leaders.

The NSW Leadership Academy

Many of the challenges facing leaders – and some capability gaps within agencies – are common across the sector. They require a sector-wide and, at times, cross-jurisdictional approach.

The NSW Leadership Academy represents a whole-of-government effort to identify potential leaders and equip them with the best possible skills for leadership. The Academy offers carefully structured, individualised programs focused on developing the skills and capabilities required for the next level of leadership. It also gives special attention to gender balance and the number of places designated for Aboriginal participants, in support of the Premier's priorities for reaching diversity targets in senior leadership roles.

The Academy's programs operate alongside existing department and agency leadership programs, and other PSC leadership development courses. Entry to the Academy's programs is via nomination and selection; the programs identify talent and potential at the senior executive level and key roles below the executive level, in order to build a pipeline of leaders. The Academy programs target high-performing leaders, and high-potential leaders who are ready to transition to bigger roles – individuals who are at the right point in their career and who show strong potential and/or performance. The bespoke nature of the Leadership Academy course structure recognises that there is no one-size-fits-all solution for developing leadership.

The Secretaries Board defines a high-potential leader as someone who displays the potential to be promoted two levels above their current role within the next three years (or one level for Senior Executive Band 3), and also:

  • demonstrates an effective leadership style
  • learns and adapts quickly
  • is engaged and committed
  • is values-driven
  • seeks to diversify their experience
  • is motivated to deliver for the people of NSW.

Two Leadership Academy pilot programs commenced in October 2015, and initial intakes will target deputy secretaries. Over the next 12 months, the Academy will offer additional programs to include other bands in the senior executive level, and will then extend new programs to levels that make up the future executive pipeline.

The initial programs target individuals who are ready to transition:

  • from leading executives to leading an agency or cluster (current Band 3 and equivalent)
  • from leading other managers to leading executives (current Band 1 and 2, and equivalent)
  • from leading a team to leading other managers (current Grade 11 and 12, and equivalent).

There is also an opt-in program for current department secretaries.

The Academy will offer a number of development options tailored to the individuals completing each program, and designed to provide the appropriate combination of education, exposure and experience required to enhance leadership capability. Options include executive education activities, coaching, mentoring, networking opportunities, secondments and other types of on-the-job exposure.

In September 2015, the Premier signed a Memorandum of Understanding with the Business Council of Australia to help pilot executive secondments between the public and private sectors.

The Leadership Academy will enhance the capabilities required to address the future challenges associated with change management that are common to so many leaders in the sector. This improvement will support the sector-wide delivery of better services and value for the people of NSW.

Figure 18: Leadership Academy transition points and programs

Diagram for 'Figure 18: Leadership Academy transition points and programs'

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Opt-in program for secretaries to guide the sector on its leadership journey  
Academy programs
  • Leading other managers
  • Leading executives
  • Leading executives
  • Leading agency or cluster
Programs targeting key transition points to develop a succession pipeline
  • Individual
  • Leading team
Programs for existing leaders targeting key capabilities...
Existing programs
  • Executive leadership essentials
  • Delivering business results
  • Aboriginal career and leadership develoment
...work alongside agency-specific leadership programs...
Agency programs
  • Agency-specific leadershiop programs to achieve targeted business outcomes
...delivered through three mechanisms.
  • Education: Leadership courses to develop skills and capabilities required at particular leadership levels
  • Exposure: Networking events, conferences, coaching and other forums to expose leaders to new ideas and practices.
  • Experience: Support for emerging leaders to develop and actively manage their career plans.

See the PSC website for more details about the Leadership Academy.

Women in senior roles

Leadership diversity can strengthen service delivery, productivity and capability – within individual agencies and for the NSW public sector as a whole. It can also increase an organisation's ability to innovate by encouraging a greater diversity of thinking. One of the Premier's top priorities is to increase the proportion of women in senior leadership roles in the NSW public sector from today's 36.3% to 50% by 2025.16

Research on gender diversity commissioned by PSC provides solid evidence of what needs to be done to achieve effective and sustainable change in the longer term. The research report17 was published in December 2014. Since then, PSC has worked with departments and agencies to develop a sector-wide response to the report's recommendations on:

  • the endorsement of gender equity by senior leaders
  • setting gender equity targets and key performance indicators (KPIs)
  • prioritising flexible work options
  • raising awareness of gender equity
  • fostering collaboration and information sharing on gender equity initiatives
  • gathering and analysing data.

The current baseline of evidence depends on whether one takes a sector, cluster or agency view. Clusters such as Education have already achieved gender equality in senior leadership roles, while others still have a long way to go (see the gender graphs at the front of this report). Analysis at an agency level shows that much depends on the specific agency, and the different occupational patterns, feeder groups and career pathways surrounding it. 

Following PSC's response to the recommendations in the Advancing Women report, NSW departmental secretaries and heads of various agencies agreed to use workforce planning processes to identify gender targets at executive levels, appropriate to their workplace context.

In the 2015 Agency survey, 36% of departments and separate agencies indicated that they had not started planning to determine targets for women in senior positions. Another 36% had completed their workforce planning efforts and determined there was no need to set gender targets. Only 16% had already set gender targets, and a further 12% had started planning to set targets.

Figure 19: Agency action on gender targets for senior executives

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Targets have not been established and workforce planning for determining targets has not commenced Targets have not been established but workforce planning for determining targets has commenced Targets have been set, workforce planning completed Targets not required, workforce planning completed
36% 12% 16% 36%

Source: Agency survey 2015

Clearly, agencies across the sector will need to do more to achieve greater leadership balance and diversity, and meet the Premier's stated 10-year target.

To help build the pipeline for female talent to enter senior leadership roles, 50% of Leadership Academy places will be designated for high-potential female employees. This will also help women in the lower levels access and realise opportunities to move through the ranks.

Another enabler for implementing targets for women in senior roles is overt sector-wide commitment to gender equality at all levels of management, including at the CEO and executive management level.18 In addition to the Premier's commitment, department and agency heads have publicly endorsed the need to achieve gender equity, raise the visibility of talented senior female leaders, and remove systemic barriers – such as unconscious bias – that block women from transitioning into senior roles.

To the next level

Leadership influences all of the factors that characterise high-performing organisations, and is a crucial factor in achieving workforce (and other) reforms across the sector. However, while many leaders support workforce reform in principle, these considerations are not always a top priority.

The Reform review showed that more is needed for the sector to align good workforce management with the achievement of core business outcomes. Furthermore, the emphasis tends to be on individual performance management. Leaders rarely use workforce management strategies to address systemic business goals and challenges – such as in delivering services, designing work roles, creating people development strategies and improving employee engagement.

With these points in mind, the first step is to develop and implement strategies aimed at raising managers' understanding of how good workforce management can help their people and agencies achieve desired organisational outcomes. Investing in initiatives such as the Leadership Academy – and further developing the management capabilities, work design skills and mobility management experience of Band 1 executives and the levels immediately below executives – will also strengthen leadership within the sector, as will ongoing efforts to achieve gender equality in leadership positions.

Clearly, agencies across the sector will need to do more to achieve greater leadership balance and diversity, and meet the Premier's stated 10-year target.

  1. NSW Commission of Audit (2012), NSW Commission of Audit Interim report: Public sector management, NSW Government, Sydney
  2. The Agency survey does not describe the nature or scale of an agency’s restructure, but the senior executive reforms under the GSE Act are likely to be a main driver of restructuring within the sector
  3. NSW Government, Making It Happen: State Priorities, www.nsw.gov.au/making-it-happen
  4. Baird M, Evesson J and Oxenbridge S (2014), Advancing women: increasing the participation of women in senior roles in the NSW Public Sector, The University of Sydney Business School, Women and Work Research Group, Sydney
  5. Workplace Gender Equality Agency (2013), How to set gender diversity targets: Guidelines for setting and meeting targets to increase gender diversity in the workplace