Chapter SevenCreating adaptive organisations

Capability requirements become broader and deeper as agencies mature

Last year’s report noted that the sector was becoming better at collaboration and customer service, as measured in the Employee Survey. However, change management and data analysis capabilities were shown to be underdeveloped. This year, sector leaders reported that as maturity grew in all these areas, there was also a better appreciation that the more they know, the more there is to learn. The capability required becomes broader and deeper. This chapter discusses these trends in organisational capability.

Cross-sectoral partnerships require effective collaboration

Collaboration remains a challenge for many in the sector, despite broad acknowledgement that it is a critical driver of success. Only half of the sector’s workforce feels that their senior managers promote collaboration with other organisations (51%), and less than half (47%) feel there is good co-operation between teams within their organisation.

The 2016 Agency Survey found that while collaboration within the sector is growing (whether in policy development, regulation, program design and management, or service delivery), collaboration with the not-for-profit or private sector is much less common and focused on service design or delivery. The drivers for cross-sectoral collaboration have been given fresh impetus by the NSW Government’s commissioning and contestability agenda. The shift of service delivery from the Government Sector to other sectors makes collaboration more important, and the required capabilities more complex.

The Premier’s Priorities have provided the drive for collaboration across agencies and clusters as the nature of the targets mean agencies can’t achieve them alone. For example, the priority to reduce the overweight and obesity rates of children by 5% over 10 years requires that the lead agency (Health) work with Education to refresh and strengthen physical activity and healthy eating programs in schools, encourage active travel by working with Transport, and develop guidelines for the planning, design and development of healthy built environments with Planning and Environment.

The challenges for many agencies leading Premier’s Priorities is in facilitating common goals and a shared vision, which can be complex when supporting agencies have different perspectives on key goals. This may influence the way they participate and to what extent. For example, one agency may be motivated by managing demand for their services, while another may be driven by a focus on citizen wellbeing.

In 2016, the PSC surveyed NGOs that work with government to deliver human services to the community. This is an area where more collaborative approaches are gaining traction. Some NGOs advised that they preferred partnership relationships with government that would give them the opportunity to help define problems and shape policy at the outset, as well as being involved in service delivery. Sixty-five per cent of the NGOs said their relationships were based on cooperation and coordination, as typified by contracted services, and typically were involved at the service tender stage. NGOs aspire to be in an alliance or partnership with agencies, reporting that their active participation at different stages of the development and delivery process typically led to far more effective service delivery.

The survey found that the small number of NGOs in the more intensive alliance or partnership mode were significantly more likely to rate the quality of their collaborative relationship as average or above average, despite these being the minority of collaborative structures in place.1

Figure 7.1: NGO ratings of the quality of collaborative relationships with government

NGO ratings of the quality of collaborative relationships with government

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  Below average  Average  Above average
Consultation or networking 36% 32% 32%
Cooperation or coordination 3% 23% 74%
Partnership or alliance 0 9% 91%

Source: PSC Collaboration Capability Review, October 2017

The adjustment required is to build ability to move beyond a purely contracting mindset to a focus on outcomes. Ideally, partnering organisations would be engaged at all stages of the project life cycle, including when policy and strategy settings are being established.

Case study: Health’s program for Ending HIV

Common stumbling blocks for agencies working collaboratively with NGOs include the funding approach, governance and an agency’s ability to monitor and report on progress and quality when the services are being delivered by others. Managing outcomes can become more complex when the agency doesn’t ‘own’ the workforce concerned, and depends instead on building mutual trust with their partner.

The New South Wales Ministry of Health has worked with different NGOs since 2013 to reconfigure funding arrangements through its Grants Management Improvement Program. The launch of the initial NSW HIV Strategy 2012–15, followed by the 2016–20 strategy, provided the opportunity to implement grants funding reform in the HIV/AIDS program area and identify other areas for a more collaborative approach.

The community sector across Australia historically worked in partnership with government to respond to the HIV health crisis, providing a basic framework and process for collaboration. NGOs were also involved in developing the most recent NSW HIV strategies. Health built on this history of the NGOs having a literal ‘seat at the table’ to invite them to join as the group responsible for implementing the HIV strategy and monitoring its progress against targets. This group reports to the NSW Chief Health Officer on the new or revised actions required to support the strategy’s targets, including in clinical practice, prevention, service arrangements and strengthening data collection and progress surveillance systems. This approach encourages far more engagement from all parties to build strong relationships of trust and a willingness to work collaboratively, rather than working to contractual rules. This has been helped by Health and the NGOs investing considerable time on talking and troubleshooting.

The move from a grant to rolling annual funding agreements was a significant change. Annual funding allowed NGOs to confirm their services are being delivered according to objectives and to identify areas of service duplication. Once an NGO’s role and responsibility in the strategy was clarified and performance targets consistently met, longer-term funding was introduced. This change has facilitated service redesign to meet contemporary needs and improve efficiency.

NGOs were then invited to refine and amend the KPIs included in their funding arrangements to ensure they aligned with the HIV Strategy’s targets. Progress is reviewed quarterly, and the KPIs can be adjusted to respond to new and emerging issues, for example, to better service a demographic group. This model of participatory, negotiated governance is considered to be contributing to the strategy’s success, with NSW on track to significantly increase testing, treatment and prevention, and virtually eliminate HIV transmission by 2020.

Customer service capability is shifting to meet growing expectations

Individual citizens and businesses conduct 40 million transactions with the NSW Government each year. Good customer service is typically provided by employees who are honest, accountable, efficient and effective, who communicate well and see things from the customer’s perspective.

Significant effort has been put into measuring and improving customer satisfaction with NSW Government services in the past few years, guided by the Premier’s Priority to increase customer satisfaction year on year. Since 2015, the NSW Whole of Government Customer Satisfaction Index has measured customers’ perceptions of NSW Government services and their employees, processes and customer values. The resulting data showed material improvements in 2015 and 2016, but perceptions remained largely unchanged in 2017. It is worth noting, however, that customer satisfaction in all other industries included in the benchmark also declined over the same period, in some instances significantly.

A customer-centric focus has been embedded in the public sector workforce. When employees were asked about their perceptions of customer service, 85% agreed that their workgroup strived to achieve customer or client satisfaction. Sixty per cent agreed that senior managers communicated the importance of customers or clients in achieving objectives. These scores were unchanged from 2016.

However, the whole-of-government Customer Satisfaction Measurement Survey found that customer perceptions of what service level they expect differed between individual consumers and businesses. For example, businesses viewed effective customer service as tailoring services to customers and providing elements such as a single point of contact. When it came to perceptions of employee-specific accountability and seeing things from the customer’s perspective, individual consumers’ scored public sector agencies at a steady 7.0 out of 10 in the 2017 customer satisfaction survey, as in 2016. However, the overall scores from businesses for these employee attributes declined to 6.8 and 6.7 respectively, down from 7.0 each. Both were the lowest areas of performance from customers’ perspective overall in 2016 and 2017. Communicating well (7.4 in 2016 to 7.2 in 2017) and providing good-value services (7.5 in 2016 to 7.1 in 2017) also declined for businesses, perhaps indicating the feedback from business on appreciating tailored service. While online services achieved the highest overall satisfaction scores, they were not the most accessed, and customer feedback showed a preference for a range of service options. This indicates the potential to integrate more service platforms with online delivery.

Figure 7.2: Consumer customer satisfaction scores for employees, 2016–17

Consumer customer satisfaction scores for employees, 2016–17

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Customer satisfaction scores for businesses 2017 2017 2016
Are honest 7.6 7.7
Deliver high safety standards 7.5 7.7
Provide services without bias 7.4 7.5
Are reliable 7.3 7.4
Explain intended actions clearly 7.3 7.4
Engender confidence in their knowledge 7.3 7.3
Communicate well 7.2 7.4
Are consistent 7.2 7.3
Do what they promise 7.2 7.3
Provide good value services 7.1 7.5
Are proactive in helping 7.1 7.3
Focus on addressing customer needs 7.1 7.3
Get things done as quickly as possible 6.9 7.0
Are held accountable 6.8 7.0
See things from my perspective 6.7 7.0

Source: 2017 Annual Customer Satisfaction Measurement Survey

Figure 7.3: Business customer satisfaction scores for employees, 2016–17

Business customer satisfaction scores for employees, 2016–17

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Employees  2017  2016
Are consistent 7.3 7.3
Are honest 7.7 7.6
Deliver high safety standards 7.7 7.6
Provide services without bias 7.7 7.6
Engender confidence in their knowledge 7.5 7.4
Explain intended actions clearly 7.5 7.4
Are reliable 7.4 7.3
Communicate well 7.4 7.4
Do what they promise 7.4 7.3
Provide good value services 7.4 7.4
Are proactive in helping 7.3 7.3
Focus on addressing customer needs 7.3 7.3
Are held accountable 7.0 7.0
Get things done as quickly as possible 7.0 7.0
See things from my perspective 7.0 6.9

Source: 2017 Customer Satisfaction Measurement Survey

Sector leaders confirm that there is a gap in sector employees’ capacity to see things from the customer’s perspective. At the leadership level, customer service is the focus of conversations held across the sector and measured in performance plans, supported by internal surveys and regular testing of service design, with much collaboration on where progress in one cluster can be shared with another.

However, these processes and capabilities have yet to flow through to the local level. This is indicated in the customer satisfaction scores, which show that empathy and communication have become key drivers of customer satisfaction. There is an opportunity to move beyond an initial focus on the mechanics to the quality of the customer interaction, particularly when resolving complaints.

Sector leaders report that at the local level, the emphasis for employees needs to shift from being engaged with work to improving customers’ outcomes. This may be a challenge when contracting service delivery outside government. For example, how do employees maintain a shopfront mentality when the agency itself may not be the shopfront?

Data capability shifts from reporting to extracting insights

Sector leaders report that there is a capability gap in extracting insights from customer, workforce and operational data to drive policy, strategy, service design and delivery, and decision making. They also say it is a challenge for their agencies to use workforce data linked to operational and customer data to understand and measure the agency’s impact that their people have on delivering their organisational priorities. This has high value in business and workforce planning, contributing to efficient and effective organisations and engaged workforces.

Many of those involved in achieving the Premier’s Priorities say using operational and customer data effectively has shaped their intervention at key stages. An example is in Education, where the Centre for Education Statistics and Evaluation, set up five years ago, provided a single data hub that informed the combination of financial, human and information resource interventions needed to address the Premier’s Priority for improving education results. Data identified a relatively small number of schools where a slight improvement in NAPLAN results would make a significant contribution to meeting the target of increasing the proportion of NSW students in the top two NAPLAN bands by 8% by 2019. School-based targets were set to ‘bump it up’ (i.e. make relatively small improvements), and focused attention at these schools saw the target achieved two years early. Other initiatives focused on early intervention and developing learning progressions, and using the School Excellence Framework to monitor changes. The Centre also evaluates the progress and impact of major reforms, and recommends adjustments to deliver the intended outcomes.

Agencies vary widely in the maturity of their data acumen. Some Priority-leading agencies report that they are still growing capability in using data to drive practice change and more effective decision making. For example, there are some collaborating on Priority dashboard-style performance reports that enable comparability between agencies – a powerful tool to compare relative progress and identify areas of improvement. Recruitment processes are now informed by the need for specific analytic capability in knowing how to distinguish between true performance metrics and general noise.

In Justice, data on when and how quickly domestic violence perpetrators reoffend was used to identify strategic gaps, optimise interventions and better track progress. Justice worked with the Bureau of Crime Statistics and Research and the Premier’s Implementation Unit to analyse the timing of reoffending and breaches of apprehended domestic violence orders (ADVOs), and the characteristics and sentencing outcomes for reoffenders. This identified the need to offer interventions before the court process is finalised. New programs for offenders on bail or remand have been implemented.

Fieldwork with victims and offenders has also shaped the design of innovative domestic violence interventions. Justice has partnered with DPC’s Behavioural Insights Unit to develop and introduce Plain English ADVOs, conduct a controlled trial of text messages to increase court attendance, and design a brief one-to-one intervention with Aboriginal ADVO defendants.

Regional strategy groups established to support the Priority are using data to identify specific challenges in each region. For example, the discovery of a high rate of domestic violence reoffending among young people in some areas of Western Sydney has reinforced the need for protocols between out-of-home care providers and NSW Police.

Justice and partner agencies have also developed a monitoring framework to improve their understanding of progress towards their target of reducing the proportion of domestic violence perpetrators reoffending by 25% by 2019. Tracking reoffending is challenging because time must be allowed between the first and any subsequent offences, but agencies have developed an agreed method to project the impact of different programs based on evidence of their effect size and the target number of offenders.

Sector leaders report that data capability across the sector via the use of dashboards and predictive analytics has improved significantly in recent years, and that this will continue. The data-driven monitoring approach used for achieving Premier’s Priority targets has helped, as has an emphasis on seeking to establish where success in one initiative can be translated to another. In workforce data, 160 users are now licensed to use the PSC Workforce Dashboard, giving them the opportunity to extract insights to feed into strategic workforce planning. Efforts are now directed to seeking reliable evidence and proof of outcomes through data analysis, to provide a clearer picture of agency performance.

Change management processes are becoming more important as transformation continues

Leaders across the sector acknowledge that technology, workforce characteristics, government policy and the needs of customers will continue to evolve. Claims of change fatigue are based on the incorrect assumption that there will be a steady state at some stage, but while the speed and scale of change ebbs and flows, its existence is a constant. Leaders report that they are driving awareness that the sector will always need to adapt and build new capabilities in people, processes, culture and systems to accommodate change. Managing this transition is becoming more complex.

Questions about employee confidence in change management received some of the lowest score in the 2017 Employee Survey, consistent with the responses to the 2014 and 2016 surveys. These scores tend to be low across government, not only those parts of the sector undergoing significant institutional change.

Figure 7.4: Employee perceptions of change management, 2016–17

  Agreement 2017 (%) Agreement 2016 (%)
I feel that senior managers effectively lead and manage change 44 43
I feel that change is managed well in my organisation  39 41

Source: People Matter Employee Survey

Much of the sector has changed significantly in the past five years but capability has been built in:

  • managing change in a real-world setting
  • learning from common mistakes
  • learning how to anticipate rather than react to typical challenges.

The 2016 Agency Survey2 reported that employee perceptions of change management tended to be better in agencies that evaluated the outcomes of their change initiatives and manager performance. Agencies are encouraged to find these pockets of experienced excellence and leverage these to lead their own change.

Growing capabilities in collaboration, customer service, change management, and data collection and analysis will require agencies to use the key GSE Act reforms efficiently and effectively, particularly when accessing and mobilising talent employees, and developing their performance. Capability can be further grown by a strategic approach to planning and arranging the work required. A culture and leadership that are open to rethinking how to best use these enablers is required to drive it forward.


1 NSW Public Service Commission, Collaboration Capability Review, October 2017.

2 Customer Service Commissioner of New South Wales, 2017 Customer Satisfaction Measurement Survey.