Why the public sector is less risk-averse after the crisis

Thursday, 23 July 2020

The Australian Public Service has adapted during the COVID-19 crisis and new research shows it is generally less risk-averse and more open to innovation as a result. Kerstin Oberprieler, Co-Founder and CEO of PentaQuest, says public sector managers have also stepped up and are changing their management style, for the better.

The culture of the Australian Public Service (APS) has changed in the past few months, according to a new research report, The Next Normal: How COVID-19 has Changed Workplaces in Government.

“We’ve seen a definitive shift towards a more innovative and less risk-averse culture, and this is from a range of agencies, including the more traditionally risk-averse ones such as law enforcement,” says Oberprieler. 

“I think we will see this continue for the coming months, and then it will be a question of whether the culture returns to its pre-COVID-19 level. Most leaders we spoke with, however, all stated their hope and intention to continue the benefits such as collaboration, productivity and flexibility that they have seen.” 
An example of agile response is the redeployment of 1,800 public service staff to Services Australia to deal with JobKeeper applications and other new processes. However, the crisis has also forced job losses across the public sector, including the Department of Foreign Affairs and Trade, the CSIROUNSW and other agencies.

Here in an interview with the AICD, Oberprieler outlines the estimated impacts of the crisis on the sector, which is forecast to last into 2021 and beyond.

In general, how has the public sector been impacted by the COVID-19 crisis and how has this changed governance?

PentaQuest recently conducted research on how COVID-19 has changed public sector workplaces and we interviewed executives and leaders across the APS to learn about how the public sector has been impacted.

There were four key findings that emerged:

1. Leaders and agencies that had invested in mobile technology were set up well to deal with the sudden transition
2. Leaders were unanimously pleasantly surprised at how effective remote working is and productivity has not been lost
3. People are relating to each other differently and showing more empathy and understanding
4. Managers have stepped up and are changing management style, for the better.

While each agency has experienced the impacts of COVID-19 uniquely, depending on whether or not they are in service delivery, policy, assurance and so on and whether or not their industry has been directly impacted, overall the public sector has embraced flexible and innovative ways of working in order to provide business and service continuity as well as manage the upheaval for staff. 

From a governance perspective, leaders have set up committees and task forces specifically to deal with the crisis. Many actually had these set up during the bushfires earlier in the year, so had some governance processes in place. All leaders we spoke to also increased their communication, with one interviewee stating their internal comms had increased by 150% since COVID-19. In addition, CEOs have been delivering more personalised and frequent all-staff meetings and messages to keep their staff informed, engaged and assured. 

In general, do you think the public sector has been innovative and agile in its response? 

Based on our recent research, I’d say that the public sector has been innovative and agile in its response to COVID-19. Having worked closely in the government sector for almost a decade, I’ve seen the spectrum of openness to innovative practices and agility you may expect from the private sector, and I’ve been pleasantly surprised at how quickly the public sector responded. Necessity is the mother of innovation. Even very traditional and conservative agencies have responded well. 

And I’m not the only one who was pleasantly surprised -  all of the leaders we spoke with stated that they found the change remarkably easy. 

Here are a few verbatim quotes:
“We are a very different organisation now compared to six weeks ago.”
“We are more flexible than we thought we’d be.”
“We’ve done 10 years of policies in 10 days.”
While overall the change worked well, we did find that there was a time lag based on how much investment had been made into technology and flexible working arrangements prior to COVID-19. For example, organisations that were set up well made the transition to work from home in two weeks or less, while others took six weeks or so.

In what ways have public sector leaders changed their management style?

Leaders have increased communication and a focus on their people’s health and wellbeing. Many have offered mental health days and leave as needed to support their staff. Others have eased on performance discussions and appraisals to take into account the pressures on family life and mental health that COVID-19 has brought.

A key finding from our research is that managers have changed their management style. Prior to COVID-19, manager capability was a key challenge for leaders and human resource directors. It came up in our pre-COVID-19 interviews and is something we’ve seen in our work in government. So it was fascinating to hear that many leaders stated that their managers had “stepped up” and adjusted their management style in light of the WFH arrangements. 

One leader we spoke described this change as  “the agency now has to fully rely on and trust directors to deliver outputs remotely”, meaning that this has resulted in managers shifting their style from an input or time-based style towards an output and outcome-focused style. Another leader said that, “The Exec and trust in middle management has increased and managers have stepped up.” This is a positive step to a more modern way of measuring performance.

Your report says leaders and agencies that were set up with mobile technology have adapted best. Why?

I believe the reason for this is two-fold. Firstly, agencies that invested in technology had the infrastructure set up to make the switch to WFH. Those that didn’t needed to first order equipment and distribute it (right at the time when everyone was buying laptops and other equipment), as well as the enabled cloud services or install Teams and Zoom. Those that were already working with mobile technology were ready. 

The second reason is cultural. The organisations that had been undergoing multi-year transformation programs had been slowly socialising a new way of working. So when COVID-19 came along, people were much more accepting of this new way of working. 

What changes will remain?

It will be interesting to see what changes remain once the immediate threat of COVID-19 has subsided. Based on our interview’s responses, the key changes predicted to stay are:

  • Offering flexible and WFH arrangements as a standard. Many leaders have realised the many advantages of WFH, with one CEO saying, “No-one will be based in the office full-time again.
  • Relatedly, we expect a continued reliance on digital tools for connection. Now that staff are used to this way of collaborating and keeping connected, these tools will continue to be used heavily.
  • Agencies have now accepted a new way or working and many described having a greater appetite to try new things. COVID-19 has forced organisations to try new things and become less risk averse, and hopefully this will continue to be part of the norm.
  • Fewer interstate travel for meetings. Several leaders stated that their departments have saved significantly on travel since COVID-19, particularly for board meetings that require travel from members from all over Australia. Having been forced to meet virtually, many see that this has worked very well and are anticipating that face-to-face meetings will occur less frequently.
  • Strong climate awareness and action. Many leaders expressed a hope that scientists will be listened to more regarding climate change. This also includes disaster preparedness for future climate events such as bushfires.

    What does the new normal look like for the public sector?

    The new normal will include:

  • Greater hygiene practices in workplaces, including spatial desk arrangements, hand sanitizer everywhere, and the related social norms like distancing, not shaking hands.
  • The focus for leaders is how to return staff to offices safely. This also includes mental health and wellbeing, given that the last six months have been difficult for all and particularly difficult for others.
  • Leaders are also working through how to return to the “next normal” and thinking through how to return to some sense of normality without losing the benefits from flexible working and digital collaboration.

    How has governance been affected for public sector boards and how have priorities changed from pre-COVID-19 to present time?

    Aside from changes to board meeting structures being virtual rather than face-to-face, the priorities have shifted to crisis management, foresighting and future proofing, as well as a focus on business continuity.

    For agencies that have been directly affected by COVID-19, such as agriculture and travel for example, the focus now is about how to rebuild cash reserves and how to recover the business. Of course, there are many unknown factors and variables that will need constant evaluation. Given that the COVID-19 situation, as well as global political movements and changes, are very much in flux at the moment, boards are focusing on understanding the latest information and making strategic decisions accordingly.

    How long do you think public sector boards are expecting the period of austerity to last? 

    This is anyone’s guess. When we interviewed leaders pre-COVID-19 and asked their top predictions for 2020, no one predicted this. 

    However, many are working on a two-year time frame. While many of us are hoping and would like to see the end of COVID-19 in 2020, the reality is that its effects will continue to be felt into 2021 and beyond. A study by Think.ing.com has predicted that economies will experience a minor recession in 2020 and 2021, with most economies having recovered by 2023.

    What does the research show about different work personalities?

    What surprised us was we did find that introverts and extroverts have handled the WFH differently. Particularly research agencies that (generalising here) typically hire introverts, have found great benefits including increased engagement and input. However, individuals that thrive on social connection have found the transition isolating and managers who rely on feeling the “office vibe” have felt out of kilter by not being able to be in physical proximity. It should also be noted that individuals who were homeschooling children and having other family duties have found WFH particularly challenging.

    Perhaps the best solution going forward is to offer a mix of WFH and in-office, as well as allowing people the flexibility to choose.

    Job losses are identified in your report as one of the biggest challenges. Why?

    Our report did not focus on this specifically and we have not collected data on job losses. However it was raised as a key challenge by the leaders we spoke to. This was both from a personal perspective, by people that have either had to drastically change their roles by being re-deployed to Services Australia or elsewhere, or by those having to dramatically shift their roles. For example, agencies that conduct port and physical inspections have had to shift to doing this role virtually or shifting roles. And while this has worked reasonably well, not everything can be done virtually. 

    From our research there were no significant job losses reported by leaders and many stated their intent to give job security to their staff. So while the APS has provided a level of job security, the impact of having family and friends lose jobs does have an impact on mental health and the general anxiety felt around an economic recession. 

    In general has the public sector been hit as hard by the crisis as the private sector?

    This is hard to say as we did not do a comparison, though it would seem that APS staff have been able to experience a higher level of job security than private sector staff. And while some private companies have been hit incredibly hard and many may not survived, other private companies have thrived (case in point, Zoom).

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