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Digital literacy to drive APS decision-making: Interview with David Thodey

By Governance Institute

Telstra’s former CEO David Thodey AO recently shared his views with Governance Directions on how the Australian Public Service’s (APS) performance can be further enhanced. No doubt he’ll have more to say when he addresses Governance Institute’s National Public Sector Governance Forum in November.

Thodey has plenty of experience with the APS. He is currently leading a panel of experts overseeing an audit of myGov and chaired an independent review of the APS which handed in its report in 2019. He is also a previous chair of the CSIRO.

Today, he chairs Tyro, Australia’s only independent EFTPOS banking institution; Xero, a cloud-based accounting software provider for small and medium-sized businesses; and Ramsay Health Care, a global hospital group.

He is also active in consulting, venture capital, public policy, science, research and innovation and manages his own investment portfolio.

Before joining Telstra and becoming CEO in 2009, he spent 22 years at IBM where he held several senior executive positions across Asia Pacific and became its CEO for Australia and New Zealand. And, having a keen interest in basketball, he also previously chaired Basketball Australia.

Room for improvement

When it comes to his review of the APS, Thodey says there’s still room for improvement even though some of the recommendations from his review have been implemented and are making a real difference or will do so over the next few years. Others ‘have room for more work to be done’.

The review, aimed at ensuring the APS is fit-for-purpose for the coming decades, produced 40 recommendations. The then Coalition government fully agreed to 15 of these. It agreed in part to 20, noted two and rejected three.

‘Broadly, I have seen a move towards tackling existing and emerging challenges as a combined service,’ says Thodey.

‘This includes the APS’s collaborative response to the pandemic and subsequent service-wide capability investments and initiatives.’

Here, Thodey points to the APS Academy, a networked hub for learning and development, and the Professions model which builds the skills of public servants with digital, data and human resources skills.

He adds that there’s also been growing efficiencies in the APS’s learning and development spending. Plus, some of the APS’s structural changes are enabling it to make better long-term strategic decisions and improve the coordination of delivering government priorities.

‘This includes the reinvigoration of the Secretaries Board and its sub-committees and enhancing transparency. There have also been important reforms to further a pro-integrity culture and developing the APS senior leadership pipeline, led by the Australian Public Service Commissioner.’

However, there’s more Thodey would like to see. ’It is essential to continue to foster cultural change to truly unite the service, reduce hierarchical mindsets and improve the use of data and evidence to drive decision-making.’

A moving target

The review called for an integrated, collaborative and dynamic approach to policy, regulation and service delivery to make APS fit for purpose. And, according to Thodey, the signs are positive so far.

‘At the leadership level, many of the structural and process changes the APS has made over recent years have been aimed at improving the collaboration and agility of the service when confronted with unexpected and cross-cutting challenges,’ he says.

‘This includes bringing more strategic discussions to the Secretaries Board that might have only received the benefit of one portfolio’s perspective, as well as an initial foray into scenario planning.

‘At the broader workforce level, the APS – supported by its first whole-of-government workforce strategy – has highlighted the need to improve its capability and skills in areas that make the service more future-ready.’

These areas include data and digital capabilities, as well as the skills to conduct more sophisticated evaluations of policies and services.

‘It’s great to see innovative new solutions being rolled out, like the APS Academy Data and digital campuses co-located with regional universities,’ says Thodey.

But he notes: ‘A fit-for-purpose APS is not a moment-in-time milestone. The needs and expectations of Australians will continue to change. Both the government and the APS will need to be prepared to apply continuous effort to make the APS as strong as it can be.

‘This is why the purpose, culture and values of the APS must be the driving force to help it adapt to the challenges over the following decades.’

Strengthening relationships 

Thodey says the relationship between the government and APS is strong and productive, as evidenced during the height of the COVID-19 pandemic when they worked hand-in-hand to deliver the crucial services so many Australians relied on.

More recently, he says the government has highlighted the core role of the service as its primary advice and delivery arm and has emphasised its commitment to building a stronger APS.

Both also have a shared focus on improvement and are making big strides to improve the integrity of their institutions and bolster their capabilities.

But Thodey says both are yet to make significant use of more innovative funding arrangements to support impactful change and improved outcomes.

‘There is still a heavy bureaucratic and administrative cost to tackling issues that straddle portfolios and multiple ministerial responsibilities,’ he adds.

‘There can also be a greater sense of strategic ambition implemented between the government and APS. I think this should be an annual strategic planning process that is driven across the APS to inform strong public policy.’

The need for digital improvements  

Thodey believes the APS has made significant progress in digital literacy since the release of the review.

‘The importance and value of digital services, and operating digitally within the service, is a lesson learnt by both our government and comparable governments,’ he says.

‘The establishment of the Secretaries Digital Committee has brought digital transformation to the forefront of the service. This has led to more strategic consideration and investment in digital capability.’

Thodey says the committee has also been supported by a renewed mandate of the APS’s Digital Transformation Agency (DTA), which recently moved into the Department of Finance.

‘The DTA is playing a critical role in stocktaking existing capabilities, planning what future capabilities are required and the best way to get there,’ he says.

But while there have been improvements in how the APS coordinates and plans digital matters, there are still significant hurdles to overcome if the APS is to become a digital leader.

‘These include reducing the long lead times and heavy costs in developing new and large-scale digital systems and the ongoing difficulty in recruiting and retaining staff highly proficient in digital skills,’ says Thodey.

Progress in governance 

Discussing governance in general, Thodey believes that environmental, social, and governance (ESG) is fundamental to good business.

‘It’s not something extra that you do nor is it optional,’ he says.

‘It’s about your commitment to the society and communities in which you work and do business. I have been encouraged to see the progress in this area over the last few years.’

One area of advancement in this respect is the growing commitment to the environment with the emerging Task Force on Climate-Related Financial Disclosures standards for carbon emissions and the Taskforce on Nature-related Financial Disclosures to measure environmental impact.

Another area is the focus on creating an inclusive workplace with gender and racial equity, especially pay equity.

‘Good governance and risk management are important for every organisation, not in looking back but in their operations and in defining their future,’ says Thodey.

‘Organisations that have strong governance and risk management built into them have a greater impact and create sustainable value.’

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