The Fiscal Year in Review: The Top 5 Issues

4 minute read

The IOG sees over 500 public sector managers yearly in leadership classes and through our advisory services. Given that this is our fiscal year-end newsletter, we thought it would be interesting to reflect on some of the key issues raised by these managers and the implications for governance that pertain to the following dimensions:

• legitimacy and voice
• direction and purpose
• performance (including risk management)
• accountability and transparency
• fairness and ethical behaviour

The top 5 issues they raise, in no particular order, include transformation, artificial intelligence and machine learning, complexity, diversity and inclusion, and innovation.

1. Transformation: whether because of digitization, new mandates, or shifting organizational structures, transformation at all levels has been a core issue for many departments and agencies. Key takeaway: Not everything is a transformation. Some changes are developmental, some transitional. It’s a good idea to clearly define what we mean by transformation (usually, it means a significant change to your operating model).

Implications for governance? During transformations, leadership presence is important. From deciding who has voice in determining the new direction, to monitoring progress and celebrating results, strong visible leadership and consistent messaging are critical success factors.

2. Artificial Intelligence (AI) & Machine Learning (ML): It’s on everyone’s agenda, but the terms mean different things to different people, and, although there are pockets of AI & ML initiatives in many organizations, it’s still relatively immature in most. Key takeaway: AI/ML both refer to automating some aspects of cognitive processes in organizations, and they require a lot of data which can represent a significant investment in time. Managers need to be clear about what they are trying to automate and understand the cost-benefit equation for investing in these tools.

Implications for governance? AI & ML can help improve governance effectiveness; think of automating monitoring of performance, risk, and external stakeholder opinions, for example. On the other hand, the use of AI & ML needs to be intelligently governed. Among other critical decisions, managers need to decide who has a voice in how data are used and consider the legitimacy and transparency of algorithmic governance within the broader public sector context.

3. Complexity: This is another term that means different things to different people. A dictionary definition of the term ‘complex’ is “…composed of many interconnected parts.” By that definition, most organizations are becoming increasingly complex. Key takeaway: many interconnected parts that are all evolving at different rates of change complicate results management. Complexity reduces our ability to define outcomes since so many different factors are involved in delivering results.

Implications for governance? Although the key dimensions of governance still apply, the way in which they are accomplished might need a rethink. For example, joint accountability, shared performance results, and ‘fuzzy’ targets might become hallmarks of results management in complex contexts.

4. Diversity and Inclusion: Québec just tabled legislation with measures that would impose a secular dress code on all future teachers, police officers, and other public service workers in positions of authority. Similar conversations, including where and when women can wear the niqab, have also made their way into recent political discourse at the federal level.. Although, we still have to achieve the promise of representation embedded in employment equity legislation and practices for so-called ‘Visible Minorities’, Indigenous peoples and people with a disability or disabilities, proponents of equity and equality have started shifting from representation to Inclusion, which holds the promise of permitting people to “bring their whole selves to work”. Key takeaway: This notion of Inclusion has become central in our evolutionary process of more than forty years of legislated fairness. Inclusion defines the promise of a just society, diversity has become an economic imperative, and a diverse workforce tends to be more creative and innovative. Where does this debate leaves us? Can diversity still be an antidote for populism?

Implications for governance? One of the key questions to address is how do leaders legitimize the many different voices that need to be heard in a highly diverse work environment? In addition, our concepts of leadership, performance, and accountability may need to be revisited as we become a more highly diverse nation.

5. Innovation: Canada’s CEO of the Year, Linda Hasenfratz, CEO of Linamar, has noted that, “Innovation is without doubt the single most important factor in driving business competitiveness and prosperity.” Governments around the world have recognized this reality and are in a race to leverage the innovation economy and embrace innovation within their public services. Key takeaway: innovation within government organizations is often equated with digitization. But history has shown that innovations such as new structures, new impact models, and improved processes are as important as the introduction of digital tools. Another key takeaway is that government organizations are service institutions and innovation in a service economy can take many forms, from front-end delivery to back-end administrative processing tasks to the design of modern, collaborative infrastructure. It’s important that we take an inclusive view of innovation to encourage innovative thinking across departments.

Implications for governance? One of the key issues is how to make space for innovation and at the same time maintain delivery of pre-established objectives. Should departments set specific targets for innovation? Is that even possible given the uncertain outcomes associated with innovation initiatives? Departments will likely need to embrace experimentation, conduct innovation audits, and revisit their Departmental Results Frameworks to embed innovation as a core objective and allocate resources accordingly.