Organisational Development and Capability

Our Organisational Strategic Direction - Progress with Stepping Up

Our major change programme, Stepping Up, implemented in November 2006, involved a fundamental look at the Treasury's strategic direction, how we organise ourselves, how we operate and how we engage most effectively with stakeholders. The changes were driven by a desire to improve our effectiveness and efficiency - in order to increase our impact as an organisation. We decided to concentrate our efforts on a smaller set of strategic issues - those areas where we can have greatest influence and impact and increase our ability to help frame and shape the economic agenda.

During 2008/09 we continued to build on the progress made as a result of the Stepping Up changes. Significant early success, in terms of getting better at identifying our Minister's current and future needs and in having a strong results focus (having a clear focus on what is important across the organisation, and making sure that drives what we do on a day-by-day basis), was maintained and incrementally improved. In addition, as in 2007/08, we targeted change in four key areas: leadership and management; quality; strategic policy leadership; and external engagement.

Leadership and Management Development

During 2008/09 we invested significant effort to create developmental strategies designed to lift management and leadership capability. We continued to roll out the Lominger competency framework (initiated in 2007/08 with the development of role profiles for deputy secretaries and assistant secretaries) with the development of role profiles for managers. In addition, managers received 360° feedback based on their performance relative to these role profiles as a mechanism for establishing individual development plans. Individual plans have included development options such as secondments, greater use of on-the-job training, peer review and one-on-one coaching for specific skill gaps. Creating competency role profiles and the 360° feedback process will be further cascaded throughout the organisation over the next couple of years.

In reflecting on the implications of changes to our external environment, new ministerial expectations and what this means for Treasury roles, and the extent of progress made towards Stepping Up objectives, the Secretary also initiated a review of the Treasury's leadership to ensure that the Treasury is positioned to meet the challenges we face. The review aims to conclude in September 2009 and any changes will be implemented in 2009/10.

Quality

Ensuring consistent quality in both policy advice and operations is key to maximising our impact as an organisation. In 2007/08 we rolled out a revised and updated Quality Standards for Policy Advice. The new Standards were published in the Statement of Intent 2008-13. In 2008/09 we undertook an external review of a selection of our written advice in order to formally assess our performance against the Quality Standards - for a discussion of the findings of this review see page 29. We also conducted two internal reviews of specific pieces of work undertaken during the year. These helped identify specific lessons as well as foster a culture of continuous improvement. The focus for the future will be to use the learning from the internal and external quality reviews to further develop the expertise, tools and systems we need to deliver the best advice to Ministers that we can.

Strategic Policy Leadership

The focus of the Treasury's strategic policy leadership efforts in 2008/09 was around post-election preparedness and advice to the incoming Government. We finalised and delivered briefing papers “Guide to the Treasury”, “Responding to Your Priorities” and “Medium-term Economic Challenges”. These were used to frame early conversations on how the Treasury could best support the Minister and his staff to take forward the Government's economic priorities in the short term (first 100 days) andto develop a longer-term programme of action. A series of “hot-topic” briefings developed as part of the Post-election Preparedness (PEP) process were used extensively and successfully to provide more in-depth, issues-based advice for the Minister of Finance and other Ministers with economic portfolios. Investment we had made in 2007/08 in our Strategic Result Areas – International Connections, Long-term Fiscal Sustainability, Natural Resource Management and Skills – meant that we were well placed to deliver strategic post-election advice.

External Engagement

Bringing a stronger external focus to our work has been a priority for the past couple of years. In the course of developing our post-election advice the Treasury engaged with a range of private sector stakeholders, which helped with the depth and rigour of our analysis. We have a continuing programme of engagement with individuals and groups from the private sector, which has ranged from addresses by Treasury leaders to sector conferences, to boardroom meetings with small groups of directors or law firm clients. They are important opportunities to provide input into the direction and tenor of debate, as well as hear from those operating at the cutting edge of the economy.

A number of key speeches were delivered by the Secretary to the Treasury during the 2008/09 year. These included his address to the February Jobs Summit, which underlined the need for new ideas and practical solutions to help New Zealand ride out the recession in the best possible shape. The Secretary's pre-Budget address to an audience of public sector leaders, analysts and market commentators gave a forthright and comprehensive account of the setting in which the Budget was framed, and was accordingly well received. So too was an outline of the Treasury's thinking on tax, delivered to the Tax Working Group in June. These are examples of the organisation engaging with key players, and informing the discussions that will help determine policy decision-making.

Value for Money and Organisational Efficiency

Our organisation changed as a result of Stepping Up, and the Organisational Performance Group (OPG) needed to evolve with that to ensure that corporate support functions were well aligned with business priorities. During 2008 we reviewed OPG's performance, its configuration and its level of resourcing, and implemented changes during 2008/09. The objectives of the review were to ensure we had “back office” teams that were customer focused, operated efficiently, delivered value for money services and provided “joined-up” advice to the rest of the business that enabled quality decision-making. Key improvements in 2008/09 as a result of the OPG review include more integrated, higher-quality decision-support to senior managers, a number of initiatives to improve our customer focus (all OPG managers and staff participated in customer focus workshops) and the development of a results framework that improves our ability to deliver joined-up and seamless services to internal clients. The review also produced savings of $500,000 per annum through a reduction in back office resources. The quest for value for money and organisational efficiency is ongoing and we will continue to seek organisational efficiency improvements in the year ahead.

The OPG Review, in combination with work we had done to assess our internal capability to deliver on the priorities of an incoming Government, meant that the Treasury was well placed to respond to the Government's “Line-by-Line” Review. We provided an analysis of historical changes in our baseline and work programme and identified potential efficiency gains. As the primary driver of Treasury expenditure is related to policy tasks, we presented the Minister with a menu of options around policy advice he could purchase from the Treasury. This informed a subsequent budget initiative that used a combination of reprioritisation and new funding to address government priorities, especially in the areas of infrastructure, regulatory quality, State sector performance and value for money.

Our People

The change in Government in November 2008 resulted in the Treasury being asked to focus on different priorities and also to undertake additional responsibilities (for example, the set up of the National Infrastructure Unit). To ensure we could deliver on these expectations we assessed our capability and identified current capability strengths and gaps. These findings are informing our recruitment and development strategies for 2009/10 to ensure we have the right capability in place at the right time. Following on from this, we have also begun to develop a three- to five-year people strategy to ensure the Treasury has the robust core capability we need to deliver across all our roles over the medium term.

The Treasury employed 343 full-time equivalent employees (FTEs) at the end of June 2009. This included seven staff on secondment to other government agencies, three to Ministers' offices and three staff on secondment to international institutions.

We have continued our focus on being an employer of choice by ensuring our work environment, culture, policies and procedures are fair and equitable. We reviewed and updated our flexi-working arrangement policy and procedures in response to the changes in employment relations law in 2008. As a result we have seen an increase in requests for flexi-working arrangements which has contributed to the increase of part-time staff employed from 10.5% in 2007/08 to 13% in 2008/09.

Staff Experience

The Treasury recognises that an engaged workforce contributes to quality productivity and retaining and attracting talent. At the end of 2008/09 we started our engagement programme with the launch of the Gallup Engagement Survey. The results and subsequent action plans will be delivered during 2009/10.

The average use of sick leave by Treasury staff increased from 4.19 days in 2007/08 to 4.48 days in 2008/09. Average annual leave balances increased by two days to 18.15 in 2008/09.

Staff Training and Experience

As a knowledge-based organisation, our success in contributing to our outcomes depends on maintaining and developing a talented workforce and making full use of its experience and expertise.

During 2008/09 we delivered a range of development across the organisation including managers being able to complete a Diploma in Frontline Management run in-house; staff could attend a number of in-house courses ranging from cost-benefit analysis to effective writing skills to improved computer skills.

We recognised that the majority of development comes from actually doing the work, so as part of the Lominger framework we have started to place greater emphasis on on-the-job development through work allocation. Peer review groups have also been started to assist with on-the-job style development.

We also started to create Lominger competency role profiles for roles below managers (for example, senior analysts) to help identify critical skills gaps and create development plans that specifically address these gaps.