Organisational Health and Capability

Over recent months, the Treasury has revised its strategic policy direction in response to changes in the political and economic environment. To deliver against this strategy, we will continue to look hard at the capability - the people, skills, systems and support - that the Treasury needs to be productive, now and in the future. Further, the demands relative to our budget means we must continue to improve our productivity, sharpen our focus and deliver value for money.

Organisational strategic direction

“Stepping Up”, the strategic change programme we began in 2007, continues to provide a focus for efforts around our organisational culture and business practices. Our SOI for the last two years describes the programme in some detail. For 2009/10 the Strategic Leadership Team has identified three priority areas: thought leadership; management and leadership; and results.

Thought leadership is about having more impact as an organisation. For 2009/10, our focus will be on improving:

• Quality of thinking: anticipating the next set of issues and the ones after that; being creative and seizing opportunities; challenging accepted wisdom
• Quality of process: bringing disparate views together; turning ideas into solutions; following through
• Quality of persuasion: using those ideas to lead the debate externally and influence key decision-makers.

The quality of management and leadership has an impact on the engagement and productivity of staff and therefore on the effectiveness of the Treasury as a whole. In recent years, the Treasury has worked with its managers to lift management competency across the board. We will continue with this investment and will be introducing measures to gauge improvement during the 2009/10 financial year.

Our results framework is the means by which we communicate and monitor what we are going to do and how we are going to use our resources to do it. In 2009/10 the changes we are aiming for are:

• More consistent use of results as the planning and prioritisation tool that allows us to optimise a whole-of-Treasury impact
• Good understanding by all staff of the results and how they contribute to the Treasury's overall impact
• More effective monitoring and better understanding of progress on results through measuring and reporting impact.

As part of our quest for continuous improvement and to lift the Treasury's overall performance, we undertook a detailed review of the Organisational Performance Group (OPG) in 2008. OPG was reconfigured to include a “strategy and decision support cluster” to deliver a number of initiatives resulting from the review, including:

• the provision of joined-up advice on results, finance and human resources for senior decision-makers, aimed at ensuring that the right people have the right information at the right time to make the right decisions and communicate them to the right audience, and
• the development of an integrated three- to five-year organisational capability strategy for the Treasury which sets out the people, finance and infrastructure requirements that will enable us to deliver on our strategic policy priorities.

The overall objective of both of these initiatives is a step change in the quality of leadership and management decision-making, which will be manifested in a high-performing, high-productivity Treasury.

Organisational capability

The heart of strategic capability is our people. In recent years, the challenge has mainly been attracting and retaining top performers in an external marketplace where job seekers have largely called the shots. This year, the current economic crisis is likely to take some pressure off the recruitment market.

Assess our capability to produce what is required

Being clear about which skills, experience and attributes directly contribute to successful performance lies at the heart of an organisational strategy. We want to improve our understanding of, and response to, our capability risks, ensuring we can not only meet immediate needs but also anticipate future needs with improved strategies to acquire or grow the talent we need. We need to identify talented individuals and to make the most of the talent we have.

The first step in this process is to understand where the talent lies in our organisation by mapping critical people and critical skills. Commencing with the senior analyst role, we will progressively map our capability to close any skill gaps.

Attract, develop and retain the right people

To attract and retain the right people, the Treasury needs to develop a better understanding of the sorts of features that keep current employees engaged and clearly identify us as the employer of choice.

Last year, we began using the Lominger framework, a research-based, competency framework to identify and develop key management competencies and leadership practices. This year, we will continue with this approach. We are also running targeted training for our senior analysts.

We plan to improve employee engagement and retention, manage staff turnover and build our reputation as an employer in order to improve retention and attract people with the right skills.

In order to achieve this, we will:

1 introduce an employee engagement survey and action plans to assess and address the level of employee engagement (studies indicate that a high level of employee engagement drives superior organisational performance), and

2 review our reward and recognition strategyto ensure we are rewarding performance that makes a difference. A reward and recognition strategy is more than just remunerating staff. It also provides different ways to reward achievement, not limited to monetary gains.

Equal employment opportunities at the Treasury

This year, the Treasury will continue to embrace the new equal employment opportunities (EEO) policy for the public service, Equality and Diversity, which took effect in April 2008¹. We will continue our commitment to appointments on merit and to the four EEO groups: Māori;ethnic or minority groups; women; and people with disabilities.