The power of priorities: goal-setting in Finland and New Zealand

Leo Yip, head of Singapore’s civil service, says public servants need to change the way they operate, organise, think, and build their capabilities “for a completely different landscape”.

By rebuilding departments’ work around a handful of core goals, governments can get civil servants working together across traditional boundaries. In Finland and New Zealand, leaders have tried to do just that – and told their stories to delegates at the 2019 Global Government Summit. Matt Ross listened in

“The structures we’ve set up in government – the systems, the processes, and even the instincts and capabilities – are geared up for a much less complex era, and a much slower clock speed,” said Leo Yip. “More and more, the issues we’re faced with are cross-cutting. And the response to cross-cutting issues is collaboration. We need much stronger coherence in government, forming policy that cuts across the different policy domains.”

Yip, the Head of Singapore’s Civil Service, was speaking at Global Government Summit: an annual event for civil service leaders, which attracted top officials from nine countries to Singapore earlier this year. The answers to many of the biggest problems facing governments, he pointed out, lie not in more effective ‘vertical’ delivery by individual departments, but in better ‘horizontal’ collaboration. To tackle drug-related crime, for example, criminal justice professionals must work with their peers in fields such as health, housing and social services.

Brokering such collaboration demands active management by the centre of government, which must set out its cross-cutting priorities. And in defining their over-arching goals, governments must avoid the temptation to list every ‘nice to have’ alongside their core aims: as management thinker Karen Martin has pointed out, “When everything is a priority, nothing is a priority.”

Kicking off a discussion of ‘Unifying strategic planning: collaboration on policies and services’, the delegates heard from two countries that have tried to meet these challenges – finding ways to define their true priorities, fostering cross-departmental working to pursue them, and establishing systems to drive and monitor progress against them.

The Finnish approach

First up was Sirpa Kekkonen, Head of the Government Strategy Secretariat in the Finnish Prime Minister’s Office.

Finland has a tradition of coalition governments, she explained, whose component parties produce a “government programme”: a coalition agreement, setting out their aims for the term. In recent years, the number of parties involved has grown – and the need to capture all of their aims led to the creation of unwieldy programmes containing hundreds of goals. Party leaders even felt the need to insert warm words on issues where no new policies or services were required, she noted: “It ended up trying to say something about everything, even if there was no need for change.”

The programmes’ rigidity also constrained governments’ ability to respond to crises, added Kekkonen, and they tended to contain some rather woolly goals – making it difficult to quantify and report on progress against them. By the time Jyrki Katainen became prime minister in 2011, she continued, the programme contained 25,000 words – requiring civil servants to track progress against some 900 line items.

Following the 2015 general election, though, a “window of opportunity” for reform opened. Kekkonen’s team had already roughed out a new system, designed to narrow down the governments’ objectives to a manageable number of measurable aims – and ensure they were delivered. Having exchanged experiences with Sweden, Austria, the UK and Scotland, and learned from the ‘FINEST’ OECD review of Finnish and Estonian governance, they’d consulted with political leaders and departmental chiefs. And they’d asked each of the main parties to nominate a key adviser or official to take the lead on the project, setting aside the time to contribute to the new system’s development and – depending on the election’s results – to help shape the new programme.

The new prime minister was Juha Sipilä, who led government negotiations between three parties – then backed the planned reforms. “It was like a dream come true from the perspective of people like me, who’ve been thinking about strategic policymaking for quite a long time,” commented Kekkonen.

Fewer goals, and a delivery plan

The new system set out a common agenda, built around 26 strategic objectives in five policy areas, plus a set of structural reforms. It defined a common knowledge base, using horizon-scanning exercises, impact assessments and agreed metrics. And it was supported by a common implementation plan, focusing on budgeting, performance management, and leadership capacity in the ministries. Significantly, the new government programme totalled less than 8000 words.

Ministerial working groups were established for the five policy areas, Kekkonen explained, and Government Strategy Sessions were held fortnightly. Ministers were strongly encouraged to attend these in person, she said, and to present the themes for discussion themselves rather than delegating the task to officials. “It’s a very simple rule that ministers give the presentation, but it makes a big difference because they really need a deep knowledge of the matter they’re talking about,” she added.

This last point struck a chord with another delegate, who noted that their country has recently adopted a similar rule. “I would say it’s a sea change,” they commented. “The ownership, the ability of ministers to convince their colleagues rather than relying on civil servants to do it, I think makes for a very different conversation.”

Looking ahead

The programme also tried to look beyond the current government’s four-year term, Kekkonen continued – drafting a ten-year vision, and setting out high-level objectives. This cannot of course bind future governments, but “for the first time in our system the political government has admitted that in four years it’s not possible to achieve many of the structural, long-term reforms that are needed.” Recognising that, these 10-year goals at least ensured that current policies would provide the right foundations for the government’s longer-term vision.

A small team was set up in the Prime Minister’s Office to run the system – producing the agendas for strategy sessions, supporting the ministerial working groups, and handling reporting. And a €1bn (US$1.1bn) fund was provided, offering “seed money” to support projects around the five policy areas.

While Kekkonen was reluctant to give a final verdict on the reforms’ impact, she noted that ministers have been impressed: when a recent Government Strategy Session considered the new system’s operation, she said, “the political assessment of the success of this structure was very positive.” And the ministers’ verdict reflected her experience: “At the level of the political ministers’ work, I think coordination has been strengthened,” she said. “But there have been handicaps in how these horizontal policy entitities have been implemented in the ministries, because the ministry structure is [built around] silos.”

To strengthen the reforms’ effectiveness, she explained, a review has been conducted. It sets out 20 recommendations, including closer links between key goals and resource allocation, and the development of cross-government communication work. But meanwhile, the changes introduced in 2015 appear to have made a difference where it matters – in delivering on policy goals. The government realised its target of raising the employment rate from about 65% to 72%, said Kekkonen, while “we’ve been able to cut the growing trend of public debt, and we designed quite a radical climate change strategy.”

“We’ve made a step,” she concluded, “but there’s still a way to go.” And for those considering similar reforms, she noted the importance of extensive consultation and engagement with the parties prior to the election: this created a foundation of trust, she said, that proved essential to the system’s operation. “Now we’re trying to build the recommendations for future changes on issues that will strengthen trust between the parties in government and the civil servants,” she added. As new prime minister Antti Rinne of the Social Democratic Party – who took office in June, after a period of negotiations following the April general election – gets to grips with the policy agenda, the new system’s ability to survive a change of government will see its first test.

The New Zealand approach

Next up was Gabriel Makhlouf, New Zealand’s Secretary to the Treasury: the government’s chief economic and financial adviser, who has since been named as the next governor of the Central Bank of Ireland.

Setting out the background, Makhlouf explained that in the 1980s powers were devolved across government – giving each departmental leader autonomy over budgets, management and organisational goals. “This was brilliant at creating clarity around the delivery of outputs. It was brilliant at making very clear who is accountable for delivery,” he explained. “But over time, it’s become more and more obvious that it’s less great at dealing with complex, cross-cutting issues. And it’s less great at putting citizens at the centre of policy, which is increasingly recognised as the way to deliver effective public policy.”

Efforts to rebalance the system have been underway for some time, with the last government producing 12 ‘public service results’ focusing on topics such as reoffending and health. Each result was allocated to a minister and a permanent secretary, and every six months the government set out its performance against a basket of metrics. (These reforms are explained in more detail in the 2018 Global Government Summit report, which includes a chapter on New Zealand featuring Andrew Kibblewhite, then Chief Executive of the Department of the Prime Minister and Cabinet.)

Since the election of Jacinda Ardern in 2017, Makhlouf explained, the government has developed and expanded work to promote cross-departmental work. “We’re now doing a much bigger set of reforms, but they’re still evolutionary,” he said. “We want to hold on to the old system’s strengths around transparency, accountability, and the fiscal responsibility required by our framework. What we want to do is to become smarter and more flexible.”

Shifting planes

The new programme of changes is designed to move “from vertical accountability to horizontal collaboration,” he continued. Under three high-level priorities – covering economic modernisation, public wellbeing and governmental reform – the administration set out 12 objectives, and is developing a set of indicators to measure progress.

The prime minister’s office then asked every government agency to explain how it would support these over-arching goals. On domestic violence, for example, the government is creating “a joint venture, with its own chief executive and resources. This joint venture’s board will comprise the permanent secretaries of all the relevant agencies, and they’ll have a mandate to deliver an agreed government programme. The idea is that instead of reorganising and creating new ministries, you have these more agile, more flexible systems focused on particular tasks.”

The board will be chaired by the State Services Commissioner – New Zealand’s most senior official – and report to a dedicated minister, he added. And he acknowledged that the domestic violence joint venture may be around for a long time: “My view is that dismantling it would be difficult, because it will be really hard for them to declare victory and say: ‘We don’t need this any more.’”

Nonetheless, he argued that it’s a more appropriate vehicle for the agenda than creating a new permanent department, “because domestic violence involves lots of departments, and if you created a department in its own right then you would – almost axiomatically – be building walls. This, at least theoretically, should force that collaborative working.”

Alongside these new joint venture structures, the government is launching programmes of work to develop the skills and culture required for cross-departmental working. These include continuing to build on nominating “functional leads” – permanent secretaries charged with leading the development of common civil service standards for IT, procurement, accommodation, data, and the legal and finance professions – and “issue leads”, tasked with driving agendas such as greater diversity and inclusion. 

Structural and political challenges

Responding to Makhlouf’s presentation, another delegate – also representing a Westminster-style parliamentary system – pointed to structural tensions between the constitution’s approach to ministerial and civil service accountability and the goal of promoting cross-departmental collaboration.

“The question we’re asking ourselves is whether the institutional contestability which is fundamental to our system of government is suited to addressing modern challenges,” they commented. “The types of relationships that contestability establishes tend to be rules-based, and to find solutions through conflict.” Indeed, they continued, a debate is underway as to whether to “flip round” departmental chiefs’ official priorities – placing collective responsibility over their individual accountability for departmental performance. “There’s a challenge around formally putting in place systems that will enable collaboration to endure beyond the intention of individuals,” they added.

It’s a substantive issue, replied Makhlouf. “Ultimately, it’s Parliament that allows government to spend money; and Parliament – in our system, anyway – wants one minister to be responsible for spending that money, not a collective.”

Another point came from Lord O’Donnell, the former UK Cabinet Secretary, who highlighted the importance of creating structures that foster collaboration between ministers as well as civil servants. “Permanent secretaries form quite a coherent group, and we should be able to form them into a good team,” he said. “Ministers are much more difficult: in coalitions, they may come from different parties, and expect to work against each other when the next election comes.” In the subsequent discussion, it was clear that his comments had pinpointed a key challenge in fostering collaboration across government.

But civil servants have no choice but to persist, concluded Yip – for governments’ ability to meet today’s challenges will increasingly depend on their ability both to establish clear priorities, and to get departments working together to pursue them. “We’re now being faced with greater complexity, and so we need much stronger coherence to provide clarity, focus and prioritisation,” he said. “We really need to move the way we operate, the way we organise, the way we think, the way we build our capabilities for a completely different landscape.”

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