The Performance Improvement Framework – where to next? Alison McDonald, Deputy Commissioner State Services Commission Presentation to the Institute of Internal Auditors New Zealand 25 September 2015

STATE SERVICES COMMISSION Results We have overall responsibility for supporting the Better Public Services results approach. We identify and resolve system bottlenecks that impede progress. Workforce and Leadership We oversee State sector workforce bargaining, and the issues arising in the course of bargaining. We are building a system leadership pipeline that is both more diverse and more able to respond to the needs and expectations of New Zealanders. Executive Management We work on behalf of the Crown to ensure the best Public Service chief executives are recruited and they are successful. System Risk and Assurance We work across government supporting integrity, system assurance and machinery of government Continuous performance improvement We deliver the Performance Improvement Framework (PIF) and support Continuous Improvement programmes on behalf of the system. Four-year plans With the Treasury we support agencies to develop a medium-term strategy that is fiscally sound and aligns resources to the required results. SSC LEVERS 2

3 A CREDIBLE TOOL... Model developed in 2009 with first reviews 2010 based on best practice models from the international public and private sectors Now published 44 agency PIF Reviews and 20 Follow-up Reviews. Every public service department has now had a PIF review. Insights have helped central agencies strengthen system’s focus on leadership, strategy and stewardship. PIF is sought out by senior leaders who use its insights to lift agency performance. PIF is: A diagnostic tool to help chief executives A forward looking assessment of how well placed an agency is to meet its future performance challenge Not an audit of past performance

USING FOUR-YEAR EXCELLENCE HORIZONS ENVIRONMENTOPERATING MODEL BUSINESS STRATEGY CHANGE CAPABILITY PERFORMANCE CHALLENGE What is the contribution that New Zealand needs from this agency and, therefore, what is the performance challenge? 4 A distillation of the critical shifts an agency needs to make to be successful in four years’ time Help leadership teams deepen their understanding of how to be strategic Give leadership teams a sense of what it might look like if they are successful A benchmark against which to assess the department, rather than past performance PIF reviews are future focused, so it is about understanding where an agency needs to be in four years to be successful.

WHY PIF WORKS Quick and low impact – only two or three weeks on site at the department Lead reviewers – independent, high profile, credible Interview-based process, with review of key documents Forward-looking, not an audit Ongoing involvement of the Central Agencies team Moderation of the results before finalisation Ratings – provide focus Publication – provides transparency 5

KEEPING THE FRAMEWORK FRESH We use our model to look at the fundamental aspects that drive agency performance. How well placed is the agency to achieve its excellence horizon? 6

7 TRANSPARENCY IS FUNDAMENTAL TO PIF Ratings are a benchmark against which to judge future performance. They describe how well placed the agency is to deliver its potential, in each area.

SYSTEM-LEVEL FINDINGS Main conclusions** Public institutions are adept at managing immediate issues, transactional stakeholder relationships and the priorities of governments of the day. They tend to be less successful in building strong and enduring public institutions whose purpose and roles are clear and whose core business effectiveness and efficiency are as strong as their ability to manage issues and events. **Core Guide 3: Getting to Great: Lead Reviewer insights from the Performance Improvement Framework Results* Organisational Management* *Based on 44 agency PIF reviews completed at the end of June

For chief executives and senior leaders A good picture of the potential for their agency and how to improve For Central Agencies System-wide diagnosis of what is good and where the system can improve For Ministers Assurance that the agencies they are responsible for are constantly looking for ways to improve how they do business and deliver value for New Zealanders For the public See that the State services is thinking about its services and how they are delivered. People can see that the State services is continuously seeking to improve and is transparent about that. SYSTEM BENEFITS SO FAR… 9

The PIF agency model is a proven tool … … but we think we can do more with it. 10 WHERE TO NEXT?

PIF IS AN EVOLVING TOOL We are flexing the PIF with three distinct offerings: The PIF Agency Review and Follow-up Review – our established tools. The PIF system offering – in development with Education. Using the Framework to help sectors achieve joint goals. It will test how well placed a system and its agencies are to achieve their future goals using the lens of the PIF agency model. The PIF self-directed review – enhancing the self review’s depth and bolstering external confidence in it. Optional ‘add-ons’ could include coaching through the process from experienced PIF staffers and a lead reviewer to help develop a Four-year Excellence Horizon and do some of the external stakeholder interviews. 11