Dialogue: State-sector manager ethos must be discarded quickly

By ANNE DE BRUIN* and LYNNE EAGLE*

The ministerial review into Work and Income New Zealand highlights a major contradiction.

It acknowledges the need to applaud the department for what has been achieved in a major restructuring, the introduction of new policies and the acceptance of additional responsibilities. At the same time, however, the review says there is an urgent need to overcome what it terms not only criticism but also ridicule around the country.

Many of the problems facing Winz can be traced to the ideology of managerialism, which was part and parcel of the state-sector reform begun under the 1984 Labour Government. This assumes that "better management" will provide an effective solution for a wide range of economic and social ills.

Its strongest critics say that managerialism makes two distinct, but fraudulent, claims. The first is that efficient management can solve almost any problem. The second is that management practices, which are appropriate for the conduct of private sector enterprises, can also be applied to public-sector services.

Better management provides a label under which private-sector disciplines can be introduced to the public service, financial budgets pruned and bureaucratic inefficiencies removed.

This management approach, driven mainly by private sector consultants rather than by academics, and embraced by policy-makers, implies that direct comparisons between the private sector and public sector can be made and that efficiency-enhancing strategies adopted in the private sector are optimal for the public sector as well.

The alternative view, that the two sectors provide quite different management challenges, has not been reflected in the reshaping of the public sector Managerialism at Winz has resulted in a corporate business culture, which the ministerial review team described as tending "to emphasise the importance of the single organisation as it strives to compete in an unforgiving world. It stresses difference, taking charge of one's own destiny, a unique mission, vision and strategy - all of which are aimed at the bottom line. There is less emphasis on collegiality, the collective interest and a shared set of values across many organisations, which are essential to the running of the public service."

At Winz, "better management" has also involved the use of private consultants - briefing papers to the incoming Government were contracted out to consultants - and a corporate style indulgent with taxpayer money (for example, the Wairakei episode and stories of extravagant office fit-outs). All of this has been an anathema to recipients of welfare assistance.

The ministerial review highlights how the corporate culture at Winz, combined with organisational skills, enabled restructuring into a one-stop shop to be achieved within deadline and within budget, as well as the implementation of "work first" and the community wage.

It also highlights, however, that Winz's "can do" attitude promoted over- confidence and a "we'll do it our way" syndrome. Unfortunately, as the review points out, doing it our way has meant a lack of sufficient analysis of problems, and what has come to be perceived as the notion of "if you throw enough money at it, you will solve it."

The Government undoubtedly wants a change in culture within Winz. The review team describes this as a wish that it becomes more departmental in style.

Presumably this alludes to Winz striving to act less like a profit-making, bottom-line-oriented state-owned enterprise and more like a government department imbued with collegiality. Collegiality would encompass building and strengthening external relationships, which the review found to be weak.

Thus, Winz would need to work better with other Government departments, ministries and agencies, such as the Department of Labour.

Further, stakeholder relationships, especially with local communities, would need to be fostered. In this connection, any uncertainties about where and how exactly the community employment group will fit in with any proposed change must be speedily resolved.

All this will no doubt also necessitate revamping key performance indicators to better reflect what is yet to be clearly defined as a more appropriate departmental style, and a change from the "customer" focus that has hitherto been so vigorously pursued.

All that is easier said than done. Nevertheless, it must be done, for as the review so aptly puts it, Winz "has an essential role to play in a sector which is fundamental to the well-being of our society. All of us citizens have an interest in the success of the organisation charged with such important responsibilities."

Certainly, a good start to the repositioning of departmental culture is the realisation that the managerialism view of one model fitting both private and public sectors must be discarded.

* Dr Anne de Bruin is an associate professor of economics and Dr Lynne Eagle lectures in marketing in the department of commerce at Massey University, Albany.