Working with Government

Written by Michael McAlary

It is clear to Chairmont that what is common in all government and private sector work is that one needs to have a strong appreciation and understanding of the key over-riding strategic and business priorities of the client. Chairmont has worked with a number of government departments and businesses as a trusted advisor over many years, which is a role we hold in the utmost regard. Our expertise has been acknowledged with our appointment as advisors on the following panels:

  • Federal Treasury - Financial Services Advisory Panel
  • Australian Department of Sustainability, Environment, Water, Population and Communities – Financial Advisory Panel
  • Australian Department of Defence – Management Consulting Panel
  • NSW Department of Lands – Management Consulting Panel.
  • Australian Energy Regulator (AER)
  • Economic Regulation Authority of WA (ERAWA)

In undertaking consulting work it is critical to place oneself in the ‘shoes of the client’. This allows one to have an appreciation of the broad objectives of the organisation, as well as the specific deliverables and requirements pertinent to the project or work piece being conducted.

That is, in addition to demonstrating an understanding of the specific work being requested and one’s own skills, expertise, formal qualifications, case studies and testimonials, it is equally important to communicate an understanding of the client’s ‘whole-of-organisation’ parameters. Such parameters would include the client’s mission, vision, strategic plans, objectives and priorities, key performance indicators, current challenges, policies, infrastructure and systems.

At the same time it is important that there be synergies with the client in respect of culture, ethics, integrity, strategic thinking with an operational focus, business partnership approach, and a balance between providing advice and implementation services.

This approach is particularly important in terms of government work, incl. regulatory agencies. Chairmont understands that a strong appreciation and understanding of the ‘whole-of-government’ parameters is essential in respect of any advisory services to be provided. Similarly, one needs to have an understanding of the ‘whole-of-economy’ issues being faced by Federal and State governments.

Our experience in discussing issues and working with Federal and State governments over a number of years has provided us with a deep and broad understanding of the complex, challenging and changing needs of these organisations. As part of our ongoing focus on government work Chairmont spends time and effort liaising with government and continually refreshing our knowledge (and data base) of the critical issues facing governments. This is achieved through trawling websites for key speeches, policy papers, consultation papers, organisational changes, budget and planning priorities and key initiatives etc. Government related websites provide a plethora of useful information setting out the broad business context. This research and groundwork enables Chairmont to be ‘at the ready’ and well prepared for government assignments. Some of our learning’s have been as follows.

Government ‘Value for Money’ Principle

The key principle underlying the government frameworks that administer their responsibilities and the expenditures related to these responsibilities is ‘value for money’. The government ‘value for money’ perspective is one that balances economy, efficiency and overall effectiveness, i.e.:

  • Economy relates to achieving the best possible quality and quantity of inputs (resources) for the best possible price.
  • Efficiency relates to the productivity of the resources used to conduct an activity in order to achieve the maximum value for the resources used, i.e. ensuring that those inputs produce the best quality and quantity of outputs.
  • Effectiveness relates to how well the outcomes meet the stated objectives. It concerns the immediate characteristics of the outputs and the degree to which outputs contribute to specified behavioural outcomes.

‘Value for money’ explicitly focuses on demonstrating results (rather than just input costs) and managing the risks of achieving expected outcomes, i.e.:

  • reducing the risk that inputs are delivered but few outcomes achieved; and
  • understanding and funding those outputs that are most likely to bring about the desired behavioural outcomes, including an understanding of what is under government’s direct control (outputs) and what is not (desired outcomes).

The ‘value for money’ principle can be applied in both a domestic and international context. Below are two conceptual examples that have been applied in a Federal government context.

Nation Building Schools Program Effectiveness

The 2010 Nation Building - Economic Stimulus Plan provided $16.2 billion over four years for the Building the Education Revolution program, which funded the building and rebuilding of primary and secondary school infrastructure and maintenance in Australia’s schools, including combined schools and special schools. Funding was also provided to build 537 new science and/or language learning facilities in secondary schools.

The ‘value for money’ for this program might look as follows (based on a government schematic):

vfm 2010sp thumb

(Click on the image and a larger view will open in a new window. After viewing close the window to return to this article.)

Overseas Aid Effectiveness

AusAID, the Federal Government’s agency responsible for managing our overseas aid program, is focussed on helping Australia’s neighbours rather than the Australian people. Nevertheless it still faces the same challenges in managing the three elements of the ‘value for money’ principle and the measurement thereof, notably the relationships between outputs and outcomes. AusAIDs ‘value for money’ principle is applied through its performance measurement framework whereby the agency prepares an Annual Review of Development Effectiveness Report. This gives transparency around progress and accountability by providing a summary of aid effectiveness through various performance indicators against the key objectives. Reporting is on a ‘whole-of-development-assistance’ basis via a ‘value for money’ based balanced scorecard. The ‘value for money’ for AusAID might look as follows (based on an AusAID schematic):

(Click on the image and a larger view will open in a new window. After viewing close the window to return to this article.)

Governments often allude to measurement deficiencies in respect of ‘value for money’ which originate from a lack of evidence of clear relationships between inputs (expenditures), outputs and desired behavioural outcomes. This deficiency is largely related to the absence of meaningful data, and the analysis thereof.

Through combining Touch-Point Pattern Analysiswhile applying sound Budget and Planning techniques, Chairmont has developed a performance improvement diagnostic. The diagnostic applies a ‘value for money’ perspective supported by techniques for data collection and analysis aimed at improving the efficiency and effectiveness of organisations, notably governments. Please refer to Diagnostics for Chairmont’s work in this area.