MINIMIZING RISK AND MAXIMISING QUALITY SEMINAR FOR PUBLIC SECTOR MANAGERS

  • John Luxton
Commerce and Industry

STANDARDS NEW ZEALAND

Special guest, ladies and gentlemen, it is indeed a pleasure to be here today as Minister of Commerce and Industry to close this senimar with has focussed on risk and quaity assurance in particular in the public sector. We need to focus on our customers directly and indirectly.

You as managers in the public sector have an important job to do. The Government sector takes up about a third of New Zealands GDP. How Government manages its resources, delivers its services and treats its customers, has a huge impact on the wider New Zealand economy. It impacts on all New Zealanders.

I have a keen interest in seeing progress being made by New Zealand commerce, industry and Government, as we strive to compete on the world market. Being a trading nation it is vital that both industry and Government continue to improve the way we do things.

Nothing ever stands still. While some may think Government has done all the improvements it needs to, simply they are wrong. By its very nature Government is an impost on business with its costs and requirements.

There has been a strong emphasis over the last six years on fiscal responsibility. This is good and is now governed under statute by the Fiscal Responsibility Act. But I beleive we now need to concentrate on the quality of our service and of our spending, rather than just the quantium.

While there have been many productivity gains made over the last decade, there has been a lack of focus on quality outcomes. There has not be a suitable recognition by both politicans or government sector managers of the cost to the economy and New Zealand citizens of that lack of quality.

Often our cautiousness in Government delays decisions at a cost tpo someone else. We often lack focus on our customers - they can wait. Sure the issues are often complex but delay has a cost. Too often inm our detail to get it right we impose large costs notnormally accounted for.

The cost to the nation of underperformance are huge, not just in terms of money paid by private sectior for unnecessary regulation and compliance costs, but the loss of opportunity and innovation that the impact of government and the way it participates in the economy can have.

Quality standards can play an important role in making improvements in this area. Customers thoughout the country should have the same high level of consistent service from whomever they seek it. And it simply isn't good enough that families end up paying more for their washing machines, their food, or their transport because it took some part of Government months and months to process a resource consent, respond to a letter, or provide some other service.

Too often we build on the status quo in Government to avoid the risks of a greenfield approach. Hence the enormous costs of IT systems in Government which have to meet demand of existing systems.

How often do we really analyse our systems. The Singapore Port Authority confronted a similar problem of having 42 different forms at the time of implementing a new IT system. But it found after a thorough reassessment of what was or was not really necessary that it needed only one.

I guess what I am saying is we need to bring a new approach to the issue of best practice. We need to ensure what we are doing is relevant, up to date, and as simple as possible. Perhaps we need to take a more questioning attitude towards the status quo and a more visionary approach.

We in Central government have a long way to go before we can say we operate at international best practice. But it is this goal that you and I as managers in the government sector have a responsibility to strive for. and I know we are.

So it is very pleasing to be here today to close this senimar that you as public sector managers have been attending to look at how you can improve quality within your respective organisations. To improve not only the quality of your spending but also of your service.

I understand your senimar has addred a range of issues:

Risk management - a continual process with well-defined steps; facilitating better decision-making by providing greater insight into risks and their effects

The emphasis on accountability and performance in the new directions for the public sector

The demands on public sector managers in a business environment of rapid, constant change

The need for flexibility and forward-thinking attitudes in adapting to this rapid change

The importance of managing risk and quality in the public sector - Jeremy Bendall of PKMG Peat Marwick

The role of standards in managing risk and quality:

The management of these needs through the use of standards that are internationally understood and accepted - Russell Kilvington, CEO of Maritime Safety Authority

Using standards to identify and harness the elements of risk and manage the process - Russell Leith, General Manager, New Zealand Permanent Trustees Ltd

Garth Saloner, visiting Professor from Stanford University's Business School, provided the global perspective, challenging the conventional view that standards stultify and inhibit development and change. Rather, they provide for intelligent management and control of risks and quality in clearly-defined, well-documented and universally understood ways.

Using standards to demonstrate performance and accountability: Patrick Duffy, Group Manager, Management Standards, with Standards new Zealand backgrounded the standards available to guide General Managers in minimising the risk.

The Standards jointly agreed between New Zealand and Australia, AS/NZS 3931, Risk analysis of technological systems, and AS/NZS 4360 Risk management, additionally provide for useful comparison between our respective public sectors.

The application of sophisticated project management techniques to projects in government and industry has become necessary to ensure the achievements of business, economic, environmental, strategic and political goals. The 1996 British Standard guide to project management, BS 6079, is very relevant in pro viding guidance to General Managers in organisations that operate projects - to raise awareness of the problems that are likely to exist within their own environment and to enable them to provide appropriate support for the project manager and team.
Today you have covered some very important issues. Make no mistake, you have a challenge to improve further the performance of the public sector. My Commerce Ministry is now working on a major initative to work with both the private and public sector to reduce compliance costs.

I look foward to working with you to improve further the quality outcome of the public sector that are so important to our nation. Thankyou