Australia's dependable and respected public service head Dr Ian Watt talks leadership with Tom Skotnicki

Public service chief Dr Ian Watt, secretary of the Department of Prime Minister and Cabinet, is well aware the organisation still has a reputation for laziness among many Australians – and he admits it causes some irritation.

He told Management Today that everyone is aware of the pejorative terms with which public servants are sometimes labelled.

"In my experience people in the public service work hard," he says.

"By the way, when you talk to people in the private sector who know how Canberra works, none of them say to us, 'You are bludgers'."

Watt adds he is sure these senior private sector figures would be prepared to call them slackers if that is what they thought.

The challenge in the public service may be greater because it is difficult to dismiss unproductive staff, but nonetheless there are a wide range of motivational drivers available, including promotion, remuneration and recognition. However, the concept of an overblown public service remains a populist one and the Coalition has indicated there will be large-scale redundancies if it wins power.

This is despite the fact the last few years of the Howard government saw a large-scale expansion of public service numbers, particularly in the best-paid senior executive ranks.

Watt is obviously unwilling to discuss political plans for the public service and departmental expenditures, but he maintains the PS will make the necessary adjustments whatever the outcome.

"The PS will cut our coat to fit the cloth but if they say there is less then there will be less done – that's just reality."

Watt says as a CEO of a department or agency you talk to your minister and discuss the budget, and if there have to be cutbacks it is an issue of how best they can be achieved. He says departmental heads and ministers do not always share the same view on the consequences of budget reductions but there is generally an understanding that if there is less funds "some lesser priorities have to go".

The possibility of budget cuts also comes at a time when public service advice is more contested than ever.

At times it has led to suggestions from former senior public servants that the traditional role of departments in policy development was being hijacked, particularly by political advisers. It has also led to claims the public service had become more circumspect about delivering "frank and fearless advice".

Watt acknowledges the increase over the past decade in the numbers of advisers. However, he says the PS has never had a monopoly on providing advice. Competition has grown from political advisers, think-tanks, academics, business groups and unions but he disputes frank and fearless advice has been compromised.

Ministers want to know what is really happening and a realistic assessment of risk, Watt says. "They know it is better to know than not to know."

He denies the tradition of giving forthright and tough advice to ministers has been compromised and says it remains a core value of the PS.

However, it is natural for ministers to want to test that advice. There are now many more stakeholders from whom they can seek reactions and information is more widely available. Watt uses the example of economic modelling – that in the 1970s and much of the '80s was largely the province of Treasury, but it is now frequently contested by a wide range of think-tanks and specialist research groups.

"There are more people in a position who have the capacity to provide advice that is credible," he says.

Watt says another key change has been the increased focus on efficiency and productivity. It is more than 25 years since the first efficiency dividend was introduced (which cuts the budget of all ongoing administrative programs by a certain percentage, usually 1 per cent).

Watt says it is designed to emulate some of the private-sector incentives to achieve greater productivity.

Watt says criticism of the public service often arises out of a lack of awareness of the complexity of the objectives and outcomes required from policy implementation. He emphasises those objectives are far more broad than just the bottom line.

The concerns regarding policy and its implementation include the outcomes for individuals, the government and political cycle, perceptions of equity, perceptions of probity and overall appropriateness, as well as financial considerations.

"Some of the judgements can be difficult and are played out in a political world that can be very unforgiving."

Watt says there is a a high level of scrutiny. He says apart from the large numbers of media in Canberra, most departments face intense scrutiny several times a year in senate estimates.

Watt says the enhanced role of senate estimates over the past 20 years has been positive, that the possibility something will be discussed in estimates keeps departments and government on its toes. He says scrutiny is beneficial and estimates has become "one of the key shop windows for departments".

One of the challenges for public service department heads is that compared to most CEOs they have far less freedom.

They are required to act in accordance with government policy and don't have the same hire and fire powers or control over remuneration, and in most cases they are working to a more complex set of objectives.

"They are also keenly aware the department will continue to operate long after they have departed," he says.

Watt says as a result there is a far greater emphasis on the role of department heads as stewards.

"It is extremely prominent in the thinking of CEOs – building capability for the future within the organisation," he says. "The only way for organisations to grow, develop and improve is by developing and training your people, and if you don't then your organisation will flounder and it flounders pretty quickly."

Watt says when he became secretary of the department of finance in 2002, leadership and management had been neglected for too long. He says by addressing the issue and improving training, the pay-off in terms of productivity and performance was huge.

Watt says getting consistency could be difficult, describing himself and the public service commissioner as the loose holding company presiding over a large number of diversified enterprises with their own CEOs.

He says this is why it was so important to get a concept such as stewardship accepted and recognised across the public service. The other thing was to constantly reinforce to the department the value of training and development. He says it was one of the issues on which he frequently "preaches".

Watt says the public service now has a commission focused on developing training programs for the public service as a whole, which is in addition to what individual departments have in place.

As a result, there is a far greater emphasis on training and development than was the case even 15 years ago.

Watt admits he knew little about leadership and management when he started in the public sector after a time in academia.

"Leadership and management was not something you talked about, especially in a place like Treasury that was chock-full of good people and thet got the job done. It was simply not on the agenda," he says.

As a consequence, Watt says he was not very good at management when he became a branch head in charge of about 20 people. It was not until he was working for the Department of the Prime Minister and Cabinet in 1995 he did his first formal management course.

"It was an eye-opener," he says.

Watt learned about how to better manage his work while providing leadership to those around him. His only regret was he had not been exposed to it earlier. In 1999, he undertook his most profound management training with a two-month residential course at Harvard, which he says was enormously influential.

Watt has been described by some senior public servants and former colleagues as a "steady hand". He avoids controversy and rarely grants media interviews.

If there is any criticism it may be he is too focused on implementation and is reluctant to explore "the vision thing", as one colleague expressed it.

However, given the speed of change and the likelihood – based on the polls – of a change of government this year, he may be just what the public service and Australia needs.