Why reform?

Chapter two

If you adhere to our definition of reform being large scale, multi-participant change to sweep aside what went before, then the threshold for proceeding with reform is high.

Generally speaking, we find four common drivers of reform: ​

  1. Failure to deliver outcomes. The system is failing, chronically or acutely, to deliver outcomes for some or all citizens​.
  2. Declining system performance. The system is experiencing a lack of efficiency, effectiveness or resilience, or a mixture of these issues.​
  3. A change in purpose. The reason the system exists, or the paradigm that underpins it, has changed, therefore adjustment or replacement is necessary​.
  4. A change to the context in which the system exists. External shocks and trends are occurring, causing changes in citizen and/or government expectations.​

Reforms may be motivated by multiple drivers. For example, the Simpson report highlights the need to “shift the balance from treatment of illness towards health and wellbeing” and the need to “[embed] te Tiriti principles throughout” (purpose), achieve “better and more equitable outcomes for all New Zealanders” (outcomes), improve how it manages its resources and workforce (performance) and “meet the challenges of the future”, including demographic changes which include “more disabled people, an ageing population, and a rural population that often feels they are invisible to urban decision-makers.” (context)​

Failure to deliver outcomes

Most commonly the catalyst for reform is underperformance of the current system, resulting in poor outcomes for some or all of the citizens it is there to serve. We can think of these as both acute and chronic failures. ​

Acute failures in how a system is performing are easy to point to, often highlighted by flash points – high profile events that propel issues to the forefront of public consciousness. This is often true of industry reform – banking, building, telecommunications – as well as social and health reform. The result is the public lose confidence in the sector, and the sector loses its licence – real or social – to continue as it is. Citizens, politicians or the sector participants themselves demand change.​

“Most unfortunately the catalyst for massive reform will default to failure and disaster – we seem to be unable to get in front of and deal with emergent systemic environmental, social and economic stresses. Young people revolting on the street over climate change is a good example. It is coming from the ground up, there is so much failure you cannot escape it, it is becoming political. The bad news is we are in that situation, the good news is it is being realised.” - Girol Karacaoglu, Head of the School of Government at Te Herenga Waka Victoria, University of Wellington

Failure may also be chronic, experienced over a sustained period. In Aotearoa our commitment to give effect to Te Tiriti o Waitangi provides an ongoing context for reform. Successively, our public infrastructure and functions have failed to deliver on the promise of rangatiratanga (self-determination) and kāwanatanga (government), and to achieve equitable outcomes for tangata whenua. ​

“It is the Treaty that gives Pakeha the right to be here. Without the Treaty, there would be no lawful authority for the Pakeha presence in this part of the South Pacific… The Pakeha here are not like the Indians in Fiji, or the French in New Caledonia. Our Prime Minister can stand proud in Pacific forums, and in international forums, too, not in spite of the Treaty, but because of it… We must remember that if we are the tangata whenua, the original people, then the Pakeha are the tangata Treaty, those who belong to the land by right of that Treaty."2 - Sir Eddie Durie, Chairman of the Waitangi Tribunal.

Deloitte Partner, David Lovatt, on the need for reform.

Declining performance​

Underperformance may be a gradual decline as functions and ways of working fail to keep pace with broader change. Performance may have dwindled, or may simply be lagging behind. ​

Modernisation reforms, often with a strong digital and data focus, are often the vehicle necessary to make the significant change needed to keep up with – let alone surpass – changing citizen demographics and expectations of how they interact with the public sector. Aotearoa’s own Strategy for a Digital Public Service3 intends to span and enable the broader reform agenda. ​

Increasingly we are seeing a shift in expectations around cultural competency, and the recognition of the important role this plays in achieving and maintaining good outcomes for all citizens. As the nation continues to evolve into a multi-cultural society, the ability to perform is linked to the ability to connect cross-culturally. Our expectations of good performance have shifted, and there is considerable investment into systems across reforms to meet them.

A change to purpose​

Of course reform can also be purpose-led: driven by a new and compelling vision, new ideas as to how our systems and society should operate. Recent examples in Aotearoa New Zealand include economic and tax reform. Some systems are particularly prone to purpose-driven reforms; for example our children’s systems have moved back and forth along a purpose continuum of child protection and strengthening and preserving families. Education reform through history has often been spurred by evolving paradigms of what, and who, education is for, as well as how it is best delivered. Today, the emphasis has shifted away from filling learners with academic knowledge and shifted towards building the enduring skills and mindsets necessary to be successful in an evolving economic and social context.​

A change in context​

Today, more than ever, we are acutely aware of how vulnerable we are to our broader context. The pandemic, a black swan event (a rare but high impact risk) that had been on strategic risk registers for decades, has put the foot to floor on global government reform agendas. The impact of COVID-19 is shaping reform on everything from health and welfare, to the future of work, food security, and supply chain resilience.​

Many participants in this report looked for indications from our pandemic response as to how we will step up to the challenge of climate change transformation. Climate change is more “grey rhino” (a known but much ignored risk) than a black swan, but the scale and reach of the impact – and therefore the reform – will surpass anything Aotearoa has experienced in the last two years.​

There are lessons for us too. As the country has worked through the health and economic response it has also raised the importance of cross-cultural competence, indigenous approaches and of community-based leadership in getting real-world outcomes. ​

Of course, whether the impetus comes from opportunity or underperformance, the unpredictable nature of reform is often the result of political drivers. Changes in government bring about alternative views on how a system should function, and even the relative importance of problems to solve. As many of our contributors noted, our three-year political terms provide a relatively narrow window to sell the big idea, get the wheels in motion and demonstrate progress and impact. These political time horizons serve to reinforce the choice of reform as an efficient and effective way for politicians to make change.​

In and of themselves, these drivers do not make reform an inevitability. Reform comes at significant cost and risk to governments and citizens, occupying decision-making bandwidth and public discussion, as well as financial and talent resource. Where systems can be improved through targeted initiatives or continuous improvement, there may be cheaper and faster ways to make change. ​

Without exception, our Māori contributors re-emphasised the importance of a Māori voice embedded in reform, particularly where there is a political persuasion. Sometimes the Māori perspective provides the leverage needed to move through “sticking points” in the process.

Scale of change​

We choose reform when we believe that the degree of change is so steep and the distance to travel so significant that the current system will be unable to get there incrementally.  Continuous improvement is no longer a viable approach because we need to change so many things about the system, and they need to change together or simultaneously.

Systems theory differentiates between complicated and complex systems. Complicated systems can be disassembled and their individual parts and interactions can be understood. This doesn’t mean change is easy, but programmes and portfolios of initiatives can implement change in a planned way with reasonable confidence in the outcomes it will achieve. ​

In a complicated system, we can usually chart a course with a high degree of confidence - there is still a reform challenge in implementing the plan effectively, but the plan itself is clear. Creating a reform programme can help to explain why so much needs to change, and provide a structure to manage the process. ​

Complex systems are more dynamic, and emergent behaviours arising between participants and parts of the system mean that merely understanding the parts is not enough to understand the system as a whole. Complex systems resist simple fixes, because the way the system behaves is constantly changing and it’s almost impossible to keep up. Attempts to change the system results in a game of ‘whack-a-mole’, where the impacts then bubble up elsewhere in the system. ​

In a complex system we can’t always chart a course, we can only set an intended outcome,  assemble the right team and gear, and have confidence in our navigational tools and ability to travel together. Creating a reform programme is essential to hold the intent, navigation and journey management steady over an extended period of time. ​

There is a Māori proverb that says “kā mate kainga tahi, kā ora kainga rua” (when one home dies, a second lives) which relates to reform, as in ancient times Māori would burn down old Pā sites whilst building the new — the two systems would coexist. During reform processes, there are two systems coexisting: the new one being created, and the old one in decline. The reform programme must manage the decommissioning of the old system – which is often entrenched and has proven itself hard to disrupt – in a way that maintains performance during the transition period, without constraining the change that needs to happen to build the new system.​

Is there always a need for reform?​

During our discussions and research we canvassed whether there will always be a need for  reform.​

Previous reforms haven’t always delivered what was necessary, and the success factors for good reform are not easy to achieve. Given the high cost of reform, it can be argued that resources could be better applied to point solutions, or direct investment to the participants and recipients of a system’s activities. 

“We don’t recognise that reforms have a lifecycle. Now, are we creating something new, or innovating on an existing idea? We keep coming up with new things, instead of innovating on pre-existing ideas and learning from those cycles.” – Matt Tukaki.​

There is a case to be made that continued high levels of reform point to a different failure, because they suggest that the system was unable to develop organically in response to changing demand, expectations or external conditions. One of the objectives of effective reform should always be to leave the system able to adapt and evolve better than before. ​

However, most people we spoke to see reform as an enduring part of our landscape, at least for now. We are in an era of unprecedented change, facing longstanding, unresolved equity issues and challenges of a scale and complexity we have not encountered before. We are increasingly aware of the interconnectedness of our communities and countries, and of social, economic, and environmental systems. We must continue to evolve, and we will need to make the punctuated leaps forward that reform enables. A common sentiment is that a longer-term outlook, bringing with us the good ideas and lessons learned from our past could make our way forward feel less lurching. Ka mua, ka muri – looking back in order to move forward.​

“Our colonial history is an important and contemporaneous part of the fabric of our society and most certainly linked to the perverse outcomes Māori experience on most social and economic measures in Aotearoa New Zealand."4  - Dr Moana Jackson. ​

So, reform is here to stay – in some shape or form. If we are to realise its promise, we must increase our odds of success.​

“Rather than undergoing a steady stream of reform in a fairly measured sense we are quite lumpy. Pressure has built up in the system from a lack of reform, which  means that a lot of those problems have crystalised at the same time” 

Hon. James Shaw,  Minister for Climate Change