Capabilities to navigate uncertainty

Executive summary

The Deloitte New Zealand State of the State 2023 report draws inspiration from our talented community, academic, private, and public sector interviewees, and the journey of the kuaka – the bar-tailed godwit. A migratory bird that flies from Aotearoa New Zealand to Alaska each year without stopping, the kuaka does not rest or feed at sea. The bird serves as a powerful metaphor. Just as we face challenges ahead as we seek to realise a collective vision, so too does the kuaka – embarking on phenomenal journeys with consequences for the generations in flight and for the generations of kuaka to come.

Our hope is that this report inspires discussion and action to invest in the capabilities we need as a country to secure the future we want for ourselves and the generations that follow.

The challenges that lie ahead for Aotearoa are significant. We are at an inflection point in our history – climate change and sustainability, chronic inequities, and global economic and geopolitical change pose existential threats we have not previously encountered. The confluence of social, technological, political, and economic megatrends creates new opportunities that we may miss if we cannot perceive them and act. When we consider the critical systems of our country: health, education, housing, infrastructure, and the sustainable economy, each has significant gaps – both through underinvestment and a changing set of future requirements.

For a generation, we enjoyed broadly stable assumptions about our place in the world, about economic and social trajectories, about international cooperation on global issues, and about technological solutions to problems. We are now in a shifting epoch, characterised by complexity, uncertainty, and disruption as we transition from one normal to another. Our issues and opportunities are playing out now but require us to take a long-term view.

Our current approaches for managing change are not fit for purpose because they are mostly based on linear thinking and struggle to deal with uncertainty and complexity. Exponential changes will continue, and the Covid-19 pandemic has demonstrated how unprepared humanity was for a fast-fuse, rapidly evolving phenomenon. Global warming provides a grim example of a slow-fuse exponential problem and illustrates how tempting it can be to ‘kick the can down the road’ when it comes to acting.

While Aotearoa has seen success in some wellbeing domains over time, we are still facing inequities of the distribution of that wellbeing. There are ongoing challenges in delivering reform and fragility in the face of shocks. This high-stakes, high-uncertainty context further exposes gaps in our capability. Last year’s occupation at Parliament illustrates the existing disenfranchisement in our society and how readily the boundary between civil discord and harmonious society can be pierced when a coalition of disenfranchised communities is ignored whilst it grows.

Our landing point is less defined than the kuaka’s; the details of our visions vary across communities. We know that we want to navigate toward a positive future aligned with what we value. As a collective, our sights are set on a future for Aotearoa, where Papatūānuku thrives, where people and communities flourish, and a productive economy creates meaningful work and value. We can learn from the kuaka’s journey to inform how we get there and how we weather the storms along the way.

In this report, we find that complexity, uncertainty, and disruption define the headwinds into which we must fly. Taken together, they mean many future states are possible, and the pathways to those future states are hard to predict. In the face of these conditions, we cannot chart a linear course to achieve the vision for our future – our choices are subject to uncertainty, and our actions will be subject to shocks. Yet the consequences of action, or inaction, are greater than ever before. We must keep moving forward; be agile, and balance analysis with action, accepting that unintended consequences might arise.

This report does not suggest which pathways we should choose. Rather, we outline a set of strategic capabilities that Aotearoa will require to chart our course: how we will choose during times of uncertainty and how we will act through disruption to mitigate risk and orient to opportunity. 

This is our sixth Deloitte New Zealand State of the State report – and in writing it, we experienced groundhog day moments. There are common threads to the findings of our series. Strategic, courageous leadership is necessary, as is overcoming short-termism, to deliver on long term opportunities and challenges. We must forge a new relationship with risk. Understanding and delivering on our Te Tiriti obligations and supporting meaningful and sophisticated partnerships across government, communities and business will be paramount. Working effectively and collaboratively across government to provide New Zealanders with the best possible services while addressing the big issues and opportunities cannot be addressed in a single electoral term. Nor does this mahi sit within the preserve of one Ministry – or even the public service – alone.

In this report, we bring the threads of our recommendations together through the lens of the unique and important stewardship role of the public sector for many of our most critical systems: economic management, housing, welfare, education, health, and infrastructure. The role of the steward may historically have been regarded as ‘holding a steady course’ against risk or threat, but in an environment of complexity, uncertainty and disruption, the role of the steward becomes far more active, future-facing and bold.

Working along with iwi, communities and businesses, the public sector collectively needs to build four faces of the stewardship role and use these fully to support the journey ahead: 

• Create a bold understanding of the future as a Strategist with foresight and insight. Facilitate a coherent long-term view of the opportunities and disruptions coming our way on behalf of Aotearoa.
• Shape the future as an Integrator building consensus for bold choices. Creating consensus, shared evidence, and collaboration for transformative changes across systems, diverse perspectives, and generations.
• Adapt to the future as a Sentinel monitoring risk and vulnerabilities. Understanding risk and resilience in the aggregate and for groups to enable us to address vulnerabilities, build buffers and make risk-intelligent choices.
• Build resilience for the future as an Investor across the four capitals. Delivering on the public services core and playing an essential role in investing in (and supporting the conditions for investment into) the human, social, natural, and financial resources for our journey.

These four faces of the public sector steward come together in the people of the public sector – current and future talent who must exhibit leadership, long term and intergenerational action, diversity, engagement and risk-taking. As the kuaka demonstrate courage and determination on their journey, so Aotearoa has an opportunity to make choices, act and adapt our pathways to secure positive futures for the generations to come.