Tag: UK

  • “This is transformation” – the challenge of leading digital change

    “This is transformation” – the challenge of leading digital change

    To say Paul Shetler’s stay in Australia has been controversial would be an understatement.

    After leaving the UK’s Government Digital Service in 2015, Shetler was the founding CEO of the Australian government’s Digital Transformation office. He lasted 16 months before being managed out.

    In January I interviewed Shetler where he discussed the relative differences between countries, the challenges facing those trying to digitally transform governments and large organisations along with some scathing observations about the management of the Australian Public Service.

    Parts of this interview were the basis for separate articles in Diginomica and the Australian Financial Review however the entire conversations is worthwhile publishing.

    Some of Shetler’s answers have been lightly edited for clarity.

    How do we compare the digital transformation journey of different countries?

    In terms of the UK, the Government Digital Service really has done a great job. If hadn’t been for GDS we wouldn’t be having the conversation we’re having in Australia today, much less in New Zealand, the United States and other countries.

    Digital Transformation wouldn’t be on the table and an awful lot of the basic ideas on how you fix government IT by looking at structural reasons for behaviour rather than just saying “let’s make a nicer interface.” they were really good at identifying those things.

    Britain was the pioneer. Every country in the naughties had their own digital strategy but the UK led the way. The US right now is a mess, they don’t really have a digital strategy.

    How does the US look with the new Trump administration?

    They do have a lot of potential there. I do think the new administration is more likely to do something big to fix things than perhaps the Obama Administration was, because they are talking about national infrastructure.

    If you to the United States it’s shocking, the physical level infrastructure is falling apart and on a digital level things are pretty much the same, if you look at the government websites many of them look like they are from the 1990s and they all look and act differently.

    They are very much like the UK before Britain started the digital transformation and they’ve had several years to fix it but there’s been no concerted effort because no-one really owns it.

    They do have the USDS which operates out of the White House that gets really great talent in to do fix something but they don’t have the authority across the government.

    They have 18F who operate on a cost recovery basis who act like an internal consultancy… they have some extremely talented people there and we’ve learned quite a bit from them.. and they help agencies with individual things, like looking at contracts or procurement or whether it’s fixing a particular service. But there’s no vision or strategy that guides it all.

    If you go to New Zealand you’ll see they’ve been doing a lot of great thinking. It really influenced us in Australia on user journeys across governments, where you want to get something done that goes across agencies.

    Let’s look from the standpoint of the end user; the end user wants to send a child to school, to emigrate to New Zealand or to open up a business. What do they need to do and how can we map it out for them.

    The problem in New Zealand is that the team has no authority, all they can do is propose and it depends upon other people saying ‘oh, that’s a great idea’ although there’s been a lot of great design thinking coming out of there and it difficult for that being translated into practice.

    One of the things I learned here was you can have all the great ideas and talent but if you don’t have the political will and authority to drive it then a recalcitrant bureaucracy will not going along with it because their interests aren’t in alignment with their users.

    What did you find on coming to Australia?

    There was a lot of excitement and enthusiasm on what we could do with the idea of the DTO, particularly among the public there was a lot of goodwill as well as in large parts of the Canberra bureaucracy, generally speaking the lower you got down the ranks there was more enthusiasm.

    In the UK you have two layers of governments; you have the central government and local administration.

    You have the split between politics and policy, you have the politicians who just don’t spend time in their departments. When I was with the UK Justice Ministry the Secretary of State, Chris Grayling, and his ministers were in the building every day.

    As a consequence they were very aware of what was going on. There were in there everyday and they could see things. It made it easier for the ministers to give direction and cover for the civil servants.

    In Australia it’s much easier for public service to capture the minister, direction is spotty and politicians are easily manipulated, partly because of lack of information.

    There’s also the gap between policy and delivery, the UK Department of Justice, for example, works on legal and constitutional policy but is also responsible for prisons, courts and other services. So there’s a tight feedback loop where if a policy isn’t working, you find out pretty quick.

    How important are people and existing processes?

    You can’t fight human nature you have to acknowledge it and live with it and make it work for you.

    In Australia we did a terrible job of working with human nature. This idea we could get Australian government to magically transform itself because it was told to, that I could come here and put up some pretty pictures and say some nice words and everyone would say ‘hey we never thought of that.’

    That’s not going to happen when you have entrenched interests, habits, structures and groups who are committed to doing things a particular way. It’s not going to happen and it’s vary naïve to think you can do it, it’s just not how people work.

    In the UK, we didn’t focus on consensus we focused on getting things done. When I first met with Francis Maude he said ‘this is not a change management process – this is transformation.”

    When we talk about change management it’s often about appeasing people who are throwing up obstacles, this isn’t about appeasing them, it’s about them doing their job. Too often here there was too much appeasing bureaucrats which I think comes down to a lack of political will and perhaps cowardice.

    One of the major reasons why the UK was a successful as they were was because Francis Maude was the minister for five years. It became clear he was going to see this through and if you were going to fight, you were going to lose. People got into line.

    Because they understood people were competitive they created a group called ‘Digital Leaders’, the digital leaders were the Director-Generals from various departments who were future leaders – most likely to become Permanent Secretaries – and said, “you guys will be those driving the transformation from the Civil Service side.” Of course because these people were all competitive they’d try to outdo each other.

    How does the Australian political culture compare?

    “It’s quite a bad culture. In Canberra you have people who think they are the intellectual elite of the nation who aren’t really, it’s a relatively mediocre elite.”

    The idea you have a group of people sitting around thinking their Big Thoughts in a bubble and telling each other how great they are who then hand those thoughts down to proles who do the service delivery. It’s a very weird class system that’s been built up – you have the Big Thinkers and then even the proles you give it to, they pass it on to the states or an NGO to deliver it.

    There is no feedback loop, there is none. You don’t know how much these policies cost, you don’t know what they’re delivering you don’t know what’s a success. That probably suits lots of people.

    We saw that with digital dashboard where citizens and ministers could monitor public services’ performance. There was so much pushback, there were some agencies that worked with us but getting information directly from the systems was difficult.

    What are the lessons from the Australian experience and for those trying to drive digital transformation?

    When the DTO was set up, they had to make a series of trade-offs. It wasn’t GDS, it didn’t have the powers of GDS. It didn’t have the powers to mandate or block.

    GDS had both, the idea you could kumbaya your way to transformation, no-one there believed it. That’s why they set up GDS the way they did. They could stop you from spending money, even if you had the budget approval or not, so that was a massive stake in the heart for a number of zombie IT projects.

    It’s particularly hard for IT managers in departments to admit that a long running project was a failure so GDS was great. That ability to do the right thing and to have it sanctioned by authority was brilliant. The years of ass-covering were over.

    Some kind of spending controls are good and some ICT procurement reform is absolutely essential. That’s potentially really, really good.

    How important is finding the right people?

    People coming into senior digital roles in the UK government were hired by GDS and that was massively important to get the right people in.

    I was thoroughly vetted as were all the other hires and it was important because it created a community of people who thought the same way. We were all committed to the same mission and we all came in at the same time. It’s not talked about much, but there was also a general clearing out of the old leadership.

    Having a common sense of mission was important, we would work together and collaborate with each other.

    You need to have political will to see them through because the departments will kick and scream but if their autonomy was working we wouldn’t have this problem.

    Why are Australian governments suffering IT problems?

    If all major government projects were failing we’d not be having this conversation. That said, there is an unacceptable rate of failure and it has to be fixed. Again, departmental autonomy is not working.

    Departments have chosen to deskill, departments have chosen to become dependent upon vendors and departments have chosen to put their own interests ahead of users – as we in the case with Centrelink. Infrastructure failures like the ATO or the Census were easily preventable. The idea you’re building data centres in 2016 is insane and anyone who tells you that should be fired.

    These are all predictable outcomes and as long as you have a public service that’s not really comfortable with 21st Century technology and which still views as its own departmental in-group as being more important than its end-users then you’ll end up with these problems.

    Public servants have to start operating the way a bank or insurance company would – how do I get onto the cloud, not how do I keep workloads off the cloud? How do I build around the user? It’s crazy to be asking these conversations because it’s an incredibly deskilled when it comes to IT. It’s appalling, much more than in the UK.

    That’s the problem, when you talk to actual practitioners in the Australian government they acknowledge it. It’s not the guys doing the designs or those trying to use the technologies, it’s those further up the management chain who don’t have the skills or have too close relationships with certain vendors where you see these anti-social behaviours kicking in.

    Where next?

    I’ve spent sixteen months banging my head against a wall so I’m not in a hurry, I’m looking some opportunities in Australia and a few elsewhere in the world.

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  • England’s historical mistake

    England’s historical mistake

    A few years ago I interviewed the boss of a US software company. At the end of the discussion he mentioned how his business had moved most of its development operations to London from San Francisco.

    I was surprised at this – while San Francisco is one of the most expensive places in the world to do business, London is even pricier again.

    “We can get labour in the UK,” explained the CEO. “In the US if I want to bring in some developers I’ll be tied up by immigration for months, if not years. In London, I can get on the phone and have a bunch of coders on the plane from Barcelona tomorrow.”

    That ease of access is now threatened by the Brexit vote, should the UK leave the EU and give up on the free movement of workers across the continent then one of Britain’s core advantages is lost.

    Brexit is a historic mistake by middle England that now threatens to see the UK disintegrate as Scotland leaves and the Northern Ireland conflict reignite, the tech industry though will probably be one of the first victims.

    For the EU, this is a warning that reform of its institutions has to be a priority. One of the ironies of Britain’s vote is the monstering of Greece, Spain and Ireland following the 2008 global crisis that cost the EU much of its popular support was partly to protect London’s banks.

    The bigger issue though is the British voters’ distrust of institutions and elites – something that’s driving Donald Trump’s rise in the US.

    We live in interesting times.

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  • Winning the global fintech race

    Winning the global fintech race

    One of the things that strikes you when wandering around London’s Docklands district is the sheer amount of advertising for financial technology companies.

    That London has established this position should surprise no-one, its civic and national leaders have been aggressive in maintaining the city’s position as technology has swept through the banking sector.

    One of the notable things when interviewing the Chief Executive of London and Partners, Gordon Innes, two years ago was how engaged both the city’s business and political leaders were in the development of the town’s technology sector and the financial industry was a natural focus.

    An example Innes gave of that engagement was the co-operation between the offices of the Prime Minister and the London Mayor where staffers meet on a monthly basis to agree on business and technology policy, which is then put into action by Westminster and the UK Parliament.

    Poaching the Aussies

    The benefits of that co-ordination and focus are global, with the London fintech sector attracting startups from as far as Australia.

    Australia’s experience, or lack of it, in the fintech sector is notable. As the story linked above mentions, the UK Trade and Investment agency actively scouts out promising businesses while the local state and Federal equivalents sit on the sidelines (disclaimer: I worked for the New South Wales government on its digital economy strategy).

    For Australia, the late entry into fintech doesn’t bode well. The country’s financial sector is overwhelmingly weighted towards domestic property speculation – a structural weakness seen as a strength by most Australians – and the country’s high costs make it tough for startups.

    Defining a competitive advantage

    High costs in themselves aren’t a barrier to a city’s success – London, New York and San Francisco themselves would be among the highest cost places to do business on the planet.

    To justify those costs a city needs a competitive advantage and there’s little to suggest Sydney or Melbourne have anything compelling as a financial centre beyond a bloated domestic banking industry fixated on residential property.

    Two of the arguments used to support Australia’s claims are it is on the doorstep of Asia and it is in the same timezone as the growing East Asian powerhouses.

    Timezone myths

    If timezones do matter in modern business, the sad truth for the Aussies is the powerhouses themselves – specifically Shanghai, Hong Kong and Singapore – are in roughly the same longitudes so any time differentials aren’t great.

    Being on the doorstep of Asia is probably one of the greatest Australian myths of all – it’s actually quicker to fly from Beijing to London than it is to Sydney. London might be on the edge of Europe – one US entrepreneur once told me how they can get Spanish developers into the UK in an afternoon – and New York is the gateway to the United States however there’s little reason to go Down Under for any other reason than to visit Australia.

    The power of history and focus

    Comparing London to Sydney is useful though as it shows the power of history and trade routes. London became a global financial centre because it was the financial centre of a global empire just as New York is today and possibly Shanghai in the not too distant future.

    For the Aussies, the trade routes aren’t so encouraging in indicating the country has a future as a financial sector. Even ignoring history, the commitments of governments and local corporations are at best half-hearted compared to their global competitors – as we see with London poaching Australian businesses.

    One of the strengths in those global centres is a constant re-invention and the ability to adapt to changing circumstances – how China adapts to a rebalanced economy will define whether it remains a global economic power – and in the UK the government is looking at the next big things in biotech and the Internet of Things, two areas where it has strengths and can attract global investment and skills.

    For countries and regions aspiring to be global players, they need not just to be playing to their own strengths but also to where the future lies and not be late entrants into the current investment fad.

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  • The race to build smartcities

    The race to build smartcities

    For the last decade city administrations have been jostling for the title of being a ‘smartcity’ – a metropolis that brings together technology, creativity and business to grow their local economy. Now the competition is getting fierce.

    While the concept has been around since British Prime Minister Harold Wilson coined the phrase the Great White Heat of Technology fifty years ago, the arrival of the Internet of Things, cheap sensors and accessible wireless broadband have made wiring up a city far more easier than a decade ago.

    So now we’re seeing a race to set up smartcities with just the last week seeing Kansas City join the Cisco Connected Communities program, a consortium of  UK technology groups announced Milton Keynes will be wired up and French machine to machine (M2M) network provider Sigfox launched its plan to add San Francisco to the cities it’s covering.

    Kansas City is a particularly interesting location being the first town to recieve Google Fiber and  its designated Innovation Precinct along the new street car route the city is building. The Connected Cities scheme will cover that corridor.

    Kansas City’s Innovation Corridor isn’t a new idea, it’s not dissimilar to the Digital Sydney project I put together a few years ago. The difference is it has both government commitment to it and a business community energised around the possiblities. Whether that’s enough to make it a success remains to be seen.

    What is clear though is that today’s technologies are changing cities, just as roads and electricity did in the Twentieth Century and steam traction, railways and town water did in the Nineteenth.

    That’s why the race to build smart cities is so important for communities that care about where they want to be in the 21st Century economy.

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  • Building modern manufacturing

    Building modern manufacturing

    Around the world manufacturers are wondering how they adapt to the rise of 3D printing nod the continued challenge of China’s low costs of production.

    In Singapore, Reuters reports, the government is putting its hopes on new technology boosting the country’s manufacturing industry in one of the world’s highest cost centers.

    “The future of manufacturing for us is about disruptive technologies, areas like 3D printing, automation and robotics,” EDB Managing Director Yeoh Keat Chuan told Reuters.

    Britain too is experimenting with modern technologies as the BBC’s World of Business reports about how the country is reinventing its manufacturing industry.

    Tim Chapman of the University of Sheffield’s Advanced Manufacturing Research Centre describes how the economics of manufacturing changes in a high cost economy with an simple advance in machining rotor disks for Rolls-Royce Trent jet engines.

    “These quite complex shaped grooves were taking 54 minutes of machining to make each of these slots. Rolls-Royce came to us and said can ‘can you improve the efficiency of this? Can you cut these slots faster.”

    “We reduced the cutting time from 54 minutes to 90 seconds.”

    “That’s the kind of process improvement that companies need to achieve to manufacture in the UK.”

    Interestingly many of those British engineers interviewed by Peter Day in the BBC report focus on China’s cheap labor as being the driver for moving up the value chain and automating

    Dismissing China as purely a low cost producer a risk as Chinese manufacturers are working hard to move up the value chain as their aging populating erodes their labor advantage.

    The last word though for Britain’s engineering sector has to go to Hugh Facey, founder of wire tool company, Gripple.

    “Are you a rich man?”
    “No”
    “Do you mind?”
    “I’m from Yorkshire.”

    Both Singapore and the UK are working on establishing their positions in the 21st Century economy; both business owners and individuals have to give some thought on where they want to be.

    For manufacturing, the rollout of new technologies means the industry is going to look very different in the next decade. It won’t be the only industry radically changed.

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