More risky business?

What risk-aversion means in the public service

Yonkers ago, I ran some customer research around a reasonably complex compliance process that many New Zealanders have to deal with. Some stages of it are time-sensitive, so there is a point when the agency needs to send out reminder letters to those who haven't completed the last bits of it. These letters were worded pretty aggressively – and I don’t mean for kiwi standards, even as a Berliner I thought *ouch*: references to breaching the law, risking one’s future, fines - the works.

Consequently, it came up a lot in the interviews, people hated that letter. I remember one person describing how they immediately took it outside and threw it in the bin, close to tears. They had just forgotten to send the last bits off, and all said the same thing: a simple reminder would have sufficed.

So there, I had a handy result with a tangible action: just replace the poison letter with a reminder card. Heck, might even be an opportunity to throw some good kiwi cheek in there, word it in a lighthearted tone. I presented the research to the person responsible for this process. I recall they sat back and thought for a moment, then simply said:

“Nah, we can’t risk compliance rates going down here. No way.”

And that was done. Nothing I could say, no stats or overseas examples I presented shifted the stiff upper lip. Weeks and weeks of research. Even after all those years I’m still frustrated thinking back.

It's the most prominent example of risk aversion that I can muster, and right now it seems that everyone’s in agreement: The public sector is too risk-averse, and that needs to stop.

So if we take that as read, let’s take a closer look – what breeds that behaviour? Starting with my example there: what was that person thinking?

In their world, that compliance rate was pretty likely the only tangible measure that their success or failure would be pinned on. I have written before about the difficulty of measuring things in the public sector, but here we do have a measure. And we like measures, don’t we? So putting ourselves in their shoes - would you be happy to take an incalculable risk on the only measure of your performance, based on what a few people said?

Were this scene to occur in a larger private setting with a healthy and well-measured customer experience unit and knowledgeable leaders (not a given in private, by any means), one would run an A-B test: split off a small proportion of customers of the compliance process and test out the friendly reminder card. Run both in parallel for a while and see how the rates compare – then you know! With some certainty.

There’s two things that such a scenario offers: an incentive, and a safe and controlled way to get some certainty on the choices you have. And it’s my contention that the public service RARELY ever provisions its workers with even one of these aspects.

What if public servants are not risk-averse per se, but lack access to the kind of information that allows people to make balanced, informed decisions and take controlled risks?

And let’s take this a step further: Do you REALLY want your public servants to make risky choices? What does that even mean?

Photo by Bernd 📷 Dittrich

We probably think of the 17-step sign-off processes, committees on committees stacked like a babushka doll, and processes that seem to take forever to come to a conclusion – of ONE MORE stakeholder that needs to be roped in before something can happen.

And that’s very true, that’s exactly what drives a lot of people in the public sector slowly mad. It’s full-blown Kafka, and it’s real.

But on the flip side, we have endless examples of projects and decisions that had some risks in them that went pretty badly, don’t we *cough, school lunches, cough*? That’s why we don’t usually tend to think of risks as something brilliant.

The worst fails I’ve seen (that usually don’t make it into the public eye) have been because of some shoot-from-the-hip decision a bunch of managers made when they got bored of involving specialists and hearing their concerns. It all took too long, so they went ahead and bought IT systems that ended up expensive nightmares, barely workable. But hey, they took a risk, right?

We all remember Novopay, where the launch of a faulty software was approved despite well-documented technical flaws. Do we want more of that?

I’m being flippant here, and I genuinely don’t think it’s an either/or situation.

But I worry that when we criticise risk-averse behaviour, the simple answer would be to just take push more concerns aside. And there sure IS risk in doing that. Because when we allow more people to make discretionary decisions, there will be instances of things not going as planned, bad actors will have more space to move, and the transparency and accountability that we currently lean almost entirely on the documentation of procedures will also take a hit.

I’ve written before about the degree to which New Zealand’s public sector is exceptionally managerialist – meaning that people with manager titles have massive discretion when it comes to certain things.

I don’t think our answer to the Kafkaesque nightmare of sign-offs and committees should be to heap more power onto the higher tiers and take more safeguards off.

The cacophony of calls for more risks, more boldness, really needs to be a call to question the pyramid-shaped concentration of power towards the upper tiers of the public sector cake.

Yes that means broader delegations and sign-off authorities, but that also means looking at mustering methods that can negotiate the balance between certainty and agility in decision-making processes that we currently only seem to understand in the shape of a steering committee and waterfall stage-completions.

I can only speak for my little bubble here, but so much of my UX/CX/research time has been confined either to the “innovation” corner, the outcomes of which never even entered the atmosphere from outer space (a rant for another day), or at the very last end of a project when all decisions had been made I was expected to find some way to polish the proverbial IT system turd. But so much of the social sciences can offer methods of testing, piloting and iterative change, that can narrow down options and space out the riskiness of decision processes.

Like in my starting example - for many situations in which public servants might shy away from trying something new because they’re unsure of the consequences, there are methods to clear the fog at least a little. But these methods are still seriously under-utilised in public service. They need to come out of “innovation” corner and play their role to meet risk-aversion with confidence, metrics and incentives.

We need to zoom in onto those areas where risk-averse behaviour stifles the power of people to improve their working environments under their own steam, and where it makes people hesitant to peek outside their remit because they’ve been bashed for doing so before.

Which brings me to my last but crucial point: and that’s the role that all of us are playing in this question, most of all our press.

It’s very easy to point fingers at the public service and cry: take more risks! But it’s our culture and our public discourse that teaches public servants what counts as “risky” and what befalls those who take a leap.

This is best illustrated by a study that has not been published yet but I have their conference abstract. Researchers compared “experimental policy-making” between Estonia and Finland and they found:

“In Finland, policy actors predominantly view experiments as potential sources of credit: a way to show that politicians are taking steps to address problems and proceed in a cautious way. In Estonia, experiments are viewed as politically risky: they are perceived to generate too little credit (compared to large-scale reforms), while the potential failure of an experiment is regarded as generating considerable blame.”

The culture of your country and its media’s disposition to reading a failed experiment either as something good (“ok, we learned something there, that’s progress”) or something bad (“how could we waste money on that?!”) has huge implications for what the public sector feels willing and able to do.

So, if we want to have a good rant about a risk-averse public service, we MUST also question what we’re doing to foster this culture!

Do we write about the upside of failed experiments and boats that were pushed out to far? Or is the only way for us to engage with what the public service does in the language of failures, blow-outs, delays and outrage?

I don’t mean to conflate this critique with the public (and media’s) important role of holding the public service accountable, as has happened in those examples I gave above. But when we’re talking willingness to take risks, we’re dealing with a double-edged sword here: If people spoke about your work this way, constantly, what would that do to your understanding of what is expected of you?

And like in my last post, it’s also our political leaders that set the tone for cultural developments that cascade all the way down the institutions. With New Zealand’s immense pace of change when it comes to our policies, restructures and interpretations of strategic goals, reducing public servants down to being “risk-averse” without acknowledging the ecosystem that breeds this behaviour is a little like the schoolyard bully, grabbing your arm and hitting your head with it while shouting: “stop hitting yourself”.