Part 2 of 2: Competition: Key to reform of civil service

Ross H. McLeod, Canberra

If radical change to an organization is contemplated, inevitably what is required is the appointment of a person at the top of the organization with high management and leadership skills who is given the responsibility for restructuring, along with the autonomy to push ahead free of interference from outside. The next step is for this new leader to establish a team of support professionals capable of putting his or her plan into action. Although there will no doubt be other matters of concern, probably nothing will be more important than

* Determining an appropriate organizational structure and the kinds of people needed to fill it

* Selecting and promoting those who appear to be capable of performing well at levels higher than their current positions

* Recruiting individuals from outside if it appears that the appropriate people are not available from within; and

* Encouraging the departure of individuals who are surplus to requirements, including those previously promoted to levels beyond their capabilities.

Obviously it is no easy matter to rid the organization of employees that are not needed, or to change a system in which people are accustomed to think of regular promotions as their entitlement, even though both changes are clearly in the interests of the general public.

But we need look no further than the relatively recent restructuring of the then highly unprofitable national airline, Garuda, and the merger of four insolvent state banks to form Bank Mandiri, to see that radical surgery on the workforces of state institutions (with a great deal in common with the civil service) is feasible. In both cases, the government brought in Robby Djohan, a highly respected CEO from the banking sector, to restructure these very large enterprises.

In this, Robby was being asked to repeat something that he had achieved more than two decades earlier with the privately owned Bank Niaga. In all three cases, the shareholders gave Robby almost total freedom to do what was necessary to turn these firms around.

He did so by installing his own top management team, selecting the best people within the organizations to fill the remaining positions, and providing generous voluntary retirement packages to other employees no longer needed. In each case he was able eventually to obtain the support of those being let go, not to mention those being rewarded by way of promotion into positions of greater responsibility.

Beyond the initial phase during which the existing workforce is rationalized, it will be necessary to undertake far reaching reform of recruitment and promotions procedures, with a view to creating a civil service that is capable of performing optimally at minimum cost to the taxpayer.

What I have in mind is a system in which, rather than being automatic, promotions only occur when there is a need to fill vacancies, and in which strong competition for vacant positions is encouraged by widening the potential pool of applicants to the fullest possible extent.

The emphasis should always be on getting the best available person to fill each position. With this in mind, various changes are worth contemplating.

First, the system of having seniority and educational qualifications as pre-requisites for applying for higher-level positions should be discontinued. If a young person with relatively little working experience has nevertheless demonstrated a very high level of competence, there is no good reason to exclude him or her from competing with more senior applicants. By analogy, one would not have deprived Maria Sharapova of the chance to defeat the defending champion, Serena Williams, in the recent final at Wimbledon simply on the grounds that she had never played in the tournament before!

Second, civil servants should be encouraged to apply for positions both within and outside their current department. There is much to be gained from people moving around the civil service, since individuals will benefit from exposure to different working environments and practices, and the departments themselves will benefit from cross-fertilization. Outsiders will bring with them both good and bad ideas; the former can be adopted, and the latter ignored. Again, the wider the pool of potential applicants, the better the chance of getting the best person for the job.

Third, applications should also be encouraged from outside. Just as there are benefits from cross-fertilization as individuals move between departments, so there are even greater benefits available from cross-fertilization between the private and public sectors.

The current presidential election campaign, now in its second phase, gives the general public the opportunity to choose between candidates who compete for the right to manage the institutions of state, including the civil service. The successful candidate will be in a position to appoint a number of individuals as ministers, thus giving them the opportunity of working from the top down to reform their respective departments.

The writer is with the Indonesia Project and Editor of Bulletin of Indonesian Economic Studies at Australian National University, Canberra.