Lessons from Ken Henry on Political Risk in the Public Sector

Ken Henry, Secretary to the Treasury, gave an interesting speech earlier this month on Political Awareness.  He points out four lessons for public sector project managers from a particular episode on currency swapping.  These are:

  1. Perceptions play stronger than facts as the Opposition will attempt to exploit any source of embarassment for the Government and public servants are often the meat in the sandwich (or in other words, don’t let facts get in the way of a good story)
  2. Losses are valued much more heavily than gains; they are not scored symmetrically (that’s a bit like marriage isn’t it!). Saving lots of taxpayers money may not win much praise, but there will be heavy criticism on things that cost a lot of money with little value. This can lead to serious cases of risk aversion, especially for the pollies.
  3. If you are managing  a risky project, then public education investments should be undertaken up-front to condition expectations if things go pear-shaped. 
  4. Few people care about records of outstanding achievement if things go wrong.  Time is often the enemy as events in the short-term are generally overvalued relative to events at a distance.  This makes dealing with more complex issues and the longer-term future much harder.

These are all important points from an experienced and well-respected senior public servant.  I distinctly remember when the cross-currency swaps project was not going well and the heat that was being applied by media commentators.  In the end, the project proved has had a positive outcome but of course, that is not the memory that I had of the endeavour.  It’s often that we remember the stories of failures more than those of successes. 

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