Capability in this context is the ability to access the right combination of people, resources, systems and structures necessary to provide goods and services efficiently now and in the future, in accordance with the Government's objectives. In other words, our capability to achieve the outcomes identified cost-effectively over the long term.

From our assessment of the Ministry's current capability, in order to achieve our outcomes we need to:

improve our strategic direction-setting capability;
make the Ministry more cohesive and unified so as to better harness our combined effort on priorities and outcomes;
enhance our understanding of the environment in which we operate and share what we learn as an organisation; and
continue to develop our staff capability.

Strategic Direction-Setting Capability

Economic development processes are typically complex, and it can be difficult to determine the most effective points for government interaction. Moreover, in the terms of this Statement of Intent, there are often not direct causal links between outputs and outcome. This reinforces the need for the Ministry to build its capability around the key drivers of economic development, and to develop stronger mechanisms to be able to assist Ministers prioritise activities that will make the greatest contribution to achieving those outcomes.

One of the initiatives we have taken in response to this requirement has been to form a new Medium-Term Strategy Group.

This new unit reports to the Chief Executive and Strategic Leadership Team, and works closely with policy and operational groups across the Ministry, adding a "big picture" perspective to complement the work of the branches. It is charged with taking a "whole of organisation" perspective.

Key functions of the Medium-Term Strategy Group include:

Building an understanding of what drives sustainable economic development and where the Ministry can make the most significant contribution to the outcomes we have identified. This means deepening our knowledge in key areas, and working alongside other "economic" agencies within government and the private sector to ensure we build a comprehensive picture of best practice. It also means building evaluative tools and systems that can test policy and operational outputs and their contribution to outcomes.
Providing advice to the Strategic Leadership Team and branches during strategic planning processes and when significant high-risk issues arise, on achieving alignment within the organisation on achieving our outcomes.

We have also identified the need to improve strategic development and priority setting processes across the Ministry.

The preparation of this Statement of Intent has itself resulted in a more integrated business planning and risk management process, and the Ministry will continue to give further emphasis and attention in its planning processes to outcomes. We need to do further work on evaluating our effectiveness and value delivered, to enable a lift in organisational performance.

Over the next three years we will focus on:

continuing to improve our planning processes to achieve effective alignment on outcomes; and
developing measuring and reporting systems around our outcomes, to support judgements and decision-making on priorities.

Harness our Combined Effort on Priorities and Outcomes

The Ministry's focus on economic development is still relatively new. The Ministry was formed a little over two years ago, and the challenge is to change our focus from "means" (a good regulatory environment) to "ends" (economic development and prosperity). Its predecessor was the Ministry of Commerce, which had a variety of functions and activities added to it over the years around a micro-economic or regulatory theme. The result is a Ministry that is very diverse and complex.

The Ministry has considerable experience and knowledge of the New Zealand business environment through its operational activities in managing intellectual property rights, company registrations and annual returns, allocating rights to the Crown mineral estate and the radio spectrum, and managing company insolvency. It also knows what matters for consumers. It has strong links to industry sector groups, and to local government, iwi and communities. It has well developed micro-economic policy knowledge and skills.

To achieve the outcomes we have identified will require the Ministry to work more effectively in harnessing this wide expertise to advance economic development. We have begun that process through our organisation development project Creating the Future. Through an interactive process with staff, that project has developed the Ministry's enduring purpose and uncovered the Ministry's core values. It has also painted a picture of the Ministry we want to become and how we intend to develop as an organisation over the next decade.

Over the next three years we will work to:

Reinforce the Ministry's core purpose, values and vision, and the roles that different parts of the organisation need to play in achieving our goals and outcomes.
Build a more cohesive organisation that maximises the contribution different parts of the Ministry make to the outcomes, rather than separate business units working on related topics in relative isolation. This requires effective systems for priority setting and a capacity to think across organisational boundaries.
Emphasise teamwork and whole-of-organisation approaches to maximise and capture the variety of perspectives and expertise that exist in the Ministry.

Share What We Learn across the Organisation

As outlined above, to be effective in achieving our outcomes we need to keep abreast of what is important and relevant for the business sector, consumers and the wider community. They are crucial to our understanding of what is effective in terms of regulatory intervention, and what the costs of regulation might be. Further, to fully understand the business growth environment requires us to know well the actions and roles of a wide variety of players.

That means we need to continue to develop strong networks in the community, the business world and the state sector, and to develop ways of sharing that understanding across the Ministry.

It also means that we need to improve our internal knowledge management systems and practices, and ensure we share what we learn across the organisation. To do this we must be able to adapt, innovate and foster a culture of learning within and across the organisation. We are developing a specific strategy to manage knowledge sharing that will help staff leverage and learn off others. It will help reduce the risk of losing knowledge, skills, and insights when people leave.

Over the next three years we will work to:

improve our contacts and relationships with key external stakeholders, to test ideas and draw their input into developing effective policy proposals; and
develop and implement an effective knowledge management strategy as a way to improve efficiency, effectiveness and seeking continuous improvement through the use of our combined knowledge, experience and expertise.

Develop Our Staff Capability

The Ministry needs to have the staff capability to achieve its outcomes. We need to further build our capacity around understanding economic development and business growth processes, and ensure that we effectively deploy those skills within the organisation. At the same time, we need to work with the whole organisation to develop staff to deliver high quality operations and policy advice across a broad front of activities.

The Ministry recently promulgated a three-year Human Resources Strategy that focuses on valuing and developing the Ministry's people as the key element in building a high performance organisation.

Over the next three years, our task is to implement the action points in the strategy. The strategy has four key goals:

Create a Supportive Environment That Enables Everyone to Perform at Their Best

Creating the right environment has as its foundation our core values. We have cast these afresh in terms of our role as the Ministry of Economic Development. We also aim to motivate staff around our core purpose and vision for the Ministry, so that they are well placed to align their own activities with the organisation's goals. This is essential given the wide range of activities undertaken by the Ministry and the complex interaction of activities in improving New Zealand's economic performance.

We aim to create an environment where our staff learn from each other and from those external to the organisation - so we will be more active in orienting the Ministry to learn about other's experiences of the business environment and their ideas for improvements.

We will also work to reduce any barriers to employing a wide range of staff with relevant skills and expertise, and will create a supportive work environment for Māori staff.

Develop Our Leadership and Management Capability

We need to develop our leadership and management capability in order to help focus the Ministry on achieving the outcomes in this Statement of Intent. In particular it will require reinforcement of senior leadership on whole-of-organisation direction and capability issues, and clarifying and updating management and leadership competencies throughout the Ministry. We also need to develop our sectoral leadership so that we can play the role envisaged regarding public sector co-ordination and alignment on economic development issues.

We will provide development and training for managers to ensure they can enthuse staff, set clear direction and oversee the efficient delivery of outputs.

We will intensify the focus on developing managers' communication skills. This is important because managers need to be able to clearly articulate and explain the interactions between the Ministry's streams of work that contribute to our outcomes. This is also a key skill in improving our partnership work with businesses and the community.

Develop and Recruit Staff to Provide Policy and Operational Leadership

A key part of our capability is our understanding of the many facets of the business environment in New Zealand. We aim to be an attractive employer to people with experience and understanding of business - whether it is in business law, intellectual property processes, oil exploration, or consumer and safety issues. With the emphasis on understanding the determinants of business growth and economic development processes, we will be looking to ensure we recruit and develop staff who can deepen our capability in those specific areas.

In order to build our understanding of the business environment we are shifting our staff development awards to emphasis opportunities for hands-on work experience through short-term secondments, study tours and staff exchange programmes.

We will provide opportunities for staff to develop their skills in a variety of positions in different parts of the Ministry. This is an important part of building an individual's career path within the Ministry, and helps transfer skills and experience of different aspects of economic development between parts of the organisation.

Develop Supportive HR Systems

Any HR plan requires effective systems to implement it and track its progress. We are aiming for simpler and more flexible HR systems to underpin this plan, and information about how well we are meeting our goals. From a capability perspective, a key focus will be on improving the Ministry's positioning in selected aspects of the recruitment market.

Our Vision: The Ministry of Economic Development by 2012

Our vision describes the sort of organisation we wish to become and the results we wish to achieve over the coming decade. It has seven elements:

Impact

Our role in fostering economic development and prosperity is acknowledged by business leaders and successive governments. The economy is performing strongly and New Zealanders are noticeably more prosperous than a decade ago.

Know-How

Our success stems from our broad understanding of the business of New Zealand. We know what drives sustainable economic development; we know what matters for consumers; we know how business works.

Hub

The Ministry is a hub connecting the many sectors and groups who contribute to economic development. We have strong networks in the community, the state sector and the business world, and are the key link between government, the business community and consumers.

Stakeholders

Ministers and other stakeholders know that we deliver innovative, practical solutions. The power of our ideas and our effectiveness in implementing them is recognised here and abroad. These strengths draw on well-established partnerships with others. People seek out our advice and assistance.

Working Together

Internally, we work effectively together. We harness our wide expertise to advance economic development and prosperity. We organise ourselves to produce results. We prioritise our work. We communicate well.

Outsiders see that every part of the Ministry has a sense of buzz and commitment. Staff are enthusiastic about the Ministry's work and their contribution to it. We devolve responsibility for tasks to those most capable of handling them. Staff are trusted in their judgements and have the resources and guidance needed to succeed. Everyone is motivated to achieve.

Leading Edge

Our operational services are leading edge and we continuously make them cheaper and easier to use. We win awards for our enterprising use of technology and successful implementation of e-government.

We thrive on intellectual curiosity, open debate and disciplined review. We share what we learn. This fosters innovation and creativity. We constantly seek new techniques and systems to help achieve our goals.

Employer of Choice

Staff enjoy working in the Ministry. Our culture of excellence, enthusiasm and mutual support creates a magnet for talent. Capable people here and overseas want to work with us so they too can contribute to New Zealand's economic development and prosperity in a stimulating work environment.

Our Structure

The Ministry is divided into six branches, and a Medium Term Strategy Group, which work co-operatively to advance sustainable economic development. Our branches are:

Industry and Regional Development, which has principal responsibility for advancing the Government's economic, regional and industry development objectives. The Ministry of Tourism, which was established on 1 January 2002 and advises the Government on tourism issues, is associated with this branch.

Operations, which runs the Ministry's operational activities, including the Companies Office and other business registries, the Radio Spectrum Management Group, the Electrical Workers Licensing Group and the Crown Minerals Group.

Regulatory and Competition Policy, which provides policy advice on the legal and regulatory frameworks for business and on the scope for regulatory co-ordination with other jurisdictions.

Resources and Networks, which provides policy advice on the regulatory environment governing energy, telecommunications, postal and radio spectrum services, and on environmental issues and the management of natural resources.

Ministry of Consumer Affairs, which provides policy advice and programmes on consumer safety, consumer rights and information, and trade measurement and is responsible for the electricity and gas safety regimes.

Corporate, which provides specialist advice on legal, finance and administration, human resources, communications, risk management, information management and technology issues, and focuses on administration and management of the Ministry as a whole.

Ministry of Economic Development Organisational Chart

960x577 pixel version (135 KB)
See Also: Structure

The Main Risks

Risks to Achieving Focus

The greatest strategic challenge to the Ministry is to determine what it "must do" as opposed to what it "can do" to help improve New Zealand's economic performance. Economic development is a very broad canvas - there are many dimensions to how the economy performs and many links to longer-term social and environmental goals. There is a risk that the Ministry gets pulled in too many directions and stretched too thinly.

While needing to be constantly aware of the bigger picture, we need to ensure that we focus on the areas where we have expertise and which relate to our core purpose and outcomes. This will require rigorous priority setting and a well-developed understanding of economic development processes. The outcomes and goals in this Statement of Intent are intended to provide that focus.

Financial Capability Risks

The Ministry will continue to adopt strategies to ensure we can provide efficient and effective services to Ministers and third party fee-payers, within the resources available to us. To achieve this, the Ministry will:

maintain an effective corporate support environment that balances support for the Ministry with the corporate governance role to the Chief Executive;
ensure our support structures are delivered efficiently and effectively;
invest in people and systems to develop the skills needed to deliver;
improve the efficiency of our own processes and systems to reduce costs to purchasers of our services; and
ensure efficient decision-making and effective identification of financial implications and capital expenditure.

Therefore, while the short-term focus is on prioritising operating expenditure and managing within budgets, the long-term focus is in on examining ways to meet increasing cost pressures within relatively fixed revenue, while minimising the impact on our strategic objectives.

In the long term, the Ministry needs sufficient cash for the replacement and enhancement of its fixed assets. Over the next year, the Ministry is undertaking a review of its capital replacement requirements to ensure we continue to improve our infrastructure.

Accordingly, the Ministry will continue to adopt processes which:

ensure capital is directed to highest priorities across the Ministry and we gain benefits from rationalisation where possible;
ensure that capital is invested in areas that meet the medium to long-term objectives associated with building a learning organisation;
develop strategies well in advance to address forecast capital requirements; and
integrate effective capital planning into Ministry-wide priorities and strategies.

Capital pressures/restrictions could inhibit the Ministry from ensuring its own capability and the Crown's ownership interests are maintained. To ensure that all necessary capital expenditure is undertaken to protect the Ministry's capability, the Ministry continues to consider the timing of some of the larger projects, ensuring that priority goes to those that meet its overall strategic objectives.

The Ministry will also continue to refine its Information Technology Strategy in order to:

establish a longer-term view of the IT environment for the Ministry of Economic Development, and the bringing together of Ministry-wide IT requirements;
establish a framework to ensure connectivity within the Ministry, especially bearing in mind that staff are located in offices throughout New Zealand; and
consider and address e-government implications.

Other Risks

The following risks could also threaten the achievement of the Ministry's strategic objective:

Risks arising from management systems, including failure of technology to deliver.
The Ministry manages these risks through analysis of both user needs and system risks, quality management principles, clear communication and control over suppliers.
Risk of underachieving relative to the Government's expectations, because of the comprehensiveness and speed of changes relating, among other things, to functions, sustainable economic development and e-Government.
The strategic and business planning processes are being strengthened to address these risks by improved direction setting, accountabilities, knowledge management strategies across the organisation, risk management and communication.

The Ministry's approach to risk management is embedded in its Risk Management Charter. This focuses on providing managers and staff with tools to better identify and manage their risks.

To assist the Chief Executive and branches in managing risks, a risk management committee operates within the Ministry. This is made up of both senior staff and external parties. Its functions include:

developing risk management policies and methodology for the Ministry;
ensuring staff are fully informed of the Ministry's risk management policies and expectation of staff in this area;
defining and receiving risk information from branches and developing a risk assessment profile for the Ministry (identifying actual and potential risks to policy and operational objectives) and reviewing and updating these periodically; and
managing a process of reviews.

Work continues to ensure that planning processes incorporate risk profiling. As goals and objectives are identified, so too are the risks to achieve them and the most effective treatment of these risks.

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Printed: 25/11/2009