What is an agile government, and how can it be achieved?
Agile is a well-known approach in the IT industry, where teams create deliverables in small incremental value within an iteration to achieve one big final goal or a product. This approach supports continuous development and allows teams to shift quickly when necessary because clients may ask for drastic changes.
Given the kind of results produced by the agile approach, it has attracted not only the IT industry but also the public sector and governmental institutions. To better understand the agile principles, let’s take a look at how Indonesia is reforming its bureaucratic system and implementing new strategies.
Bureaucracy in Indonesia
Indonesia is one of the countries in ASEAN that already put some effort into being agile by reforming its bureaucracy. President Joko Widodo expressed this intention in his speech at the Sentul International Convention Center on July 14, 2019. He recommended structural reform “so that institutions are simpler, more agile.”
Indonesia has a total of 217 government agencies, 31 ministries, and 98 statutory agencies as of 2014, based on the data of the Institute of Public Administration Australia. In the World Bank’s Mapping Indonesia’s Civil Service report, Indonesia’s civil service has increased by 25 percent from around 3.6 million in 2006 to over 4.5 million in 2018.
Bureaucracy bleeds several problems, ranging from corruption to low performance. The study “A Structural and Mindset Bureaucratic Reform Agenda for Jokowi’s Second Term.” published in May 2020, cited data from the Commission of Corruption Eradication (KPK) showing that in 2018, out of 2,357 civil servants who had committed corruption, only 891 were dishonorably discharged and 62 percent have not been fired and are still receiving salaries.
Indonesia’s six strategic steps
The bureaucracy culture of the Indonesian government can be traced back to its history of colonialism. But the country continues to aspire for reforms to give the public quality service. Its bureaucratic reform initiatives will be implemented according to the Grand Design of Bureaucratic Reform 2010-2025.
Bureaucratic reform, according to Indonesia’s “Regulation of Minister of State Apparatus and Bureaucratic Reform Number: PER/15/M/PAN/7/2008 concerning General Guidelines for Bureaucratic Reform,” refers to a systematic process and carefully planned fundamental changes in government organizations that aim to achieve high performance in carrying out duties and efficiently implementing services, development, and governance.
Widodo instructed his cabinet to implement bureaucratic reforms based on the “Regulation of the Minister of State Apparatus Utilization and Bureaucratic Reform number 25 year 2021 regarding Simplification of Organizational Structure in Governmental Institution.”
It consists of instructions in the form of a Circular Letter, which presents six strategic steps for every government institution as they reform their bureaucratic system.
Identifying which echelon can be simplified according to each organizational structure;
Mapping which structural role for echelon III, IV, and V in each unit that can be converted into functional roles;
Mapping the functional roles needed by each institution to replace the structural roles;
Adjusting the budget according to the new organization’s structure;
Communicating the results to internals;
Submitting the results to the Minister of State Apparatus Utilization and Bureaucratic Reform.
Indonesia’s bureaucratic system is loosening up to give way to an agile environment. An organization that is flattening its organizational structure is aiming for a more agile, adaptive , according to the paper “Cultivating Agile Organizational Culture: Addressing Resistance to Change in Bureaucratic Government Organizations.”
The study states that in organizational flattening, “leaders allow subordinate units to operate with minimal higher level control, and prefer more collaborative interactions.”
Going agile: analysis and recommendations
Bureaucratic reform, when done right, could transform organizations and public services. For instance, the One Stop Service at the Investment and Integrated Licensing Service Agency (IILSA) in Puruan City is a result of reforms made in the administrative services licensing process.
For a country to exhibit agile governance, it has to listen to its constituents in an efficient manner. According to the article “Agile: A New Way of Governing” written by Ines Mergel, Sukumar Ganapati, and Andrew B. Whitford, agile administrations must welcome reforms and adapt to the changing environment, public values, and public needs.
The authors stressed that agile governments must choose adaptive structure over hierarchies and silos and individual discretion over bureaucratic procedures.They also emphasized that consensual decision-making and trial-and-error approaches must take place for a government to be agile.
To be adaptive, governments must introduce an approach where their decision-making structure is decentralized and bottom-up, according to the paper “Adaptive governance: Towards a stable, accountable and responsive government.”
Indonesia launched its decentralization process in 1999, encouraging participation in community and regional planning and involving citizens in local governance. However, Indonesia has yet to experience the full effects of decentralization.
For example, in the area of public finance, decentralization is not being carried out properly due to two concerns, as stated in the report “Government Decentralization Program in Indonesia” released by the Asian Development Bank.” The first issue refers to “the capacity of subnational governments to produce public and private goods, increase productivity and employment, and promote economic growth in their jurisdictions, was not increased.”
The second concern is about the lack of training of financial managers, as required by the new laws of public treasury and auditing.
To address those issues, the government must demonstrate flexibility. Mergel, Ganapati, and Whitford suggest that flexibility is crucial because agile is not confined to one finished product, service, or process and prioritizes continuous improvement instead.
This is applicable in contracting processes. Traditional governments apply the waterfall model, but agile “requires a contract management approach that is flexible and stretches beyond a fixed-price, one-time project.”
Lastly, these public management reforms can only happen under a new style of leadership. In the IT industry, developers in an agile environment are expected to collaborate with business users. The same is true for agile governments, where leaders must serve and empower people.
To learn more about how governments can measure and improve performance at all levels, visit The KPI Institute’s Center for Government Performance.
From new employee engagement to technology adoption, organizations must consider a variety of factors nowadays when conducting strategic planning and implementing performance management systems. In this interview, Yousef S. Aljomah, a program manager who works for a Saudi government entity, shares his insights on how organizations can navigate uncharted territories while getting results and staying true to their core values.
Yousef has over 15 years of experience leading high-impact strategic projects and programs in the public and private sectors. His expertise has allowed him to drive projects that align with organizational goals, improve efficiency, and promote innovation. He holds an impressive 20 certifications in strategic and project management and a Master of Science in Technology Management. Let’s find out what he thinks of today’s trends and practices in performance management.
Trends
In your opinion, what are the key trends in organizational performance management in 2024?
The path of organizational performance management in 2024 is significantly shaped by integrating AI tools. This strategic direction is in harmony with both public and private organizational development, harnessing AI-driven data analytics, integrated systems, real-time feedback mechanisms, personalized development plans, facilitation of remote work, DEI analysis, process automation, outcome-based metrics, agile methodologies, and sustainability tracking. These advancements are anticipated to drive efficiency and innovation, thereby making a meaningful contribution to the global transformation of organizational development.
Which of the existing trends, topics, or aspects within performance management have lost their relevance and/or importance in your opinion?
The outdated trends in performance management include annual performance reviews, rigid hierarchical structures, one-size-fits-all training programs, traditional office-bound work models, a sole focus on output metrics, top-down feedback mechanisms, and manual process management. On the other hand, AI tools prioritize flexibility, continuous improvement, and data-driven, inclusive approaches.
What does the corporate performance management system of the future look like?
AI will usher in the forthcoming corporate performance management system, which features integrated platforms, real-time feedback, personalized development, support for remote work, DEI emphasis, automated processes, outcome-based metrics, agile methodologies, and sustainability tracking. It will prioritize flexibility, continuous improvement, and data-driven, inclusive approaches.
What will be the major challenges in managing performance in the future, and how should organizations prepare for them?
In the future, managing performance will involve dealing with significant challenges such as adapting to rapid technological changes, ensuring data privacy and security, maintaining employee engagement in remote work, addressing skill gaps, fostering DEI, and managing continuous feedback. To tackle these challenges, organizations should invest in training, robust cybersecurity measures, flexible work policies, DEI initiatives, and advanced analytics tools.
How is technology impacting the way organizations conduct strategic planning and manage performance? Any specific tools you would like to mention?
Technology is revolutionizing strategic planning and performance management by improving data analysis, real-time monitoring, and decision-making. AI and machine learning (ML) offer predictive insights, while cloud-based platforms facilitate collaboration and scalability. Notable tools include Microsoft Power BI for data visualization, OKR software such as BetterWorks for goal alignment, and AI-driven HR platforms like Workday for comprehensive performance management.
How is sustainability impacting the way organizations conduct strategic planning and manage performance? Any specific aspects you would like to mention?
Sustainability is reshaping strategic planning and performance management by integrating ESG criteria into business objectives. Organizations are setting measurable sustainability goals, such as promoting sustainable project management practices, enhancing resource efficiency, and advancing social responsibility. Specific aspects include incorporating green project management principles, efficient resource allocation, and fair labor practices, using tools like the Project Management Institute’s (PMI) Code of Ethics and Professional Conduct and ethical decision-making frameworks.
What should be improved in the use of strategy and performance management tools to make an organization even more resilient to future crises?
To enhance organizational resilience, strategy and performance management tools should improve real-time data collection and analytics for faster, data-driven decision-making. Tools should support agile methodologies, integrate robust risk assessment and mitigation features, and foster cross-functional collaboration. Additionally, incorporating advanced scenario planning, employee well-being monitoring, AI, automation, and sustainability metrics will help organizations better navigate uncertainties and maintain performance during crises.
While navigating through these challenging times, what would you consider a best practice in performance management?
During challenging periods, it is advisable to incorporate real-time feedback mechanisms and continuous performance evaluations. These approaches promote agility, maintain employee alignment with evolving objectives, cultivate continuous development, and facilitate prompt adaptation to strategies. Consequently, they also strengthen resilience and sustain productivity.
How does benchmarking support the improvement of performance management and target-setting systems?
Benchmarking helps improve performance management and target-setting systems by comparing them to industry standards and best practices. It identifies performance gaps, sets realistic and competitive targets, fosters continuous improvement, and encourages the adoption of proven strategies. Ultimately, it enhances overall organizational efficiency and effectiveness.
Research
Which organizations would you recommend being observed due to their approach to managing performance and its subsequent results? Why?
In Saudi Arabia, several organizations—namely Elm, Saudi Arabian Military Industries (SAMI), and NUPCO—are Public Investment Fund (PIF) entities known for their exceptional performance management approaches. These organizations have significantly improved their service quality and customer satisfaction through digital transformation efforts and data analytics. Their emphasis on innovation and continuous improvement demonstrates best practices, resulting in enhanced operational efficiency and alignment with the objectives of Saudi Vision 2030.
Given their importance in practice, what aspects of performance management should be further explored through research?
Some key areas for further research in performance management include the impact of AI and ML on performance outcomes, the effectiveness of real-time feedback systems, strategies for enhancing employee engagement and motivation, the role of agile methodologies in performance management, and the integration of sustainability metrics. Understanding these areas is crucial to improve organizational efficiency and achieve strategic goals.
What are the key competencies of a successful business leader (C-level executive)?
The key competencies of a successful C-level executive include a strategic vision, strong decision-making and leadership skills, excellent communication, financial acumen, the ability to drive innovation, and adaptability. They also need to possess ethical judgment, resilience, customer focus, and a global perspective. These skills enable effective interaction with stakeholders, adaptation to market changes, and successful organizational leadership.
What are the key competencies of a strategy and performance manager that are necessary to succeed nowadays?
The key competencies of a successful strategy and performance manager include strong analytical skills for data-driven decision-making, excellent communication and leadership abilities, strategic thinking, and the ability to drive continuous improvement. Proficiency in performance management tools, knowledge of AI, adaptability to change, and a focus on achieving organizational goals are also essential.
What processes and tools do you look at when differentiating a successful performance management system from a superficial one?
When distinguishing between a successful performance management system and a superficial one, it is important to consider the following key processes and tools: goal-setting tools, data-driven decision-making tools, and agile practices.
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Riham Mahmoud Saad is a Senior Strategy and Corporate Performance Specialist with over 15 years of experience in corporate performance management in the public sector. She holds a master’s degree in Information Systems Management from Zayed University. Moreover, she has acquired certification in KPI Professional and Practitioner and a Nanodegree in Data Analysis and Visualization from Udacity.
Khalid Alharbi boasts over 20 years of experience in partnering with business unit executives to develop strategic plans, direction, market analysis, partnership, growth guide, and operation excellency. He leads large and complex projects to achieve key business objectives and promote digital transformation. He is pursuing a career in engineering, project management, sales and strategy planning.
Rayed Alhumaid is the current Head of the Strategy & Institutional Performance Program for the Kingdom of Saudi Arabia’s Ministry of Finance. He previously participated in the drafting and planning of the digital projects portfolio for the Ministry of Higher Education.
Riham Mahmoud Saad is a Senior Strategy and Corporate Performance Specialist with over 15 years of experience in corporate performance management in the public sector. She holds a master’s degree in Information Systems Management from Zayed University. Moreover, she has acquired certification in KPI Professional and Practitioner and a Nanodegree in Data Analysis and Visualization from Udacity.
Khalid Alharbi boasts over 20 years of experience in partnering with business unit executives to develop strategic plans, direction, market analysis, partnership, growth guide, and operation excellency. He leads large and complex projects to achieve key business objectives and promote digital transformation. He is pursuing a career in engineering, project management, sales and strategy planning.
Rayed Alhumaid is the current Head of the Strategy & Institutional Performance Program for the Kingdom of Saudi Arabia’s Ministry of Finance. He previously participated in the drafting and planning of the digital projects portfolio for the Ministry of Higher Education.