This document is part of the Serving Victoria: A guide for Public Sector CEOs resource.

A core responsibility of the CEO is to ensure that the organisation has the capacity and capability to meet its objectives.

CEOs may choose to undertake or commission an organisational capability assessment. Such an assessment can assist CEOs understand the fundamental strengths and weaknesses of their entity and provide valuable information about where to direct resources. This may be particularly relevant when the defined goals or objectives of the public entity have changed.

‘Capability’ has many different meanings and there is no single public sector definition of the term. The VPSC defines capability as what an entity needs in order to deliver efficiently the outputs required to achieve the government’s goals as set out in the entity’s strategy.

The skills and resources that make up an entity’s capability include staffing, infrastructure, technology, financial resources, strategic leadership, process management, and networks and linkages with other organisations and stakeholders.

An entity’s capability is its potential to perform by successfully applying its skills and resources to accomplish its goals and satisfy in stakeholders expectations. Public entities need to utilise this capability effectively and collaboratively to improve their operations and reduce costs to government.

Capability assessments can provide a conceptual framework as well as a practical, evidence-based, analytical tool. CEOs may conduct a capability assessment of their entity to:

  • identify and consider capability areas most relevant to the goals and purpose of the entity;
  • provide a focus for future activity;
  • contribute to the identification of capability strengths, gaps and opportunities relevant to successful implementation of the business of the entity; and
  • determine whether the entity has sufficient capacity to achieve its objectives.

There are many tools to assess an organisation’s capability. In general terms there are some essential elements that are common to all tools. These elements are shown in Table 3.

Table 3: Organisational capability assessment elements

Element Description
people the staff and their collective skills, experience, tacit knowledge, culture, attitudes, relationships, and needs and expectations necessary to deliver the desired service
business practices the documented processes that underpin service delivery
facilities and equipment the physical facilities and (non-ICT) equipment required to enable service delivery
information and communication technologies (ICT) the systems for the communication, capture, classification, documentation, storage, management, retrieval and dissemination of knowledge
knowledge the domain-specific knowledge applied in service delivery, excluding tacit knowledge
accountability and governance the framework to determine accountability and governance for all aspects of the entity’s operations

When undertaking a capability assessment, it is important to have a clear understanding of the public entity’s role, as determined by the legislative requirements, and government and board priorities (including ministerial statements of expectations or obligations). Section 1.5 provides further guidance on this.

Workforce Planning

Effective delivery of government priorities, both in the present and the future, is dependent on a strategic emphasis on human resource development.

Workforce planning is a tool that assists organisations and managers to plan for the future, anticipate change, manage their workforces and meet their business goals. It provides a framework for making workforce decisions that align with the strategic goals of the organisation. The workforce plan identifies how future staffing and skill needs will be met (i.e. via recruiting, development, internal deployment, recruitment, succession planning). This ensures that planning is proactive and talent surpluses and shortages are avoided where possible.

Workforce planning includes the following steps:

  • understanding the organisation’s strategic direction and the impact of that direction on the workforce;
  • analysing the current and future workforce needs and competencies;
  • analysing the gap between the current and future needs;
  • developing strategies to address workforce gaps, including an understanding of market forces;
  • implementing strategies to align the workforce with future business needs; and
  • evaluating the success of the workforce planning strategies in meeting objectives.

A workforce plan will help the entity meet its objectives by ensuring that the staffing profile of the entity has the right capabilities to meet current and future demands.

Recruiting staff with a view to future business agility is appropriate in the public sector, as future trends are unpredictable. Strategic workforce development requires high-level input and ownership from the entity’s executive to ensure targeted recruitment.