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GEORGE ROSS Development strategy


MARY CHAPUT Connecting Remembrance





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November 2012 – VOLUME 18 – NUMBER 9


The new currency Tomorrow’s data centres today BY DAVID DRURY AND DAVID HATHAWAY


Back from the brink Back from the brink BY RON MCKERLIE


Veteran’s Week Innovative ways to connect with Canadians BY MARY CHAPUT


Accounting for value Financial lessons from lean BY JACOB STOLLER


Digital compliance Six must-do’s for electronic recordkeeping





Meeting the mineral development challenge BY ANIL ARORA


Epost evolution A technology platform for the digital economy

Northern wealth 22

IRB policy Helping industry in the global marketplace

Golden era


Ontario’s mineral development strategy BY GEORGE ROSS


Think tank Independent policy analysis for Northern Ontario


New professionals Celebrating 10 years of contribution




Devolution in Yukon Pioneering territorial resource management


Performance management Meaningless measurements




Personal perspective Managing in a new frontier



16 Online Extras

Innovation and wealth creation Challenges, changes and opportunities in Canada’s North



The Leader’s Bookshelf When ‘yes’ means your word




Governing digitally The wider stakes of Apple versus Android

Online Extras

Missed an issue? Misplaced an article? Visit for a full archive of past CGE issues, as well as online extras from our many contributors.

Procurement Breaching a last bastion of bias



Opinion The rise of the user fee BY DAVID ZUSSMAN November 2012 // Canadian Government Executive / 3

Editor’s note

Toby Fyfe


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Contributors: Anil Arora, George Ross, David Robinson, Greg Komaromi, David Mate, Ken Coates, Greg Poelzer, Mary Chaput, Jacob Stoller, Bruce Miller, Kerry Munro, Nick Simmons, Murray Kronick John Read, Harvey Schachter, Jeffrey Roy, David Zussman Editorial Advisory Board

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Northern transformation “There are strange things done in the midnight sun By the men who moil for gold; The Arctic trails have their secret tales That would make your blood run cold; The Northern Lights have seen queer sights, But in the future they will see A mining rage that will set the stage For great prosperity.” With apologies to Robert W. Service, the above is what he might have written had he been alive and flying around the North today rather than mushing across the snow over a century ago during the Yukon gold rush. For the consensus seems to be that Canada’s North is on the verge of striking it rich, this time thanks to a growing worldwide demand for its minerals and metals. The North has always had a fascination for the rest of Canada, too often in rhetoric rather than in appropriate support and development. Some initiatives have been bad, such as residential schools. Some have been forward looking, such as the negotiation of Northern Aboriginal land claim agreements and the creation of the government of Nunavut. The challenge is out: governments have significant leadership roles to play as the economic, social and political transformation driven by resource development unfolds. Because if it is true that increased mineral and metal development is key to the future, all governments have to make sure they ensure economic independence, social cohesion, environmental protection and prosperity for Northerners. In short, governments must be out front as both the drivers and enablers of change. Building upon the lessons learned from the past, they must make sure that things are in place so that the citizens of the North, including First Nations, reap both the short- and long-term benefits. Our contributors this month point out the opportunities and challenges facing governments dealing with Northern transformation. Ken Coates and Greg Poelzer of the International Centre for Northern Gover-

nance and Development at the University of Saskatchewan (p. 16) review the issues facing public servants as they lead and respond to Northern change: examples include rural and Aboriginal poverty, a small population juxtaposed with huge distances, and “profound and rapid” governance changes. Greg Komaromi, deputy minister of Energy, Mines and Resources for Yukon, explores one of those major governance changes. Devolution has given the territory authority over natural resource development (p. 12). He argues that it has contributed significantly to increased prosperity and has resulted in lower unemployment rates. In response to the challenges of preparing for increased mineral exploration and mining, Anil Arora of Natural Resources Canada (p. 6) and George Ross, deputy minister of Ontario’s Ministry of Northern Development and Mines (p. 8), describe how their jurisdictions are preparing the groundwork so that future mineral and metal development will be successful today and benefit future generations. And finally, what’s it like to be public servants in the North? Well, Coates and Poelzer note that they live in “fascinating times.” David Mate, the chief geologist who manages the Canada-Nunavut Geoscience Office in Iqaluit, agrees; his personal account (p. 13) explains how he has learned to use collaboration, open communication, diplomacy and compassion to set the stage for success and a satisfying management challenge.

Erratum In the last edition, we indicated that contributor Allen Doppelt was a senior council with the Ontario Ministry of Corporate Services. This is inaccurate: after 30 years as a lawyer with the Ontario government, he opened his own legal practise last year in Thornhill, Ontario. He practises primarily corporate law, with an emphasis on the law of non-profit corporations (

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Cover North

Anil Arora is assistant deputy minister

for the Minerals and Metals Sector at Natural Resources Canada.

Northern wealth

Photos: Archbould Photography

Meeting the mineral development challenge

As foreign markets create an ever-increasing demand for minerals and metals, new exploration is resulting in new mines in more remote areas throughout the North. To support these new opportunities and other goals, the government of Canada is implementing an integrated Northern Strategy based on four pillars: exercising sovereignty, promoting economic and social development, protecting our environmental heritage, and improving and devolving Northern governance. In pursuing this strategy, the government works closely with territorial organizations, Aboriginal groups, Northerners and other partners in the circumpolar Arctic. A coherent, organized, multi-level approach to resource development is es6 / Canadian Government Executive // November 2012

sential. As Prime Minister Harper noted while visiting the copper-gold Minto Mine in the Yukon this summer: “For the benefits to flow, it is necessary to get resource projects up and running in an effective and responsible way and to put agreements in place with territorial governments to ensure that revenues generated by these initiatives stay up North.” The Prime Minister also reiterated the government’s commitment to safeguard the environmental health and heritage of the region while remaining focused on establishing a regulatory regime that re-

duces bureaucratic duplication and is more efficient and predictable. A lack of infrastructure, the training of a skilled workforce, land access and land use planning, climate change, limited geoscientific knowledge, and energy constraints pose immediate challenges to development. Yet these challenges can be met. Currently, there are eight operating and 27 potential mines in Canada’s Arctic. Of the proposed major developments now undergoing environmental assessment or regulatory approval processes, almost all are new or expanding mines. These projects represent approximately $20 billion in estimated capital investments for the mines themselves and their related transportation infrastructure, and they involve long-term mineral activities that will bring sustained economic growth and well-paying jobs to the North. Much of the federal government’s involvement is made through Natural Resources Canada (NRCan), which supports the resource development cycle directly and indirectly on several fronts through scientific research, technological development, economic and policy analysis, program delivery, standards and regulatory development and assessment.

north CovEr

Photo: Deb Ransom

“For the benefits to flow, it is necessary to get resource projects up and running in an effective and responsible way and to put agreements in place with territorial governments to ensure that revenues generated by these initiatives stay up North.” — Prime Minister Stephen Harper The lifecycle of large-scale mineral projects is long and challenging, one that is made even more so by the North’s harsh climate and unique environmental conditions. As a result, there are many special opportunities for making science- and policy-based decisions to ensure responsible development and to maximize the social and economic benefits for local communities. To support responsible development, NRCan is moving forward on several key initiatives: • The $100-million Geo-mapping for Energy and Minerals (GEM) program is designed to modernize geological knowledge in the North to support increased exploration for new resources; • The Green Mining Initiative, a multistakeholder initiative, focuses on the development, assessment and application of competitive green and responsible mining technologies for the North; and • The recent expansion of the Polar Continental Shelf Programs (PCSP) facility in Resolute Bay, Nunavut, has doubled its capacity to better serve Canadian and international scientists conducting research throughout Canada’s Arctic. NRCan also supports responsible mineral development in the North by providing specialized S&T advice and information through various activities such as assessing the impact of climate change on mine tailings management; quantifying the resource potential to better target strategic government investments; and working with other federal departments to help communities maximize the opportunities from mineral resource development.



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Feature North

George Ross is deputy minister, Ontario Ministry of Northern Development and Mines, and the president of the Institute of Public Administration of Canada.

Breaking new ground Ontario and jurisdictions across Canada are entering a new golden era of mining. Massive mineral deposit discoveries are spurring enormous economic opportunity. But, to fully benefit from the prospect at hand, governments need to adapt to 21st century needs, and Ontario has led the way. Ring of fire

Esker Camp, in the Ring of Fire region

There is no doubt that the minerals industry in Ontario is booming. We are anticipating eight new mines to open over the next decade with three opening this year. Yet, while success has been traditionally measured by jobs created and economic prosperity gained, it’s vital that the social well-being of Aboriginal communities and other area residents – and the need to curtail any potential environmental concerns – are put front and centre in the planning process. This is not only for just reasons, but also to ensure mine development can be fostered swiftly and assuredly. In addition, it’s critical that the province – through its legal duty to consult – ensure that Aboriginal and treaty rights are respected throughout the mining process.

Development strategy Six years ago we introduced our first ever Mineral Development Strategy to foster the sustainable management and stewardship of Ontario’s mineral resources. Our goal was to boost Ontario’s standing as a leading international mining jurisdiction and to solidify responsible mineral development. Our groundbreaking Modernized Mining Act continues to reflect this vision. When introduced in 2009, Ontario was the first jurisdiction in Canada to expressly recognize Aboriginal and treaty rights in its mining legislation and to incorporate a dispute resolution process for Aboriginalrelated mining issues. New regulations that came into effect on November 1, 2012 are the direct result of 8 / Canadian Government Executive // November 2012

four years of far-reaching dialogue with a countless array of stakeholders and Aboriginal representatives. Over the last two years alone, we’ve carried out over 90 Aboriginal and stakeholder consultation sessions. The passion and commitment of everyone involved has transformed a 100-yearold piece of legislation into one that addresses the needs of today, while reflecting the values we hold dear. Clear rules and requirements are making it easier to reach common ground, and are driving our mining industry forward. For example: • A system of exploration plans and permits requires that Aboriginal communities are notified in advance and consulted on proposed early exploration activities. Private landowners would also be notified in advance, and the public will be able to comment on exploration permits on the environmental registry; • Comprehensive policies provide clear, progressive guidance around Aboriginal consultation relating to mineral exploration and development activities; • New tools help protect sites of Aboriginal cultural significance from mineral staking and exploration; • Requirements for carrying out and rehabilitating early exploration activities are helping minimize impacts on the environment; and • New rules requiring prospectors to take a mining act awareness program when applying for, or renewing, a license help ensure everyone knows their obligations from the outset.

All of this sets us up to take full advantage of one of the most promising mineral development opportunities in Northern Ontario in perhaps a century. The Ring of Fire is a potentially massive nickel, copper, platinum and chromite deposit located in northwestern Ontario that promises to bring prosperity to Ontarians across the north, and indeed the whole province. Our success is again dependent on consultation and collaboration. So, we are engaging in discussions with First Nations communities to ensure they will be involved in decision-making on things such as: • Socioeconomic, community development and regional infrastructure supports, including transmission, local road access and broadband needs; • Long-term monitoring of the environmental impacts to the Ring of Fire region to complement the existing environmental assessment and land use planning processes; and • Resource revenue sharing. To date, we have signed agreements with two of the most directly affected First Nation communities near the Ring of Fire, Marten Falls and Webequie. And, we look forward to engaging with others as we move to take advantage of the enormous opportunity that lies ahead. Ontario is a global leader in mineral exploration and development. It is, quite simply, something we are very good at. And to be even better at it, we are balancing the economic development of our natural resources with environmental protection, respect for Aboriginal and treaty rights and regard for community and cultural values. For more on Ontario’s Modernized Mining Act, please visit:

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Feature North

Dr. David Robinson is director of the Institute for Northern Ontario Research and Development at Laurentian University.

Independent policy analysis for Northern Ontario We are entering what Neil Bradford calls the third wave of Canadian regional development policy, which recognizes the importance of regions in national-provincial economic growth. The word “northern” in Ontario means something quite different from northern in the rest of Canada. Northern Ontario is southern Canada. Almost all the population of Northern Ontario lives south of Vancouver, and more than 99 percent live south of Edmonton. It is a region larger than Alberta, Saskatchewan or Manitoba, and larger than the four Atlantic provinces. It would have been a province, in fact, if forward thinking Torontonians had not engaged in a bit of successful colonial expansion. Northern Ontario provides a striking example of how regional differences complicate provincial policymaking. The south of the province is part of one of the world’s most powerful economies: 56 percent of Canada’s population lives and works in a tiny strip 1,100 kilometers long, just 100 km wide bordering the largest market in the world. The rich, industrial WindsorQuebec corridor, can go toe-to-toe with the famous “Asian Tigers.” Modesty aside, it is the historic heart of Canada and still the economic engine of the country. The south is dealing with massive urban growth and immigration. The north is an economically depressed region despite the current mining boom, and Ontario forecasts zero population growth over the next 25 years. It has 80 percent of the province’s land mass and only 5.6 percent of the population. It lies in the boreal shield, an entirely different eco-zone from the St. Lawrence woodlands to the south, and it relies almost entirely on resource extraction. It has more First Nation members than the three territories and more francophones than the entire south of the province. The first step in implementing Ontario’s Northern Growth Plan was to invest in brains. On August 31, the province an10 / Canadian Government Executive // November 2012

nounced a $5 million, five-year plan to create a Northern Policy Institute. The NPI will “boost the northern economy and help provide a stronger voice to Northern Ontario.” The Northern Policy Institute is a response to the deep regional divisions in Ontario. Recognizing that it lacks real expertise in regional development, the province has begun the process of developing the necessary talent where it is needed. This important initiative recognizes the growing need for independent analysis of policy issues at the regional level and the fact that each of the western provinces and the far north are doing better than Northern Ontario. The NPI extends the long and highly successful Canadian tradition of fostering expertise in universities, then drawing on the pool of expertise to shape policy. This announcement comes four years after the province committed $5 million to create a research institute to examine public policy issues that affect Ontario. Like the earlier initiative, the NPI will be university-based, with a mandate to provide non-

partisan policy research and analysis on key governmental issues. The idea for the NPI developed separately at the two ends of the region. In 2006, municipal politicians in Northwestern Ontario were grappling with economic and demographic decline. The forestry industry was in shambles, mills had closed, regional alienation was once more on the rise. Dr. Livio Di Matteo of Lakehead University proposed a research institute to help develop strategies. The Northwestern Policy Institute would be the research arm of the new, locally-controlled development agency, the Northwestern Ontario Regional Development Authority (NWORDA). Dr. Robert Rosehart, one-time president of Lakehead University in Thunder Bay, and freshly appointed Northwestern Ontario Economic Facilitator, endorsed the idea of a policy institute. A thousand kilometers to the east, but still in Northern Ontario, new Laurentian University president Dominic Giroux asked: “What policies, actions or programs related to universities should MEI and MNDM recommend to the provincial Growth Secretariat?” and “How can universities help economic growth in Northern Ontario?’’ The resulting report from the Institute for Northern Ontario Research and Development recommended the creation of a cross-university policy “think-tank” involving policy researchers at all northern institutions. When the province’s Northern Growth Plan was finally released in 2011 it promised a northern policy institute. The NPI will be split between the two major universities in Northern Ontario. The universities will provide in-kind support, housing the two branches on campus. The search for a founding director is underway.


Paul Crookall is editor emeritus of Canadian Government Executive.

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The Triple play in DigiTal governmenT Improve service to citizens and improve governance, while reducing the deficit – that’s the mandate from the Prime Minister, and from most other political leaders.


ut where to start? How can you do all three at once? Well, consider how often interactions with the government start with a document? It has been estimated to be about 80% of the time. What if that process could be improved? Some examples where improvements are happening: Nova Scotia has reduced the burden of obtaining a small business license from in some cases, more then a dozen forms and transactions across three levels of government, to one application. The rest is now filled in by “the back end.” The Ontario Homicide Investigators Association has reduced the average 40,000

pages of evidence documents for each case to one USB key, which is then shared with the Crown, the defense, the jury. That saves money and it frees up investigator time for higher-value activities. With improvements in the way information workers deal with documents, in addition to the benefits of improved service, improved governance, and reduced cost, there is increased staff satisfaction as they are better equipped to do their jobs. It’s a marked contrast to organizations where the mantra is a top-down “Do more with less.” Public servants are inspired when given the tools, the organization, the opportunity to

improve service delivery and client satisfaction. They appreciate being empowered to better achieve their mission.

The Front end A lot of attention is shifting to back office shared services; but we shouldn’t forget what has been referred to as “the 25%” – the $1.9 billion federal spend on front-end, client-facing data management. It has been estimated that up to 45% of the Deficit Reduction Action Plan (DRAP) reduction targets can be achieved in this domain alone. The Institute for Citizen-Centred Service has identified a public servant’s “willingness to go the extra mile” as a source of citizen satisfaction. But wouldn’t it be better to have smoother systems in place so public servants didn’t need to “go the extra mile” so often? Adobe strives to help government achieve this. Area Vice President of Public Sector for Adobe Canada Shawn Cruise explains: “we leverage our rich heritage in content and document creation, and add to it process and web content management, personalization, mobilization, and analytics. We focus on (1) making; (2) managing; and (3) mobilizing content, then delivering it through personalized media; and (4) monetizing – finding measurable cost reductions. “That’s accomplished through advanced analytics, which provide real-time, on demand information to identify opportunities and trends, and understand what is happening with the content. It’s flexible, personalized dash boarding to help create strategy and achieve the three key objectives of deficit reduction, improved service delivery and improved governance.”

GTEC attendees can see a practical example: Citizenship and Immigration Canada’s Christopher Clissold and Chan Chac will be speaking on a global case management transformation project to reduce immigration application wait times while driving down transaction costs, in a presentation November 6 at 11:15 a.m, visit

Feature North

Greg Komaromi is deputy minister of Energy, Mines and Resources for Yukon.

Devolution in Yukon

Pioneering territorial resource management Yukon is the only territory to have authority over its natural resources and it is clear that devolution has proven to be beneficial for the territory and its economy. Nunavut is entering negotiations with Canada on devolution and the Northwest Territories has negotiated a devolution framework agreement with the government of Canada. Yukon’s work to develop a strong and modern regulatory regime and success at managing this authority should serve as a model for the future transfers to the other territories. With the government of Yukon empowered to manage its own resources, the impact on local development has been profound. Yukon’s unemployment rate remains below the national average and GDP growth is projected to continue. The government of Yukon inherited successor legislation and has embarked on a process to develop a modern and locally developed regulatory regime. Amending these Acts to reflect Yukon values and goals has been instrumental in facilitating a successful devolution of authority. In 2003, Yukon adopted responsibility for lands and resource management, water, forestry and mineral resources. Since 2003, the Yukon government has amended and modernized the Forest Resources Act, Quartz Mining Act, Placer Mining Act and Miner’s Lien Act. The Waters Act and the Territorial Lands Act are further pieces of legislation that have been inher-

ited as part of devolution, but have not yet been amended. The comprehensive consultation and review of these Acts prior to amendment has ensured that they reflect Yukon values and the regulatory regimes meet our needs in the North. At the territorial level, Yukon has settled eleven of fourteen Final Agreements with Yukon First Nations. This governance environment with Yukon’s First Nations fits well with the devolved regulatory regime. The Yukon Environment and Socio-Economic Assessment Act (YESAA) stems from the Umbrella Final Agreement and establishes an assessment board that invites input from First Nation governments, local residents and interested parties prior to the commencement of any project. In an era with increased expectations for public input on development projects, desire for certainty from proponents on regulatory procedures and demands for public access to information, YESAA serves as an excellent tool to manage development in Yukon. A single assessment process with set timelines provides certainty to proponents, a public registry provides transparency of all projects under assessment, and the open submission portion of the review provides all parties an opportunity for input into the process. Industry and proponents know that

12 / Canadian Government Executive // November 2012

decisions are being made locally and this provides the basis for a maturing and sustainable economy in Yukon. The government has been able to work with industries and projects to explain our processes and assist them to navigate Yukon’s regulatory regime. This certainty and local access have created a successful environment for investment. Governments involved must recognize that devolution is not a final product, but an evolving process. As Nunavut and Northwest Territories negotiate their own devolution agreements, they will impact Yukon’s agreement with Canada. The governments of Canada and Yukon announced a new resource revenue sharing agreement in August 2012 that provides Yukon with the opportunity to retain more of its own source revenue from mining, forestry and oil and gas development. This initiative stemmed from the devolution framework agreement that the government of Northwest Territories negotiated with Canada. The framework agreement proposes an increase in the government of Northwest Territory’s share of revenue in the resource revenue sharing agreement and Canada returned to Yukon to enable retention of the same share of own source revenue. As devolution evolves in Canada’s North, Yukon will continue to be an example of the success that can be achieved when local governments are empowered to make decisions over their own resources.

Photo: Melissa.O.Anderson

David Mate is the chief

geologist at the Canada-Nunavut Geoscience Office.

Personal perspective Feature

Managing in a new frontier Canada’s North is at the forefront of unprecedented change and the focus of increasing global attention. Managing a government office here provides an exceptional range of opportunities and challenges.

As a geoscientist, I have worked in Nunavut since 2006 on a diverse range of issues that include climate change adaptation and resource development. I became a resident of the territory in 2011 when I took on the role of Chief Geologist of the Canada-Nunavut Geoscience Office (CNGO). I have a team of six science and technical staff. The CNGO’s mandate is to provide accessible geoscience information and expertise to support responsible development in Nunavut. The programming is diverse and aims to generate new knowledge about the land and its resources. CNGO is co-managed by a board of directors from the government of Nunavut (Department of Economic Development and Transportation), Natural Resources Canada and Aboriginal Affairs and Northern Development Canada. Nunavut Tunngavik Incorporated sits as an ex-officio member.

Operating context Nunavut is a vast, remote region that is approximately 20 percent of the Canadian land mass (and three time zones). CNGO is located in the capital city of Iqaluit on

Baffin Island. There are no roads connecting to the south, so any shipment of supplies happens by air or by annual sea-lift. Generally there are only two months a year without snowfall, and daylight varies from around five hours in December to up to 22 hours in June. Significant change is occurring on several fronts. Environmentally, the summer extent of intact sea-ice is diminishing with implications for traditional ways of life, wildlife, marine traffic and access to the land. Economically, the territory has transitioned from a region with little mineral exploration to the fourth busiest jurisdiction in Canada in 2011 with nearly $400 million dollars invested. In the next decade it is possible that several mines could begin operations, creating new wealth and employment opportunities while putting a strain on community infrastructure and skilled labour.

Making a difference Nunavut offers public sector managers (and employees) opportunities to make a difference in people’s lives. For me this includes supporting better decision-making for land use planning, resource exploration and community development. CNGO delivers collaborative programming that addresses local issues. It helps communities to better manage infrastructure maintenance and development by providing geoscientific information about local permafrost conditions and sand and gravel resources. Planners, engineers and a range of decision-makers now have better information available online ( Many areas of Nunavut have not been mapped to modern geological standards. CNGO’s regional mapping efforts im-

prove the knowledge of Nunavut’s land mass, which directly contributes to attracting exploration investment and assisting with land use decisions. Mapping these areas provide unique opportunities for our geoscience staff to push back the knowledge frontiers.

Management challenge Managing in the North, in particular Nunavut, is dynamic and exciting. Due to the smaller size of my office and the types of projects we run, the tasks I face on a daily basis are diverse. I am required to coordinate community engagement for project planning, constantly work collaboratively to get things done, ensure all staff and students receive robust field health and safety training (e.g., helicopter, firearms and polar bear), develop partnerships with universities and industry to deliver programs, plan complicated field logistics and motivate staff to constantly take on new roles and responsibilities. I would like to expand on the last two items. In the context of planning field logistics, a standard geoscience mapping project requires support from helicopters, fixed wing aircraft, a range of tents and shelters, teams of 15-20 people, cooks, camp managers, grocery orders, hundreds of barrels of fuel, caching supplies in the winter, coordinating guest visits and on and on. It is not for the faint of heart and managers must have the ability to work with people, be organized, delegate, have thick skin and the capacity to manage in constant change (you can always count on weather delays). As a manager in the North motivating staff to take on new roles and responsibilities is a must. There is always more work than there are people. This requires open communication, demonstrating the value of the contribution, diplomacy and compassion. Nunavut is at the forefront of unprecedented change and there is no place that I would rather be managing in.

November 2012 // Canadian Government Executive / 13

FEaturE iCt

David Drury is general manager, Global Technology Services, IBM Canada, and

David Hathaway is vice president and partner, Public Sector, Global Business Services, IBM Canada.

tomorrow’s data centres today Over the past few years, Canada’s public sector organizations have begun a major transformation to become even more effective, cost-efficient and accountable in their delivery of services. Throughout this process, they have progressively taken advantage of technology innovations, spurred by the need to do more with less. This has put data centre relocation and consolidation high on government’s list of IT priorities. gone are The daYs when managing a data centre meant focusing on how much capacity the computers could handle. The data centre is evolving into an organization’s “control centre,” and is required to manage a growing spectrum of activities that stretch far beyond traditional computing into a complex ecosystem. Handling a data centre today involves managing everything from business compliance and risk issues to volatile energy costs and environmental sustainability questions. It requires the ability to manage a host of smart devices that link into the data centre from around the world as well as the executives and employees, who are increasingly tech savvy and operate in a 24/7 model. It means being able to deal with an explosion of data within the enterprise as well as outside of it. This is no small challenge. The amount of data stored doubles about every 18 months. It requires integrating cloud computing into a company’s strategy so that huge amounts of data and analytical resources can be accessed from the Internet. This increase in responsibilities raises the risks and cost pressures that IT managers face. With the data centre acting as the organization’s control center, IT managers could feel completely overwhelmed. The data centre, though, is evolving to meet these demands. One way to deal with the increasing expenses caused by the rising operational costs of systems and networks, the explosion in the volume of data, and the difficulty in deploying new applications and business services, is to simplify the storage environment. Virtualization and consolidation are just two options available to IT managers. For example, IBM uses just three global data centres to support 80 percent of the company’s applications. Thirty-one net14 / Canadian Government Executive // November 2012

works have been combined into one globally managed network, and deployed applications have been reduced from more than 15,000 to 4,700. Over a period of five years, these kinds of IT transformation and optimization efforts yielded US $1.25 billion in savings. Consolidation and the associated documentation of inventory can also lead to some surprising finds. Some corporations uncover storage devices that they didn’t even know they had. These are costly and potentially risky discoveries. More important, though, consolidation improves manageability and service levels by increasing data accessibility. And it pays off, reducing the total cost of ownership up to 30 percent by reducing complexity, labor expenses, cutting power and cooling costs. That means that the typical payback happens within three to 12 months. High performing, energy-efficient data centres can produce 15-50 percent annual energy savings with less than a two year payback. Today data centre managers are also on the frontlines of security strategy. Their responsibilities are exploding as compliance demands increase, the number of devices hooking into the networks and systems skyrockets, and the amount of information

pumped into these systems jumps. Organizations can take many different steps to improve security, but the human factor remains one of the biggest risks that businesses face today. Mobility is at the heart of today’s networks. Employees bring in devices from home, log in from hotels, home, or other offices, and take laptops and smart devices on the road. Lost or stolen devices can expose intellectual property to competitors. Careless use of corporate networks can lead to the uncontrolled circulation of internal documents. Malicious insiders can introduce malware or undertake corporate espionage. Fully managed information protection services can reduce these risks while saving up to 40 percent of the total cost of ownership. Data is the currency of our society and drives every aspect of business. It is integrated into every aspect of our lives, whether it’s Facebook pages, iPhone apps or corporate or public entity networks. As data centres continue to evolve into full “control” centres for organizations, public sector departments able to capitalize on emerging trends will be able to save significant costs and be even more effective for constituents in the future.

tiPs For ConsoLidation • Build an IT plan to support the business or policy mandates that is continuously updated, not only to help boost efficiency, but also to take advantage of an ever-changing set of technologies and services; • Build a robust optimization strategy that drives cost containment with increased server, storage and data centre optimization while also enabling a more flexible IT architecture for your organization; • Leverage automation to reduce the costs to support the infrastructure and to increase the speed by which services are provided to users; and • Whenever possible, align commodity computing capability with each business need – separate complex tasks into discreet functions – if it allows you to move away from complex, highly customized IT systems and toward integrated cloud services.

Ron McKerlie is interim president and CEO

of Ornge. Prior to his appointment, he was deputy minister for Government Services and Secretary of Management Board of Cabinet.

At arm’s length Feature

Back from the brink:

Refocusing Ornge

Even before controversy shook the organization to its foundation, Ornge was always an anomaly in the Ontario world of ABCs (agencies, boards and commissions).

Ontario’s air ambulance company was created in 2005 in an effort to bring a fragmented provincial system under the stewardship of a single not-forprofit organization. The reality, in fact, was much different. By late 2011, the organization had morphed into an unusual private-public, for profit/not-for-profit hybrid – one with 19 separate entities and more than 30 bank accounts – that would soon be laid bare on the front pages of Ontario’s major newspapers. The focus of the organization had strayed from its core mission of providing air ambulance and related services to the people of Ontario, toward a fixation on generating business outside of the province. A series of media stories in late 2011 revealed a host of problems: a lack of transparency and accountability, taxpayer-funded executive salaries growing unchecked without being subjected to public scrutiny, as well as a variety of patient safety and operational issues. When an organization such as Ornge begins to fall apart, it doesn’t happen in a systematic, predictable way. After Deb Matthews, Ontario’s Minister of Health and Long-Term Care, installed new leadership in January 2012, new revelations about the extent of the damage appeared almost daily. How could this have happened? That question has been at the core of a number of audits, investigations and committees, but ultimately it comes down to two

missing pieces. An organization like Ornge requires a board of directors who can think for themselves, and have their noses in the business to keep management in check. In addition, it’s essential to have a firm foundational document that provides focus and gives enough operating freedom, but is strong enough to impose penalties if the organization fails to deliver. Those two items were both absent at Ornge. To correct this, a new, independent, top tier board of directors was appointed, made up of seven volunteers from across Ontario with considerable experience in health care, government, industry and aviation. A committee structure was created to address specific areas of concern, including governance, human resources and compensation, finance and audit, quality care and operations. Next, the Performance Agreement with the Ministry of Health and Long-Term Care was renegotiated and signed. Among the many transparency and value-for-money enhancements, Ornge’s funding is now tied to key performance indicators; executive expenses are reported publicly; and the government has control over changes to Ornge’s corporate structure. The amended agreement also improved patient care through the appointment of a Patient Advocate and the creation of a Quality Improvement Plan. There was also a significant crisis in leadership as frontline staff had lost confidence in senior executives. Within months, the former CEO and all his direct reports were replaced by a transition team comprised of senior members of the Ontario public ser-

vice on secondment to Ornge, along with experts in paramedicine and aviation. The transition team was tasked with ensuring the core business – transporting patients safely to the care they need – remained functional as the organization underwent audits and reviews by as many as nine separate third-party organizations, while at the same time making necessary personnel and operational changes. Not to mention motivating a workforce exhausted from months of daily media stories. During the initial crisis phase, communication was especially important. Townhall staff meetings were held twice monthly at the beginning and now once a month. Rather than relying on briefings from outgoing executives, management turned to the people on the frontlines for information. The organization also reached out to stakeholders such as patients, Emergency Medical Services agencies and hospitals, who had been largely neglected or ignored under previous leadership. Many were forthcoming, and their advice helped shape policy. The delivery of air ambulance service involves two of the most heavily regulated industries in Canada: aviation and health care. Under these circumstances, change can be exceptionally time-consuming. While there is still much work to be done, the organization has moved on from the initial crisis into a phase of reputation recovery. While the task of bringing Ornge back from the brink is both challenging, as well as a little messy, the 19,000 patients transported each year makes this a worthy pursuit.

November 2012 // Canadian Government Executive / 15

feature North

Ken Coates is Canada Research Chair in Regional Innovation, Johnson-Shoyama Graduate School, and co-director of Research, International Centre for Northern Governance and Development , University of Saskatchewan. Greg Poelzer is director, International Centre for Northern Governance and Development, University of Saskatchewan.

Innovation and wealth creation

in Canada’s North

The North is, in political and administrative terms, a young land, with many innovative leaders and public services, and with a North-centred view of how the future might unfold. Government officials engaged in the administration of the Canadian North live in fascinating times. Charged with managing in fiscally challenging circumstances, public servants are nonetheless called on to be innovative in approach. They are supposed to find new ways of engaging with the Canadian public and must work to address old problems while new issues arise with regularity. The juxtaposition of resource wealth and rural and Aboriginal poverty across Northern Canada is but one of the complex challenges being confronted daily by Northern public servants.

Challenge of change Public servants in the North, of course, face unique challenges. These are boom times in the Canadian resource sector. Mineral deposits are under development across the vast sub-Arctic and Arctic regions of the country, generating jobs, government revenues and opportunities for collaboration between government, business and Aboriginal communities. The rapid development carries significant challenges, particularly in terms of environmental stewardship, social change, and the ongoing effort by Aboriginal people to shape their engagement with the market economy. 16 / Canadian Government Executive // November 2012

In many parts of the North, wealth creation based on resource development is happening rapidly. Ensuring that the wealth that is being created has positive benefits for the region and its residents remains a very different matter. On the governance and administration side, an innovative framework has been put in place in the territorial North. Consider the major changes that have occurred in the past 40 years: the establishment of elected government (though in Yukon it had existed for some time already), the creation of Nunavut, devolution of federal authority, major changes in federal-territorial financial arrangements, the resolution of most Aboriginal land claims, and the emergence of Aboriginal self-government. Add to this constitutional protection of Aboriginal and treaty rights and the “duty to consult” provisions established by the courts and the scale of the Northern political and administrative change becomes clearer. Few jurisdictions in the world – and none with such small and widely distributed populations – have experienced such profound and rapid transformation. The territorial governments are both large, as a percentage of the total population, and very small in terms of the number of public servants relative to the duties at hand. Yet the pro-

cesses of governmental transformation in the territorial North have been relatively free from scandal, abuse, administrative chaos or even national notice. There have been areas of challenge, such as preparing a cohort of Northern public servants to tackle the new work, and some fine achievements, particularly around collaborative resource management. Critical attention has been paid to Nunavut’s early challenges, themselves a function of the vast scale of the regional challenges, the small size of the emergent government, and the urgent need for action on many fronts.

Governance challenges When Canadians talk about the North, they typically mean the territories. In reality, the major public sector challenges in the country are actually focused on the provincial North. It is vital to recognize that the provincial North has experienced few of the above noted political changes and now lags well behind the territorial North in terms of opportunities for local and regional control over government. Many parts of the provincial North have no modern land claims settlements, or even negotiations underway. Regional administration is subordinate to provincial departments, with vague and often

North feature changing lines of authority and limited resources. Aboriginal rights and political engagement in the territorial are much more entrenched than in the provincial North (except Quebec). In contrast, resource development is proceeding apace, placing unprecedented pressure on regional infrastructure and Northern communities. Much work lies ahead, in both the territorial and provincial Norths. In the latter case, the ongoing difficulty of political recognition and administrative autonomy remains to be addressed. There are few obvious opportunities, save for those groups in Labrador, Northern Quebec and Northern British Columbia operating under or negotiating land claims settlements. Across the North, however, the administrative challenges are well-known and widely discussed: building Northern governance capacity, both in terms of Aboriginal and public governance; converting resource development into financial stability and long-term jobs for local residents; building bridges with indigenous governments; slowing the transiency of nonAboriginal people (particularly in the professions, where mobility remains a crucial issue); and addressing the socio-economic and cultural priorities of indigenous peoples and communities.

Need for innovation To this point, innovation (as understood in southern Canada) has rarely been seen a key Northern priority. The intensity of political, legal and administrative change has been a formidable challenge for Northern public servants, one that they have handled very well. The North has countless innovations underway – the work being down to engage indigenous peoples and newcomers is among the best in the world – and a large number of detailed tasks are still to be done. There is openness to doing more, particularly if some of the challenges around the cost and reliability of Internet service and other infrastructure can be addressed, and a desire to experiment with

new administrative arrangements. Wealth creation or, more properly, more widely spread wealth creation remains a crucial objective. All three territorial governments assign a high priority to natural resource development, involving indigenous governments, businesses and communities in both the evaluative processes and the implementation activities. People and communities in the Northern provinces often have fewer political levers – Northern Quebec and Labrador being exceptions – and have much less influence over resource and economic development. Even here, however, “duty to consult” provisions have alerted governments and businesses (though business has often been ahead in this regard) to the need for new approaches, empowering indigenous communities and firms in ways that seemed unlikely 30 years ago. A series of impressive developments, some still at the early stages, auger well for the systematic and sustainable improvement of the innovation and wealth creating capabilities of the region. The James Bay Cree, for example, capitalized on their land claim deal to create a series of businesses that operate effectively in the region. The Inuvialuit Regional Corporation converted the funds from the Inuvialuit settlement into one of the most successful indigenous corporations in the country. Collaboration between First Nations and the Athabasca Basin Development Limited Partnership shows the potential benefits of indigenous-municipal cooperation in seizing regional economic opportunities. British Columbia has taken important steps toward building revenue-sharing into its relationships with First Nations. Major corporations, including Cameco, Suncor and Syncrude, have worked creatively on both employment and joint venture initiatives that ensure Aboriginal people a significant return on local resource activities. In Northern communities like Fond du Lac, Buffalo Narrows and Fort Chipewyan, Aboriginal people fly in to work sites while maintaining connections to their communities. The government of Saskatchewan has taken innovative steps to ensure First Nations communities such as Montreal Lake and Big River obtain forest leases to enable the creation of viable and impressive business opportunities. Canada should also draw on the examples

of other Northern countries. In Scandinavia, for instance, Northern communities are making even further headway. Skelleftea in Sweden, comparable to a small Prince George or a Whitehorse, has attracted major investments in digital media, including contracts from Disney and Coca-Cola, and ensures the forestry industry is more sustainable by utilizing dimensional lumber waste for its main biomass energy and heating. A small company in Kirkenes, Norway, has commercialized Arctic char aquaculture to promising effect. The North need not be anyone’s economic backwater, as Northern peoples, communities and businesses are demonstrating.

Capacity building Regionally controlled wealth creation is on the table in a major way and important steps have been taken. A promising start is, however, just that, a strong but somewhat uncertain improvement in economic opportunity. It is clear that governance matters a great deal to the future of Northern innovation and wealth creation. Recognition of indigenous rights, devolution and co-management are critical and must be expanded. Human capacity matters. Indeed, capacity building is the greatest Northern challenge, requiring a major rethinking of elementary and secondary education, new approaches to trades, technical and professional development, and extensive work with local governments and institutions on matters of governance systems, management and planning. Infrastructure matters. Unless there are major commitments to Northern broadband, transportation, food security systems and power generation, the North will struggle to overcome the limitations imposed by great distances, long winters and extreme cold. Tomorrow is finally very close in the North. Effective governance and administration underpin the region’s successes to date and will shape opportunities in the coming decades. Innovation and wealth creation are not just buzzwords in the region; instead, they represent a rapidly emerging reality as Northern residents shift from being Canada’s colonies to establishing regional autonomy and a madein-the-North strategy for political, economic and social development.

November 2012 // Canadian Government Executive / 17

Feature Veteran’s Week

Mary Chaput is the deputy minister of Veterans Affairs Canada.

Innovative ways to connect with Canadians

By using existing technologies such as Facebook and Twitter, and even by creating a few new technologies of our own – a mobile smart phone app, for example, one of the first developed by a government of Canada department – Veterans Affairs Canada is working to bring remembrance to Canadians in their own communities.

During Veterans’ Week, Canadians turn their thoughts to the brave men and women who fought and continue to fight for the freedom and peace we enjoy today. We at Veterans Affairs Canada are doing all we can to help honour our veterans by using new technology and social media tools to give Canadians the information they need, when they need it. As in years past, there will be literally hundreds of commemorative ceremonies and events held in communities across the country during the week leading up to Remembrance Day. The number of ways Canadians take part in remembrance activities has increased over the last few years, and much of this increase can be directly linked to the department’s social media campaign. Veterans Affairs Canada has one of the largest Facebook communities in the country with 632,000 “likes.” These “likes,” combined with the people who shared our content with their own followers, translated to a Facebook reach of 7.87 million Canadians.

In 2011, we also had 1,500 new Twitter followers, 56,000 YouTube views and 1,300 downloads of our mobile app. Analyzing these numbers, it’s difficult to fully grasp how much things have changed in just a few short years. When VAC’s advertising campaign for Remembrance Day first launched in 2007, television was the sole medium used. In 2009, the campaign was expanded to social media, including a Facebook page and YouTube channel. The 2010 and 2011 campaigns added a Remembrance Vignette and the “I am a Veteran” video as the campaign foundation. Thanks in part to the fact that all of these campaign elements link back to the departmental website, there were a total of 2.2 million unique visitors to in 2011. Social media as a means of engaging Canadians just works. And VAC has been at the forefront of a number of advancements in recent years. But, because technology moves so quickly, there is absolutely no time to rest on our laurels. This year, VAC is introducing an interactive Facebook app through which Canadians will be able to interact in various ways and express their personal acts of remembrance. Twitter will be used to remind Canadians about the importance of remembering and providing specific examples and suggestions how to do so. We are also launching an updated mobile app that will give Canadians access in the palm of their hands to a list of remembrance activities in their own communities, as well as information about services and benefits,

18 / Canadian Government Executive // November 2012

a geo-mapping tool and the department’s new Benefits Browser. We are also trying to further increase the number of visits to our website through this year’s remembrance campaign. Every marketing element of the campaign – print, online, television, our mobile app, Facebook, Twitter and YouTube – will be linked back to to drive visitors there. And, when they arrive, veterans will find even newer ways to get information about the services and benefits they may be entitled to, 24 hours a day, 365 days a year, through our new My VAC Book. Improvements such as these are where the rubber meets the road, because they allow VAC to provide better service, faster and easier, to Canada’s veterans. It makes little sense to direct people to a website if the services they find once they arrive don’t suit their needs. The challenge for VAC and other government departments is to continue the momentum and build upon this type of success – and not just during Veterans’ Week. These tools have worked for commemoration outreach, but will they work as effectively for other initiatives? These kinds of discussions will become more important as they are tied to government-related services and benefits or performance. Veterans Affairs Canada tries to communicate and share current information in effective, innovative and engaging ways. Canadians are connected to the Internet; they want to share content online and they are quick to embrace new ways of doing so. It is up to us to continue to change and adapt so that this information sharing can continue as new technologies become available.

Jacob Stoller is a business and

Business management Feature

technology writer based in Toronto.

Accounting for Value

Some Financial Lessons from Lean

from studying value streams: Seeing the big picture: Value streams allow financial professionals to see costs within the context of overall outcomes, as opposed to individual components. This approach exposes disconnects between local efficiencies and the bottom line. Customer value: While customer value is mere talk in many organizations, VSM provides a method for identifying and In a 2011 white paper published by the Internal Federation of Accountants quantifying it in real dollars. “Customer (IFAC), Competent and Versatile: How Professional Accountants in Business value doesn’t show up in traditional accounting systems,” says Brian Maskell Drive Sustainable Organizational Success, the authors present a vision of of consulting firm BMA. “They are spethe professional accountant as an active partner in the creation, enabling, cifically set up for us to understand sharepreserving and recording of sustainable value. holder value.” plans to incrementally eliminate the latter. While the vision is clear, the pracFuture potential: Larry Coté, CEO Value is strictly defined here as customer tical side of identifying, measuring and, ulof Lean Advisors, a lean consultancy that value, or outcomes that a customer would timately, accounting for sustainable value is has utilized VSM to assist in the valuation willingly pay for. In healthcare, people will in an early stage of evolution. As the proof companies, finds that the process is an gladly pay for a caregiver to spend time fession seeks new tools to exercise this exexcellent window into the future. “When with patients, but would not want to see panded role, some answers may come from implemented comprehensively, the prothat caregiver spending a large part of the lean, a management system pioneered by cess can reveal where current operators working day on paperwork. These non-valToyota in the latter half of the 20th century are missing huge opportunities,” he says. ue elements, called waste in a lean context, that has subsequently spread to many other “Value stream maps that show where and are widespread in most organizations, and industries including healthcare and governto what degree customer value can be inas such represent a substantial opportunity ment services. Of particular interest is a lean creased tell accountants a lot about the to reduce costs, speed processes, and imtechnique called Value Stream Mapping. potential value in a company.” prove quality and the customer experience While lean is well known as a suite of shop Green initiatives: In the process without significant investment. floor quality tools, few are aware that it is a of identifying waste, value stream maps Not all waste, however, can be elimicomprehensive system for managing an enpinpoint unnecessary use of raw materinated, and VSM divides non-value comterprise from both an operational and finanals, electrical power, space, fuel and other ponents into two categories: elements cial perspective. Significantly, lean places a resources whose reduction can improve a that can be removed without affecting the great deal of emphasis on optimizing value. company’s environmental footprint. quality or delivery of the final product, Value stream mapping (VSM) is used to VSM is not an exercise that can be and those which are necessary for the orcreate strategic plans for separating and conducted in isolation by a few financial ganization to function. consequently removing non-value eleanalysts; this requires senior management The latter category includes internal ments from work processes. VSM looks at buy-in and a significant commitment to functions such as management, HR and entire systems, as opposed to components, put cross-functional teams together. Furaccounting. In lean organizations, emand the process typically involves multiple thermore, sustained benefits can only be ployees in these areas, including financial departments. In the mapping exercise, a achieved through a comprehensive lean professionals, see their role as enablers of cross functional team collaborates to cretransformation. customer value, and wherever possible, inate a detailed, flowchart-like representaHowever, by learning the technique, and tegrate their work into the value streams. tion of the end-to-end chain of events and studying how it is used in lean organizaThis is markedly different from the strictly materials, called the Value Stream, whose tions, financial professionals can gain valufiduciary role that financial professionals output is the product or service that an exable insights on how they might become, as tend to assume in organizations. ternal customer has sought from the orgathe IFAC document suggests, active partHere are a few areas where financial nization. The teams then identify the value ners in the creation, enabling, preserving professionals can gain valuable insights and non-value components, and develop and reporting of sustainable value. November 2012 // Canadian Government Executive / 19

Feature ICT

Bruce Miller, president of RIMtech, is an author, educator, consultant and industry thought leader on electronic recordkeeping (

Six must-do’s for electronic recordkeeping Why is it so difficult for governments to implement an enterprise-wide EDRMS (Electronic Document/Records Management System)? Despite having the technology for years, few organizations have been able to deploy these systems to achieve true recordkeeping compliance. There are three fundamental reasons for this lacklustre track record to date: • Culture: Insufficient emphasis is placed on developing the underlying business culture needed to support the disruptive change instigated by EDRMS deployment. • Governance proficiency: Once built and deployed, someone has to “drive” these systems. Complex EDRMS systems are difficult to truly master to the level needed for proper pre-implementation design, or for the sustained care and feeding they require once implemented. • Measures: Vague descriptions of the benefits of good information management will not tell you if the system is complying with your recordkeeping requirements. Well-defined, measurable key performance indicators are essential to proving compliance, ongoing health and overall success of an EDRMS system. EDRMS systems are absolutely essential to achieve recordkeeping compliance, but are extremely disruptive to users. They are a very different place to store documents. It takes more time and effort to store documents. Things are organized differently. There are new rules to follow. Documents

are even deleted. No wonder most users resist this disruptive change. And therein lies the principle challenge to successful implementation – user adoption. In reality, these systems are easy to implement successfully, as long as sufficient resources are applied to the non-technology side of the implementation project. This means the people, the organization and the governance principles. The first level of change is the people (attitudes, roles) and policies (decisions, rules of conduct). Then business procedures can be altered to accommodate the changed rules and policies. Finally, the technology can be fitted to the new business procedures, which in turn reflect the underlying policies and rules. The following six “must-do’s” will go a long way to help ensure user adoption and recordkeeping compliance is achieved:

1. Make the tough decisions.

There are roughly 20 significant business decisions needed before the software is installed. These will drive software configuration and behaviour, and ultimately determine the nature of the end user experience. For example, will email and documents be automatically deleted? If so, which ones, when and how?

2. Change the RIM perception.

Create a business environment that values Records and Information Management, which will ultimately increase users’ perceived value of RIM. This will in turn support the additional effort needed for user adoption. 3. Measure relentlessly. Measure the three EDRMS key performance indicators, and measure them often. React before they slip out of range. They are Qualification (which documents should be treated as records), Declaration (how many documents are being managed as records), and Classification Accuracy (what percentage

20 / Canadian Government Executive // November 2012

of records are correctly classified).

4. Management engagement. Support is not enough. Senior management must be actively engaged from design through to permanent implementation. This ensures that the necessary organizational change will happen, and is a positive influence on user adoption.

5. Ensure governance proficiency.

Someone has to see to it that the system is designed and built to meet compliance requirements. Once implemented, someone has to ensure ongoing compliance and continuously monitor system health. This is not an IT function – it is an information governance function. Ensure the person(s) responsible have the skills, know-how, and confidence they’ll need to take full responsibility for this system on a permanent basis.

6. Build an acceptable user experience. Some inevitable degree of end-user

effort is required to achieve the needed level of participation; not everything can be automated away. This effort is mostly on the input side: getting documents into the system as well-defined records. The output side, retrieving documents, is a joy for most users; however, everyone needs to make a small investment of effort each time they put a document into the system. Build customized document ingestion methods and techniques that minimize this effort, while maintaining the overhead burden required for recordkeeping compliance. As a general rule of thumb, these mustdo’s should consume a minimum of two thirds of the effort and resources of any modern EDRMS system implementation. In doing so, the odds of a successful implementation, defined by user adoption, compliance with requirements, and proven performance against qualitative measures, is virtually assured.


ICt Feature

Kerry Munro is group president of the Digital Delivery Network at Canada Post.

tHe eVolution of ePoSt In May, CGE reported on the deployment of identify management services in British Columbia under the leadership of Dave Nikolesjsin. Canada Post, through its new Digital Delivery Network and increased investment in epost, is uniquely positioned to enhance how Canadians connect within a digital economy and government.

CAnADiAns Are the Most digitally engaged country on the planet, by almost 30 to 40 percent. And yet Canada remains somewhat of a third world e-commerce economy. Though governments are looking to increase consumer e-service capabilities, several barriers exist. First, in a period of fiscal austerity, governments lack the investment required to build and maintain the infrastructure. Second, consumer privacy is pivotal and yet governments expose sensitive consumer data by allowing it to travel across the border via email. And finally, identity authentication and address validation are central to protecting government, business and consumers from potential fraudulent activity online. The public sector’s response to these key issues will shape Canada’s economy for years to come. As Canada’s only electronic bill consolidation solution, Canada Post’s epost has over 7.5 million registered Canadians since its inception in 2001. The only external platform sitting behind all major banks’ firewall, epost delivers 250 different bills, paystubs and T4s as well as many other essential documents from 100 businesses and government bodies – safely, securely and while ensuring the individual’s data remains privacy protected within Canada’s borders. Epost’s evolution involves becoming Canada’s largest household management platform, connecting Canadians with a broader range of household and personal management solutions that will save them time and money. Already, 17 municipal governments across the country participate within epost through utility or property tax e-billing. But through further integration and authentication, there is potential for other applications

like notifications, forms, fulfillment, tracking and identity management. The City of Toronto most recently approved epost for water, taxes and payroll services, and is broadening e-accessibility across its entire suite of services to cost-effectively deepen its digital connection with its citizens. As a crown corporation, Canada Post recognizes the key challenges government faces – high infrastructure, technology and human resource costs related to e-service initiation, adoption and maintenance amid more stringent fiscal realities. Over the last several years epost has invested in enhancing its infrastructure to support the onboarding of government services within the epost platform. For example, in Ontario alone a very small percentage of license stickers are renewed online, while everyone else chooses to stand in line. Other jurisdictions have similarly low penetration. If license sticker renewal (or other services) was managed online through epost, Ontarians could save valuable time while government could accelerate e-adoption and further reduce its costs, deploying the capital funds to other government priorities. In the near future, epost will evolve to include digital authentication and address validation, effectively matching the individual’s virtual presence with their physical address. It is being launched this fall in the Kitchener-Waterloo Region and set to roll out nationally next year. By attaching the virtual presence within epost with a validated physical address, business and government can now validate that an individual isn’t just who they say they are, but the address they claim is a valid address at which they reside or are associated with. This authentication capability can stand alone under the epost platform with one

login and password or can become part of a federated identity ecosystem. Supported by its vast physical retail network of over 6,500 locations, Canada Post is developing a complementary dual network to support the physical and digital needs of Canadians and government. Should an individual be unwilling or unable to authenticate online they can then be forwarded to any one of Canada Post’s retail locations for in-person proofing. The functionality being deployed in Kitchener-Waterloo could further support a government’s push to accelerate the deployment of identify management services such as what is taking place in British Columbia. The combination of the address validation with identity management provides a more complete and secure authentication path. And the combination of epost and a diverse physical retail network offers a broad and complementary channel by which to accelerate the deployment of the dual card format. Epost’s evolution to a technology platform with scale, secure government connections and address authentication provides a unique opportunity to partner with government to advance a new agenda, one which enables Canada’s digital economy to rival other countries and creates the foundation for future prosperity for citizens.

November 2012 // Canadian Government executive / 21

Feature Policy

Written by Industry Canada’s Industrial and Regional Benefits Branch.

Industrial and regional benefits Helping the defence industry in the global marketplace The environment in which Canadian firms do business is ever-changing. Companies are facing increasing competition to improve production and invest in innovation. Canada’s Industrial and Regional Benefits (IRB) policy assists Canadian industry in meeting these challenges and helps them succeed in the global marketplace. Most other countries of Canada’s size and position in the defence and security marketplace have similar requirements for industrial participation, referred to as “offsets.” Canada’s approach to industrial benefits is focused on providing business opportunities for Canadian firms. Businesses, many of them small- and medium-sized enterprises (SME), want to grow and become globally competitive. Government defence and security procurement typically obligates contractors to engage in activities with Canadian industry to promote domestic capabilities and competitiveness. The IRB policy requires contractors to place business activities with Canadian firms of equal value to the purchase contract. Over the past decade, more than $20 billion of new government defence and security contracts have included IRB obligations. These large commitments facilitate competitive opportunities for Canadian firms and encourage partnerships with defence contractors. With planned new procurements for navy projects in particular, the IRB portfolio could double in the next several years. The IRB policy has the following key characteristics: 22 / Canadian Government Executive // November 2012

business activities. For example, large amounts of aerospace activity take place in Ontario and Québec, as well as across the West and Atlantic Canada.

• Successful in having defence contractors fulfill their obligations.

• Promotes value-added activities with Canadian firms. The policy,

More than 75 percent of the required business activity (by value) has occurred or is underway and the balance is being identified. Canadian companies are reaping the broad economic benefits of the policy’s approach that focuses on sustainable, long-term outcomes. This level of business activity also reflects the capabilities of Canadian industry to provide goods and services that are globally competitive.

through its focus on innovation, encourages defence contractors to provide valuable supply chain and export opportunities to a Canadian firm. • SME focused. Over 300 SMEs across Canada have received IRB work, representing about one third of total recipient firms. Defence contractors are required to submit plans on how they will work with SMEs when bidding on government contracts. Those plans then become part of the contract for the winning defence contractor. This approach is intended to open new business opportunities for Canadian firms, which can translate into long-term supply arrangements. • Regional focus. To balance work across Canada, the policy encourages capabilities that exist in various regions across the country to be reflected in the

As the aerospace and defence industry evolved over the years, so too did their needs. The IRB policy has adapted to meet these changing dynamics. In 2009, the government announced enhancements to the policy to encourage more strategic investments and higher quality outcomes. New measures also provided contractors with the time, flexibility and incentives to develop these types of activities. For example, the policy encourages defence contractors to make investments into the creation of public/private consortia for research development through incentives. Canada’s IRB policy is focused on supporting industry, ensuring it continues to adapt to the changing nature of the defence sector, while promoting long-term economic benefit for Canadian companies.

• Market-driven. Defence contractors are encouraged to find business relationships that make sense for both sides – the contractor and the Canadian firm receiving the work. In this way, the industrial benefits can be long-term, sustainable and founded on sound business principles.

This article was wiki composed by the Federal Youth Network (FYN), the national organization for youth networks across the Public Service of Canada.

New Professionals

Ten years of contributing to public sector excellence As young public servants, members of the national Federal Youth Network (FYN) play an important role in shaping the future of the public service. Our network contributes to the advancement of the federal public service’s goal to become a more modernized workplace through the cultivation of innovation. We strive to support public service activities and nurture ties between departments through the consistent use and promotion of evolving social media and innovative tools. In addition to enhancing our workplace, our network fosters the development of our workforce. We create and make available relevant and accessible learning applications on a national scale. FYN’s commitment to working closely with partners such as the Canada School of Public Service, Regional Federal Councils (RFCs) and functional communities has resulted in the creation of customized learning opportunities to enhance development of young and new talent in the federal public service. Examples of such developmental activities include forums (3,500 participants from 20 departments annually) and informal learning events such as Lunch & Learns (3,000 participants from 20 departments annually) in addition to professional networking events (10,200 participants from 20 departments annually). Most recently, and perhaps most notably, we have developed a Mobile Learning App to facilitate access to developmental training. This type of novel approach will enable the efficient evolution of the public service in these times of constraint and change. The constraint and change to which we allude is not only of a financial nature. Age

demographics will continue on the same path with an increase in number of young and new public servants and fewer with experience. Federal public service statistics, as of July 31, 2012, indicate there are over 60,000 employees under 35 years of age and nearly 100,000 employees with five (or less) continuous years of service. FYN helps foster a sense of community among the next generation of public servants by serving as a unified national voice for federal public servant youth. The network actively engages in horizontal collaborations which foster awareness of our objectives, such as a video to be presented at all future orientation sessions (approximately 80 sessions per annum). We have also provided input from a national youth perspective to projects at the behest of groups such as the National Managers Community, IPAC and APEX. Thanks to the resourcefulness, focus and determination of its members, this year is one of great significance to FYN, marking the milestone of a decade as it celebrates its 10th anniversary. Committed to actively influence the evolving public service in its quest for excellence, FYN’s collaborative relationships permit the sharing of knowledge and the exploration of creative ways to inspire leadership and change. It serves to unite networks of innovative leaders that advocate for, and on behalf of, the young public servants they represent. Moving forward, FYN will continue to work with its partners to ensure the engagement of all involved. It will do so by enabling collaboration, applying efficient methods, promoting efficient tools, engaging in effective communication, cul-

tivating leadership, instituting change, fostering innovation, sharing knowledge, inspiring excellence, contributing positively, challenging the status quo and defying expectations. We are working hard to ensure another 10 years of worthwhile contributions to the public service. If you or someone you know is interested in getting involved or learning more about the Federal Youth Network please visit our GCPEDIA page for additional information: http://i.gc20. ca/fyn . This leaves but one question…how will you contribute?

November 2012 // Canadian Government Executive / 23

Performance management

Nick Simmons is a senior consultant in the Transformation and Change practice with Interis Consulting ( Murray Kronick is a principal in the Planning and Performance practice with Interis Consulting (

Meaningless measurements:

Exposing worst practices

This article is New and Improved! After an exhaustive review cycle with an extensive team of researchers and editors, we’ve enhanced it from the previous version! Were we successful in grabbing your attention with the first paragraph? Did the “New and Improved” draw you in? Perhaps a more pertinent question would have been: did the introduction mean anything to you? After all, it’s packed full of vague promises that what follows is the answer to all your performance measurement problems. Guaranteed! Perhaps it’s simply a marketing ploy that we’ve copied after seeing it time after time on television commercials or print advertisements for products as diverse as toothpaste, laundry detergent, shampoo and soft drinks. Using vague words such as improved, better, enhanced, streamlined, and strengthened is just one of five weaker techniques used. Other “worst practices” that we have seen include: reporting measures without context; counts of activities without outcomes; perverse indicators and information overload.

Reporting measures without context: Politicians love to cite large numbers, particularly in the millions of dollars. This is a wonderful headline grabbing technique, but it often presents an incomplete picture to the reader if the number is not given in context. For example, 24 / Canadian Government Executive // November 2012

while the mayor of a city may claim that $100 million is to be spent on new roads over the next two years, if given in context – namely that $1 billion is required to deal with the infrastructure deficit – the number is less meaningful, as only 10 percent of the requirement is being dealt with. This context is a vital part of reporting on the measure.

Counts of activities without outcomes: How many measures have you seen that include, for example, the creation of 12 policies over the fiscal year? This illustrates a performance measure that lacks context and is simply the count of an output as opposed to the measurement of an impact or an outcome. Another example: 30,000 projects were completed as a result of the government’s Economic Action Plan; while this is an impressive figure, additional context in terms of impact on Canadians would provide increased insight and relevance. Governments across the world have been proclaiming the success of stimulus spending by releasing statistics of the number of jobs “created or saved.” The count of something that may or may not have happened is not a recommended technique and, arguably, a number that lacks meaning, particularly if you only give a range of figures. Another “worst practice” to avoid is setting perverse indicators that may have the opposite or unintended effect of what was planned. Consider an organization that has chosen to concentrate on

and report the time (in days) taken to process an application and return a result to the applicant. While the turn-around time may have decreased, this may have been to the detriment of quality, which may similarly decrease as staff may have to rush or shortcut steps to meet the new service standard to process applications. Monitoring multiple measures is a way to guard against this perverse effect. Information overload may cause “analysis paralysis.” We have observed occasions where executive reporting decks are cluttered and contain too much information that does not contribute to reporting on results. Such information should be summarized and the additional information either eliminated or moved to an appendix. Dashboards or other reporting tools need only contain key information that will assist executives in decision-making. Sometimes simply asking the executives what measures they need to see to make decisions can identify those key indicators to report on. Avoiding some of these all-too-common “worst practices” will decrease the amount of meaningless measurement that is in use within your organization, along with reducing the effort to gather and manage the information in the first place.

Save the Date! Planning and Performance Exchange (PPX) Annual Symposium. May 13-15, 2013


John Read provides procurement consulting services to public sector clients. He served for almost 15 years in the Public Works procurement arena.

Breaching a bastion of bias Over the past 40 years federal procurement has incorporated many measures to eliminate bias in the selection of government contractors. Clearer and unwired descriptions of work, evaluation criteria structured for objective and measurable application, strictly limited communications between potential bidders and departments, and the presence of the CITT (Canadian International Trade Tribunal) have all contributed to a high (albeit not perfect) level of confidence that a procurement process will be fair. It is time get rid of one of the remaining prevalent inequities: the words that say, “there could be appearance of conflict of interest.” Conflict of interest has no place in government procurement. Seeking to stamp it out by dealing with appearances, the government uses arbitrary and undisclosed measures that are totally opposite to the accepted standard for procurement that requires full disclosure of all of the rules of decision. The problem is that the processes leading to decisions on appearances are vulnerable to at least seven types of subjectivity. Start with could – so many meanings, so dependent on context. I learned it as a word of positive potential, but in today’s government it has taken on the role of bogeyman. Saying that something “could” happen is akin to promising disaster leading to unfair subjectivity. Then, appearance. It has two meanings: what something looks like or coming into view. The second in this context makes no sense: talking about avoiding conflict of interest or its coming into view is re-

dundant. So we are talking about what something looks like – which isn’t necessarily what it is. Two old adages could apply: “appearances can be deceiving” and “where there’s smoke there’s fire”. Depending on which one an organization follows, there can be quite different and unpredictable consequences. Appearance is sometimes replaced by perception. We perceive things all the time, but what we perceive is not necessarily true. Further, people can “perceive” a situation in quite different ways: witness the recent Quebec election and the ensuing observations by the media and politicians as to what it might mean for the future of our country. It depends on your vantage point, perhaps, but in the end different perceptions of the same situation mean more possibility of less than objective, certainly inconsistent and inevitably unfair decisions. Then there is the person who makes the decisions. Making a decision about “appearance” requires careful thought. The government of Canada’s Treasury Board Contracting Policy tells us that procurement must “…stand the test of public scrutiny in matters of…prudence,” which is the use of reason, skill and good judgement. These are individual characteristics: the resulting decisions will also be individual. Every decision, therefore, is likely to be different, and overall government decisions on “appearance” cannot be objective. And, there is that person’s perspective. The moment that the person injects any element of personal status – could the decision have an effect on position or ca-

reer? – that person is in an actual position of conflict of interest. Interesting: a person in an actual conflict of interest making a decision on a case that could appear to be a conflict…. If the people have to be looked at carefully, what about the process? The government routinely includes in its call for bids a clause giving itself the broad right to reject a bid if a bidder has been involved in any situation of conflict of interest or appearance of conflict of interest. It further takes to itself the sole discretion to determine whether a conflict of interest or appearance of conflict of interest exists. Nice: discretion, with no rules set out as to how and on what basis the decision may be taken. Not objective… Finally, consider the likelihood that decision criteria will be influenced by the situation and history of the organization. If an allegation of conflict of interest is the first one received by that organization, it may be resolved quite differently than if the organization spends much of its time in the media defending the quality of its procurement activities. If you are the most recent “apparent” culprit, the roof is likely to fall on you. In closing, I return to the concept of “appearance.” Are decisions really being made on the appearance of conflict of interest, or on the how the organization and the government will “appear” when its decisions are made known? If the latter, then looking good risks trumping sound business decisions. For the terms “open and transparent” mean just that, and dealing with perceptions or appearances of conflict of interest has a way to go.

November 2012 // Canadian Government Executive / 25

The Leader’s Bookshelf

Harvey Schachter writes The Globe and Mail’s Managing Books and Monday Morning Manager columns. He is a freelance writer specializing in management issues.

When ‘yes’ means your word

The Primes Chris McGoff John Wiley, 241 pages, $35.95 As the World Bank in the 1990s was preparing for a major transformation to mark its 50th anniversary, consultants Chris McGoff and Michael Doyle met to discuss the plan developed under the auspices of the Bank’s director of strategy, Christina Wallace. While McGoff was still trying to process the ideas in the dozen or so pages she handed them, Doyle looked up from the documents, straight into her eyes, and said bluntly, “It won’t work.” She admitted to a similar feeling, but said she needed their help to understand why and to fix it. Doyle took a piece of scrap paper and drew two quick sketches. He labelled the first the “Rule of Problem/Solution Parity” and the second, “Logic.” He explained that the first rule related to the fact that people needed as much space to talk about the problems as the solution. But the design for the World Bank process that had been prepared didn’t give sufficient time for the Bank’s senior leaders to get clarity on the problems and gave too much time for the solutions part. As well, the process violated the natural logic of group planning and collaboration. Doyle set out three aspects to

26 / Canadian Government Executive // November 2012

such logic. Groups work best when they start with the situation “As Is,” and then move to the “To Be” state they envision. Group members need to start by thinking about the world and their outside environment before considering what’s going on in their own organization. They also needed to start with long-term plans and then shift to short-term plans. Those three steps are the essential logic of group planning, but in the plan were mixed up. “People will get lost. This process won’t result in the outcomes you want and need,” he advised. Those sketches, and the thinking behind them, allowed for a successful redesign of the World Bank’s effort. The two rules Doyle had shared were among 46 guidelines for working in groups that he and McGoff developed in the heat of battle, as they struggled with the complexities of their consulting assignments over the years. The duo – Doyle died a few years ago of a heart attack – called them “primes,” viewing the insights as blinding shocks of the obvious. “Like genes are to individuals, primes are to groups. Whether you understand them or not, they determine a group’s performance. Master the primes and you can master leading groups,” McGoff writes in his book sharing them, The Primes. The book is eclectic, but consistent in the terse way each idea is laid out – a guide for practitioners – and the equally pointed sketch accompanying each prime idea. Take Integrity, where the sketch is SAY → DO. There are many definitions for integrity but the focus here is on the fact if you say something you must do it. That requires three skills, McGoff says: • You must recognize when you have been requested to, or are about to, give your word. • You should say “yes” only when you mean it (and you should only say “yes” if you mean it). • You must get very good at saying

“no,” since that should be your most common response. “Integrity is the source of trust. Trust enables intimacy. If you get nothing else out of this book, get intimacy,” he declares. The Declaration Prime is also about being intentional. It advises that a declaration is a statement of what you will achieve by a certain date. “Are you willing to live unreasonably?” he asks, and to take a gamble by declaring an uncertain outcome for a specific date? Too often, we hedge of course. President John F. Kennedy didn’t hedge. He declared that an American would go to the moon and back by the end of the 1960s. Mahatma Gandhi declared that there would be a free India before his death. Babe Ruth declared that he would hit the next pitch over the wall. “These leaders pointed and then hit. Athletes today swing away. When they happen to hit one over the fences, they stand and point. That is not declarative leadership. The order matters,” he says. When you declare, like Cortez abandoning his ships, you have no options. McGoff tells the story of a complex project where declarations were made, spurring everyone on to new forms of collaboration to make sure the outcome was achieved by the appropriate date. A declaration can be a powerful thing. A hedge, not so much. Declarations and vision often go hand in hand. But the primes include an element of vision that most of us wouldn’t consider, yet is crucial. It’s called the Dynamic Incompleteness Prime and it counsels that while you must come up with a vision for your organization that is compelling for what it signals, you must also make sure it is inviting for what you leave out. Then indicate what is missing, and what the group has to complete for you. This encourages everyone to contribute to the framework you have out-

The Leader’s Bookshelf lined and helps develop a description of the future that those followers are likely to fall in love with. “Dynamic incompleteness adheres to the truth that too much form causes resistance and too much void creates chaos. The leader’s job is to bring just enough form to inspire the people and frame what needs to be articulated. In a nutshell, that is the art of visioning,” he writes. In the Power Prime, the duo looked at the power of a group. “Do you know how to turn strangers, competitors, cautious allies, and suspicious shareholders into powerful, outcomes-driven coalitions?” McGoff asks. Again, in the chart for the prime, it’s depicted simply, a triangle, with three elements listed: right shared perspective, right shared intent, and right co-ordinated action. The message is that any group’s power is a function of the degree to which members are willing to operate from a shared perspective; the degree to which they will commit to a shared intent; and the level of co-ordination of their actions. “A weakness in any part of the triangle erodes the power,” McGoff warns. He suggests this simple formulation will give you power in the many groups

you must work with today beyond your internal team. “Teams are only one kind of group, and their future is limited. Globalization, interconnectedness, and systems thinking are producing an entirely new level of problems and possibilities that no single organization or authority can get its arms around. The highest skill to master is the ability to generate power in groups composed of strangers, competitors, cautious allies, and suspicious shareholders. That is the world in which we live,” he notes. The Request Prime highlights the importance of being able to distinguish during the frenzy of our day between a statement, a request and a command: • A statement is a description of something or the condition of someone. No response is necessarily required. • A request is an invitation to give your word on something. It requires a response, yes or no. “Maybe,” or “I’ll try,” means no, and McGoff argues their use should be forbidden. Instead, say the actual word: “No”. • A command is a requirement for someone to make good on his or her word. “Commands are an essential part of high performance social contract-

ing, and the only response to them is ‘yes,’” he stresses. He points out that too many people cloak their requests as statements and their statements as commands. The result is confusion and frustration. He urges you to make sure that everyone in your team can tell the difference between a statement, request and command, and recognize – in the moment – which they are receiving. Make sure they understand that statements don’t require any response or actions; that can save a lot of time. And make sure that when a request is made, people have the right to say “no” without any repercussions. That’s particularly important since under the Integrity Prime, as we saw earlier, most responses to requests will be “no,” since a “yes” response can only be given when it is truly meant to be followed by the promised action. Nothing here is totally surprising. But it’s an intriguing compilation of rules, or at least guidelines, for actions in a workplace. The thinking is solid, the sketches stark and memorable, and the whole package stimulating for government executives to grapple with.


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November 2012 // Canadian Government Executive / 27





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Governing Digitally

Jeffrey Roy is professor in the School of Public Administration at Dalhousie University (

Apple versus Android

The wider stakes at play

ARE YOU MISSING OUT? In recent months, Apple and Samsung have been clobbering one another in court rooms around the world. Some highlights: an important August victory in U.S. courts for Apple; a separate decision soon thereafter in Japan favouring Samsung; the subsequent dismissal of yet another Apple suit by German courts; and to stir the pot a bit more, unrelated Swiss accusations against Apple over the look of its watch on the newly-released iPhone. Quite aside from providing fodder for intellectual property (IP) lawyers, these legal battles denote a much wider philosophical rift between proprietary and open systems and their respective value propositions. The stakes are far-reaching in shaping both competitive conduct and the wider ethos of a digital world. Samsung deploys Android source code to power its smart phones and tablets, and in doing so has been making inroads against Apple in this all-important market. But Android is much larger than Samsung, most firmly associated with Google. By creating Android as an open source variant to mainstream proprietary models – most notably Apple – Google sought to foster the conditions for a wider eco-system of apps and devices to challenge and ultimately erode Apple dominance. And it’s working. While many Canadian headlines focus on RIM’s demise and Apple’s ascent, globally the scene is much different. Nearly two-thirds of all smart phones sold worldwide in the second quarter of this year featured the Android operating system (the subsequent launching of the iPhone 5 a powerful counterpunch). Android is gaining ground as well in the tablet market (fueled primarily by low-end Amazon offerings and higher end Samsung products; rumours abound of a 2013 Google-branded tablet to further challenge Apple pre-eminence).

Yet market shares and alleged patent infringements are only part of a much larger story. While Apple is primarily a software company predicated upon innovative and proprietary product offerings, Google has long championed an alternative business model predicated first and foremost on open and often free services. The search engine is the most obvious example; think too of Gmail, a model that killed the quaint notion of paying a bit more for extra Hotmail storage space. Critics and cynics alike may counter, and not without some truth, that Google is plenty secretive in terms of its search algorithms and corporate strategy: they are, after all, first and foremost a competitive leviathan seeking to dominate markets and keep their share price in the same stratospheric heights as Apple. Nonetheless, the Android operating system speaks to a widening philosophy of open source and openness writ large, a counter-weight to the traditions of proprietary protection (epitomized in the past by Microsoft). Indeed, Apple’s brilliance in the music sector was to bridge an arguably dubious but rapidly growing openness philosophy of illegal downloads with a proprietary model for individual song purchases. Apple’s community of apps-developers is similarly open, albeit on Apple’s terms. In relentlessly challenging Samsung smart phone designs, Apple has emerged as the poster child for defending proprietary protection; conversely, Android and Googlepowered openness fuel a Wikipedia-stylized vision of a truly open and participatory society. Android’s attractiveness for many thus lies in a wider set of opportunities for shared innovation and applications for both consumers and designers alike. While cloud computing itself fragments into proprietary (i.e., private clouds) and open segments, even the nature of grant-

ing patents reflects this wider clash of ideals. Teaming up with Google and other open source partners, the U.S. Patent Office has begun crowd-sourcing the assessments of patent applications, a remarkable shift from the traditions of in-house and secretive reviews. While seeking to provide legal protection when genuinely warranted, the wider objective is to leverage collective intelligence and limit barriers to creativity, all hallmarks of a more open source universe. Analogous to such competing visions of market offerings are individual choices pertaining to online behaviour and the calculus of privacy protection versus the benefits of openness. While Facebook and Twitter operate largely on open source platforms (interoperable across Android and Apple systems), many users are seemingly oblivious to the tools at their disposable to render proprietary their own images and content. In such a world, patent protection may well face a precarious future. Through competition policies, innovative strategies, and vendor selection for their own internal infrastructures, governments around the world may well tip the balance between these two worldviews. Apple has not formally targeted the public sector as an institutional buyer in a manner akin to Microsoft in the past and Google today with its cloud-based suite of offerings; it will be interesting to see whether such a stance changes going forward. For now – and for the foreseeable future – our world will feature ongoing clashes of proprietary and openness ideals, tactics and choices. Smart phones and tablets are simply the tip of the iceberg.

November 2012 // Canadian Government Executive / 29


David Zussman holds the Jarislowsky Chair in Public Sector Management and is director of the Graduate School of Public and International Affairs at the University of Ottawa (

The rise of the user fee For the last few years, governments around the world have been preoccupied with cutting costs to strike a better balance between government revenues and expenditures. While most of the current action in Canada has been directed at the spending side, a recent study conducted by the Parliamentary Budget Office (PBO) on federal user charges signals that the revenue generation side is equally important when looking at public finances. The PBO report garnered limited attention from the media. This is unfortunate since this study demonstrates that there are billions of dollars that move through the budget cycle that receive almost no public scrutiny and oversight. User fees are a particular form of government revenues that are “levied on consumers for government goods or services in relation to their consumption.” All Canadians are familiar with the various forms of user fees since they will have encountered them often in their day-today lives. As examples, they apply to the 30 / Canadian Government Executive // November 2012

use of public transit, public recreational facilities, tuition fees for higher education, road or bridge tolls, resource royalties, accessing government data sets, and purchasing various types of licenses. Even a cursory look at the revenue stream of the three levels of government in Canada reveals that user fees are present in all areas of government activity. In fact, the PBO reports that user fees are the fastest growing area of taxation in Canada. For instance, at the federal level, revenues from user fees grew from $3.4 billion in 2000-01 to $8 billion in 2010-11, representing an average increase of 9% per year, whereas overall tax increases have been limited to 1.8% per year over the same period. While user fees are only 4% of total tax revenues at the federal level, the rate of growth is eye-catching especially since it mirrors similar growth patterns at the municipal and provincial levels. In general, there have been two significant developments since the mid-1990s when user fees became a large-scale fea-

ture of revenue generation. First, governments are now charging for a wide range of services that were once free to citizens and, in other cases, the fee is no longer a nominal amount but covers the actual cost of providing the service. Given the growing importance of user fees as a revenue source, in 2004 the federal government passed the User Fees Act to regularize the use of user fees, to increase the role of Parliamentarians in setting user fees, to prescribe a pre-consultation regime before introducing new user fees, and to require public reporting to improve the accountability regime. The Auditor General was quick to follow the lead set by Parliament by undertaking a review in 2008 of user fees administration. At that time, the AG noted that user fees were becoming more important but there were wide inconsistencies in the way departments determined the fees. Departments also did a relatively poor job of explaining the rationale for determining the fees and describing the process used to consult the public and to analyze the fee regime. User fees are never a popular measure since the public does not like the idea of more taxes, especially regressive forms of taxation. For this reason, politicians are always ambivalent about introducing more user fees even though they are also perceived as a “good tax” since they are imposed only on service users. Given the rate of growth of user fees over the past decade, the PBO study raises the question of what in the future we can expect to be provided to us as taxpayers and citizens and what we will be expected to pay as customers or consumers of government services. This is a very complex question that goes to the heart of the future role of government in Canada. It is a wonderful example of a “wicked problem” and it deserves the attention of decision-makers at the three levels of government. The City of Toronto has attempted to address this issue and in other jurisdictions there should be a similar effort to categorize and measure the impact of user fees on demand, service improvement and accessibility. At a minimum, Canadians have a right to know more about this important form of taxation.


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