The Power of a Growth Mindset in Public Sector Leadership
As governments face mounting challenges—from housing affordability to the net zero transition—the need for innovative, evidence-based policy solutions has never been greater. In navigating these complexities governments face competing priorities and need to make challenging policy choices.
The Australian Productivity Commission has encouraged governments to adopt a growth mindset in approaching policy decisions. We explore what this means for policy development with Danielle Wood, Chair of the Australian Productivity Commission, at the upcoming IPAA Queensland event, Adopting a Growth Mindset – The Role of the Public Sector in Lifting Productivity.
What is a Growth Mindset in Policy Development?
For government, having a growth mindset means elevating economic growth and its benefits in policy decisions. It requires decision makers and their advisers to:
Acknowledge Trade-offs: Recognise that every policy decision involves balancing competing objectives, such as economic growth and social equity. As Danielle Wood noted in her 2024 speech at the Australian Public Service Economist Conference, “Economics remains a powerful antidote to ‘magical thinking’ that can often prevail in the policy world. We’ll do that by building the evidence base and acknowledging and weighing trade-offs.”
Focus on Evidence: Use data and evaluation to inform decisions and ensure policies deliver measurable outcomes. The establishment of the Australian Centre for Evaluation (ACE) is a prime example of how evidence-based approaches are being embedded into federal policy development (Andrew Leigh, 2023).
Foster Innovation: Encourage new ideas and cross-disciplinary approaches to solve complex, “wicked” problems. As highlighted in the Australian Productivity Commission’s Five-Year Productivity Inquiry (2023), innovation and adaptability are critical to addressing challenges like climate change and economic inequality.
Danielle Wood has consistently emphasised the importance of these principles to improving the overall wellbeing of Australians and most recently in the Five Pillars of Inquiry has championed the importance of a growth mindset if we are to meet the productivity challenge and deliver higher standards of living.
Why It Matters More than Ever for Public Sector Leaders
Productivity, the engine of Australia’s economic growth and improvements in living standards, has slowed significantly, motivating a renewed push by governments – at all levels – to identify and implement reforms to boost productivity growth.
How governments choose to spend and invest, regulate and tax and deliver essential services all matter to productivity and influence the trajectory for economic growth and prosperity.
The public sector plays a vital role in providing evidence-based advice to inform these policy choices and ensure decision makers can effectively weigh trade-offs and apply a measured approach to risk.
In constrained environments, where hierarchy, risk appetite, and public accountability shape decision-making, a growth mindset also requires leaders to:
Build coalitions: Working collaboratively across teams and sectors to drive change. As Danielle Wood noted in her 2024 speech, “Working with people with different frameworks requires more mental work to test and integrate these alternative perspectives. But while diverse teams feel less comfortable, they perform objectively better overall at problem-solving” (Rock, Grant & Grey, 2016).
Adopt values-based communication: Framing solutions in ways that resonate with stakeholders and align with public sector realities. Danielle Wood has highlighted the importance of clear and accessible communication, stating, “If we stake our claim to our unique contribution to public policy being the clarity of our thinking, that clarity must be evident in the advice we provide” (Wood, 2024).
Provide solutions-focused advice: Providing practical, evidence-based recommendations that address real-world challenges. The National Interest Framework, developed by Treasury, is an example of how economic frameworks can guide disciplined and impactful policy decisions (Treasurer Jim Chalmers, 2024).
Pre-Reading Recommendation
To prepare for the event, we recommend exploring the Productivity Commission’s introductory reports on Australia’s Five Productivity Inquiries. These reports examine the causes of Australia’s slowing productivity growth and highlight why reigniting productivity is essential for improving wellbeing and fostering resilient, sustainable economic growth in an uncertain global environment.
Podcast Recommendation
For further insights, listen to Richard Aedy in conversation with PC Chair Danielle Wood as they discuss the challenges of Australia’s productivity slowdown and preview the key reforms proposed in the Five Pillars of Productivity inquiries.
Access the reports and podcast here
Growth mindset: how to boost Australia’s productivity | Productivity Commission.
Join the Conversation
Don’t miss the opportunity to hear directly from Danielle Wood and Claire Ibrahim at the Adopting a Growth Mindset seminar. Gain practical insights, network with peers, and learn how to lead with impact in today’s complex public sector environment.
A growth mindset isn’t just a buzzword—it’s a critical approach for public sector leaders striving to create meaningful change and inform effective policy solutions to help drive productivity and innovation.
Join us on 12 March to learn how you can apply this mindset to lift productivity and tackle the challenges of tomorrow.
References:
Wood, D. (2025). Growth mindset: How to fix our productivity problem. National Press Club address. Read the full speech here.
Productivity Commission (2023). Five-Year Productivity Inquiry: Key Findings and Recommendations.
Leigh, A. (2023). Data and evaluation: A match made in policy heaven. Speech to the Data for Policy Summit, Life Course Centre.
Rock, D., Grant, H., & Grey, J. (2016). Diverse teams feel less comfortable – and that’s why they perform better. Harvard Business Review.
Treasurer Jim Chalmers MP (2024). Building a new economy on 5 pillars of productivity. Address to the Australian Business Economists.