Strategic imagination: Leading government in the age of AI
The public sector is preparing for AI but the challenge isn’t adoption — it’s imagination. Strategic imagination is becoming one of the defining leadership capabilities for government in the age of AI.
Fiona Armstrong

Image source: An AI-generated image illustrating the concept of strategic imagination—the ability to envision new possibilities and lead confidently into our AI-enabled future.

Every roadmap assumes we know where we’re going. But what if this time we don’t?

At the recent Mandarin Live Canberra event, I asked a simple question: From here to where?

Across government, attention and energy are focused on AI Governance frameworks, AI literacy, Chief AI Officers and pilot projects. These are important foundations to build capability, manage risk and enable responsible adoption.

But they don’t address the more fundamental question: What kind of government do we want to become, and are we bold enough to build it?

Before we decide where we use AI, we need to understand where we are trying to go. AI isn’t just a technology challenge. It’s a leadership one.

The next capability for public sector leaders
Every significant reform in government has begun with an act of strategic imagination. Medicare, The NDIS, Digital identity. None began with a roadmap. They began with leaders imagining a future that didn’t yet exist — and building the confidence to take others there.

AI presents a similar moment. Not because it changes government’s purpose, but because it expands what’s possible in pursuing that purpose. It gives us the opportunity to rethink how government works, how it collaborates and how it interacts with the community. This isn’t simply about doing what we do faster or more efficiently. It’s about rethinking what is possible.

That’s why the next capability public sector leaders need isn’t simply AI literacy, it’s strategic imagination.

Strategic imagination is the ability to paint a credible picture of a future organisation clearly enough that people can debate it, refine it and begin building towards it. One that is ambitious enough to inspire, grounded enough to be credible and flexible enough to evolve as technology continues to change.

Government has always been good at planning. But planning assumes we already know what success looks like.

Today, many agencies are wrestling with a more fundamental question: If AI genuinely expands what’s possible, what kind of organisation are we trying to become?

What is our north star that’s compelling enough to inspire people, yet grounded enough to remain true to the values and principles of the Australian Public Service.

It starts with strategic imagination and an artist’s impression — much like an architect’s sketch that helps people see the future before the detailed plans are drawn.

Strategic imagination starts with humans
A good place to start is to imagine the sort of experience we want to provide to the community we serve, if we were freed from the current constraints.

Imagine Margaret, an older Australian who has been stuck in hospital after a fall because there’s nobody ready to support her safely at home.

Instead of her family spending weeks navigating aged care, community nursing, home modifications and transport support, the next steps already feel connected. Everyone understands what happens next, who will make contact and what support is available.

Behind the scenes, health, aged care and community services work from shared context. AI helps identify risks, surface relevant information and recommend next actions, while people remain responsible for judgement and care.

Or imagine Sarah, who is opening her first café.

Instead of paying thousands of dollars for advice — or discovering too late that she’d missed an important compliance requirement — government understands what she’s trying to achieve. Guidance is personalised to her circumstances, forms are largely completed for her, routine checks happen instantly and she can move forward with confidence.

Behind the scenes, agencies share context, policy teams continuously learn from customer experience and compliance becomes easier because the system is designed to help people succeed from the outset.

Or imagine Jo who has recently lost their job.

Instead of repeating the same story to multiple agencies, financial institutions and support services while trying to navigate unemployment, financial stress and declining mental health, their support feels connected. Employment services, financial assistance and mental health support work together around them, not organisational boundaries.

Behind the scenes, information flows securely between agencies, frontline teams spend more time supporting people than processing paperwork and emerging issues are identified before they become crises.

What would have to change inside government to make these new experiences an ordinary Tuesday morning?

All of these examples depend on organisations redesigning how they work around new possibilities. The technology exists and can enable it.

Australians expect government to meet them where they are and provide seamless support across organisational boundaries.
Public servants want to spend more time using their expertise and less time on process and administration.
Government leaders need better insights to confidently design policies and services that create better outcomes for the community.
This isn’t about replacing public servants. It’s about giving them greater capacity to fulfil the purpose that brought them into public service in the first place.

The real challenge is creating the confidence, capability and leadership to redesign organisations.

Technology doesn’t redesign government. Leaders do. Technology doesn’t redesign organisations. Leaders do.
The public sector’s strength has always been stewarding complex systems responsibly. AI doesn’t diminish that responsibility — it expands what’s possible within it. Strategic imagination is the capability that helps leaders navigate that opportunity.

The leadership challenge isn’t deciding where AI fits into today’s operating model — it’s imagining how today’s operating model could evolve because AI exists.

Strategic imagination is centred on purpose, organisational design, workforce capability and public value. It shifts the conversation from: “Which AI tools should we implement?” to “What kind of organisation do we want to become?” before organisations become consumed by technology choices.

You can’t build confidence in a future you haven’t imagined
While AI experimentation builds confidence and governance creates trust, neither creates direction. If we want AI to create genuine public value — not simply greater efficiency — we first need to imagine the future we’re trying to build. That’s what strategic imagination does.

Without strategic imagination government will realise only a fraction of the potential of AI. Realising AI’s full potential won’t depend on having the most advanced technology. It will depend on leaders who can imagine how AI expands what’s possible — for Australians, for public servants and for the communities they serve.

Because you can’t build confidence in a future you haven’t imagined.

How can Liquid help?
Liquid helps organisations imagine — and build — the next generation of services and systems by combining human-centred strategy, practical delivery experience and applied AI.

Liquid and The Mandarin’s recently published AI Roadmap outlines a practical three-horizon approach to building momentum, from safe experimentation today to redesigning services around people tomorrow.

Strategic imagination: Leading government in the age of AI

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