Purpose – The purpose of this paper is to ask how the public sector manages complex issues, and suggests that new strategic thinking is needed about ways forward. Design/methodology/approach – The paper outlines recent conceptual and empirical research demonstrating the challenges for government posed by complex problems, and the difficulties of addressing them successfully. Findings – The paper suggests that most governmental systems are preoccupied with a host of issues which impede the consideration of long-term goals and methods. Research limitations/implications – More research is needed on the capacities of governments to identify and respond to complex problems while maintaining performance in other areas. Practical implications – Implications arise for leadership, building policy capacity, building coordination capacity, and better use of partnering to improve implementation capacity. Originality/value – The paper encourages new thinking about the capacities required for strategic direction setting and coordination to tackle complex problems.