Strategic Change Management in the Public Sector

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Strategic Change Management in the Public Sector

• Professor David Baker,
• University College Plymouth
• St Mark St John

2
The Necessity for Change

• Highly competitive environments
• Faster development needed
• Private sector profit
• Public sector added value
• Determining that value
• Internationalisation

3
Users

• Greater choice
• Raised expectations greater demands
• Contribution to cost of services
• Need to take account of the user as customer

4
e-University

• Hefce pulls the plug on UK e-university The UK's
  62m e-learning university is being scrapped in
  its present form after it failed to recruit
  enough students or attract sufficient private
  investment in its first year of operation.

5
Competition

• After the primary change driverthe customerthe
  actions of competitors provide a major impetus
  behind attempts to implement innovation and
  change practices (Solomon, 2001)
• Massification and Segmentation

6
Diversity and Diversification

• Reflecting diversity
• Richness of thinking and approaches
• Legal compliance fundamental shifts in attitude
  and culture
• Diversification of products or services

7
Legislation

• Government aspiration
• Keeping up to date and staying within the law
• Encapsulation of changes within society
• Represent shift in culture or public opinion

8
Recent UK legislation

• The following have had a significant impact on
  the ways in which both private and public sector
  organizations operate
• Telecommunications Act (1984)
• Data Protection Act (1998)
• Human Rights Act (1998)
• Freedom of Information Act (2000).

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Human resource management

• People as core strategic asset
• Modernised human resource function
• Poor employee relations as a driver for change
• Communication vital to improving relations

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Technology

• Revolutionary power
• Working patterns
• Changes in the nature of work
• Relationship between knowledge areas and
  disciplines
• What is a routine procedure?
• What is a professional activity?

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Finance

• Requirement to make a surplus
• Stay within budgets
• Effective use of available resources
• Staffing budgets
• Financial pressures
• Market approaches
• Price of services

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Internal Responses to External Drivers

• Re-engineering of processes
• Focus on quality management
• Financial accounting
• Technology transfer
• Strategic planning

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Resulting in

• Shifts from collegial to corporate institutions
• Embracing of commercial activities
• Emergence of the entrepreneurial public sector
  organization

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Key challenge

• What to do
• When to do it
• How to do it

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Change Management

• The process, tools and techniques to manage the
  people-side of the process, to achieve the
  required outcomes, and to realise the change
  effectively
• Context, content, process
• Fit into one coherent whole
• Wider environment
• Solving longer-term problems by learning lessons
• Embedded, fundamental change

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Strategic Change Management

• Clear-defined purpose
• Strong set of shared values
• More successful organisation

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Strategy 1

• Something to work towards
• Frames change
• Basis of communications
• Focus for effort
• Integrative tool
• Allows delegation
• Requires proactive leadership

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Strategy 2

• Resource allocation
• Ability to manage change as a project
• Capability assessment
• Comparisons with the rest of the sector
• Recognise generic change factors
• Identifying and engendering attitudes
• Key skills development
• Fostering culture change

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Strategy 3

• Systematic, well constructed change management
  project
• Route map for change
• Identification of requirements
• Order and pace
• Key opportunities for success
• Danger areas
• Key prerequisites and gaps

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Key skills

• Business external environment and user demands
• Political Organisational situation, power bases
  and key influences
• Spiritual vision and values
• Emotional ability to understand and empathise
  with feelings self and others

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Strategic change managementtechniques

• Means to an end no single approach
• What, how, when, who, what impact, where?
• What the organisation has/has not?
• Help or hinder?
• Drawing up of strategies and plans
• Environmental and market forces taken into account

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High level strategic techniquesBenefits

• Improved quality of decision making
• Identification and handling of problems and
  opportunities
• Appropriate view taken broad (strategy)
  focussed (implementation)
• Performance indicators based in environmental
  factors comparison and monitoring throughout

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Foresight

• Analysis of broader environmental issues
  informed by deep insights into trends in
  lifestyles, technology, demography and
  geopolitics (Hamel and Prahalad, 1994)
• Art and science
• Create scenarios

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Delphi

• Qualitative forecasting - team approach
• Based on iteration of one or more future
  scenarios
• Eventual agreement reached for forecasting
  purposes
• Provides a future framework/set of scenarios for
  specific analyses
• Integrates different data sources

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Environmental analysis

• Analysing and understanding the environment in
  which the organization operates essential
• Determines future strategic direction and what
  needs to be changed
• Broad as possible approach
• Early hints of major change not always obvious

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STEEPLE

• Socio-cultural eg population structure, lifestyle
  choices
• Technical eg impact of internet, emerging
  technologies, technology transfer, RD
• Environmental eg local, national and
  international
• Economic eg stage of cycle, employment levels,
  income
• Political eg type of government, levels of
  freedom, legislation
• Legal eg national and international
• Environmental eg green legislation

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STEEPLE

• Values
• Ethics
• Education
• Demography
• Internationalisation.

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Key stakeholder groups

• Primary - Direct interest in the strategy
  typically employees, and especially senior
  managers and those groups and institutions that
  fund the programme of work that the strategy
  generates and that have a financial stake in the
  organization to which the strategy pertains
• Secondary - Indirect interest in the strategy
  typically those who use the organization whose
  strategy it is, or who supply goods and services
  to it
• Tertiary - Remote interest in the strategy
  typically those who are interested in the key
  actions of the organization and how those actions
  are performed, such as government agencies or
  pressure groups

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Stakeholder themes

• Stakeholders have demands things that they have
  to do and which they will need to have satisfied
  if they are to be supportive
• They will have choices and will wish to exercise
  them
• They will be operating under constraints

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Defining benchmarking

• A predetermined set of standards against which
  future performance or activities are measured
• Involves the discovery of the best practice,
  either within or outside the business, in an
  effort to identify the ideal processes and
  prosecution of an activity
• Purpose is to ensure that future performance and
  activities conform with the benchmarked ideal in
  order to improve overall performance
• Increased efficiency key to the benchmarking
  process
• Leading to a more competitive edge
• Determines priority areas

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Portfolios and Markets

• Review products or services
• Review market
• Product or service development mapping
• Enhancements and other changes prioritised

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Scorecards

• Balanced scorecard summative approach for
  position and performance
• Innovation scorecards real capacity to innovate
• SWOT tried and tested, still valuable
• 7S model integrative SWOT
• Content, Context and Process model emphasis on
  fitness for purpose

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The four perspectives of a balanced scorecard

• Financial Analysis cost-benefit financial risk
  assessment organizational improvement
• Internal processes Identification of
  organizational performance in relation to
  customer/user expectations
• Learning and growth Identification of where
  training and development most needs to be
  targeted
• Customers/users Analysis of different types of
  customers/users and their satisfaction with the
  organization, its products and services

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Innovation scorecard

• 1 No real level of innovation, and no plans to
  innovate
• 2 A basic level of innovation is evident, with a
  degree of motivation amongst the senior
  management to change
• 3 Innovation is a stated and implemented key
  objective of the organization
• 4 The organization is best of breed in
  innovation and innovatory performance

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SWOT

• Strengths Areas in which the organization has
  strong capabilities or a competitive advantage,
  or areas in which it may develop capabilities and
  advantages in the time period covered by the
  Strategic Plan
• Weaknesses Areas in which the organization is
  lacking the capabilities necessary to reach its
  goals, or areas that can be expected to develop
  within the time period covered by the Strategic
  Plan.
• Opportunities Situations outside of the
  organization that, if capitalized on, could
  improve the librarys ability to fulfill its
  mission. These may exist now or develop within
  the time period covered by the Strategic Plan
• Threats Situations external to the organization
  that exist now or may develop in the time period
  covered by the Strategic Plan that could damage
  the library and should be avoided, minimized, or
  managed(Siess, 2002)

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7S model

• Strategy
• Structure
• Systems
• Staff
• Style
• Shared values
• Skills

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Content, Context and Process

• Emphasis on organizational fitness for purpose
  and historical, cultural, economic and political
  contexts
• Environmental assessment
• Human resources as assets or liabilities
• Linking strategic and operational change
• Leading change
• Overall coherence

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Some more specific tools

• Force field analysis facilitates identification
  of drivers of, and resistance to, change
• SIPOC identifies all relevant elements of a
  process improvement project

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SIPOC

• Suppliers
• Inputs
• Process
• Outputs
• Customers

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Approaches 1

• Choice of tools and techniques based on
  assessment of what is appropriate
• Each situation is different and dynamic from
  previous ones
• Multi-faceted approach best
• Embrace complexities, including internal,
  external and politic realities

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Approaches 2

• Gather enough, not too much, information
• Combination of hard and soft approaches
  likely to work best
• Begin with harder techniques to identify
  imperatives
• Soft approaches involve and empower all those who
  will be affected

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Techniques at work

• What does the future hold? Delphi
• What is the core environment? STEEPLE
• What do our stakeholders want? Stakeholder
  analysis
• How are we doing relative to others? Benchmarking
• Are we offering the right products or services?
  Portfolio analysis
• What do the markets want? Market analysis
• Where are we best and worst placed? SWOT
• How do we bring it all together into a plan for
  the future that can be measured against delivery?
  Balanced scorecard
• Is the organization fit for purpose and well
  integrated? 7S
• Is the organization ready for change? SIPOC
• What is in the organizations favour and where
  will the resistance come from? Force Field
  Analysis

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Conclusions 1

• Use influence and strategic thinking to create a
  vision and identify those crucial, early steps
  towards it
• Recognize the dissatisfaction that exists by
  communicating sector trends, leadership ideas,
  best practice and competitive analysis to
  identify the necessary change

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Conclusions 2

• Whole series of processes, approaches and styles
  for particular environment
• Subtle mix of art and science directing,
  navigating, caretaking, coaching, interpreting
  and nurturing
• Develop processes for the strategic management of
  change
• Change will bring continuity