Features: May 20th, 2003

Change Management in the Public Sector – The New Holy Grail?

By Steve Windsor

The public sector has fundamentally changed in the past seven years. It has learned valuable lessons from the private sector and has started to take a more commercial approach, adopting the lexicon of business. In particular, the concept of the customer has grown in importance..

Change management is particularly important in the public sector because these organisations carry the burden of public expectation, not least because it is our money they are spending – we are all stakeholders. Success needs to be demonstrated and measured. There are initiatives from the Office of Government Commerce (OGC), the Cabinet Office and the Prime Minister’s Office all calling for greater accountability and more demonstrable benefits. Change management plays a vital role in driving out the benefits of e-government projects.

What is change management and why is it important now?

GartnerG2 recently decreed that at least half of the budget dedicated to the customer-facing side of an IT implementation should be allocated to change management. In the public sector, this means that organisations need to worry about adoption of technology within their departments as a first step, well before they address any concerns about outside acceptance from their customers.

Any organisation undergoing a transformation needs to take into account all the things that will make that journey a success. These include preparing the organisation for change, understanding its impact and managing stakeholders’ expectations of it. The end result should be a successful technology implementation.

However, success is often undermined because organisations don’t understand that the project does not end at the point the new system ‘goes live’. True change management includes the critical phases that follow going live – stabilising the business and realising the benefits.

The public sector is well-known for the length of its projects. The traditional hierarchies it operates often lengthen the decision-making and procurement processes, which can literally end up taking several years. The knock-on effect for change management is that the project team risks losing sight of the end benefits of the implementation and the final two phases might remain incomplete due to ‘project fatigue’. The overall cost of implementation therefore escalates because of high procurement costs.

Recipe for success

So what are the key ingredients for successful change management in this sector? The most important factors are effective planning, timely decision making, stakeholder management and ensuring that the right people are available to implement change. A lack of any of these could result in delay, or even failure, of the implementation.

The issue of resourcing is fundamental to success. Getting the right mix of people often involves partnering with private sector companies and this can potentially lead to a clash of cultures. The best partnerships are built with private sector partners who can empathise with the traditional hierarchies within the public sector but are prepared to challenge constructively.

When bringing in a third party, it’s also important for the public sector not to lose sight of good people within its own organisations. The most successful partnerships involve the leveraged model of consultancy, whereby the client ‘owns’ the project and the consultant ‘shadows’ and advises the client counterpart during the implementation. The idea is that the consultant can step off the project at any point and the client can manage the next stage alone because she/he has retained ownership of the project from the beginning and has the capability to take it forward. But this will only work if the client organisation is prepared to put forward the right people. It’s a big investment.

Deciding the correct amount of stakeholder communication during the project is also a fine art. Too much information can leave stakeholders feeling bombarded or bored. Too little can make them feel left in the dark and unaware of how the change will affect them personally.

In addition, different stakeholders within an organisation require different levels of communication and a blanket approach will not be as effective as a targeted one. Information should be disseminated by the project team along business lines. For example, the IT and human resources departments will receive slightly different perspectives on the progress of the implementation. This should prevent loss of interest or abdication of responsibility by various groups of stakeholders during the course of the project.

The stabilisation process after the implementation goes live is also critical, as any organisation using a new system will experience a dip in productivity while employees adjust. To maintain momentum after implementation, it’s important for organisations to allocate responsibility for realising each benefit of the new system to an individual, linking it to appraisals and even incentivisation schemes. The immediate question is ‘who is accountable for stabilising the business and driving out the benefits?’

Finally, the key thing for public sector organisations to remember is that, when putting together a successful project team within the organisation, it is building an asset for the future. Project team members will not only have built on their past experience but also they will have developed new skills that will ultimately further their careers. They are likely to be much more organisationally aware at the end of a project. The confidence a project gives them also means that they are keen to develop their skills and move on within the organisation rather than move out. It is imperative to realise the investment in them by identifying early on the role they can move into after the project. Many will become future leaders and will have high expectations.

Forensic Science Service: A best practice case study

The Forensic Science Service (FSS) is a profit-making Home Office agency that supplies services to a number of public bodies, such as the police and Customs and Excise. It provides information and expertise to support the investigation and detection of crimes and is a vital part of the criminal justice system.

After rapid growth, the FSS now has over 3000 employees. In late 1998 it realised that it needed to replace its existing, disparate IT systems which were originally designed for an organisation of just 400. It invested in an SAP Enterprise Resource Planning (ERP) system to knit everything together and permit future sustainable growth. Partners for Change was brought in to oversee the change management stream of the SAP implementation.

This ensured that, as far as possible, expectations were set at the right level and that the FSS management recognized the importance of change management if they were to continue hitting their deadlines. The project came in on time and to budget.

The project fine-tuned processes to support the FSS’s supply chain, from collecting and identifying evidence through to presenting it in court. The system comprised sales elements to capture customer details; exhibition management to record pieces of evidence; tracking facilities to assess the progress of the case; and HR capture and database to identify the appropriate skills needed at each stage of the supply chain.

The project was the FSS’s largest IT implementation to date. Historically, the FSS had met with a number of challenges when working on sizeable IT projects and, as a result, the ERP implementation was met with a degree of scepticism. It was therefore crucial to ensure that the right team was brought on board to implement the project and see it through to completion.

The change management stream of the implementation programme ran alongside the technical implementation. Stakeholder expectations were set at the right level from the beginning. FSS project leaders understood the importance of change management, and of meeting and exceeding deadlines.

Steve Windsor of Partners for Change shadowed the FSS team, particularly Brian Rankin, the FSS change management leader. It was critical throughout that Brian and his colleagues were in the driving seat, but also that they had the support required. Working in the background, Windsor could impart knowledge and instil confidence in the project leaders.

Partners for Change encountered a number of challenges during the project. The first was to overcome resistance from FSS staff, who were understandably worried about getting the right levels of support, integration issues and basic ‘what does it mean for me?’ questions. Partners for Change addressed this issue by helping develop the appropriate communication messages for the relevant audiences within the organisation.

It was also important to recognise the longer-term value of the project in terms of knowledge transfer. Members of the actual project team were required to spend a significant amount of time analysing the company’s business needs, deepening their involvement in business processes and ultimately becoming involved in decision making with top-level executives.

The FSS project is a success story. Most importantly the project has added invaluable success to the team at FSS. This means that the project has not just helped FSS financially but also in terms of people and skills.

Steve Windsor is with Partners for Change.

Partners for Change helps leaders of major change initiatives to succeed. It specialises in process and organisational transformation in business functions such as IT, HR and Finance.

It has an established track record of success in managing the leadership and cultural challenges of major change initiatives whether the driver is a change in technology, process or organization. www.partners-for-change.com.