Managing Change in the Public Sector

Penna plc, the HR Services group, has produced an interesting review of the challenges faced by public sector organisations as a result of the Comprehensive Spending Review

It is not that the absolute number of job losses is so very large.  Of course, 490,000 is a big number but set in the context of a public sector work-force of 5.53 million, that is equivalent to only 2% per year over the four years to 2014-15, which – even though the forecast is loaded towards the latter two years – should be easily managed through natural attrition. 

The challenges are more subtle than that.  Across the board, public sector organisations need to radically change their practices, processes and culture to imbue a more commercial approach to their activities.  As Penna points out, this needs to be achieved whilst maintaining the commitment and energy of existing employees who will be facing hitherto unseen levels of change and uncertainty.  That average job tenure in the public sector is 31% longer than in the private sector (10.1 years compared to 7.7 years, according to the think-tank Reform) and average redundancy costs are more than double (£17,926 compared to £8,891, per Reform) speaks to the public sector as a last bastion of the “job-for-life” attitudes which have all but disappeared in the private sector.  Penna notes that the lack of individuals’ career-management skills will be a major issue for organisations to manage.

Public sector organisations will need to attract the skills necessary to deliver required change whilst ensuring that they retain the institutional knowledge required to make the change effective.  Almost by definition, the most valuable institutional knowledge will be in the heads of the longest serving and most expensive individuals.  Not only that but a sizeable culture clash will need managing throughout. 

It is not explicit in Penna’s review but it strikes me that a creative, “flexible working” approach is at least part of the answer here.  Some of that invaluable knowledge could be re-engaged on a project basis (not the more-than-you-ever-earned-before scandals that regularly make the tabloids) yielding the win-win of allowing the organisation to access institutional knowledge cost-effectively whilst offering the individual the possibility of some work perhaps whilst constructing a portfolio career (for which Barrie Hopson and Katie Ledger’s book is essential reading).  It’s not an option which will appeal to everyone but when piloted in one private sector company it met with almost embarrassing popularity.  The model was first espoused by Charles Handy in his 1989 book The Age of Unreason when he described the Shamrock Organisation.  Since then, the steady advance of technology has enabled the Shamrock concept to become a reality for any organisation, at any scale.  Individuals and micro-businesses can partner with large corporations and those corporations can exchange information across boundaries and across the leaves of the shamrock.

Microsoft’s recent set of white-papers on the Hybrid Organisation explored similar ground and extended the concept to show how a hybrid approach can lead to a more agile, leaner and greener organisation.

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