A client is undergoing a significant government re-organization.  Specifically, what was an independent agency is becoming a Ministry (let’s call it the Ministry of Plans, MoP).  As well, functions and responsibilities in other Ministries are being transferred to the MoP.  

[IMAGE]

Defining Change

Looking back over a 30-year career, I count 2 Significant-Reorganizations that I was directly or indirectly involved in and about 30 Other-Reorganizations.  By way of definitions: 

• Significant: the product or environment of the organization has changed radically.  For example, healthcare amalgamation in Alberta in the mid-1990’s or a consulting company being sold to a telephone company.  
• Other: more of the garden variety re-organizations to achieve efficiencies, effectiveness or because the organization wants to avoid having to make a difficult decision.  
• Direct: managed the changes (but did not precipitate the change). 
• Indirect: affected by the change with little or no input thereto.
• Restructure/Reorganize: interchangeable terms.

How (NOT) to Reorganize

Each change was unique in its own way.  One of the constants was the chaos, uncertainty, loss productivity, reduction of employee morale and then the slow climb back to operational-fitness afterwards.  

The literature and internet are full of best practice advice and lessons learned.  Most is focused at a corporate audience, which according to Gartner [1] … less than half (42%) of OD (Organizational Design) restructures are clear successes, and over a third (37%) take longer than expected.  HR leaders report the top three barriers to successful redesigns as:

• Unclear or competing priorities
• A lack of understanding of new roles and responsibilities
• An unclear division of responsibilities for implementing a redesign

Change is constant

If the private sector struggles with organizational change, pity the public sector.  Cabinet shuffles, Ministry re-jigging or the creation/absorption of Crown organizations occurs periodically.  

The following are some personal lessons learned, observed or research on how governments may wish to approach a re-organization.  

The Big Steps

The following 10 steps represent the key milestones that a government should (ideally) follow.  Some specifics in bullet form are more of a laundry list to be considered or rejected as applicable.  

1. Why: What is the Purpose, Benefit or Crisis Behind the Change?

• Why Does the Organization Exist, what are its objectives?
• How does this change the vision and mission?
• What is the time frame for the change and the intended results?
• Possible reasons for reorganization:
  • Improve customer and stakeholder satisfaction.
  • Improve efficiency; e.g., eliminating redundant approvals.
  • Reduce cost and risk.

2. Success: When the Smoke Clears, How will Success be Measured?

• The restructuring project should have defined, measurable goals consistent with the organization’s strategic plan. These goals should be defined in both monetary and non-monetary terms. [2, p.8]
• Compare your data to known benchmarks and identify performance gaps, i.e. gaps between actual vs. desired performance.
• Environmental Scan, who has done this before and what are their lessons-learned?
• Don’t forget about the things that cannot be measured but which do matter:
  • Preserving or promoting a positive organizational culture,
  • Employee motivation,
  • Organizational adeptness
  • Trust in the Organization
• Forbes magazine provides “10 Guiding Principles Of Organization Design” which includes a best practice for restructuring.  Not for the faint of heart. [3]

3. The Boss: Who is in Charge of the Change?

• What is the Chain of Command for the change and how does it differ from the operational or normal hierarchy?
• Clarify who has the decision-making authority for which decisions at for what scope?
• Ethics and values monitor – who can the organization turn to for doing the right thing.

4. The Plans: Strategic, Tactical and Operational Plans.

• Does the organization know how to do Operational and Tactical Planning to sustain or enhance the above?
• The time-frame and implementation plan for changing business processes, organizational roles, and the organization structure.
• How will the plans be monitored against, modified and how gets the variance reports (ideally before things go off the rails).
• Records, Content and Document Management Strategy.
  • A core function of governments is to preserve citizen records, privacy and public information requirements may also impose limits on organizational records and their disposition. 
  • Develop a record, content and document management strategy.  

5. The Affected: Communications and Change Management.

• Engage Stakeholders
• Identify the different groups who will need communication and the different messages/information they will need
• Review and update mediums and messages (e.g. with management, clients, staff, press, public, etc.)
• Individual and focused meeting in addition to the above general communications.  

6. Your People: The staff and Contractors Who Deliver.

While staff and contractors fall into the above step, they are different and important enough to warrant their own considerations. 

• What skills will be required in the new structure, are these: 
  • The same as before,
  • Broader scope, complexity and technical competence.
  • Elimination of skills or competencies
  • Need for net-new skills
• Assess the skills, knowledge, and experience of department employees including potential and readiness for new assignments.
• Before and after organization charts
• Job descriptions for new, changed positions
• Names, titles of employees to be affected by changed or eliminated jobs, new reporting lines, physical relocation, or reduction in time
• Layoffs, redundancies and Union/Labour Relations Impact.

7. Product: What Outputs or Intended Outcomes will Change?

• What outputs and outcomes are currently produced?
• Which products will stop, be merged, re-branded or created net-new in the new organization?

8. Process & Plant: What will be Unaffected, Stop or be Net-New?

• What are the Current Processes to produce or support the above products?
• What processes will continue, be merged, stopped or need to be created net-new to deliver the new-organization’s products?
  • Before and after flow charts to help clarify the transition of business processes.
• Do the People have the right Operational knowledge to operate the systems they are responsible for?
• Identify your opportunities for cost reduction, improved efficiency, and/or increased effectiveness and set improvement targets which may include:
  • Elimination of non-value-added processes
  • Standardization, simplification, and enhanced use of technology.
  • Clustering services

9. The Cost of Change: Required Ad Hoc or Incremental Resources.

• What is the anticipated direct and indirect cost of the change?  This includes cash outlays (e.g. severances, new IT licenses) and non-cash (e.g. loss in productivity or trust in the organization by customers).
• Does the organization have the resources as well as the strategic and leadership capacity to Change the Above?
• What temporary resources are available to support the changes to systems, processes, staff changes, etc.  
• Financial: What was the cost to restructure, were the stated objectives achieved.

10. Risk and Opportunity: (Un)intended Consequences of the Change.

• Given that the chances of a restructuring are dodgy at best (see the above Gartner reference), how will the organization track the project, operational and strategic risks directly or indirectly arising out of the change?
• More important than tracking, how will these risks be acted upon?  Particularly important if there is an insufficiency of one or more of the above steps (e.g. lack of top-level sponsorship).  
• Whether or not the change is audited internally or externally, plan to conduct an impartial review.  At a minimum it will provide lessons learned for future changes. 

Selected Sources and Further Reading: 

1. Foundations of Organization Design Part 1: Key Concepts and Relationships, Gartner, 2019.
2. Organizational Restructuring, Society of Management Accountants
   of Canada. ISBN 1-55302-045-6, 07/99.
3. RECARDO, RONALD J., and KLEIGH HEATHER. “Ten Best Practices for Restructuring the Organization.” Global Business & Organizational Excellence 32, no. 2 (Jan/Feb2013).
4. Integrated planning guide, Government of Canada.
5. Steps in Managing a Reorganization, University of Berkeley.