Managing Change-John Knight and Catherine Inskip presentation

Editor's Notes

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2. Cath iESE started in 2004 as a voluntary collaboration of local authorities along with Police, Fire and Health iESE incorporated in 2011 and began its life as a mutual in 2012 We are a social enterprise not for profit A Company limited by guarantee, owned by public bodies A Board of Directors appointed from members Owners also appoint representatives to the iESE AGM
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4. John ‘To sustain or even enhance services in the current (and future) financial environment means stepping away from traditional and perceived models and delivering real innovation, re-design and a total focus on exactly what public service customers – tax-paying residents – want. Councils are often on a journey from improvement to transformation to innovation, and can be in different places in different service areas at any one time. This reflects the complex nature of local services, with different communities and political priorities across the country. However iESE projects across the country have identified that whatever stage they are at, the options and opportunities for most councils are similar: Level 1: Departmental-level changeLevel 2: Transactional-level changeLevel 3: Demand-level changeWhere is your organisation? And where should you be going next?
5. John The White Paper: Set out our view of the strategic reform initiatives and service options which have provided good practice and delivered savings to date – creating the draft 3R reform model. It shared what we has learned from work with local authorities. Quantitative research with more than 150 councils to identify their reform priorities, what stage they are currently at and shaping a view on a single framework for improvement. Qualitative research with members and chief executives
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7. John We asked a range of quantitative questions in the survey to establish where councils are in transformation activity at the moment – which level of the model they’re performing at, and what their future requirements are.
8. John The feedback on this question was clear – that while many authorities believed they were operating strongly at Levels 1 and 2, there would have to be a paradigm shift towards Level 3 as the norm in future. There us a clear acceptance that what was considered innovation in the past must now become embedded, and the next step must be to reinvent services, reduce demand and look at far more commercial and partnership solutions as standard. Reviewing is no longer a way to solve the fiscal crisis.
9. John The answers to this question show the biggest consensus of all the data: Cost control, considered an essential reform activity five years ago, is now simply seen as the expected norm – with just over half of councils saying this is their main priority. Many are now saying cost controls and effective commissioning will be lesser priorities and should be seen as business as usual. The focus should be instead on shared services, new trading models and complete organisational transformation.
10. John Understandable that going into the future there are lower levels of confidence. Worth noting that only 1% said ‘very confident’ in the long term.
11. John Not about protecting residents from cuts. About re-purposing the council. This is about understanding the needs and preferences of residents and responding appropriately to that. Some respondents felt that the impact could be ‘positive’ as opposed to ‘negative’
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13. Cath But forget all of the theory, how do all of these things translate into activities. What have local authorities been doing to deliver against the change, and what are the keys to success? Using the same criteria as the 3R model, the kinds of activities that have been occurring at the review stage are reviews, service by service of efficiencies – using things like Lean and systems thinking to drive out waste and failure. Also cost control – both keeping a tighter internal spending and income (charging for car parking!) or managing external spending through things such as procurement reviews. We have also considered the most fundamental of shared service arrangements to be level 1 activity – as this is about two or more authorities shared services and generating economies of scale. At the level 2 remodelling we have included customer insight – this is about the council delivering the service in a way that is more focussed around the customer’s needs than the internal service structures. Much of this is about understanding demand. We have also put new trading model at this level – as these are about looking for opportunities to do things differently for the whole organisation. Finally organisation restructure. This leads on from the other two and is about structuring the organisation around the needs of the customer. In many authorities these restructures are often technology led. At level 3 there are two main activities – strategic commissioning and organisational transformation. These are both whole system, planned change, that involve re-thinking the purpose of the council and understanding the needs of the customer, before you even start to consider what you are going to do. These are what we call the hard changes. However, in our experience, none of these changes, at any level, will ever be successful without the ‘soft’ change which need to be present. Behaviour change is key. It is not a different skill set, but a different mind set that needs to be present in council employees. There is also a specific change of behaviour that is around business and commercial acumen
14. Cath E.g. Efficiency, Lean, Process, Procurement Where the majority of authorities have and are doing It may sound basic but there is still a long way to go in this area. Standing in a council reception for 10 minutes is more revealing that pawing through any statement of account or key performance indicators. One of the occupational hazards of our jobs is getting parking tickets for overstaying our welcome at local authority car parks. It’s almost worth it, as trying to pay the fine can speak volumes. I once tried to use a ‘self service’ fine machine in a council reception, only to have it snatched off me, was bundled to the reception desk, made to fill out all the paperwork in long hand and was then bundled back to the machine so that the receptionist could entry all the details on the machine. Reason – the payment machine system didn’t talk to the finance machine system. The 10 to 20% saving held true. When ever we went to talk to a council who had been star struck by a conversation with one of the big 4 consultancies we would ask how much they said could be saved. Answer – 10 to 20%. Sometimes they were much more scientific – 16% or 18%. Our answer these days is generally ‘how much do you need to save, and what’s your appetite?’. 5 years ago, this was the focus of our work. There was a lack of capacity or capability to deliver this. It has now become the day job – continuous improvement and controlling costs. It’s laudable, but the danger of this approach on its own and of ‘lean’ is that that it can help your be incredibly efficient at doing the wrong things. We don’t say more for less anymore. And one of the inevitable consequences for these reviews is a reduction in people. But at this level we still employ people with the same traditional, expectations and values of the past – job for life – e.g. pension, rigid structures and hierarchies, annual performance appraisals and pay progression, etc. (eg NSG) If we need something different, are we prepared to employ differently (don’t mean use consultants, interims etc. who come and do the different stuff while we get on with the day job) Are we be prepared to pay more – or differently? Compete in the job market to get the right people with the right skills and behaviours There needs to be a fundamental shift in thinking about what the jobs and roles are.
15. John Redesigning the organisation to put the customer at the centre – internal change – solving what we we do by doing it better Local government has, for eternity, been structured around groups of professionals – planning professionals, social care professionals, waste and recycling professionals – delivering professional services. This can often be quite internally focussed – deciding ‘what’s best’ for the customer. A good example of this is the way services are designed, described and delivered on web site. The professionals will tell you everything they know about planning, social care, waste etc, not what I need to know to access those services. I recently told a local authority that if I had tried to make a planning application by using the content of their website I would have broken down and cried. After a few days analysis – listening, talking and understanding – we concluded take 75% of the contacts (telephone and face to face) to the council was because of a failure in how they communicated information. For them, a small council, this equated to around £1.5M wasted effort every year. Ownership is another huge problem – where a customer is bounced around from service to service, person to person, council to council to try to solve their issue. Councils at level 2 are creating ‘case managers’ to own and deal with peoples’ issues end to end. Professionals only get involved where there is a judgement based decision, which glean from their professional knowledge and experience. It is desirable to divide up the professional element of the work, from the customer element. And by working with authorities in this way we have often seen that huge savings can be extracted by focussing the professionals on the high priced, highly complex tasks. The case managers, who are not a customer/call centre become a very valuable commodity for the council, filtering and managing demand. However, whilst reducing demand, shifting channels and putting the work in the most appropriate place can generate savings of 20 to 30%, the focus here is still around internal structures and services and managing the demand. To go beyond this, another step change is necessary.
16. Cath At this level it is about council taking a good hard look about what their customers need – by asking them. It is not about managing demand, it is about understanding and anticipating need. And when ever possible preventing it. Prevention strategies in vogue varying degree of success – but something someone does not embedded in organisational activity (Swansea) Challenging demand means challenging many of the ’statutory’ requirements that often many local government officers will tell you they have to do. At best this is a waste of effort, at worst a smoke screen to prevent change. External - Lots of this in social care (more money to do the wrong thing) Internal legal depts – use legal as a way of not taking responsibility or decisions Business and commercial acumen Commercial acumen. We often work with councils who describe themselves as ‘families’. I recently was working with one that described itself as being like a ‘family business’. I had to have a frank conversation with the CX and tell her that they are not a family, or a family business – they are a business Level 1: reviewing - councils have long been trading spare capacity with other councils. Level 2: redesign – trading outside of the council and selling services. Issues – impact on local economy. Lack of commercial skill meaning costs outweigh income (profit) Level 3: Reinventing – Undertaking real commercial activity, to provide long term financial sustainability whilst also adding public value. E.g. Eastbourne Council has invested into a broadband company to ensure the growing need for access is met, reducing demand on other services and increasing ability to access services online in a non-metropolitan area. E.g. Many authorities are operating an commercial property activity – home building, commercial premises etc. to generate revenue for the council, while others were using it to meet demand management and outcomes for communities – for example integrating housing with regeneration and ensuring enough affordable housing would be available to meet local demand and reduce housing benefit reliance, or to enable older people to live longer and more independently (reducing social care reliance). Some just financial. Increased maturity in how to do this. Initially setting up trading company to solve problem (e.g. financial, governance, performance, etc.). Commissioning Skills needed include: issue definition (output based structures rather than outcome and understanding) therefore relationship management, procurement, business analysis, contract management, negotiation. Many of these skills missing or partly developed within authorities Technology Question of whether information technology is a standalone theme to enable Level 3 activity reinvention or beyond E.g. Emerging software solutions for service access, technology does offer a significant step forward. We also wondered whether it could in fact form another level of the model altogether. Technology is a continuous presence throughout all levels of the model, as a means to deliver an outcome rather than a solution in its own right. And for that to happen need to have sufficient intelligence to identify, specify and implement technology enablers not just buying what the market is offering People But still employ people with the same traditional, expectations and values of the past – job for life – e.g. pension, rigid structures and hierarchies, annual performance appraisals and pay progression, etc. (eg NSG) If we need something different, are we prepared to employ differently (don’t mean use consultants, interims etc. who come and do the different stuff while we get on with the day job) Are we be prepared to pay more – or differently? Compete in the job market to get the right people with the right skills and behaviours Behaviours and culture At this level, as well as commercial behaviours, there are a whole set of other different behaviours needed. Creativity, innovation, challenge. There needs to be a changed attitude to risk – from one that says ‘how do we prevent this risk occurring’ to one that says ‘how much risk are we prepared to tolerate’. Culture shift – inward downwards backwards to outwards upwards and forward Leadership And with all this come a new leadership requirement. In steady times, leaders were there to keep the ship on course – much more task based. In these times leaders need to be transformational (sometimes) and keep the ship on course (sometimes). They need to be flexible and to be able to respond. We refer to this as situational leadership.
17. John Understanding customers - Public value vs income generation Need to remain relevant ‘survival plan’ Talk of 20 authorities that could be about to implode Re-invention is the only game in town if reductions equate to over 50% The picture is mixed A framework is necessary to help the whole sector Culture is key White paper out now.