The insidious phrase "headcount reduction" hangs over many business transformation projects like an executioner with a fake tan. Management-speak can't hide the fact that "seeking efficiency improvements through new technology" often translates into substantial job losses. CIOs and change managers are in a catch-22 situation. Successful transformation depends on gaining the trust and commitment of those involved, but how do you persuade anyone to buy into a project that threatens their jobs, or those of their colleagues?
- Manage union conflict
- Build mutual trust with staff
- Support employees with skills training
- Sell the benefits of transformation
- How managers can sabotage transformation
For some, the recent industrial action at the Royal Mail over pay and modernisation conjures up the spectre of 1970s-style battles between unions and management. Plenty of doom-mongering commentators are warning of a likely return to those days of discontent, as the depth of the inevitable cuts required across the public sector becomes ever more apparent. But although the sector is still heavily unionised, the kind of antagonism seen at the Royal Mail is today the exception rather than the rule.
Jos Creese, head of IT for Hampshire County Council, says the vast majority staff, union leaders and managers realise they need to work together constructively. "Your team, and indeed the unions, need to understand what you're trying to do and why you're trying to do it. In my experience, working with the unions on these difficult issues has been constructive, not unhelpful. But I think if you see it as a conflict situation, rather than as working together to restructure, then you will get into difficulties," he says.
Where conflict does arise, it's often down to personalities. One local council CIO says in such cases it is best to bypass the individuals concerned. "We went through an extremely antagonistic patch which was down to a personality clash between the union branch manager and the chief executive. So we appealed to staff directly. We also started talking to the union at a regional and national level rather than going through the local branch. The personalities were changed and we now have a more realistic relationship. Obviously, the union still wants to protect its members' jobs, but it is also being more pragmatic about the realities of the economic situation. The conversation now is more about how we soften the blow and ensure people are treated fairly," the CIO says.
The key to successful dialogue is to build a relationship of mutual trust by being upfront, open, fair and honest. Hampshire's Jos Creese says: "At the end of the day, in many areas we will be talking about potential job losses. There will be a lot of sensitivities about how you do that in practice but I don't think anyone believes we can somehow fudge the issue or sweep it under the carpet. Everybody - staff, the public, employers, the unions - know we have to go through this. The mark of the best organisations will be doing it cleanly and swiftly to achieve the necessary organisational efficiencies, but in a way that clearly recognises the human cost of this and doesn't treat everybody as a number."
So what does this mean in practice? Birmingham City Council has been going through a vast multi-phase transformation programme since 2004 that touches most of the organisation. Glyn Evans, Birmingham's director of business change, says: "First of all, you have to demonstrate you're doing all you can to avoid compulsory redundancies - without actually saying there'll be none. With our first transformation programme around finance and procurement, for example, we knew we were going to require fewer people so we were taking on agency staff as posts were becoming vacant for about two years before we implemented the new processes. That meant we had a pool of agency staff we could get rid of easily and painlessly."
Glyn Evans says Birmingham has also tried to ensure it has an open, ongoing dialogue with staff, continually talking through the proposed changes and what they mean. And everything you do must be demonstrably fair, he adds. "You have to be able to show you're not picking on individuals. It has to be a robust, transparent process. When we were trying to slot staff into the new roles in finance, for example, we recognised we had a lot of people here with long service. If you haven't done an interview for 20 years, it's daunting to think your job might depend on one. So we gave people opportunities to go on courses in interview skills, as well as setting up assessment centres so it wasn't just the interview that was important in identifying a suitable role for them."
Richard Steel, until recently CIO of Newham Borough Council, agrees: "You need to give people the opportunity to hone their skills to ensure they stand the best chance of hanging onto their jobs, and for those that do go you should provide help with CV preparation, training, access to alternative job opportunities and so on."
Both Richard Steel and Glyn Evans share Jos Creese's view that it is critical to engage openly and constructively with staff and unions. Evans says: "The union's perspective doesn't always align with our own, but that doesn't mean we can't have a dialogue. A lot of the time, access to information is one of the key issues. If people don't know what's going on, they tend to invent it. So we have union representatives on the programme boards, with access to all the papers. We're not removing any of the formal consultation that follows - but now they are better informed about what we're trying to do."
Evans adds that as well as being upfront about any downsides, it's equally important to communicate the benefits a successful transformation will bring for staff who remain. "Most people would rather work for an efficient organisation than an inefficient one, so it's important to show them what's in it for them after the transformation. For example, there are more development opportunities and a better career path for staff here now we've been through this process than there was before," he says.
Yet there is a real danger of organisations shunting best practice to one side in the urgency to cut costs, as well as the problem of change-resistant managers scuppering your chances of success (see box). But as Steel says: "You need to be aware that as well as surviving the tough times, you also need the right capability to succeed in future - and that means not alienating the people you've got to work with. I think virtually everyone is capable of being reasonable and realistic if they think they've been fairly treated and supported by an employer."
|How managers can sabotage transformation|
| Many CIOs concede the biggest obstacle to keeping transformation on track is a lack of commitment from senior and middle management. When bosses fail to "walk the talk", promises of fairness and openness ring hollow, setting you on course for staff cynicism, conflict and ultimately failure.
One council CIO says: "If you have an old-style manager involved in a programme who fails to deliver on your promises of inclusivity, for example, it reinforces people's prejudices. And as soon as you get one example it can tip the whole programme out of kilter."
He believes the problem is widespread: "In local government, I'd say the majority of managers still have a relatively old-fashioned perspective on leadership and management - and it's a serious issue in the private sector too."
Richard Steel, former CIO of Newham Borough Council, agrees. "For a long time the biggest struggle has been with managers who want to preserve their empires," he says.
Jos Creese, head of IT for Hampshire County Council, recognises the problem, but believes it's not down to managers feathering their nests. He says they're simply unable to grasp the fundamental changes they need to make. "Their experience, skills, remuneration and status are generally based on an old model. They can't grasp the new world so they're clinging to the old one," says Creese.
But what can you do about it? Steel believes the growing pressure to achieve organisational efficiencies will force the old guard to either step in line or ship out. "The severity of the economic situation means their position is becoming increasingly untenable. We're already seeing more managers having to take direct responsibility for their own business efficiency. And the shake-out's starting to happen as older managers approaching retirement are given packages to go early. Younger people and others who understand the bigger picture are rising up the ranks. Natural evolution is being accelerated by the economic conditions."
And if change-resistant managers think they can stick to their old ways and weather the storm, they are mistaken. As Creese says: "The pain of transformation will be just as severe - if not more severe - at the middle and senior management levels."