Going beyond organisational transformation

This article was first published on Government Business

Many organisations are facing dramatic, large-scale change. This is challenging enough, but with increasing interconnectedness, change is spilling over organisational boundaries. Technology is making organisations more connected, blurring boundaries between them. Customers empowered by the same technology now expect a seamless experience. And of course legislation and regulation can often affect whole sectors, rather than individual organisations.

Such ‘system-level’ change is becoming more prevalent in the UK. Now government departments are coming together to tackle large-scale issues like security and healthcare. Police, security organisations, education authorities and the courts are collaborating to strengthen child protection. And NHS organisations and local authorities are working to integrate health and social care services.

Successful change always depends on its leaders. And when it affects a whole system, the demands are even greater. Having a network of collaborative leaders is therefore essential.

There’s no instruction manual

Much has been written on organisational transformation and the characteristics of successful leaders. But there’s little to rely on for system-level transformation. Leadership and decision making are particularly hard when there’s no single point of authority across autonomous organisations which can’t or won’t delegate control. When costs and benefits land in different organisations it’s hard to break the ‘organisation first’ mindset. And it’s harder still when decisions in the best interests of the system as a whole are at odds with organisations’ goals. But based on our experience working on such transformations, we know, however tough, they are deliverable and leadership is key.

A strong coalition is essential

These transformations need a collaborative network of leaders – a small group of individuals who ‘get the big picture’ goal and have credibility across the various parts of the system affected. They’ll need to share insights and resources to help overcome challenges and build strong mutual trust. The group doesn’t need to be formalised. In the electricity liberalisation programme, for example, it included individuals from the regulator, the government department, a couple of the electricity companies and a consumer representative.

So how does such a group come together and what should they focus on? In our view the leadership group needs to form and set the programme up for success by: defining and uniting behind a common vision to set a clear direction, recognising when enough is enough; empowering local teams to mobilise and produce change from the bottom up; and bringing your best people together to help keep the top-level vision and the bottom-up change joined up.

Define and unite behind a common vision

As with any transformation, the leadership group needs to provide direction through a clear ’picture’ of the future system. It won’t be possible to create a detailed design of the end state – it takes too long and the system is usually too complex. So key is deciding how far to take the design and when it’s enough to provide the direction the programme needs.

In creating this design, leaders may have to make decisions in the best interests of the system that conflict with their organisations’ priorities. Trust needs to be built through this process, but it takes time and effort to develop. Tackling tough issues upfront, like how money will flow through the system, and where costs and benefits will fall, is crucial. Don’t waste time defining ‘clear governance structures’, ways of working and delegated authorities; it consumes time and energy and yields very little.

The implications of Brexit for the borders system illustrates the challenges. With many stakeholders involved across government departments, the private sector supply chain of port operators, travel organisations and non-UK stakeholders, no single person or organisation can anticipate and tackle the conflicting priorities and cost implications across the system. Success will be determined by whether a leadership group establishes effective decision-making that doesn’t rely on consensus between involved parties.

Support and mobilise change from the bottom up

There are numerous organisations involved in the drive to integrate health and social care. We’ve seen change directed top down getting mired in business cases, assurance, governance and even legal challenges. But change is happening, when those delivering care on the ground get together and agree how to improve things for patients.

So while direction must come from the top, it’s the individual organisations that make change happen. The leadership group have to give people within different organisations the mandate and means to come together to design changes to the system (in line with the overall vision) and put them into action.

At times the delivery teams will need to bring in specialist skills and techniques – like Agile working, which allows you to try things out and adjust as you go along. Others include enterprise architecture, analytics and modelling. Leaders need to make sure the right support is available to the delivery teams at the right time.

Put your best people in charge of keeping the top-level vision and the bottom-up change joined up The leadership group is going to need help in order to make all this happen and will need to invest in developing a really capable central team. This team will help develop the vision, establish an effective ‘control framework’ for the programme, create a capability road map of skills and resources needed and actively manage the overall delivery to make sure things stay in line with the overall vision.

The central team should also set up a ‘design authority’ – a group tasked with ensuring that the system continues to work effectively with each change made – despite no complete design and no formal authority! It should bring together individuals with the combined expertise and credibility to spot and resolve potential problems. With energy liberalisation, for example, various working groups designed different aspects of the system. They took major issues and decisions to a senior level group – the Issue Resolution Group – for resolution.

Leading from the top, transforming from the bottom

Given the challenges in transforming a system, the place to start is to pull together a small, highly capable, network of leaders – look for others who share your vision, as well as providing the accountability, credibility and drive to make it happen. Individuals who will collaborate across organisational boundaries, help to overcome the inevitable challenges, maintain a relentless focus on delivering the system vision, and keep the transformation on track with just the right level of design, direction and control.

Oliver Excell and Tony Wood are transformation experts at PA Consulting Group