Sound familiar? As leaders, we see the need for organizational change, and too often our stock response is either to consolidate functions or break them apart. Just look at the new mega- Homeland Security department. It happens at state and local level, too - problems are identified and "reorganization" is given as the answer.
At PSG, we find reorganizing to be a rather weak transformation tool. For one thing, no matter where you draw the line to create a new organizational boundary, it will be messy. People or functions will simply refuse to fit neatly - there will be reporting relationships, employee classifications, and space issues to sort out. The usual result is that reorganizations create a lot of activity, but most of the energy generated, both in anticipation of and during the period of transition, is directed at the bureaucratic structure and the people inside. With only so much energy available, reorganization diverts energy from the work to the work place.
Reorganizing diverts energy from the work to the work place.
This Connie's Corner showcases alternate transformation tools
that keep a steady focus on the work results that
external customers care about.
But when I recently railed against this rush to re-shuffle the deck chairs, a former State legislator chastised me, saying, "Give Legislators a break, Connie. A merger - or dismantlement, for that matter - is the best tool we have at our disposal to offer the general public the sense that something is happening."
I considered her challenge an important one. For me, it elicited two further questions --
- What better "tools of reform" are available to Elected officials?
My partners, Peter Hutchinson and Larry Grant, recently recapped these alternate tools in a memo to a large city mayor. (We have included references to David Osborne's book The Reinventor's Fieldbook if you want more details on any of what follows.)
- Separate steering from rowing. (Page 105 in the Fieldbook)
Steering organizations set policy and use resources to purchase results. Rowing organizations produce results that they "market" to steering organizations. Right now legislators have a bunch of organizations that do both.
We have found it works well to consolidate steering functions into a small organization that sets goals, uses resources to purchase results, and manages performance. This assures that the whole enterprise (state, nation, city) is headed in the same direction and allows the managers of the rowing functions to focus on the effectiveness of their rowing. The steering organization becomes, in effect, an agent for citizens - buying results on their behalf. To use this tool, elected officials don't have to move many boxes around because the vast majority of people remain in their rowing organizations. But they would need to sharpen their focus on what results are to be produced - and charter a new steering organization to accomplish them.
- Use performance contracting. (Page 243 in the Fieldbook)
In the relationship between the steering organization and those who row - whether inside the public sector or with outside contractors - we recommend using performance contracts to specify the results to be produced and the consequences for hitting, exceeding or missing the targets. Performance contracting can be used to make performance matter and to align all relationships with key strategies.
- Separate service from control. (Page 119 in the Fieldbook)
There are really two different kinds of rowing organizations - those who deliver services to individual "customers" and those that deliver obligations to individuals on behalf of citizens as a whole. Right now the two are mixed together in organizations that are charged with both serving and enforcing compliance. (e.g. "I'm from OSHA and I'm here to help you.") Elected officials could get better results if they worked to distinguish compliance functions from services - and negotiate performance contracts for both. Then..
- Adopt a "winning compliance" approach to regulatory functions. (Page 355 in the Fieldbook)
Enforcement is a way to achieve compliance but not the only way. Ask yourself why so many people comply with our expectation to recycle and so few obey the speed limit? Winning compliance starts with the articulation of community norms and expectations, and elected officials need to hold a front row seat. These norms are then used to win over those who are expected to comply. We can set up compliance processes that are easy to understand and predictable - with performance standards and consequences. In this approach enforcement mechanisms are reserved for those who purposely violate the community set norms. Winning compliance is a more effective and less expensive way to conduct regulatory business.
I thank Peter and Larry for this review. If accountability for performance, alignment, lasting change, and fiscal responsibility are our common objectives, reorganization holds neither the short-term results nor long-term potential for improvement inherent in these ideas. I'd like to see them become elected officials' tools of first resort.
- 2. How might the concept of Re-organizing' be better used for Reform?
I also wanted to explore how we've thought about reorganizing' inside our client engagements. What has been done beyond the traditional re-organizing around function? I found these:
- re-organize around Customers.
My favorite, we call this service-oriented restructuring. This builds on the old adage that every person in an organization should either serve a customer or serve someone who is. There are nine steps to Service Oriented Restructuring, but it starts with identifying each unit's primary customer - those it exists to serve. Each unit must also identify the value they contribute to a "chain of service" to an external customer. Clients who have used Service Oriented Restructuring range from school districts to property tax administrators to city maintenance departments.
- re-organize around Outcomes.
We help our clients hear from their customers about the outcomes they desire - and then organize their work to produce the outcomes. Sometimes this involves work re-engineering. In others, we help clients develop performance contracts with internal and external producers of outcomes. Sometimes, we help clients improve the value produced in the "chain of service" by negotiating service agreements that specify what each unit needs from the others in order to accomplish improved customer outcomes.
- re-organize around Compliers.
We've already said that regulatory functions would do well to bring a winning compliance' strategy to their mission. One client extended this thinking to deeply consider the type of businesses that needed to comply with their laws and rules. They strove to understand whether the business was new or longstanding, the industry type it was, and its size. One group of employees worked exclusively with those businesses that were new. Others with the small businesses. A third set with those who were longstanding, but problem, compliers. It made a difference - each set improved on their expected levels of compliance.
- re-organize around Geography.
There are times when it literally doesn't make sense to travel over the same territory. In Alexandria, Egypt, we helped leaders of the wastewater treatment system re-organize. Since that agency had to interact with the public in multiple ways - communicating about the proper use of the waste system, collecting fees for the first time, responding to service calls - they decided to organize around small geographic areas. In this way, they got to know both their residential and commercial customers well, working with them upfront to reduce what goes into the waste stream and providing quick and responsive service across all functional areas.
- re-organize Information.
We all know the potential of e-inventing.' I love to see our clients use their energies to make information accessible anywhere, anytime on the Web. We recently helped a Minnesota state agency design a "solutions inventory" that will serve as a repository for all public, private, personal, and non-profit tools and resources available to help persons with vision loss retain or regain their self-sufficiency. To me, organizing information rather than staff was time well spent.
This Connie's Corner set out to shake up traditional notions of re-organizing and to showcase alternate transformation tools. My underlying intention is to minimize, or avoid entirely, any energy spent on re-shuffling the deck chairs internal to an organization! All five of the client approaches kept a clear and steady focus on the external customer. Let's go and do more of the same.
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