By Shaw, David; Whittington, Richard
European Business Forum , No. 14
How can you modernise a government organisation to produce a step change in its delivery performance within a limited period of time? And what capabilities do you need to manage an organisational change programme successfully to achieve that result?
Recent research conducted across a range of public and private sector enterprises, sponsored by the UK's Chartered Institute of Personnel and Development (CIPD), has highlighted the scale of the challenges involved (Mayer, M, Smith, A and Whittington, R, 2003). Such programmes, the research concludes, mostly fail to achieve the objectives of improving effectiveness and efficiency, and some actually make matters worse. Most take longer than planned. Only a small majority are completed within budget.
One programme which we believe has achieved conspicuous success and illustrates some of the wider lessons contained in the literature is that carried out by Arts Council England (ACE), the national development agency for the arts set to invest some [euro]3bn of public funds (including money from the National Lottery) between 2003 and 2006.
The programme dates back to July 2001 when radical proposals for changing the system of support for the arts in England were first published. These required a merger of The Arts Council of England, based in London, and the ten independently constituted Regional Arts Boards, to create a new, single national body with some 600 employees (named 'Arts Council England' in February 2003).
The vision was for a devolved organisation in which a national office would deal only with those matters that could not sensibly be handled at regional level. This would include devolving to the regional offices--within an overall national strategic framework--responsibility for determining grants for, and managing relationships with, all funded organisations.
The scale of the upheaval and the changes in behaviour required of management and staff were formidable and demanded a fundamental organisational change programme. Based on discussion with Pauline Tambling, ACE's Change Programme Director with day-to-day responsibility for implementing the programme, and Hilary Boulding, one of Pauline's team, this article sets out ideas which will be relevant to those planning similar exercises in both private and public sector enterprises.
Three challenges in organisational change
The CIPD work (see box) identifies three key challenges that managers face in seeking to deliver organisational change programmes successfully: the need for clear leadership, the need to win over hearts and minds in a tight, budget-constrained timescale, and the need to manage complex change cohesively.
Leading enterprise-wide change
Senior managers with a wide 'repertoire', based on diverse and rich experience, can play crucial roles in supporting organisational change that improves performance. Sometimes, however, the limitations on senior managers' repertoires can constrain their organisations' approach to managing change and reduce the chances of success. In these circumstances senior management teams need to identify the gaps in their repertoires, and to seek to learn from sources outside their own organisations so as to fill the gaps.
This point is particularly important because of the growing research evidence that complex, enterprise-wide programmes of organisational change have a far more positive impact on performance than more limited change initiatives. The CIPD research shows that enterprises that implement cohesive programmes of complementary changes in organisation structures, business processes and supporting systems achieve the biggest improvements in effectiveness and efficiency. This reinforces other research sponsored by the Economic and Social Research Council (ESRC) and PricewaterhouseCoopers (PwC), which showed that those few enterprises (fewer than five per cent out of a sample of 450 European companies surveyed) that undertake multi-dimensional programmes of complementary organisational changes achieve much better performance than those undertaking individual changes in isolation (Pettigrew, AM, Whittington, R, Melin, L, Sanchez-Runde, C, Van den Bosch, F, Ruigrok, W and Numagami, T (Eds), 2003). …