Strategic Change Management
in the Public Sector
Professor David Baker,
University College Plymouth
St Mark & St John
The Necessity for Change
Highly competitive environments
 Faster development needed
 Private sector – profit
 Public sector –added value
 Determining that value
 Internationalisation
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Users
Greater choice
 Raised expectations = greater demands
 Contribution to cost of services
 Need to take account of the user as
‘customer’
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e-University
Hefce pulls the plug on UK e-university The UK's
£62m e-learning university is being scrapped in its
present form after it failed to recruit enough students
or attract sufficient private investment in its first year of
operation.
Competition
‘After the primary change driver…the
customer…the actions of competitors
provide a major impetus behind attempts
to implement innovation and change
practices’ (Solomon, 2001)
 Massification and Segmentation
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Diversity and Diversification
Reflecting diversity
 Richness of thinking and approaches
 Legal compliance: fundamental shifts in
attitude and culture
 Diversification of products or services
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Legislation
Government aspiration
 Keeping up to date and staying within
the law
 Encapsulation of changes within society
 Represent shift in culture or public
opinion
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Recent UK legislation
The following have had a significant
impact on the ways in which both private
and public sector organizations operate:
 Telecommunications Act (1984);
 Data Protection Act (1998);
 Human Rights Act (1998);
 Freedom of Information Act (2000).
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Human resource management
People as core strategic asset
 Modernised human resource function
 Poor employee relations as a driver for
change
 Communication vital to improving
relations
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Technology
Revolutionary power
 Working patterns
 Changes in the nature of work
 Relationship between knowledge areas
and disciplines
 What is a routine procedure?
 What is a professional activity?
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Finance
Requirement to make a surplus
 Stay within budgets
 Effective use of available resources
 Staffing budgets
 Financial pressures
 Market approaches
 Price of services
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Internal Responses to
External Drivers
Re-engineering of processes
 Focus on quality management
 Financial accounting
 Technology transfer
 Strategic planning
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Resulting in:
Shifts from collegial to corporate
institutions
 Embracing of commercial activities
 Emergence of the entrepreneurial public
sector organization
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Key challenge
What to do
 When to do it
 How to do it
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Change Management
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‘The process, tools and techniques to manage
the people-side of the process, to achieve the
required outcomes, and to realise the change
effectively’
Context, content, process
Fit into one coherent whole
Wider environment
Solving longer-term problems by learning
lessons
Embedded, fundamental change
Strategic Change Management
Clear-defined purpose
 Strong set of shared values
=
 More successful organisation
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Strategy 1
Something to work towards
 Frames change
 Basis of communications
 Focus for effort
 Integrative tool
 Allows delegation
 Requires proactive leadership
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Strategy 2
Resource allocation
 Ability to manage change as a project
 Capability assessment
 Comparisons with the rest of the sector
 Recognise generic change factors
 Identifying and engendering attitudes
 Key skills development
 Fostering culture change
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Strategy 3
Systematic, well constructed change
management project
 ‘Route map’ for change
 Identification of requirements
 Order and pace
 Key opportunities for success
 ‘Danger’ areas
 Key prerequisites and gaps
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Key skills
Business – external environment and
user demands
 Political – Organisational situation,
power bases and key influences
 Spiritual – vision and values
 Emotional – ability to understand and
empathise with feelings – self and others
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Strategic change management:
techniques
Means to an end: no single approach
 What, how, when, who, what impact,
where?
 What the organisation has/has not?
 Help or hinder?
 Drawing up of strategies and plans
 Environmental and market forces taken
into account
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High level strategic techniques:
Benefits
Improved quality of decision making
 Identification and handling of problems
and opportunities
 Appropriate view taken: broad (strategy);
focussed (implementation)
 Performance indicators based in
environmental factors – comparison and
monitoring throughout
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Foresight
Analysis of broader environmental issues
‘informed by deep insights into trends in
lifestyles, technology, demography and
geopolitics’ (Hamel and Prahalad, 1994)
 Art and science
 Create scenarios
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Delphi
Qualitative forecasting - team approach
 Based on iteration of one or more future
scenarios
 Eventual agreement reached for
forecasting purposes
 Provides a future framework/set of
scenarios for specific analyses
 Integrates different data sources
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Environmental analysis
Analysing and understanding the
environment in which the organization
operates essential
 Determines future strategic direction and
what needs to be changed
 Broad as possible approach
 Early hints of major change not always
obvious
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STEEPLE
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Socio-cultural eg population structure, lifestyle choices
 Technical eg impact of internet, emerging
technologies, technology transfer, R&D
 Environmental eg local, national and international
 Economic eg stage of cycle, employment levels,
income
 Political eg type of government, levels of freedom,
legislation
 Legal eg national and international
 Environmental eg ‘green’ legislation
STEEPLE +
Values
 Ethics
 Education
 Demography
 Internationalisation.
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Key stakeholder groups
Primary - Direct interest in the strategy – typically
employees, and especially senior managers and those
groups and institutions that fund the programme of
work that the strategy generates and that have a
financial stake in the organization to which the strategy
pertains
 Secondary - Indirect interest in the strategy – typically
those who use the organization whose strategy it is, or
who supply goods and services to it
 Tertiary - Remote interest in the strategy – typically
those who are interested in the key actions of the
organization and how those actions are performed,
such as government agencies or pressure groups
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Stakeholder themes
Stakeholders have demands – things
that they have to do and which they will
need to have satisfied if they are to be
supportive
 They will have choices and will wish to
exercise them
 They will be operating under constraints
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Defining benchmarking
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A predetermined set of standards against which future
performance or activities are measured
Involves the discovery of the best practice, either
within or outside the business, in an effort to identify
the ideal processes and prosecution of an activity#
Purpose is to ensure that future performance and
activities conform with the benchmarked ideal in order
to improve overall performance
Increased efficiency key to the benchmarking process
Leading to a more competitive edge
Determines priority areas
Portfolios and Markets
Review products or services
 Review market
 Product or service development mapping
 Enhancements and other changes
prioritised
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Scorecards
Balanced scorecard – summative
approach for position and performance
 Innovation scorecards – real capacity to
innovate
 SWOT – tried and tested, still valuable
 7S model – integrative SWOT
 Content, Context and Process model –
emphasis on fitness for purpose
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The four perspectives of a
balanced scorecard
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Financial Analysis: cost-benefit; financial
risk assessment; organizational improvement
 Internal processes: Identification of
organizational performance in relation to
customer/user expectations
 Learning and growth: Identification of where
training and development most needs to be
targeted
 Customers/users: Analysis of different types
of customers/users and their satisfaction with
the organization, its products and services
Innovation scorecard
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1 No real level of innovation, and no plans to
innovate
 2 A basic level of innovation is evident, with a
degree of motivation amongst the senior
management to change
 3 Innovation is a stated and implemented key
objective of the organization
 4 The organization is ‘best of breed’ in
innovation and innovatory performance
SWOT
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Strengths: Areas in which the organization has strong
capabilities or a competitive advantage, or areas in which it may
develop capabilities and advantages in the time period covered
by the Strategic Plan
Weaknesses: Areas in which the organization is lacking the
capabilities necessary to reach its goals, or areas that can be
expected to develop within the time period covered by the
Strategic Plan.
Opportunities: Situations outside of the organization that, if
capitalized on, could improve the library’s ability to fulfill its
mission. These may exist now or develop within the time period
covered by the Strategic Plan
Threats: Situations external to the organization that exist now or
may develop in the time period covered by the Strategic Plan that
could damage the library and should be avoided, minimized, or
managed(Siess, 2002)
7S model
Strategy
 Structure
 Systems
 Staff
 Style
 Shared values
 Skills
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Content, Context and Process
Emphasis on organizational fitness for
purpose and historical, cultural,
economic and political contexts
 Environmental assessment
 Human resources as assets or liabilities
 Linking strategic and operational change
 Leading change
 Overall coherence
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Some more specific tools
Force field analysis – facilitates
identification of drivers of, and resistance
to, change
 SIPOC – identifies all relevant elements
of a process improvement project
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SIPOC
Suppliers
 Inputs
 Process
 Outputs
 Customers
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Approaches 1
Choice of tools and techniques based on
assessment of what is appropriate
 Each situation is different and dynamic
from previous ones
 Multi-faceted approach best
 Embrace complexities, including internal,
external and politic realities
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Approaches 2
Gather enough, not too much,
information
 Combination of ‘hard’ and ‘soft’
approaches likely to work best
 Begin with harder techniques to identify
imperatives
 Soft approaches involve and empower
all those who will be affected
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Techniques at work
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What does the future hold? Delphi
What is the core environment? STEEPLE
What do our stakeholders want? Stakeholder analysis
How are we doing relative to others? Benchmarking
Are we offering the right products or services? Portfolio analysis
What do the markets want? Market analysis
Where are we best and worst placed? SWOT
How do we bring it all together into a plan for the future that can
be measured against delivery? Balanced scorecard
Is the organization fit for purpose and well integrated? 7S
Is the organization ready for change? SIPOC
What is in the organization’s favour and where will the resistance
come from? Force Field Analysis
Conclusions 1
Use influence and strategic thinking to
create a vision and identify those crucial,
early steps towards it
 Recognize the dissatisfaction that exists
by communicating [sector] trends,
leadership ideas, best practice and
competitive analysis to identify the
necessary change
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Conclusions 2
Whole series of processes, approaches
and styles for particular environment
 Subtle mix of art and science: directing,
navigating, caretaking, coaching,
interpreting and nurturing
 Develop processes for the strategic
management of change
 Change will bring continuity
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