Build Change Management Capability across Sectors

Question: Do you think that these sectors handle change in a similar or different way?

Although the drivers of change in the private sector and public sectors may share similar attributes e.g. financial austerity, new legislation, changing customer expectations or disruptive technology, their respective responses to these drivers are fundamentally different. A key difference between the two sectors is how each develops and employs its organizational change capability. Private sector organizations typically respond using change practitioners and resources. Although these may be augmented in the short-term by internal or external consultants with specific skills or a functional specialism, the corporate change capability is generally internal to the organization and typically embedded within the HR or OD function. Over time, the knowledge, skills and experience of these practitioners develops and, as such, organizational capability increases. With increased capability comes an attendant ability to respond more rapidly and effectively to externally and internally driven change demands. This growth path is only to be expected when there is a commercial imperative to act quickly and where, if you don’t, your competitors will and then threaten your revenue, profitability or reputation.

In contrast, large public sector bodies have, all too frequently, downsized or outsourced their change capability: the presence of a dedicated, internal change capability is now uncommon. As a consequence, when organizational change needs to be undertaken there is an increasing tendency to use external assistance (a public sector euphemism for consultants) to assist and sometimes lead the change endeavour. This approach generates a number of issues and concerns. Firstly, those affected by the change perceive that change is being done ‘to’ them by outsiders rather than being done ‘by’ them; this generates a natural response of resistance and, inevitably, a delay in implementation.

Secondly, for external change agents to understand the organizational context and culture they need to spend time immersing themselves in the day-to-day operations of the organization before they can begin to plan and implement change. This attracts an additional time penalty and a further delay in responding to the change imperative. It follows, therefore, that the absence of an internal change capability inhibits a public sector organization’s ability to respond quickly to change. Moreover, this dependence on external support; increasingly the hallmark of all public sector change, has resulted in a ‘hollowing-out’ of an organic change capability within central and local government organizations. A recent example from the Ministry of Defence highlights how the lack of an internal capability has incurred significant delay in implementing much needed organizational change and also attracted a considerable cost for the UK taxpayer:

‘The Department accepts it still does not have the skills it needs in DE&S [Defence Equipment & Support] despite years of work to reform the organization. In 2013–14 some £480 million, some 37% of total costs was spent by DE&S filling skills gaps with contractors... The Department agrees that DE&S is over-reliant on expensive contractors and DE&S is spending a further £250 million on contractors over the next three and a half years to determine how it will address this and secure the skills needed to deliver the Equipment Plan within the assumed budget and to time.' (House of Commons Committee of Public Accounts: Major Projects Report 2014 and the Equipment Plan 2014 to 2024, and reforming defence acquisition, Forty-seventh Report of Session 2014–15)

For the experienced change practitioner, who has developed his or her knowledge and skills in the private sector, we suggest you accept any chance to be involved in a public sector change initiative. Operating in a highly politicised and scrutinised public sector is not only different, it also provides a great opportunity to test and develop your change leadership skills. As the Public Accounts Committee report illustrates, governance and accountability requirements will rapidly expose gaps in your leadership ability and your capacity to plan and execute successful change; these gaps will provide a clear indication of where, therefore, you might need to develop knowledge or skills.