IMPLEMENTING LARGE-SCALE ORGANIZATION DEVELOPMENT AND CHANGE IN THE STATES

SPAEF

IMPLEMENTING LARGE-SCALE ORGANIZATION DEVELOPMENT AND CHANGE IN THE STATESAuthor(s): NEIL BOYDSource: Public Administration Quarterly, Vol. 33, No. 2 (SUMMER 2009), pp. 233-269Published by: SPAEFStable URL: http://www.jstor.org/stable/41219980 .

Accessed: 16/06/2014 01:35

Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp

.JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact [email protected].

.

SPAEF is collaborating with JSTOR to digitize, preserve and extend access to Public AdministrationQuarterly.

http://www.jstor.org

This content downloaded from 188.72.96.141 on Mon, 16 Jun 2014 01:35:46 AMAll use subject to JSTOR Terms and Conditions

http://www.jstor.org/action/showPublisher?publisherCode=spaef

http://www.jstor.org/stable/41219980?origin=JSTOR-pdf

http://www.jstor.org/page/info/about/policies/terms.jsp


IMPLEMENTING LARGE-SCALE ORGANIZATION DEVELOPMENT AND CHANGE IN THE STATES

NEIL BOYD Lycoming College

This article is a revised version of a paper presented at the 59th Academy of Management Conference in Philadelphia, Pennsylvania on August 15, 2007.

ABSTRACT

This paper highlights some of the cognitions and behaviors that state-level administrators and Organization Development (OD) change agents need to exhibit if a sustained momentum toward change is to occur. Previous research has highlighted particular states and their "reforms," but the literature does not contain specific information on implementation techniques. Details are presented from a large-scale OD process that was introduced by Governor Tom Ridge and his top administrative team during his administration in the Commonwealth of Pennsylvania. The findings were derived from thirty-seven semi- structured interviews and participant observations of the author during a five year analysis of the change effort. Interviews were conducted with Ridge staff members, executive branch upper-management, legislative members, employees in state agencies, ex-Governors of the Commonwealth, and political insiders. The findings show that success in large-scale change interventions is a function of hurdling several key obstacles that lay in the path of change. In addition, the findings highlight that particular administrative leadership skills are necessary in order to overcome these obstacles, and they shed light on factors that state administrators and OD professionals need to consider when attempting large-scale change.

The Problem During the past few decades, state governments

have turned to organization development (OD) practices in the hope of changing public governance. Most of these programs were developed during the "reinvention of government" era, and most were able to achieve



234 PAQ SUMMER 2009

incremental change (Lindbloom, 1959) or ripple effects (Light, 1997). Therefore, empirical evidence of large- scale OD implementations and the details that are associated with implementation success are lacking. Moreover, due to the fact that large-scale OD interventions are a relatively new phenomenon in general, there is also a lack of large-scale change findings in the broader fields of organization development and public administration.

A few analyses of "reform" have been conducted at an "across-the-states" level (Brudney, Herbert and Wright, 1999; Council of State Governments 1997; Kravchuck and Leighton 1993; Walters 1995), and report card analyses have been generated that compare, in a very broad sense, the fifty states in regard to large-scale reforms (Barrett and Greene, 2001). In addition, one brief report showcased administrative reforms in the state of Arkansas (Vanagunas 1999). In short, the current literature offers information on who is implementing large-scale change, and what types of change they are implementing. However, very little is known about the "details" of implementation, and very few specific recommendations exist for administrators and OD change agents regarding how they should implement large- scale change interventions in the states.

The present study is an attempt to begin to fill this literature gap, by evaluating the details of the large scale change program that Tom Ridge initiated in the Commonwealth of Pennsylvania. Over a five year period, I was engaged with the change program as an external consultant and participant observer. In addition, I gathered evidence of important issues to the large scale change event through extensive interviews with a variety of stakeholders who were intimately involved in the change agenda. The findings provide empirical support for a number of issues that state administrators and OD consultants may need to consider when implementing change programs in the states.



PAQ SUMMER 2009 235

The Context of Large Scale Change The most recent OD wave hit the states beginning

in the 1990s (National Commission of the State and Local Service 1993), and the most obvious large-scale OD programs in state government were Total Quality Management (TQM) and process reengineering techniques (Kravchuck and Leighton 1993; Milakovich 1991; Swiss 1992). These techniques, along with a host of other private business "best practices," and publications like Osborne and Gaebler's Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector (1992) facilitated the "Government Reinvention" movement. Later in the decade, the "New Public Management" movement promoted the idea of privatization of public services with the assumption that market competition leads to cost effective and quality oriented service delivery (Lynn 1998; Terry 1998).

By the 1980s it seemed that Pennsylvania had joined the "bandwagon," so to speak, regarding the use of OD methods and techniques. In the midst of Governor Richard Thornburgh (R) (1979-1987)) and the Robert Casey (D) (1988-1995) administrations, TQM was implemented in several state departments, and in some it took hold (Richard Harris, personal communication, March 15, 2002). In others it did not. TQM interventions were typically conceived within a department, and sometimes shared with other agencies, but it was never a priority of the governor or upper-level executive staff. Where it did take hold, it was promoted by the top executive leader of an agency or bureau, and implemented at multiple levels or in pockets of an organization.

The piecemeal implementation of OD interventions appeared to change when Tom Ridge ran for governor in 1994. He argued that Pennsylvania could become "a leader among states and a competitor among nations," and to achieve this objective, he advanced seven critical policy



236 PAQ SUMMER 2009

goals: (1) strengthening families and communities, (2) reinventing government, (3) creating economic opportunity, (4) promoting lifelong learning, (5) protecting our homes and communities, (6) building an environmental partnership, and (7) establishing a first rate infrastructure (Commonwealth of Pennsylvania 1995). One of the primary policy goals was "reinventing government," which had been a theme of recently elected Republican governors across the nation.1 With the creation of this policy goal, the stage was set for a comprehensive top-down vision for "doing it better" within the state of Pennsylvania.

During the first term of the Ridge administration, several events occurred that eventually led to a large-scale change effort. First, the Governor established the Keystone Committee, which was made up of business executives, to investigate "Pennsylvania's Challenges," and to report on what could be done to facilitate meeting the modern problems of running the Commonwealth (Keystone Committee 1995). Part of its analyses included a focus on government reform in the areas of procurement, operations, technology, performance measurement, and privatization of services. Soon after the Keystone Committee reported its findings, the Governor and the legislature established the IMPACCT Commission (Improve Management Performance and Cost Control Task Force) to study the management of current government operations and the experience of other states in an effort to propose changes which would reduce costs, increase accountability, and improve service (IMPACCT Commission Report 1996). After several months of study, the IMPACCT Commission

Among the gubernatorial leaders pushing organization development programs were the so-called "invincible five" GOP governors of Ohio (George Voinovich), Illinois (Jim Edgar), Wisconsin (Tommy Thompson), Michigan (John Engler), and Minnesota (Arne Carlson) (Greenfield 1994; Peirce 1995).



PAQ SUMMER 2009 237

recommended over fifty major operational changes (and 450 specific recommendations) that could enhance the performance of Commonwealth government. The operational changes were targeted in the areas of human resources, employee benefits, organization structure, planning, budgeting, performance measurement, procurement, fiscal management, general services, information technology, and privatization/outsourcing of government services (see Table 1).

Table 1 IMPAACT Commission Recommendations

Human Resources 1 . Change the employee compensation and evaluation

system to create more appropriate incentives for performance.

2. Use salary increases to reward performance. 3. Establish more flexible work schedules to meet changing

organizational needs. 4. Implement a management development program to better

equip managers to respond to a rapidly changing work environment.

5. Establish a system to elicit and address suggestions from the Commonwealth's employees.

Employee Benefits 6. Increase participation of employees in managed care

programs to reduce costs without reducing coverage. 7. Consider shifting annuitants from indemnity plans to

managed care. 8. Develop a new methodology for determining the

contribution rate for health care insurance. 9. Consider the use of fully insured managed care plans. 10. Contain the escalating costs of the State Employees

Retirement System.



238 PAQ SUMMER 2009

Organization Structure

1 1 . Evaluate strategies to reduce the number of positions reporting directly to the governor.

12. Develop a revised sunset review program for the Commonwealth's boards, commissions and advisory bodies.

13. Continuously assess the Commonwealth's organizational structure and staffing patterns, based upon sound management principles.

14. Begin by applying the organizational models to organizational changes identified by IMPAACT.

Planning, Budgeting, and Performance Measurement

15. Develop and implement a performance-based budgeting system.

16. Improve agency management practices to prepare for performance-based budgeting.

17. Apply improved management practices to budget process. 18. Implement and institutionalize the performance-based

budgeting process. 19. Use quality management tools to achieve more effective

and efficient government.

Procurement 20. Reduce the turnaround time for processing purchasing

requests. 2 1 . Reengineer the purchasing contract system to better meet

customers' needs. 22. Take advantage of competitive opportunities to attract

more prospective bidders and gain a higher response rate on bids.

23. Refine and improve bid and Request for Proposals (RFP) process.

24. Define and implement best practices in inventory management.

25. Revamp procedures for procuring information technology to reduce the time cycle and costs.

26. Improve administrative processes to better serve internal and external customers.

27. Improve the efficiency and effectiveness of service purchase contracting.



PAQ SUMMER 2009 239

Fiscal Management 28. Re vise the Treasury Department's investment authority to

permit adoption of the "prudent investor" policy. 29. Empower the Pennsylvania Lottery to maximize

investment earnings. 30. Increase the Lottery's efficiency by improving cash

management practices. 3 1 . Improve taxpayer service by the Department of Revenue. 32. Reform the audit of corporate tax returns to improve

turnaround time and reduce interest costs. 33. Improve the operation of the Medical Professional

Liability Catastrophe Loss Fund.

General Services 34. Implement alternative methods of capital facility

development. 35. Streamline the process by which the Commonwealth

leases space for departments and agencies. 36. Implement innovations in custodial and facilities

maintenance. 37. Take steps to improve the efficiency and security of

underwriting activities. 38. Enhance safety and loss prevention activities. 39. Implement consistent procedures to investigate, manage,

and resolve claims.

Information Technology 40. Manage information technology to assure a

comprehensive, long-range strategy. 4 1 . Improve the cost effectiveness of information technology

investments. 42. Better serve Pennsylvanians through information

technology. 43. Use information technology to make Pennsylvania more

competitive. 44. Improve information technologies to enable the

Department of State to fulfill its mission. 45. Apply technology to improve agencies' capacity to meet

citizen's needs.



240 PAQ SUMMER 2009

Competitive Government 46. Privatize the entire state alcohol retail and wholesale

distribution system. 47. Outsource custodial functions where appropriate. 48. Consider outsourcing selected laboratory functions. 49. Explore additional opportunities to inject competition into

government activities

Immediately after the IMPACCT Commission concluded its work, Governor Ridge directed Lieutenant Governor Mark Schweiker to head a large-scale change process. The change process was directed by the PRIME Council (Privatize, Retain, Innovate, Manage, Eliminate), which was charged with the mission of "coordinating the implementation of as many of the recommendations contained in the IMPACCT Commissions final report as shall be deemed appropriate, and to review those areas of state government which, due to time and other constraints, were not included in the report" (Governor's Office Executive Order 1996-2).2 A PRIME Office was established in the Lieutenant Governor's Office in the Capitol Building, and two management consultants were hired as internal change agents to facilitate training, information, and liaison work with agencies that would functionally move agencies toward change. After the PRIME office was up and running, the Council established innovation teams (I-teams) in each of the state agencies to coordinate the change process. Each I-team had a captain and approximately ten employees from various levels of the agency served as team members. In addition, the PRIME

2 The PRIME Council consisted of 11 members including the Lieutenant Governor. Six members were business executives in transportation, engineering, auto-dealing, cement, banking, and telecommunications. One member worked in the non-profit sector with a focus in human services and criminal justice. The final three members were a state senator, a college professor from the University of Pittsburgh, and a management consultant.



PAQ SUMMER 2009 241

Office and the Council conducted town-hall assemblies with state agencies to promote the change process and they administrated all-day assemblies with individual agencies. They held monthly PRIME success sessions in which the individual(s) responsible for an innovation would present the innovation to an audience of interested state employees. Also, each Friday morning a PRIME NOTE went out to the I-team captains via e-mail to highlight innovations that occurred during the previous week. Finally, an innovation bank, an innovation bank awards system, and other recognition awards were created, and if an innovation award was won, savings from the innovation would be returned to the innovators for discretionary use within their agency.

Over the next five years, the PRIME initiative was able to accomplish over two hundred significant administrative changes, and saved the taxpayers of Pennsylvania approximately $1 billion in costs. By most accounts, the PRIME initiative was a successful large-scale change effort that increased the efficiency, effectiveness, and responsiveness of the state government (Gaebler, et al., 2000). However, detractors argued that the PRIME Council was not able to achieve the estimated $7.6 billion that they initially estimated, and the initiative was not able to accomplish some of its most important goals. In particular, reforms to the civil service system and privatization of the liquor stores were not achieved. Both of these issues were among the most prized goals of the PRIME Council and Tom Ridge.

Studying Large-Scale Change in State Government Participant observations of the author during a five-

year period and semi-structured interviews served as the methods of data collection for the present study. As an external participant observer to the change process, I was able to see the large scale change process from a variety of



242 PAQ SUMMER 2009

levels. In particular, I observed the strategic planning process in the Governor's Office and implementation at the agency and managerial levels. In addition, I observed implementation at the mid management level to the rank- and-file employee. In the midst of my observations, I scheduled formal semi-structured interviews with a variety of key stakeholders to the change agenda (see Table 2 for a list of respondents).

Table 2 List of Interview Respondents

Executive and Legislative Branch Executives and Political Insiders Title

1 . Ex-Governor 2. Ex-Governor 3. Aide to Ex-Governor 4. Legislative Aide to Ex-Governor 5. Press Secretary for Ex-Governor 6. Budget Secretary for Ex-Governor 7. Harrisburg Patriot-News Political Reporter 8. PRIME Office OD Consultant 9. PRIME officeOD Consultant 10. Chief of Staff for Governor Ridge; Secretary of

Education 11. Chief of Staff for Governor Schweiker 1 2 . Director of Policy for Governor

Ridge/Schweiker 1 3 . Secretary of the Office of Administration 14. Governor's Staff for Governor

Ridge/Schweiker 1 5 . Speaker of the House of Representatives 1 6. Member of House of Representatives 1 7 . Member of House of Representatives 1 8 . Member of House of Representatives 1 9. Top Aid to President Pro Tempore of the

Senate 20. Member of the Senate



PAQ SUMMER 2009 243

2 1 . Member of the Senate 22. Member of the Senate 23 . Top Aide to Senator 24. Director of Republican Caucus Research

Center (House) 25 . Director of Human Resources and

Management 26. Chief Information Officer in the Office of

Administration Agency Personnel

Department of Transportation 27. Secretary 28. Deputy Secretary for Administration 29. Director of the Policy Office 30. Director of the Center of Performance

Excellence

Department of Public Welfare 3 1 . Secretary 32. Director of the Policy Office 33. Deputy Secretary for Administration

Department of Health 34. Deputy Secretary for Administration 3 5 . Director of the Policy Office

Department of Environmental Protection 36. Executive Deputy of Policy &

Communication 37. Deputy Secretary, Office of Management

and Technical Services

I interviewed members of the governor's staff, the Secretary of the Office of Administration (human resources), majority and minority leaders of both the Senate and House, long-term legislative representatives in the House and Senate, upper-level executives in four major state agencies, and several political insiders. Face-to-face interviews were scheduled for one-hour periods via a



244 PAQ SUMMER 2009

telephone or e-mail contact. Interview questions focused on perceptions of positive and negative attributes of the OD process, the role of the governor in relation to large-scale change, roles of key stakeholders to the change effort, and perceptions of the present change effort with past attempts of gubernatorial-led change management in the Commonwealth. In addition to the planned structured questions, probes were used for clarification and expansion of respondent answers. Each interview was transcribed and thematic content analysis was conducted to organize the data.

Actionable Knowledge for Large Scale Change Interventions

My participant observations and the content analysis from the interviews revealed that administrators and OD change agents need to focus on a variety of decisions and tasks that are located in three distinct conceptual areas: Environmental Scanning, Stakeholder Issues, and the OD process itself.

Environmental scanning refers to issues that require the attention of leaders if they are to create a vision for change. In particular, administrators may need to engage in specific scanning exercises in both the external and internal environments to the state government if they are going to achieve success in large scale change efforts. Stakeholder Issues contains items that relate to particular offices, roles, and people who are involved in the change effort. The analysis highlighted that a number specific individuals, role positions, and actions of these stakeholders are critical to large-scale change success.

Finally, the OD process includes OD design, implementation, and institutionalization. The analysis demonstrated that the organization development process may need specific modifications for state government contexts.



PAQ SUMMER 2009 245

Environmental Scanning

Determine your customer needs & wants. The first external scanning task that administrators

and OD consultants need to complete should occur in relation to external customers (citizens). One of the things that the Ridge administration seemed to do successfully was to focus on customer needs and wants in the external environment. For Ridge, the primary external environment included the citizens of the Commonwealth, members of the business community, the Republican Party, and the fiscal economy of the Commonwealth. In addition to evaluating the management innovations of other Republican governors, the Ridge campaign team listened to business leaders for advice about how to operate the business of state government.

"It probably was a real interest on the part of the business community particularly. Many of them had been supporters of the Governor during the campaign, and they were frustrated by the way government was run."

Chief of Staff in the Governor's Office

Another governor's staff worker added that citizens and business leaders were facilitating the push toward administrative reforms.

"Who was driving it? I think it was citizens who were complaining about the inefficiencies of Commonwealth government. I think it was a combination of citizen impact and CEOs with a sense of helping the Governor see the world. The Governor knew he was the CEO of the state, so he turned to CEO input to understand



246 PAQ SUMMER 2009

and use a business change process model inside government."

Conduct environmental benchmarking for od & for political gain.

As part of the external scanning process, managers and OD professionals need to look for OD models and benchmarks that might facilitate the change effort, and might better fit the context in which change will operate. The Ridge administration seemed to pay particular attention to the way large-scale change efforts were designed in similar contexts.

"I was Ridge's policy director on the campaign, and we went out as a policy staff, and we looked at who was doing this [reinventing government] in other places, and who was doing it best, how it was structured, and what they were doing. We viewed the states as laboratories of democracy and so we looked for pockets of innovation."

Secretary of Education

The initial choice to focus on administrative reform as an umbrella policy appeared to be rooted in the pockets of innovation that were occurring in a variety of states. The Ridge campaign team noticed other governors enjoying political successes as a function of promoting change in their campaigns and in their subsequent administrations. At the same time that the Ridge team noticed a significant political upside to reinventing government, they noticed that real successes were being achieved and they benchmarked philosophies and implementation methods from a variety of other states.



PAQ SUMMER 2009 247

Act in multiple internal environments. Managers and OD professionals also must conduct

an internal scanning exercise in order to understand the social and political environments that exist in relation to change. For the Ridge team, the major internal stakeholders consisted of managers and state employees of the various agencies, and the members of the General Assembly (House and Senate).

In particular, Governors need to cast policy in relation to who is in majority control of the Senate and House. This is especially true in relation to "big issues" like privatization and civil service reform that are likely to draw significant contention from members of the general assembly. To tackle these big issues, they may have to prioritize and specifically focus on them given that very little time exists to accomplish major policy objectives.

Similarly, managers and OD professionals need to understand that divisional and departmental differences exist, and that enactment of change cannot come in the form of a "cookie cutter" approach. Large scale change efforts may need to be customized to fit the cultures of specific divisions or departments. In the case of the Ridge administration various agencies did not enact identical change management implementations. Administrative reform was assimilated into the organizational culture of each agency.

Appreciate the work of others. A final internal environmental scanning task of

managers and OD consultants is to appreciate the work of others who are currently engaged in change within the organization, as well as those who attempted change efforts in previous years. In the case of the Ridge administration, one agency had been instituting change efforts in the form of a "quality movement" for the past twenty years, and many respondents commented that the best thing Ridge did



248 PAQ SUMMER 2009

was to allow it to continue. A PRIME office staff member presented an interesting view regarding the organizational culture of PennDOT.

"Change management was easier to implement in agencies that already had instituted TQM, like the Department of Transportation. But for those agencies that had not instituted management innovations during the 1980s, a different approach was necessary."

Instead of changing the quality program of PennDOT, Ridge allowed his change agenda to assimilate with PennDOT's process. In PennDOT, the initiation of TQM began by 1982 with the establishment of twelve quality circles, and within five years over 600 quality changes had been implemented. Much of the growth of quality management programs during this period is centered on one important fact. Since the hiring of Tom Larson as secretary in 1979, the two successive secretaries, Howard Yerusalim and Brad Mallory, continued the quality management style of Larson. Policy cohesion like this between successive secretaries is not typical in state government. Instead, new secretaries come in over time representing different political parties, and they institute the programs of the governor or their own pet projects. What occurred at PennDOT was that governors, beginning with Thornburgh, decided to let the agency alone because it was beginning to reform its operations. When Ridge became governor they were prepared to assimilate the "reinventing government" change management vision into their agency. Other agencies (e.g., the departments of Health and Environmental Protection) that had not previously been champions of change management needed to "start from



PAQ SUMMER 2009 249

scratch" in terms of understanding, developing the culture of innovation, and implementing administrative reforms. The case of PennDOT shows that Governors might want to consider continuing the change management policy of an immediate predecessor instead of worrying about creating a legacy for themselves.

Stakeholder Issues The governor should initiate the change effort. A major theme that was evident from the analysis

was that Governor Ridge fervently supported change management during the political campaign of 1994 and throughout his administration. In contrast to the two preceding Commonwealth administrations (Governor's Richard Thornburgh (R) (1979-1987)) and Robert Casey (D) (1988-1995)), and the current administration of Edward Rendell (D) (2003 to present), Ridge promoted a policy vision for comprehensive cross-agency change management. A deputy secretary during the Thornburgh administration commented:

"The Thornburghers were serious about change management, but it was in an earlier day and they did it more episodically. The Casey administration was a little spottier, and I don't think there was a real interest like there had been with Thornburgh. Under Ridge there has been much more emphasis on change management and it has been much more broadly conceived."

Several respondents argued that the Casey administration wasn't interested in administrative reform policy primarily because he was so focused on pro-life issues and budget woes. Most felt that it was a "dead



250 PAQ SUMMER 2009

period" for change management policy. These comments are ironic in that Total Quality Management (TQM) and process reengineering techniques had swept across the private sector and had found their way into several state governments in the midst of the Casey administration. At best, they latently existed in Pennsylvania government. A Quality Council had formed at the grass-roots-level, and several pockets of TQM existed within specific agencies. At one point during the second term of Governor Casey, the Quality Council approached the Governor's Office to share reports on quality initiatives in Commonwealth government. Their purpose was to attempt to get top-down support for the initiation of TQM across the whole of state government. Unfortunately, for the members of the Quality Council and perhaps for the Commonwealth, the Budget Secretary and the Governor were not interested in promoting the TQM program from the Governor's office.

The current governor of the Commonwealth, Edward Rendell, did not initiate or support a change management policy during his campaign or after taking office. In fact, very soon after assuming the Governor's Office, Rendell eliminated the PRIME program and all of the I-teams in the agencies.

These examples are telling, in that, change management may need to be supported, and perhaps initiated, by the governor if they are to succeed. Respondents in the study concurred that the top-level focus on change management was critical to the ultimate successes that were achieved. This is especially true for large-scale change efforts which are intended to comprehensively effect entire organizations.

Make sure the top executive team knows od. Another key theme of the findings was that education and functional experience in change management is critical to its success. The top executive officials of the organization



PAQ SUMMER 2009 251

may need to have an educational background in management or a related field in which they learned about change management concepts and interventions. If they do not have a formal change management educational background, they might need to receive specialized training or complete a certificate program. At the very least, they need to have advisors who are educated in change management, and be open-minded to change management information. In the case of Tom Ridge, he did not have a formal educational background in management or public administration (he earned a B.A. in government studies from Harvard, and a law degree from Dickinson College), but he listened to his campaign team and Lieutenant Governor Mark Schweiker. Interestingly, Schweiker holds a master's degree in administration from Rider University and after college he entered the business world and advanced to positions at Merrill Lynch, McGraw Hill, and eventually operated his own management consulting firm. Ex-Governor George Leader (D) (1955-1959) specifically drew attention to this issue by arguing that governors tend to be lawyers who are political animals and not particularly capable of effecting large scale change efforts. He further- echoed this sentiment by noting,

"I think the fact that I attended the School of Local and State Government at the University of Pennsylvania and that I came in with a more professional view than other governors is what was different. The idea that a lawyer can run anything, a university, a business, or a government, is probably one of the most fallacious rules in the world. Very few of them, in my opinion, are trained to do the creative and innovative things that these positions call for. I say that in spite of the fact that my



252 PAQ SUMMER 2009

brother was a lawyer and my son is a lawyer."

Another key lesson for managers and OD consultants is that they should hire or select steering committee members, secretaries, and deputy secretaries who have the knowledge and capacity to enact change. If upper-level administration does not have current knowledge of change management, they need to be willing to update their skills in relation to change management information. In addition, the Governor should think about selecting secretaries and deputies for steering committee assignments and administrative positions who have proven to be innovative and who have experience with large-scale change.

All managers are important to the change effort. Managers and OD professionals also need to

recognize that large-scale change involves every managerial level in the organization. As such, top managers, middle managers, and lower-level managers can serve as great catalysts toward change or stern barriers to its success. In Pennsylvania government, top management includes the Governor and his staff and agency secretaries, middle management includes deputy secretaries and the upper-level managers in the agencies, and lower-level managers include division and bureau directors and supervisory managers within the state agencies. Once a change policy vision is created and accepted by the top management team, it will be a difficult task to extend the OD message and execute an efficient process that takes hold in the multiple layers of the organization.

One respondent summarized it like this,



PAQ SUMMER 2009 253

"I think it would be difficult to really make process changes if you don't have top leadership from the Governor, the Lieutenant Governor, and even some top cabinet people. Maybe most important on the cabinet is the Secretary of Administration."

The Secretary of Administration in state government oversees human resources, training and development, organization development, and information technology functions. Therefore, organizational leaders who supervise these tasks need to be supportive of the change process. In addition, you need support from other peer offices. For example, in state government, you need support from the Budget Secretary, because you need to get the money to launch the project. Below this level, the secretaries of the agencies are important links in the system of change. They also sit at a critical juncture between the top-management team and the rank-and-file employees of the agencies. The secretary and the deputy secretaries carry a significant information and visionary role for the employees in individual agencies. One member of the governor's staff characterized it like this,

"Deputies are pretty important, however, I think clearly the greatest responsibility sits with the secretary, and I think that within his or her fiefdom a deputy can limit that kind of change, but the right leader at the top of an agency can certainly facilitate a change effort."

In addition, an empowered and decentralized management style was important between the secretary, the deputy secretary of administration, and the bureau deputies in the agencies. Most of the respondents felt that they were able to get more done if they were empowered to innovate and create change.



254 PAQ SUMMER 2009

Place the change agents carefully & where they'll be noticed.

Another important finding was that the expertise and location of the "change agents" is important. The location of the change message needs to occur at a level which supercedes the intended population of interest for change. Therefore, if change is intended to occur across an entire organization, at least one change agent needs to be located at the highest levels of the organization. By contrast, if change is planned for a single department, at least one change agent should be located at the supervisory level immediately above the department. In the best of circumstances, change agents would be located in the midst of the intended population of interest as well, but at least one change agent should be located in the supra-system to the change event. This helps the change agent to assess organization-wide factors that may influence the OD process, and increases the probability of a comprehensive and consistent OD process information-flow with all stakeholders to the change effort. In the case of the Ridge administration, the primary change agent was Lieutenant Governor Mark Schweiker, and he assumed two major roles. First, he acted as a promoter, a cheerleader, and a spokesperson for change management, and second, and he worked in a hands-on capacity by overseeing and developing innovations as a functional member of the PRIME Council.

"He wanted the responsibility. Mark had a background in management consulting and reorganization, and he was a logical and natural fit to the job. He wanted to sink his teeth into it, and this has always been a primary issue for him, and it still is a primary issue for him."

PRIME Staff Member



PAQ SUMMER 2009 255

Schweiker was more than a right hand man of Ridge when it came to the large-scale change effort. With his management consulting background, and his strong interest in reshaping Commonwealth government, he promoted and took the lead with the PRIME initiative. PRIME was housed in the Lieutenant Governor's Office, and this gave it a stature that helped make the large-scale change effort visible to employees in state government. Another excellent location for a state-level change effort would be in the Governor's Office of Administration that oversees human resources, training and development, labor relations, and management consulting functions across all of the agencies, or in a special office that is located in the Governor's suite. In short, the change effort needs to be physically located in a space where it can easily be noticed and where it has clout.

On the other hand, the Ridge team may not have hired enough change agents to run the PRIME office. Two OD consultants were hired as internal change agents to facilitate change in the agencies, and in retrospect this turned out to be a mistake. Many respondents argued that the change process needed a greater commitment of monetary resources, and that the Ridge administration needed to "put their money where their mouth was."

Conduct a stakeholder analysis then, pick your battles!!!!!!

OD professionals and managers need to conduct a stakeholder analysis and prioritize the major constituencies to the change effort. Next, they need to determine if friends or foes exist in various stakeholder groups, and create an individual game-plan on how to handle each stakeholder group. One foe to the Ridge team turned out to be the General Assembly. In state government, the executive branch (led by the Governor) and the legislative branch (Senate and House leadership) clearly compete for



256 PAQ SUMMER 2009

control of the agencies. A fact of life in Pennsylvania is that a number of administrative changes in the agencies require the General Assembly to create a legislative intervention in the form of new law.

Very soon after Ridge assumed office, discussions regarding the creation of the IMPACCT Commission occurred between the Ridge staff and the Republican leaders of the Senate and House. With Republican control of both the executive and legislative branches of government, the passing of a resolution to create the commission appeared to be a formality. However, the resolution did not pass without considerable debate. One Republican House member reported: "It was quite a battle to have this resolution passed, and it was quite a lengthy argument on the floor. I believe the argument went on for at least an hour or more." The Minority Leader (William Deweese, D-Allegheny), mostly controlled the counter- arguments by prognosticating about the evils of privatization. In relation to privatization of services, one House staff member offered this view,

"The same thing with privatization during budget negotiations. The way we do the budget, every member is allowed to put in amendments. There is always an amendment in there from Deweese [the Democratic Minority Leader of the House] and it says, don't privatize anything in prison operations, even if it is just the laundry services. And this is because he has a correctional institution in his district and AFSCME is a very powerful union, especially with their caucus."

Director of Republican Caucus Research in the House

In terms of the change initiative very few legislative acts were required and that was part of the design. By lessening the number of legislative acts from the outset, the



PAQ SUMMER 2009 257

number of opportunities for contention with the General Assembly was clearly reduced. The Executive Director of the IMPACCT Commission who later moved to the PRIME office noted: "We had seven bills that required legislation, however, a lot of the recommendations and changes that have happened thus far have been internal within the executive branch." In addition, there were several "big areas" that were included within IMPACCT that were never put in front of the legislature. One big administrative issue that appears difficult to initiate in Pennsylvania is civil service reform. Not one General Assembly member thought that the Commonwealth would be able to enact civil service reform legislation anytime soon due to a lack of votes.

Even with a Republican majority in the executive and legislative branches, there was a perception of political risk regarding some of the aspects of the change agenda, and in the end, several major initiatives were abandoned. Perhaps this could have been avoided by a more thorough stakeholder analysis, and creating a steering committee with bipartisan legislative involvement for the joint diagnosis and execution of the change process. At the very least, the contention with the General Assembly served as a reminder that large-scale change processes may contain significant resistance from stakeholders with power, and at times it makes sense to "pick your battles."

Look out for the unions. In a similar way to the General Assembly,

unionized Commonwealth employees and their union leaders posed a potentially significant barrier to the change agenda. A Governor's staff member characterized the relations with the unions like this,

"You know, we, very early on, which is amazing for a Republican administration, developed a very good



258 PAQ SUMMER 2009

working relationship with AFSCME, which is the major union. We have nine or eleven unions that make up the state collective bargaining unions. AFSCME is the primary union with over fifty percent of the employees. Early on, Governor Ridge and Tom Paese, then Secretary of Development, began a working relationship with Ed Keller, who is the head of AFSCME, and we developed a policy where we would sit down and work things out with the unions. We developed a policy of never surprising them with things. And we just made a continuous commitment to working with them"

A deputy secretary in an agency argued, "Union relationships in the department have been excellent during the Ridge administration. Yet when privatization of services is suggested union opposition is consistently encountered."

It was also apparent that if the Ridge administration had not inherited good economic times, the relationship with the unions could have been much different. The Secretary of Administration for the Commonwealth noted, "I think it helps that we have served under good economic times because in our last union negotiation there were not many tough decisions about having to cut benefits or having to cut back on increases." If the economy is sour and union/management problems exist on any front during contract negotiations it could spell problems for other policy initiatives that require cooperation of union leaders and members.

THE OD PROCESS

Make the OD Model the Focus There are a lot of OD models to choose from, and

the choice of the model is an important step, however, once you choose your model make it the focus of your change



PAQ SUMMER 2009 259

effort. A model can serve as a backbone to the project and help steer it in the right direction. The Ridge administration "Reinvention of Government" change program was designed as an "umbrella policy" over substantive policy areas like education, welfare, crime, and economic development. For example, as an agency like the Department of Education was attempting to create a "vouchers" system, they were doing it under the rubric of the large-scale change effort. From the first day of the administration, it was clear to Ridge and his upper- management team that reinvention of government would be a primary catalyst for change during the administration, however, the details of its implementation were foggy. Ridge, and his top-management team seemed to "manage by groping along" (Behn, 1988), and did not particularly enact a specific model for change until the second year of the administration. This fact significantly slowed the progress toward actualized change. It is true that Ridge created the Keystone Committee and the IMPACCT Commission as a way to determine many presenting problems across the agencies, but the creation of the PRIME Council in response to this work occurred after-the- fact, and most people outside of Ridge and his cabinet could not make the connection between the work of PRIME and earlier committees or commissions. When the PRIME initiative was launched, most of the state employees saw it as a new program, and were not cognizant of the fact that its root was in the "reinvention of government" policy. To employees and middle management, reinvention of government was mere rhetoric, and until PRIME was launched some two years after assuming office, there was no particular model in place that would help employees to achieve the goals of reinvention.

By placing the change model as the primary focus of the change effort, employees at varied levels of the organization can understand the purpose of the change



260 PAQ SUMMER 2009

effort, and can operationally understand their tasks in relation to the change. The data clearly showed that as one progressed from the top-layers of the government, to mid- level management, and to the civil-servant level employee, the reinvention goal was sequentially less well understood. This fact suggests that top management and the change agents, need to talk about, promote in writing, and conduct training at multiple administrative layers in order to fully expose employees to the change agenda.

Set a Specific Timeline for Change NOW, Then Alter It In state government new administrations come and

go fairly quickly due to term limits, but moreover, political parties have difficulty maintaining the top executive office for consecutive terms. A fact of life in Pennsylvania is that voters tend to elect governors from opposing parties in a fairly consistent manner every eight years (if not sooner). The fast rate of executive turnover increases the demand on administrations to set an early change agenda. For elected public sector administrators, the best time to initiate a change agenda is during a political campaign for office. One House member summarized this issue succinctly: "Most governors can only do about three things well in eight years. You have to pick things that really have an impact." A Policy Director in the Department of Public Welfare said: "I think it is difficult to get people excited about stuff when you have a window of about 5 or 6 years. The first two years, everyone is just trying to figure out what is going on. The last two years, everyone is saying 'hey don't let the door hit you in the butt on the way out.'" In the case of state governors, they tend to get engrossed in specific policy issues like environment, welfare, education, or tax reform, and this limits the attention one can spend on change management.

Therefore, Governors should look to OD professionals as potential members of their



PAQ SUMMER 2009 261

campaign/transition teams as they seek a new professional office. The lesson here for top administrators and OD professionals is to consider a realistic timeframe for the institutionalization of the change, and make that a part of the planning process for change. If a change agenda is not set earlier than later, and a realistic timeline is not set, time may run out before change can be fully institutionalized. On the other hand, after the timeline has been set, be immediately ready to alter it. Why? Because the context of the change will itself change over time. The context will change on at least two levels, (1) new events will occur in the future, and (2) unforeseen states or events will be present that were not taken into account during the planning process.

Consider a Multilingual Approach & Clear OD Process Model

Another key finding of the study was that speaking in a language that matched to the stakeholder group increased goal understanding. In other words, a multilingual approach to the OD process might be warranted. This fact was especially evident in the Department of Transportation (PennDOT). PennDOT has a long history of using quality management techniques, and utilizing Baldrige criteria to optimize product and service quality, and the quality of their internal operations. The agency used a quality process called Self Assessment Gap Analysis (SAGAs) that many successful private companies had embraced during the 1990s. A gap, or problem, is identified through a dashboard and scorecard measurement system of every bureau and division within the agency. Then a gap closure team is put together, and they use a six- step problem solving process, or some other quality management tool to close that gap. Most of the gaps focus on some kind of improvement or efficiency.



262 PAQ SUMMER 2009

To the credit of the Ridge team, they did not require the Department of Transportation to change the name or the focus of their quality program. Instead, they worked on assimilating the quality program into the framework of the PRIME initiative, and allowed the language of Baldrige and SAGAs to remain in the agency. By constrast, the Department of Health and the Department of Conservation and Natural Resources had never enacted major change efforts, and therefore were encouraged to use the PRIME initiative and the language that was associated with it.

Another important issue is to choose an OD process model that people understand. Several respondents argued that clear goals and structure was critical to success, and that a lack of structure and specificity in objectives of the PRIME Council was a significant problem. The director of the organization development program in the Department of Transportation offered this view,

"We follow a structured six-step problem-solving process, and thus problem-solving is consistently conducted throughout the organization. PRIME is not necessarily following a systematic process and they're sort of randomly telling the I-teams to come up with customer- focused innovations. You've got to at least give them a structured problem solving process with the idea of starting at A and coming out at Z."

In short, OD professionals and managers who attempt to implement large-scale change may need to develop a clear and well-understood process model if they are going to be successful in fully institutionalizing the change policy.

Don 't Just Empower. Direct!!!! A clear theme of the findings was that

administrators and change agents should empower other



PAQ SUMMER 2009 263

mangers and employees to create and innovate. However, an excessive and liberal empowerment strategy might allow managers and others to engage in pet projects that are in conflict with the change goals of the upper management. The present findings support the notion that managers should be empowered, but they should also be directed from the top and held accountable for their actions. Some of the ways that top managers can "direct" their change vision is through direct personal contacts, via formal top management meetings, in town-hall meetings with agencies and bureaus, through the primary and secondary change agents, and through top human resource professionals of the organization.

On the other hand, top management and their agents need to empower rank-and-file employees to innovate. Rank-and-file employees were not overwhelmingly positive in their perceptions of the change process during the Ridge administration, and in particular, they felt that red tape, morale, and motivation had worsened in the last seven years. Employees argued that one of the best ways to empower rank-and-file employees is to invest in training programs that educate employees on change management. In addition to training, rank and file employees argued that administrators and change agents need to empower employees by allowing them to be more involved in the diagnosis, planning, implementation, and evaluation of change initiatives.

CONCLUSION

The findings of this study contribute to the budding literature regarding large-scale change in general, and in the specific context of state governments in the United States. The research highlights several key issues that state government administrators and OD change agents might



264 PAQ SUMMER 2009

consider when designing and implementing large-scale change efforts in the states. The research clarifies and extends the current literature on large-scale change in the context of state government.

First, administrators and OD consultants should conduct an external scanning exercise to ensure that the change program meets the needs and wants of important stakeholders. In addition, the top administrative executives must conduct an external environment analysis of OD methods in the hope that they use appropriate ideas, models, and techniques that will fit with the environment of the state. To execute this external scan, the administrative team will need existing knowledge of OD. Moreover, the administrative team and OD change agents need to avoid certain stakeholders who strong power-bases, and consider customizing the change effort in various sub-pockets of the organization. These suggestions are counterintuitive to those who believe that large-scale change requires modifying internal stakeholders of the organization to achieve change (Cummings & Worley, 2005; Schein, 1992).

In relation to stakeholders to the OD process, the findings shows that top administrators need to accept a great deal of responsibility for change. First, they must strongly "cheerlead" the change effort, and they must design and guide the process with a high level of OD knowledge. They might need to seek the advice of an OD change agents for process knowledge, but they cannot rely on the OD professional to take responsibility for the change effort. Therefore, the top administrative executives should not focus as much attention on the competencies of the OD professional (Eisen, Steele, & Cherbeneau, 1995; Neilsen, 1984; Church, 2001), but instead they should focus on their own competencies for large-scale change.

In relation to the OD process, the findings corroborated the idea that managers and OD professionals



PAQ SUMMER 2009 265

need to focus on the OD model. Government workers will best understand a change effort if they understand the rationale for change, the specific plan to achieve change, how the plan will work to achieve change, and the specific behaviors that are required of them during the change effort. As an extension to the OD literature, administrators and OD change agents need to carefully consider a timeline for change. Many consider OD to be a long-term adaptive, evolving process without specific boundaries of time (Beer, 1980; Cummings & Worley, 2005; French, 1969). The present research shows that state administrators and OD change agents need to be flexible with a timeline, but they need to set a timeline sooner than later. In addition, the research shows that the OD change agent(s) should be located at a level that supercedes the intended population of interest for change. Previous literature indicates that the change agent should be located near the top executive team (Bennis & Nanus, 1985; Nutt & Backoff, 1997; Tushman, Newman, & Nadler, 1988), but the current research provides clarification, in that, the change agent should reside in a superceding role, and that the change agent should be a member of the top management team instead of an external consultant to the organization. Another addition to the literature is that managers and OD professionals need to facilitate a dominant language of change in the various sub-cultures of the organization. The dominant language form might be the one that the top executive team created with the change effort, or it might be a dominant language that has existed within a sub- culture for a significant period of time. In allowing a dominant language to exist in a sub-culture of the organization that varies from the intended dominant language of the change effort, the top-executive team might need to abdicate their power. This type of power strategy goes beyond what has been articulated to this point (Greiner and Schein, 1988).



266 PAQ SUMMER 2009

The present work demonstrated a number of issues that administrators and OD consultants should heed when attempting large scale change in state government contexts. However, a few caveats are necessary.

The findings of the study were obtained by analyzing large scale change within the context of the Ridge administration in the Commonwealth of Pennsylvania. As Behn (1998, p. 213) notes, "employing an innovation that has already proven effective elsewhere requires modification." In a similar argument, Lynn (1987) states that organizations are a "social and cultural unit with a past, a present, and a future, and with a flow of organizational life characterized by a more or less swift current that renders executive maneuvers particularly difficult" (p. 245). The arguments of Lynn and Behn support the notion that implementing large scale change is hard work, and that transferring a reform program from one administration to another is difficult. However, given the paucity of literature in this area, the present work helps to establish detailed information regarding how to implement large scale change events in the states.

REFERENCES

Barrett, K., and Greene, R. 2001. Grading the states: The government performance project, Washington, DC : C.Q. Press.

Beer, M. (1980). Organization change and development: Strategies and models. Santa Monica, CA: Goodyear Publishing.

Behn, R. D. 1988. Management by groping along. Journal of Policy Analysis and Management 8, no. 3: 643- 663.



PAQ SUMMER 2009 267

Bennis, W. and Nanus, B. (1985). Leaders: The strategies for taking charge. New York: Harper and Row.

Brudney, J. L., Herbert, F. T., and Wright, D. S. 1999. Reinventing government in the American states: Measuring and explaining administrative reform. Public Administration Review 59, no. 1: 19-30.

Church, A. (2001). The professionalization of organization development, in Research in Organization Change and Development, eds. R. Woodman and W. Pasmore. Oxford: JAI Press.

Commonwealth of Pennsylvania 1995. Program policy guidelines for fiscal year 1995-1996.

Council of State Governments 1997. Managing for success: A profile of state government for the 21st Century. In Cooperation with Deloitte & Touche Consulting Group, LLC. Lexington, KY: The Council of State Governments.

Cummings, T. and Worley, C. (2005). Organization development and change, 8th ed. Mason, OH: Southwestern.

Eisen, S., Steele, H, and Cherbeneau, J. (1995). Developing OD competence for the future, in Practicing Organization Development, eds. W. Rothwell, R. Sullivan, and G. McLean. San Diego: Pfeiffer.

French, W. (1969). Organization development: Objectives, assumptions, and strategies. California Management Review, 12 (2), 23-34.

Gaebler, T., Blackman, J., Blessing, L., Bruce, R., Keene, W., and Smith, P. (2000). Positive outcomes: Raising the bar on government reinvention. Burke,

VA: Chatelaine Press. Greiner, L. and Schein, V. (1988). Power and organization

development: MobilizingpPower to implement change. Reading, MA: Addison- Wesley.



268 PAQ SUMMER 2009

Governor's Office Executive Order 1996-2. Implementation of the IMPACCT Commission recommendations .

IMPAACT Commission Report 1996. Making Government Make Sense.

Keystone Committee 1995. Keystone Committee report to Governor Ridge: Meeting Pennsylvania's Challenges. Harrisburg, PA.

Kravchuck, R. S., and Leighton, R. 1993. Implementing total quality management in the United States. Public Productivity & Management Review 17, no.l: 71-78.

Light, P. 1997. The tides of reform. New Haven, CT: Yale University Press.

Lindblom, C. E. (1959). The science of muddling through. Public Administration, (19), 79-99.

Lynn, L. 1998. The new public management: How to transform a theme into a legacy. Public Administration Review 58, no. 3: 231-237.

Lynn, L. 1987. Managing public policy. Boston, MA: Little, Brown and Company.

Milakovich, M. E. 1991. Total quality management in the public sector. National Productivity Review, (Spring): 195-213.

National Commission on the State and Local Public Service. 1993. Hard truths/tough choices: An agenda for state and local reform. The First Report of the National Commission on the State and Local Public Service. Albany, NY: The Nelson A. Rockefeller Institute of Government.

Neilsen, E. (1984). Becoming an OD practioner. Englewood Cliffs, NJ: Prentice Hall.

Nutt, P and Backoff, R. (1997). Facilitating transformational change. Journal of Applied Behavioral Science, 33, 490-508.



PAQ SUMMER 2009 269

Osborne, D., and Gaebler, T. 1992. Reinventing government: How the entrepreneurial spirit is transforming the public sector. Reading, MA: Addison- Wesley Publishing Company, Inc.

Schein, E. (1992). Organizational culture and leadership, 2nd ed. San Francisco: Jossey-Bass.

Tushman, M., Newman, W, and Nadler, D. (1988). Executive leadership and organizational evolution: Managing incremental and discontinuous change, in Corporate Transformation: Revitalizing Organizations for a Competitive World, eds. R. Kilmann and T. Coven. San Francisco: Jossey- Bass.

Terry, L. D. (1998). Administrative leadership, neo- managerialism, and the new public management movement. Public Administration Review 58, no. 3: 194-200.

Vanagunas, S. 1999. Arkansas public management and the government reinvention movement. Arkansas Business and Economic Review 32, no. 2: 21-24.

Walters, J. 1995. Paths to performance: A seven state focus. State challenge grant conferences on strategies for change. A report for the National Commission on the State and Local Public Service. Albany, NY: The Nelson A. Rockefeller Institute of Government.



Documents

IMPLEMENTING LARGE-SCALE ORGANIZATION DEVELOPMENT AND CHANGE IN THE STATES