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World Bank Presentationby Dr. Andy Macdonald
Washington, D.C.
June 29, 2001
Presentation Outline Brief Review of Work Experience
Competencies and Lessons Learned
Change Management Experience Experience in Canada, Australia and South Africa Purely personal observations on success
strategies and relevance to development initiatives
Discussion
Early Work Experience (1963-76) Electrical Engineer
Problem analysis Project management
Transportation Expert Regional development Systems costing
Transportation Institute Project management Focusing researchers on
results
Transport Canada Strategic Planning Federal-provincial
relations Results-based
resource allocation Budgeting process
Office of the Comptroller General Budget and Estimates reform
Policy development & implementation(Selling the unwanted to the unwilling)
Parliamentary Liaison (leading the horse to water)
Program budgeting – early experiences Supply push vs. demand pull – the challenge
Government Financial Management Perceptions of senior management Cash management Risk approach to control Accrual accounting
Comptroller General (1989-1993) Governance issues
Functional direction in 3 communities Financial Transparency
Financial statements Linkages to outputs Fraud monitoring & detection
Program performance measurement Role of program evaluation, audit, financial managers
Management representations Audit assurance
Human resource management issues Targeted recruitment/development programs Staffing of key individuals
CIO- Canada (1993-95) Government-wide approach
Major cultural change Internal and external impacts
IT Strategic Plan Business/HR/information focus+technology Major communications effort Multiple stakeholders, deep-seated prejudices
Internal process re-engineering Council for change Procurement processes Time to achieve change
CIO – Australia (1995-98) First CIO
Challenges of government-wide approach External change agent Role of visible senior champion(Minister)
Strategic Plan Service delivery focus Significant public interest Department involvement Internal and external impacts Challenges of implementation ( coming down from
60,000 feet)
CIO Australia (Continued)
Outsourcing Initiative Major cultural change, strongly resisted Approval process – “dictatorship” of the Cabinet table Opposition
IT community Departments and their Ministers IT Industry – SMEs & economic development Opposition party and parliament processes
Excellent example of change management Communications strategy Lessons learned
Change Mangement Principles* Sense of Urgency Develop Powerful Coalition Create the Vision Communicate the Vision Empowering others to act Get early successes Build on early successes for fundamental changes Institutionalize the changes
* Kotter, John P., « Leading Change », The Leader’s Change Handbook, Jossy Bass (San Francisco, 1999) p 99.
Principles: IT Outsourcing Urgency – crisis can be opportunity
Incoming government’s $1 Billion IT spend reduction Competitive Government in Asia Pacific
Powerful Coalition – inside & out Minister of Finance, Senior Advisor, Treasurer and PM State support politically (South Australia, Victoria) AIIA major players
Create the Vision Best practice in private sector- non-core Market testing basis, not by fiat Benefits extend far beyond cost savings
Technical currency, service levels, career paths for IT staff,scalable assistance
Key strategies – credible market testing, communications throughout exercise, cluster approach, departmental champions
Principles: IT Outsourcing (contd)
Communicate the Vision Cabinet decision and resource adjustments Role of Minister, CGIO in championing vision Four stages of adjustment Specific communications person – general meetings, departmental
meetings, weekly newsletters, conference speaking engagements, media interviews
Political costs of communication
Empowering others to act Many obstacles to change – departmental Secretaries, IT community, IT
SMEs, Opposition party, Senate, media Major pension policy changes required Economic development – multiple objectives Departmental champions and peer group endorsement Risk management concept difficult in polarized political environment
Principles: IT Outsourcing (contd)
Early successes Build momentum and credibility for initiative – risk of lost
momentum Veterans Affairs & Department of Finance – unanticipated outcome No rewards for successes – governments tend to punish more than
reward
Institutionalizing the changes The most difficult part – bureaucracies are very immobile and tend
to snap back when the pressure is relieved Changes take a long time to implement and require constant
pressure until the process becomes irreversible The Humphrey review - 2001
Personal Reflections
Major change is possible in government administration People change when the perceived cost of change is exceeded by
the cost of the status quo
But, reform in government requires patience Risk averse culture – status quo safer NIH resistance can be quite pronounced - we’re different
Multiple & competing objectives complicate change management process Nature of government processes Competing stakeholders pressure to satisifice vs. optimize Optimal solutions rare – practical trade-offs omnipresent Criticism from opposition
Personal Reflections (Contd)
Major change can only occur after a strong shock to the system
Small vs. large budget cuts
Expect strong resistance from the agencies
Strength of status quo Needs strong support from the centre Continuous pressure to continue the process Budget cuts get attention
Personal Reflections (Contd)
External change agents have greater chance of success Greater perceived authority/experience No baggage Easier access to key decision makers Unencumbered by internal constraints – tell it like it is
Senior, highly-visible and articulate spokesperson(s) Complemented by internal champions at middle management
levels South Africa experience
Communications is critical Your can never over-communicate All stakeholders targeted, including affected staff
Personal Reflections (Contd)
Metrics are critical to monitor change If you are not keeping score, you are only practising
Inter-agency benchmarking for comparison of progress
Peer group endorsement strategy Wide consultation with agencies Shared project responsibility
Lead agency concept Knowing when to stop consulting
Information is a strategic government resource that is underdeveloped
Personal Reflections (Concluded)
External pressures from funding agencies can be crucial Major shock to system External agent of change Expertise provided
Locking it in Requires internal senior champion and supportive agencies
(peer endorsement) Bureaucratic buy-in is important for long term changes Benefits must accrue to the public
Discussion