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