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So You Want to Restructure?

So You Want to Restructure?

There are some useful approaches and principles all CIOs or equivalents might consider when restructuring management reporting lines

With management restructures there's only one rule: get it right first time.

When the CEO or minister announces the agency is going to restructure in the name of operational efficiencies or an expanded range of services, public sector managers suspect they are really hearing: "The last approach didn't work so let's try another".

On the other hand, it may be that technology is precipitating changes in the service delivery model of the public sector so quickly that continuous management restructure is inevitable.

In those cases, there are some useful approaches and principles all CIOs or equivalents might consider when restructuring management reporting lines.

Assess the Current Situation

Before embarking on a restructure, assess today's situation and ask:

  • what management and service processes are not working as expected and why
  • what service delivery changes are in the pipeline and how will they affect the existing structure
  • how customers have rated service delivery and whether they believe they are getting value for money

Use the assessment to determine what changes are required and as a point of reference when testing the practicability of the new structure.

Sometimes the assessment reveals only minor problems. In such cases it is often best to address those problems via a partial management restructure, while leaving other reporting lines that are working well alone. Minor problems include:

  • a manager is taking longer than expected to process active matters
  • too many systems errors are being picked up by clients
  • business volumes are growing beyond expectation
  • a new client service offering is being implemented

Unless absolutely necessary, managers should avoid undertaking a major restructure because it can (a) be disruptive, (b) consume valuable management time and (c) divert staff from their operational activities. The golden rule is, undertake a major restructure only where there is no option. After all, failure to get it right first time may be a career-limiting move.

Testing the Design

After designing some optional management reporting structures, critique them for reasonableness with an audience of peers in an egoless review.

Try to involve a range of participants, from those with intimate knowledge of today's problems as well as those with none. Choose participants not afraid to ask "dumb questions" and, consistent with the egoless approach, do not defend the design, merely record feedback for later review. Do not invite those directly affected to take part as their feedback may be perceived as biased.

Exit feedback from the first review will probably vary from: "That will not work" to "You have my support". If in doubt about the viability of the proposed structure, revise the options and conduct a second review with the same participants and egoless review process as above. Repeat until the most appropriate structure emerges.

Managers prepared to spend time in this phase will find they have increased their chances of getting it right first time. The road map in the diagram below depicts the steps and the linkage of the review with the Guiding Principles.

Guiding Principles for Managers

The following principles should be applied when designing and reviewing a new structure:

  • spans of control for a manager should be in range of 4-6 reporting lines to ensure effective contribution during deliberations of the management team
  • there should be separate operational, governance and strategic roles - that is, do not have them reporting to the same manager
  • do not split key processes across organisational lines
  • preserve critical mass in a section; ensure staff backup and knowledge transfer
  • design roles that are not difficult to fill
  • design roles to meet service delivery requirements - not the strengths of an individual
  • promote to management, people:
  • with broad technical and strong interpersonal skills
  • who can make a mature contribution in team meetings
  • who are respected by their peers

These principles are germane in most public sector agencies, which operate under a charter and where structure and form are critical for success.

Convincing Stakeholders

When presenting the new structure to senior management, explain:

  • why it is necessary
  • the business consequences of not restructuring
  • the target environment, that is, what the restructure will achieve, including benefits to clients
  • the plan to restructure, e.g. how it will be implemented
  • the risks and how they can be minimised

Caveat

It is rightly said that, "One cannot make a silk purse out of a sow's ear". In the same way, implementing a restructure may not be enough to turn around a bad situation. CIOs also need to consider whether a cultural change is required to complement the restructure.

Where cultural change is needed, success will depend on management's preparedness to "walk the talk", that is, explain why restructure is needed, how it will be implemented and how the agency and, most importantly, its staff will benefit from it.

Complementary Benefits

In the public sector, managers typically have to define new or expanded roles, which could justify a salary or level change, in unambiguous terms to HR or the equivalent.

Having an approved restructure and following the Guiding Principles as above, will:

  • facilitate the salary/level change approval process
  • make the management selection process more transparent and
  • help the new manager understand the role, reporting lines and accountabilities on day one

Alan Hansell is an associate of Intelligent Business Research Services (IBRS), an independent Australian research and consulting company (www.ibrs.com.au)

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