Breaking the Shell

Originally published in our client newsletter CityWatch in November 2007

Ben Taylor argues that even as the challenge for Finance Directors increases from all directions, they will benefit from taking the time to take organisational development seriously.

The world of finance managers is an increasingly complex and demanding one. Pressure is increasing on technical functions with new products, new approaches, affordable housing and financial market concerns, pension worries, and IFRS. The need for better financial management across whole authorities is being recognised through medium-term financial strategies, zero-based budgeting and the like. This year’s revenue settlements are looking increasingly worrying, adding further financial squeeze to the ongoing rounds of Gershon savings that must be found from increasingly bare-bones operations. Members are ever less willing to countenance Council Tax increases. There’s the headache of how to get fees and charges right, maximising income without appearing too often in the local press (avoiding this fate seems to be a preoccupation of some Executives). And, last but not least, increasingly the finance function is becoming a catch-all resources department, as disparate parts of the organisation including IT, HR, property and valuations, best value, benefits, and even front office ‘customer first’ responsibilities are piled on.

So, why then should Finance Directors be thinking about organisational development? And how could they find the time anyway?

At Sector Projects, we think there are five main reasons why organisational development supports and benefits the finance function:

1) Organisation development helps you to know your organisation better.
Financial and performance metrics, even if well set and well reported, don’t tell you what you really need to know about the Council. Even the politics which is such an inevitable part of organisational life only adds a little more. Boundary staff in your organisation (those on the ‘front line’) know so much that you need to know that you need a mechanism to liberate this valuable knowledge. What customers really want. Where the big money savings are. Who is underperforming - and why. Why the last big change effort failed. Why the next one will, too. Surveys, roadshows, asking them all help, but unless you make a sustained effort you will find it hard to tap into this goldmine.

2) You can really get people aligned to strategy - not just paying lip service to it. Strategy is probably one of the most over-used words in local government, which often leads to us under-valuing its potential. But when people from across the organisation feel they have contributed to generating a real strategy - that they have a stake in it - something quite impressive happens. People start understanding the reasons for what they are doing in their working lives, and become committed. Far more committed than any amount of carrot-and-stick ‘incentives’ can achieve.

3) ‘Change’ can become something you do together - not a constant struggle. ‘Change management’ is so often just a question of doing what you have to do scare people into compliance, or mollify them after the event. If organisation development is done well, change becomes a normal part of life, something which we can all learn from, and be better prepared for next time. The secret is, as with strategy, to make people genuinely involved in and contributing to what changes.

4) Organisational development can get your staff working to contribute to the organisation, not fight you. As the old adage goes, for every pair of hands you employ, you get a free brain. Yet we can so easily make our organisations places where people have to ’switch off’ their brains when they come to work. Not many people started their local government career as embittered, cynical resisters of change, equally dubious of the motives of the public, senior management, and Members. Yet a surprisingly high number end up in that position within fifteen to twenty years. Staff could be actively contributing ideas to improve performance and cut costs - but when was the last time someone spontaneously came up with n efficiency saving in your council?

5) Finally, it is possible to enjoy your working life more.
We all have to decide whether we want to switch off our brains, respond to crazy edicts from above, lose our enthusiasm - or whether we want to be positively engaged, honest, and enthused by our working lives. Sadly, the only way we can make this decision as individuals is often to move on and seek an organisation that suits us better. But good organisational development allow us to make this choice as a group - and allow work to become fun again.

In short, as our executive director Jim Brooks likes to say, “the job of an organisational leader is to turn a mass of critical people into a critical mass”.

So, how to do it? If this sounds like a panacea, you might be reassured to know it is very hard work. Results don’t come instantly, but they are usually long-term, sustainable, and cumulative. A good way in is to start to use a more consultative and involving approach with your staff the next time you have one of those big strategies to work up, a significant savings programme, or another change initiative. Creating a balanced scorecard, or any value for money measures that link performance and cost, are good ways to do this. But remember, if you are focused solely on making it happen, you are less likely to help people to learn to do it better.

How can you involve members in this? I’m sure some people reading the list of five key benefits were thinking about the capriciousness of members and the impact of this behaviour on trying to change the way the organisation works. The only way to work with this is to ensure that councillors are treated as part of the system, as they are. They must be involved and engaged, and they must see the benefits of organisational development too, so there’s as much of a job involving and selling to them as in engaging front-line staff.

Finance departments can set the tone for councils by focusing not just on the visible bottom line, but also on the underlying reasons why costs are challenging to control and reduce. If they do so, the long term benefits will be significant.

Sector Projects offer the revolutionary Power+Systems organisational workshop, a one- or two-day event for up to 80 people. Participants learn, through direct experience, how our behaviour is so often decided not by conscious choice, but by our role in the organisation - and a variety of strategies to change this behaviour in themselves and others. We can also offer a wide range of other organisational development support.