Despite the prevalence of restructuring efforts in government (and other sectors) many – if not most – change efforts fail to achieve their desired outcomes. This largely stems from the complexities associated with integrating people, managerial styles and different cultures. These challenges were reinforced in recent research we conducted into structural changes within the Department of the Prime Minister and Cabinet.
The PM&C shift entailed moving from a sole focus on coordinating whole of government policy advice to incorporating service delivery functions: “we tried to marry a very large number of service delivery functions into a central agency that had not much experience with service delivery at all … It’s a massive change process for any organisation, but for a central agency that was purely focussed on policy with a little tiny bit of service delivery occasionally, it was a massive shock.”
Hence, the change enhanced the complexity of PM&C’s operations. It involved a rapid increase in the size and change of focus within the agency. These changes meant that PM&C went from primarily being co-located in the one building (in Barton, Canberra) to a considerable proportion of its workforce being geographically dispersed across the country: “the actual central agency was dwarfed by the size, complexity, scale and reach of the new parts that came in … We went from one location in Canberra to 108 locations throughout the country’.” This created both cultural and physical divides between ‘legacy’ PM&C staff and new staff who were merged in.
In the public sector there has been a normative aura around organisational culture. In practice it is often presented as the critical link for achieving desired outcomes, such as joined up working and performance improvement. Yet, culture can also impede performance. This is most likely to be the case in instances where groups with different cultures are merged together (as often happens with Machinery of Government Changes). Our research on the PM&C MoG change is a particularly interesting case for examining these issues because it merged a central agency and line agency functions – bringing together very different cultures.
Practitioners reported there were cultural differences and issues within PM&C at two levels: between the eight groups that comprised the Indigenous Affairs Group, and then between this group as whole and PM&C. Cultural differences across the line agency functions (i.e. the eight groups brought together from different line agencies) were due to the function being dispersed across multiple agencies for over a decade: “The thing about Indigenous Affairs Group is we’ve inherited eight separate cultures, so we’re trying to blend and manage and shape that.”
Key differences were evident in the purposes for which each group existed. PM&C legacy existed to serve the Prime Minister. This meant they were driven by the need to be responsive to the Prime Minister’s requests and provide whole-of-government policy advice within short timeframes. In contrast, the line agencies were concerned with a particular realm of responsibility (i.e. Indigenous or women’s affairs), which often involved undertaking detailed and time consuming work.
“… a lot of the program implementation work is reiterative, it’s developing a series of products whether it be guidelines [or] help manuals for the providers … [whereas with] a PM&C central agency approach, you have to take a very strategic high level [approach]: ‘is this in line with the government’s other 50 million policies? Are there implementation issues? Are there people in my area who need to know about this in case it conflicts with something they’re doing?’”
The inclusion of the Indigenous Affairs function was particularly seen as counter to the way in which PM&C operated, because the sheer nature of dealing with such a politically-fuelled, wicked problem meant that staff had learnt over time to adopt a trial and error approach and acceptance of making mistakes was key to learning. Moreover, the targeted timeframe of outputs was much slower – driven by the difficulties of addressing wicked problems rather than changing political priorities. In turn, this meant that challenges and conflict were evident, primarily due to cultural differences.
What can we learn from this experience?
We found that the politically driven nature of the MoG change meant that the decision to merge functions was made by the government. This means that the rationale for the change was not based on strong organisational or functional principles, nor was there strategic and cultural fit between functions. The political nature of the change also meant that insufficient time was provided to ensure the department could adequately plan and implement the change; nor could it establish the supports necessary to overcome potential cultural barriers. Specifically, it was apparent that the lack of attempts to integrate the disparate groups perpetuated the difficulties with cooperating and coordinating.
Based on this research, we recommend future structural changes consider:
- Establishing a team that develops and implements integration strategies. Teams should consider the organisational, process and people matters that are most likely to derive value and enhance integration. We also suggest that integration teams should comprise representatives from all merged entities and from different functional areas to enable a broader understanding and greater effectiveness.
- Devote more attention to effective communication. This includes conveying the rationale for change, anticipated benefits and a shared vision and identity for the new organisational unit. This can help enhance clarity and decrease uncertainty.
- Use performance management to support employees through change processes. This will clarify expectations and what is required of staff during the change process.
- Provide opportunities for groups to engage in dialogue and share ideas, learning and knowledge. This will enhance cohesiveness, cooperation and help to build trust.
- Focus on enhancing cultural learning across the newly formed organisation. This can be achieved through holding facilitated discussions where employees from different groups collectively discuss their various ways of thinking and operating and the function they serve. In these discussions, differences can be revealed and discussed to determine how to optimise the strengths of the various cultures and how to minimise conflict, misunderstandings and miscommunication.
Dr Fiona Buick and Dr Gemma Carey are from the Public Service Research Group, UNSW, Canberra.