Change Management in Practice

At OCM, we recognise that the pace of change across government can have some highly visible effects. New programs, mergers, downsizing or outsourcing are all attention grabbers. But in the background the changes can also be eroding the web of incentives, norms, reporting structures, management capabilities, processes and so on that regulate the conduct of the members of the organisation. Almost by definition organisational change must break what is already in place to build a new system. Regardless of how positive the final change outcome may be, there is likely to be a period during which the organisational control arrangements are weakened.

Many ICAC investigations have illustrated that the weakening of this control environment during change has resulted in serious misconduct, as individuals exploited confused reporting lines, lost segregations, degraded management capabilities, or confusion over process. Shifting incentive arrangements also motivated unintended misconduct. Less dramatically, conduct risk during change can manifest itself as dropping service standards and workplace misconduct.

Because the degradation of the control environment during change is somewhat invisible to management, and certainly less salient than losing staff, merging, or relocating, OCM has developed a 45-point change ‘health check’ that focuses attention on those elements of change management that are central to keeping control during the often-chaotic times of change.

Some of these are as well-known as establishing strong change leadership and setting clear plans or roadmaps with milestones and frequent measures. But equally important can be the constant review of process segregations, reporting lines and accountabilities. As staff leave or processes are merged, the segregations that were built into the process initially can be breached as staff pick up work on both sides of the segregation. When managers leave or units are restructured, reporting lines can become broken or confused and accountabilities may not be reallocated. Staff may quickly find they are not being monitored or supervised.

Maybe the most important control that is affected by change is the culture and incentive structures within organisations. In the financial services sector there have been several scandals that have occurred as a result of changes in the incentive structures and cultures within organisations that lead to poor advice, ultimately causing great harm to customers.

For managers within government agencies that are under time and budgetary pressures as they implement changes, coping with the basics of people issues and logistics can already be overwhelming. Without a method to manage the load, and an internal change governance structure that will help maintain control, there will remain a conduct risk during the change period.

For more information please contact OCM on 1300 882 633 or insights@ocm.net.au