Chapter 1
Steps In The
Restructuring Process
Step 1 Assessing Current Operations
When Restructuring Is and Is Not Appropriate
Initial Indicators Signaling Need For Restructuring
Assessment Strategies and Tools
Step 2 Determining Best Options for Change
Know the Outcomes You Wish to Achieve
Analyze Gap Between Ideal and Current State
Restructuring Options
Set Priorities for Action
Step 3 Creating A Transition Strategy
Involvement
Communication
Cover the Big Picture and How To
What Needs to Be in Place to Support Changes
Step 4 Ongoing Assessment
STEP 1
Is restructuring the answer for my organization?
How do I determine if
restucturing will help my organization?When considering restructuring, it is important to identify your organization’s needs and determine what changes need to occur to address those concerns. That is, you must have a sound basis for restructuring before you begin. Restructuring is not always appropriate and in some cases can be detrimental to an organization.
| When It’s Appropriate... | When It's Not... |
|---|---|
| To improve the efficiency and effectiveness of your organization. |
To address employee perfomance issues |
| To better meet customer needs or expectaions |
To address budget cuts solely |
| To enhance/enrich employee job satisfaction |
To tailor your organization to fit the requirements of automation. |
| To respond to external changes influenced by legislation, the economy, or new philosophies. |
To find a "quick fix". |
As you begin thinking about whether restructuring is the right move for your organization, it may be helpful to reflect upon some common concerns that can indicate a need for restructuring.
Assessing Current Operations Initial Indicators Signaling a Need for Restructuring
Indicator #1 A Gap Exists Between
Customer Expectations and Current Performance Government is a service organization even when regulating and enforcing laws. Organizations need to identify who their customers are and what those customers need and want. How is the organization viewed by those it exists to serve? Does everyone in the organization know who their customers are and understand customer expectations? Does the organization have a strategy for meeting those customer expectations which have been determined to be the most important? Is the organization structured to give the most efficient, highest quality service to customers? Do the internal procedures and policies support the organization’s customer service goals? Indicator #2 Organizational Alignment Askew Effective organizations have structures, procedures, policies, and employee behavior which complement one another and facilitate the achievement of stated goals. Many times restructuring efforts are undertaken to align one of these aspects with the overall direction of the organization. Does this organization have a clear picture of what outcomes or results it intends to achieve? If outcome measures exist, how successful has the organization been in meeting these outcomes? Are staff clear about the goals and priorities of the department? Do they know what they can do to achieve those goals? Is staff behavior and attitude consistent with the goals of the organization? Do the policies and procedures help or hinder the achievement of goals? Does the organizational structure focus staff efforts in a way which supports the internal communication goals and meeting customer expectations? Are tasks well coordinated among work groups? Are there steps in your processes or procedures that add time but no value to the final result? Indicator #3 Changes In Resources Available Do you anticipate any significant increase, decrease, or change in your organization’s resources that may affect how people carry out their jobs or the organization’s structure? Staff Do you anticipate any increase or decrease in staff levels during the fiscal year? Are staff currently organized in a way that enables them to function most effectively? Will staff need to perform their jobs differently in the coming months? Are staff adequately trained to meet the organization’s needs? Are staff being prepared to fill future positions? Are appropriate incentives in place to retain skilled staff? Are staff productive or are there indications of low morale and stress? Budget Do you expect level funding or budget decreases to influence the work of your organization? Are there opportunities for increased funding from grants or fees? What kinds of decisions about your programs and staff might need to be made in light of budgetary changes? Technology Are you anticipating implementing or enhancing automated processes? How will these automations streamline the way work is being done? How will changes in the work process affect current positions? Have you reviewed your operations before automating so your automation does not tie you to obsolete processes? If your organization has experienced any of these initial flags indicating gaps between ideal performance and the current level of operation, a more detailed analysis of the organization’s opportunities for improvement may be warranted. Some assessment tools and strategies follow on the next pages.
How do I begin to identify how my organization can improve? What areas should I assess? What assessment tools or methods are available? You may wish to focus on staff issues, customer satisfaction, work flow or processes, organizational effectiveness, or examine a combination of factors. Whether your analysis will be specific or comprehensive, it is essential that you be clear about the type of information you need; have an organized process for collecting, analyzing, and reporting the data; and promote the participation of involved staff at all levels of the organization. It is also important to have the support of top management and maintain open communication with all staff throughout the process. Collect General Data Revisit Mission Statement and Legislative Charge Organizational structure, work-flow, and individual performance standards should be created to support the outcomes the organization is responsible for achieving. A review of the mission and legislation that guides your organization is important before considering any restructuring effort. These documents can help to clarify what the organization is expected to achieve. If the mission or statute is outdated, it should be changed. Review Organization Chart Is your organization structured in the best way to facilitate accomplishing the work? Are tasks and functions coordinated effectively? Does the structure facilitate or hinder communication, problem solving or decision making? Are job descriptions current? Do employees participate in entire processes or are jobs segmented? Are employees offered challenges and opportunities for growth and development? Benchmark Research other organizations who perform similar services, functions, or processes to look for examples of best practices. Assess Organizational Operations Check for Alignment of Goals and Internal Operations Many organizations have not clearly articulated the goals or outcomes they strive to achieve, thus the collective energy of the staff is not harnessed and directed at specific objectives. Individuals within the organization may be operating toward divergent ends. The first step is to make sure organizational goals and outcomes are clear and commonly understood. The existence of clear outcome goals alone does not ensure a well-functioning organization. Clear goals must be accompanied by: a structure which supports the direction and operating philosophy of the department; employees who support the positive values the organization aspires to; internal mechanisms or systems which support communication flow and decision making throughout the organization; and leadership that brings all of the above in to alignment. There are many organizational diagnostic tools, but one that is simple to use is Marvin Weisborg’s Six Box Model. Analyze Work Flow or Process Examining how we do our work and streamlining our processes can result in better service to our customers, less frustration and greater satisfaction among staff, and reduced costs (time, money) to the organization. Streamlining processes is a concept discussed in both quality management and re-engineering literature, but how do we know if we can improve our processes? A process is defined as the grouping in sequence of all tasks directed at accomplishing one particular outcome. Examples include steps in producing a product; steps to receive a service (from the customer’s point of view); responding to a request; or an approval process. Determining if a process can be streamlined (reducing unnecessary, non-value added steps) starts with mapping or flow charting the current process and identifying: steps
costs
benefits
deliverables
bottlenecks
what adds value to the end product
current assumptions about what must or must not be done Process redesign can be done on a macro or micro level. A macro-level would examine processes which are cross-divisional or cross-departmental. Their redesign could result in a new organizational structure. A micro-level redesign would examine one process and result in smaller, incremental changes. Two resources to learn about flow charting and process redesign are available at the Learning Center library: The Team Handbook by Peter Scholtes and Seamless Government: A Practical Guide to Re-Engineering in the Public Sector by
Russell M. Linden. Identify Outcome Measures and Monitor Outcome monitoring is the routine measurement of important indicators of outcome-oriented results. Most organizations measure their outputs or activities. Far fewer organizations measure the outcomes or results (see examples of outputs and outcomes on page 12). Many states including Vermont are moving toward measuring program outcomes. If your organization has not already identified specific outcome measures, then introducing this method of assessment will be a long-range effort. Once the intended program outcomes are stated, then a valid and practical method of measuring the results must be developed and implemented. Outcome monitoring can facilitate program assessment by: • Identifying performance problems and opportunities for improvement. • Developing commitment to continuous improvement. • Greater accountability One source for learning about outcome monitoring is the Handbook of Practical Program Evaluation, (Wholey, Hatry, Newcomers, editors) available through the Learning Center library. Assess Customer Satisfaction What better measure of your organization’s performance can you obtain other than the opinion of the recipients of your services? While this concept is surely not new in the private sector, government agencies are gradually recognizing the importance of customer input in improving operational effectiveness. Listening to one’s customers is more than merely hearing complaints. To provide useful information your customers’ needs, opinions, and suggestions must be sought in an active, deliberate way. Identify Customer Groups The first step is to identify your organization’s customers. Customers are the individuals and groups who receive your products or services (a service can include information). Customers can be external or internal. External customers are those individuals or groups outside your organization whom you serve. Internal customers are those individuals within your organization who count on you for information, service, or products. Your organization could have many different customers. Some customers may be more important to your operation because they use your service more frequently or their status or position has greater potential influence on the work of your organization. If you desire a customer-focused operation, your mission will be driven by the needs and expectations of your customers. Solicit Feedback Methods for clarifying customer expectations include: individual interviews, telephone interviews, focus groups, and/or questionnaires and surveys. In utilizing these methods it is essential that the survey design be approached systematically keeping in mind the scientific principles that apply to the various survey methodologies. A poorly designed feedback process will produce findings that cannot be used to develop a strategy for your organization. Each method has its strengths and weaknesses that should be considered before determining your course of action. For help in designing feedback processes you may consult a research expert in your department, contact the Department of Human Resources, or contract with external consultants. The Vermont Learning Center resource library has resources on this topic. See Appendix A for sample customer surveys. Decide Who Interviews Customers? If part of your information gathering strategy involves individual interviews or focus groups, you must decide who will do these. Some of the options are: 1) Department Management Group. This group may need to receive input from customers and understand it on a personal level first before moving on to involving all staff. 2) Staff in Cross-Functional Groups. Including staff from mixed functions, divisions, and/or levels can begin improving lateral communication in the organization and create buy-in throughout the organization. 3) Consultant External to the Organization. An external consultant can bring a fresh perspective, be viewed as unbiased, and/or bring a particular expertise to the process. In state service an external consultant could be a private consultant, a member of The Vermont Learning Center staff, or a person from another department. Interviewers should be trained in interviewing skills and use a consistent format
and set of questions. Surveying Staff
Your employees can tell you a great deal about your organization’s values and culture and whether it is consistent with your organization’s mission. Employee satisfaction and morale affects your organization’s productivity. Employee attitudes are reflected in the way staff members interact with your customers. You can assess organizational culture and staff attitudes by using the same methods described in the section above: interviews, questionnaires, and focus groups. Doing an assessment of culture and attitudes will help you to determine whether these factors are aligned with where you want to go. For instance, a staff that is unclear about organizational objectives and individual performance standards cannot contribute effectively to the organization. See Appendix A for sample staff surveys. After you have collected and recorded your data you will need to organize the results and look for patterns. What strengths and weaknesses have you documented? How can you build on these strengths and improve areas of weakness? Is restructuring the answer? If so, how will you restructure your organization? Will reorganization be part of the implementation plan? These are some of the questions to be addressed in Step Two. STEP 2 Determining Best Options for Change What strategies best fit with my organization’s goals, resources, and mission? Given the informatlon I have, how do I prioritize the changes,
that we should pursue? Now that you have collected information about your organization’s strengths and opportunities for improvement, it is time to consider what strategies will help you reach the outcomes you desire. In order to do this you must: • Know the outcomes you wish to achieve In your organization. • Analyze the performance gap between the Ideal and current state. • Understand the restructuring options available to you. • Set priorities from the available options.
Know The Outcomes You Wish To Achieve What are the outcomes you wish to achieve? Outcomes may have an external or internal focus. Externally-focused outcomes address results which are important and observable to customers or individuals outside your organization or with whom you do business. Internally-focused outcomes aim to improve the way people within the organization operate and/or relate to one another. Here are some examples of general outcome statements: Once your group agrees on the outcomes desired, you should define these statements in more specific and measurable terms. Determining Best Options Analyze Gaps Between Ideal and Current State The information you gathered in Step One paints a current picture of your organization. The outcomes you identified point toward an ideal state. The difference between the two represents your opportunities for improvement. In moving toward an ideal state you need to understand the options available to you. Given the limited scope of this guide, only some options can be presented. Determining Best Opt ions Restructuring Options Redesigning the organization’s structure and fine tuning certain processes is a tool informed leaders can use to emphasize certain issues, standards, and/or values and to give staff a focused direction in which to move. Design options fall into two categories: structure and lateral processes. Decisions about design should flow from the organization’s goals, desired outcomes, mission, and values. In other words, the structure should help the organization achieve its goals and be consistent with organizational values. Areas to be covered in this section: • Some Initial Decisions. • Structural Options. • Strategies for Creating Lateral Coordinating Mechanisms. Some Initial Decisions Position specialization facilitates an in-depth focus and expertise in a particular area, but can be isolating to the staff member who does not see the connection between his or her tasks and the big picture. It can work against coordination across functional or specialty lines. A generalist may be able to respond to customer or internal requests with greater speed and coordination. Decisions about whether staff should be generalists or specialists should be based in part on the level of skill it takes to perform the tasks (low and moderate skill tasks may be better suited for the generalist role) and what role will best meet customer needs and expectations. Recent trends in organizational designs are to flatten hierarchies by reducing levels of supervision and decentralizing decision making. Flatter organizations can lead to faster decisions, lower operational costs, and improved communication. However, flatter hierarchies will not work unless management delegates authority and responsibility to lower levels where line staff are given the training and freedom to make decisions. Other factors contributing to enabling reduced levels of supervision include: an experienced
staff, an experienced leader, performance of similar tasks, and tasks that are easily
measured. Structural Options Most organizations are organized around functions or activities. This structure places workers with compatible functions together such as planners, trainers, attorneys. Free exchange of ideas and information among individuals with common expertise can allow a greater level of specialization among workers. A functional structure, however, can also result in less communication among divisions and may be more likely to create "us versus them" attitudes. Initiatives which require cross-divisional cooperation can be more difficult to achieve in this environment. This structure organizes staff by customer groups. An administrative group might organize in divisions to serve managers, supervisors, business managers, and line staff. An agency regulating the private sector might organize by heavy industry, light industry, taxpayer liaison, etc. This structure focuses on service to groups and allows a greater level of knowledge about particular clients or customer groups. The disadvantage is the possible duplication of functional efforts within divisions and can also result in an "us versus them" environment in the organization. Many state organizations have, in part, a geographical structure with district offices. This type of structure allows the organization to function within the service area and reduces some operational costs such as travel. It is also possible to have a geographical structure with central office staff working in cross-functional teams or divisions focused on specific locations in the state. The newest organizational structure is the process structure. In this structure employees work on a complete flow of work, from the first steps to the final outcome. Often this involves staff from multiple disciplines working together. Some common core processes which occur in many governmental organizations are: program delivery, information delivery, license and permit application, and complaints management. Having a diverse group work toward a clearly defined outcome can increase understanding of the various functions, provides ample opportunity for streamlining the processes, and increases accountability. Strategies for Creating Lateral Coordinating Mechanisms The coordination of information, decisions, and activities across organizational units is as important, if not more important, than the structure itself. Jay Galbraith’s book, Designing Organizations, outlines three types of lateral processes: Three Types of Lateral Processes Type 1: Informal or Voluntary Processes • Rotational assignments that move individual employees throughout the organization to increase their overall understanding of operations and reduce control issues. • Interdepartmental or divisional projects to reduce barriers among staff and encourage communication. • Co-location of groups which need to coordinate activities. • Use of information technology such as e-mail and local networks to facilitate communication across divisions and departments. • Creation of performance measurements and reward systems which create consistent goals and objectives in all divisions and reward cross-functional cooperation. Type 2: Formal Groups Teams, task forces, or councils can be set up on an ad-hoc basis to focus on a set of issues. For example, cross-functional teams might be created to work on a special project, deal with the development of a new service, focus on affecting the organizational culture, or work on redesigning/streamlining a specific process. Creation of formal groups such as these require deliberate action on the part of management. For these groups to be successful, their collective mission and individual roles needs to be clear. In many instances the group will require training in areas such as facilitation and conflict management. Type 3: Integrating Roles Integrating roles involves the creation of full-time leaders whose role it is to integrate services across organizational units. The designation of full-time integrators indicates a strong commitment to lateral coordination in the organization. It can be very fruitful provided that the leader’s authority is clearly defmed. The individual in this role must have strong organizational and interpersonal skills. See Appendix B for an example of this model (Department of Environmental Conservation) and other structures in state government. Determining Best Options Set Priorities for Action When making decisions about how to proceed, consider the following: What will the criteria be for selecting restructuring options? Better service, greater efficiency, cost savings, position reductions...? Which criteria must be included in any options that you pursue? Do the criteria vary in importance? Do the criteria take into consideration what is most important to your customers/clients/constituents as well as political and organizational realities? You can compare possible criteria options to select in light of their relative importance to your restructuring decisions. Step 3 Good ideas are not enough to create successful change in your organization. Many leaders have had good ideas sputter and fail because they have not anticipated or did not have the skill to manage the transition from the existing way to the "new" way. Successful, lasting change requires a deliberate, thoughtful plan which addresses: Involvement Research supports a strong link between participation in the change effort and commitment to the change. The invitation to be involved in a change effort must be accompanied by genuine respect for the individuals and their values. Some questions to consider: At what point in the process will staff have input into the decisions being made? Who will be affected by the changes we are considering (customers, stakeholders)? Do we want to involve them in the process? If so, how and at what point? Do staff, managers, or meeting facilitators need any additional skills to make this participation effort work? Do we want to use an outside facilitator in this process? Communication Absolutely critical to managing the people-side of change is communication. Managers who are "in the loop" often forget staff are not as well informed. Communicate often and in a variety of ways: large staff meetings, small group meetings, memos, meeting minutes distributed, e-mail, etc. Even if there is not much news to report, say so. Make it a part of your transition plan to set goals for frequent communication. To the extent possible, aim to ensure that all staff get the same information, at the same time, in the same manner. If information will be shared in work groups, discuss with supervisors not only what is communicated, but also how the information will be shared. The attitude and style of the person communicating about the progress of organizational change will greatly influence how that change is perceived by staff. Cover the Big Picture Change efforts are most successful when a well-articulated reason for the change is communicated. Why are we changing? It is best to phrase the answer to such questions in positive terms - "To create a more flexible, customer-friendly organization." rather than in negative terms - "Because we have so many complaints and we are under pressure to change." A well-articulated picture of how the organization will function in the future helps to focus the change efforts. Addressing the big picture alone is not sufficient however. While many individuals are motivated by understanding the context or reason for the change, others will want to know the specifics: How will my job change? What do I need to do differently? How do I fit into the big picture? If you do not yet know the answer to these questions, at least state that you understand and are aware of the need for these questions and you will answer them as soon as possible. What Needs To Be In Place To Support Changes Will the changes planned for the organization require different skills or behaviors from staff?
Are new or different technological resources needed to support changes? If the structure is changing, are the organizational values, performance measurement systems, rewards, and management styles changing as well? Anticipating the answers to these questions will help you develop an appropriate plan for training and technology. The third question addresses organizational alignment and the need for these areas to support one another to accomplish a successful change. The book Business Reengineering: The Survival Guide by Andrews and Stalick illustrates three layers of organizational change; starting with the areas which are most concrete and easiest to change, to the layer which is least concrete and most difficult to change. Three Layers of Organizational Change Physical Technical Layer Process, Technology, & Organization Structures Infrastructure Layer Reward & Measurement Structures Management Methods Value Layer Organizational Culture Political Power Individual Belief Systems In order for changes to the organization and/or process structures to be successful, appropriate changes in the infrastructure and value layers must take place as well. STEP 4 and Continual Improvement Now that you have redesigned your organization for a particular purpose with specific outcomes in mind, the next step is the ongoing process of evaluating how well you are reaching your outcomes. Program evaluation is a science and thus your evaluation strategy will be most effective if researched and applied systematically. After considering what you want to measure you will also need to decide how to measure it. For resources in this area refer to the Resources section in this guide.Assessing Current Operations
Assessment Strategies and Tools
Output
The quantity of a good
or service producedOutcome
The quantified result, or impact,
of the service produced
(output)
vaccinations given
% reduction in incidence of disease
# tickets written
% decrease in auto accidents
# individuals who took class
how much improvement demonstrated
# patients treated and discharged from
mental hospital# discharged patients who are capable of living independently
Externally-Focused Outcomes
Internally-Focused Outcomes
Increased customer/client satisfaction.
Reduced duplication of efforts.
Faster turnaround or processing time
Removal of unnecessary steps in a process
Greater accuracy
Increased authority given to and responsibility taken by non-management staff
Improved-ease-of-use.
Increased cooperation among staff and programs, less "turf protection".
Increased effectiveness in meeting stated
Change in the culture of the program goals.organization or the way in which the
staff behaves on the job, e.g. increased customer-service focus.