The true cost of re-organisations - Stakeholder relations are a major casualty of regular reorganisations

There is a famous quotation, attributed to Petronius, which talks about the military being organised in teams, and laments that he was to learn from experience that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization.

It now seems that the author of Satyricon never wrote these words, but that hasn’t stopped business gurus and others from using them to make a familiar point – that there are serious disadvantages to the management obsession with re-organisations. It is deeply embedded in the culture of some Companies; there is an annual October revolution, or an institutionalised kleptomania – the practice of lifting people or whole departments and dropping them somewhere else! This game of musical chairs was once mostly a private sector phenomenon, but the public sector is now just as culpable. No-one argues that change should be banned. But there needs to be a scrupulous cost-benefit equation where the disruption costs can be seen to be demonstrably less than the benefits we can confidently anticipate. The latter may often be over-estimated, but our concern today is on the costs of organisational change.

Those involved with public participation and consultations will know that one of the most fragile pieces of the jigsaw is the management of relationships with key stakeholders. There has to be trust, and for trust to build, there has to be continuity and a stable basis for doing business. Any sales organisation trying to sell complex products over months and years will confirm that the worst scenario is having to change key people in the sales team half way through the process. They know that people buy from people not from firms. And stakeholders build trust with people – not with amorphous public organisations

This is particularly the case with hard-to-reach groups. Helping them see the advantage of entering into dialogues and motivating them to participate, often when to do so is highly counter-intuitive, is a very skilled task, and is successful only thanks to the dedicated efforts of very special people in our public services. When their roles or modus operandi are changed, we run the risk of serious disruption to these relationships; sometimes we have to start all over again; it can take years and cost a small fortune.

Consultative bodies are similarly impacted. There is a peculiar chemistry that needs to work well if committees representing different interest groups are going to be able to give a coherent response to public bodies that consult them. Tinkering with their terms of reference, membership or their governance just reduces their effectiveness.

This is what may have happened with the NHS Patient & Public Involvement Forums. In December 2003 they went “live” in 572 English NHS Trusts, and were made up of 4,000 volunteers recruited to act as the voice of the consumer. Yet two and a half years later, the Government announces they are to be scrapped in favour of less rigid networks to be called LINks that will cover Social Care as well as NHS services.

Now there may be an excellent rationale for this rapid change. Indeed there is much to support in the new proposals and the Consultation Institute will submit its own recommendations on their detailed implementation in the coming weeks. But the inescapable fact remains that the painstaking work of building the Forums, and establishing the necessary relationships with stakeholder bodies in our towns and cities will inevitably suffer with disruption of this kind. Those who have learnt to work with the Forums will question whether it has been a waste of their time; those still developing a relationship will assume there’s no point in taking it further. Worst of all, Managers in the Health Service can afford to ignore anything the Forums say or do; after all, they’re being scrapped aren’t they?

Let’s hope the DoH has done its sums and that their new ideas justify the likely reduced effectiveness of consultation in the meantime.

Trigger points

• Before making organisational changes affecting those in regular contact with stakeholder groups, conduct an impact analysis. Is it worth the disruption?
• Be especially careful with stakeholder interfaces with hard-to-reach groups.
• If you hold views on the NHS Patient & Public Involvement Forums, and the implications of the new proposals on Local Authorities etc.

This is the 65th Tuesday Topic; a full list of subjects covered is available for Institute members and is a valuable resource covering so many aspects of consultation and engagement