Continual restructuring – it’s such a waste

It is almost expected that a new chief executive will turn a government agency on its head and distract people from the organisation’s objectives for at least a year. These restructurings tend to be justified with vague phrases like:

‘‘The changes were designed to ensure that resources and structures were aligned to and appropriate for realising our long term plans.’’ (Te Papa 2013)

‘‘… our current operating model hampers our ability to be agile, responsive, and flexible.’’ (Ministry of Health 2016)

Media comment on restructuring often focuses on the dollars spent on redundancy payments, the costs of changing signage and letterheads, and perhaps the cost of employing another set of consultants to come up with yet another form for an organisation.

But there are far bigger costs when agencies are continually reorganised, and these are never quantified.

The most important is the loss of momentum in delivering better public services – things like shorter waits for surgery, better mental health services, better oversight of mines, and better services to protect children from abuse.

Example: Oranga Tamariki

The agency responsible for children has been restructured an incredible 15 times since it was formed in 1989. And the penny still hasn’t dropped, with the latest change being started only last year.

Imagine what could have been achieved if the agency had been given extra funding instead. All the effort wasted in continuous structural change could have gone into hiring more social workers, providing more support for foster families and children, streamlining administration, and implementing new initiatives to better protect children at risk.

It happens far too often

It has been estimated that NZ public sector chief executives initiate more restructurings than occur in the entire US federal government service. Victoria University research also found that chief executives felt pressure to restructure to demonstrate that change was happening. If they didn’t act quickly, they risked being seen as failing to take charge.

A common perception is that restructuring is necessary to remove poor performers. However, if current employment law is the cause of repeated restructurings, it should be changed.

The proposals from the Review of Tomorrow’s Schools fall into another category of restructuring.

During 2000-2017 there were more than 160 restructures as a result of Cabinet decisions to create or abolish agencies, or reorganise whole sectors. Far-reaching changes like these can take years to have their full effect, by which time a new government may be wanting to change it all again.

Example: Health

Back in 1995, the government embarked on a major initiative to reduce waiting times for surgery (for example, hip and knee replacements, cardiac bypass surgery) and provide patients with certainty. We then had two changes of government and two major overhauls of the organisations making up our health system. This was followed by five new structures for the Ministry of Health in the space of 10 years.

With all this upheaval, minimal progress has been made: the current waits for surgery are far too long, and patients are still left hanging, not knowing when they will be treated.

Valuable expertise is lost

The cost of restructuring is even higher when people with knowledge and expertise walk out the door: people whose jobs have gone, people who can’t bear another restructuring, or don’t want to work under the new regime.

The Royal Commission on Pike River commented on the 1998 transfer of the Mining Inspectorate to the Department of Labour (DOL): ‘‘At the time of the transfer several mining inspectors resigned, meaning only two transferred to DOL.

‘‘The effectiveness of the mining inspectorate had been declining for many years and by the time of the tragedy DOL had only two mining inspectors. They were unable to discharge their statutory functions.’’

For staff affected by restructuring, the personal costs can be very high – the stress of not knowing whether your role will continue, frustration when your work has been stalled, and the impact of redundancy.

What needs to happen?

There are many tools that can be used instead of restructuring: setting up crossagency working groups rather than new organisations; making incremental adjustments to structure or functions; asking staff what they think; and directly managing any staff performance issues.

The State Services Commission, along with public sector boards, should explain when a new chief executive wants to rearrange things. Shouldn’t the last chief executive they appointed, or the one before that, have got it right?