Matt Hamnett, Director, MH+A

There is evidence to suggest that most public service transformations fail – but also that successful transformations share a certain set of characteristics.

A 2018 McKinsey Centre for Government survey of 3,000 public officials in 18 countries found that 80 per cent of government attempts to transform performance in public services don’t fully meet their objectives.

McKinsey’s study identifies five disciplines which, together, can more than triple the success rate of government transformations:

  1. Committed leadership: leaders of transformation ‘must commit extraordinary energy to the effort, take personal accountability for success or failure, lead by example and challenge long-established conventions.’
  2. Clear purpose and priorities: ‘successful transformations paint a compelling picture of their destination and make it clear to public servants and citizens why the change is necessary.’
  3. Cadence and coordination in delivery: effective delivery requires‘a fast, yet steady pace, a flatter hierarchy than is usual in the public sector, close collaboration between different agencies and functions and the flexibility to solve problems as they arise.’
  4. Compelling communication: almost 90 per cent of respondents to the McKinsey survey said that the programme they were involved in would have been enhanced by more engagement with front-line employees.
  5. Capability for change: McKinsey argue that, though highly skilled, public servants rarely have the expertise in change management required to successfully deliver major transformations.

McKinsey claim that transformations which have all five of these disciplines embedded within them are three-and-half times more likely to succeed.

They go on to identify three practical steps for leaders of transformation programmes:

  1. ‘Paint a compelling picture of the destination—and commit to reaching it’: leaders must be able to paint a vivid picture of why changes are necessary and the potential they have; the act of setting an ambitious target can itself motivate and help to engage people in discussion about how those goals might be achieved.
  2. ‘Create a common baseline and trajectory’: transformation aspirations must take account of the performance baseline and the trajectory the organisation would be on if action is not taken; and, the baselining exercise needs to go beyond a simple analysis of financial resources and inputs to understand how inputs become outcomes.
  3. ‘Keep targets few, specific, and outcome-based’: achievement relies on setting clear, measurable targets for outcome improvements early on in the transformation.

There are clear resonances between the five disciplines which McKinsey claim will multiply the prospects of a given public sector transformation and the seven lenses framework proposed by the IPA.

They share a focus on clarity of purpose, robust programme management and coordination, communication, staff engagement and capability.

As such, the McKinsey analysis resonates as strongly with Ofsted’s common criticisms of poorly performing colleges and the FE Commissioner’s common recommendations described in Chapter 3.

McKinsey’s recommendation that leaders create a common baseline is important. I will talk a lot more about this in Chapter 5.

Further education colleges are large, complex and dynamic organisations; a great deal will have happened in each of them since they were incorporated as distinct entities in 1992.

To properly understand the issues their transformation needs to address – and the approach they will need to take to deliver it – leaders must thoroughly interrogate their baseline position.

A separate 2016 McKinsey piece argues that transformations require an ‘execution engine’ that will change the performance rhythms and decision-making in a given organisation.

They argue that such an engine should be a function of five leadership actions:

  1. Taking an independent perspective: organisations which sustain change are never satisfied, continue to look for fresh facts and guard constantly against falling back on negotiated targets that managers will readily accept.
  2. Thinking like an investor: passive employees‘kill the dynamism’ of a business; employees in successful organisations sustain their transformation by constantly challenging colleagues, not just getting along.
  3. Ensure ownership in the line: central teams and top–down target-setting should be resisted in favour of line-ownership of the transformation.
  4. Execute relentlessly: senior leaders must sustain their pace and their proximity to the detail throughout.
  5. Address underlying mindsets: managers must inspire,‘instil meaning’ and recognise the extra effort of employees; they must not assume that employees will necessarily understand why the organisation has to work differently in the future

This is a useful supplement to the more holistic analyses provided by Barber, the IPA and the aforementioned McKinsey piece. I would particularly like to draw out the suggestion that leaders adopt an ‘investor mindset’ – which may at first glance feel less relevant in a further education setting.

It is certainly my experience that leaders and colleagues who are willing to challenge convention – and colleagues – in pursuit of new, better ways of doing things can unlock improvements which others do not find (because they’re not looking). It is also interesting that McKinsey counsel that leaders should stay close to the detail throughout the transformation.

That can be incredibly difficult – if not impossible – to do in a large, complex, organisation with such a challenging and changeable external environment. McKinsey’s advice is a helpful reminder that leaders need to find ways to get and stay close to the detail – which may impact their thinking on, for example, the programme management and reporting arrangements they put in place to drive the change.

Recent Institute for Government research into organisational failure in the public sector offers some valuable insights relevant to further education college transformation…

In 2016, the Institute for Government (IfG) looked at four different instances of organisational failure in the public sector – one in each of a local authority, hospital trust, children’s services and school.

They identified eight lessons:

  1. Peer support can provide opportunities for early intervention – but requires a trigger: government tends to intervene only when there is evidence of very serious problems; peers,they argue, could provide earlier, more consensual, intervention.
  2. Interventions may not need to remain in place until the turnaround is complete: in some instances, interventions may need to remain until service standards have returned to the required level, while in others it may be possible for intervention to cease when the organisation is deemed capable of completing that improvement journey itself.
  3. Insularity is often characteristic of failing organisations: they note that failing organisations are often insular, with weak networks and connections to their peers.
  4. Responses to failure can be over-reliant on structural reforms: they note that structural changes including, for example, changes in governance and accountability mechanisms, are one of the most common responses to failure.There is a risk that too much faith can be placed in structural changes,which may not prevent further failure unless enacted in combination with other measures including, for example, new leadership.
  5. Creating an open, no-blame culture helps to protect against future risk of failure: their research showed that environments in which people feel unable to be honest about problems can allow even more serious failings to incubate.
  6. There is scope for more sector-wide learning from failure: colleagues feel there are currently limited opportunities to learn from failure; there is an opportunity to capture and more widely disseminate lessons from effective turnaround efforts.
  7. Failure can (appear to) get worse before it gets better: while being labelled an organisation-in-failure is traumatic for an organisation and those working in it, the IfG found that the label can itself be a pivotal moment in the turnaround journey – breaking the organisation’s insularity, bringing problems into the open and galvanising action.
  8. Turnaround should set the foundation for long-term improvement: as well as dealing with immediate problems, the IfG notes that recovery from failure is only half the journey; converting turnaround into lasting improvement is also important – and the approach taken to intervention can impact the organisation’s ability to do that.

Government’s approach to intervention in further education colleges is decidedly not the focus of this piece; it is a subject worthy of deep exploration and discussion in its own right.

That said, I cannot resist the temptation to note that IfG counsels against an over-reliance on structural reform at a time when government’s preferred solution to college failure is merger.

It is several years too soon for us to see whether merging weaker colleges with stronger ones moves the dial on curriculum and/or financial measures of performance and sustainability.

Though focused on organisational failure and the external, government interventions which follow the lessons articulated through the IfG’s research also offer some important insight with respect to college leaders’ efforts to drive transformation from within.

That three of the IfG’s lessons concern the merits of peer support, the insularity of failing organisations and the scope for learning from failure, points to the merits of looking beyond organisational and sectoral boundaries for the insight, expertise and good practice required to successfully transform a given further education college – whether that means looking at how other colleges are successfully addressing similar issues and/or thinking about how techniques more commonly applied in other sectors could be used to drive transformation.

The IfG’s fifth lesson, about culture, is pivotal. It notes that whatever policy or process changes are implemented, transformation also requires that colleagues are engaged, enthused and determined to deliver improvements.

This engagement is both about identifying problems – giving leaders much greater visibility and understanding of what’s really going on – and about refocusing the organisation on the delivery of high-quality services for itsusers.

We saw in Chapter 3 that Ofsted often criticises poorly performing colleges both for a culture of low expectations and for failing to focus sharply enough on areas for improvement. The IfG’s last lesson is also important to this piece.They found that,‘some organisations can be too focused on achieving an “adequate”rating without addressing the underlying causes of poor performance’.

They argue that a focus on sustained, longterm improvement can be the difference between organisations sustaining their improvement rather than yo-yoing in and out of trouble. We saw in Chapter 2 how difficult colleges are finding it to make the improvement to Good – let alone to stay there or continue improving.

The transformation of the NYU Langone Medical Centre is an interesting case study from which further education college leaders can draw important insights…

Eric J. McNulty, Nathaniel Foote and Douglas Wilson looked at the case study transformation of NYU Langone Medical Centre in the USA99 led by Robert Grossman.

Over the 10 years from 2007, Grossman transformed the hospital – which is now rated amongst the 10 best in the USA. From an operating loss of $120 million in 2007, the hospital now consistently generates an operating margin of 10 per cent and has received top ratings for patient safety and quality of care.

The NYU Langone transformation put people – rather than changes in technology or business model – at its core, focusing on three mutually reinforcing elements: ‘creating belief in an inspiring stretch vision and then translating it into tangible improvements for each area; … championing data transparency as a powerful source of focus and motivation; [and] … committing to upgrading and supporting talent in key roles.’

By engaging the senior leadership team in a structured dialogue about the vision he had articulated,Grossman was able to garner the insight required to test and refine the vision – and was able to build support for it.

He was also able to develop a more detailed roadmap and functional plans which taken together – and tested with colleagues – would deliver the required transformation.

He tasked a group of senior leaders to translate the vision into the metrics that should be used to monitor the hospital’s frontline performance against external benchmarks.

These metrics were drawn together in a dashboard that was used to inform individual departmental review meetings – and then opened up so that it could be accessed by departmental leaders across the hospital.

This enabled departments to judge their own progress relative to others – using benchmarks which they had helped to define. On arriving in post,Grossman quickly replaced five of his direct reports with ‘more aggressive’ managers.

He also understood the critical role of department heads, recognising that many had been promoted into managerial roles because of their high performance as medical practitioners, rather than for their managerial capability and experience – and saw that many were entrenched in the old mindsets that Grossman wanted to change.

He used early vacancies to establish a new profile for the sort of departmental leaders he wanted – those with strong organisational and emotional leadership skills. He also matched his heightened expectation of managers with a greater willingness to invest in them – providing the resources and support they needed to build strong teams around themselves and creating an orientation programme for new leaders.

By 2015, all of the 33 departmental heads in post when Grossman arrived had been replaced. Grossman’s approach with respect to vision, data and the programmatic roadmap for transformation are all consistent with the approaches and recommendations we have seen from Barber, the IPA, IfG and McKinsey.

It is interesting to note how consistently the development of a vision for the future is seen as an inclusive, discursive process which should involve input from and consultation with colleagues at all levels in the organisation; there is good counsel here for those who tend to think of strategy as something which best happens amongst a small group of analytical and intellectually super-charged colleagues. I am also interested to note the relationship between vision and roadmap in this case study.

One follows, falls out of and, therefore, fulfils the other.Again, there is good counsel here about the need for direct alignment between transformation and vision; practical improvement action must move the organisation towards its stated vision – which must, therefore, be sufficiently detailed and sharply articulated to serve as a filter for decision-making.

Likewise, it is important to note that Grossman commissioned colleagues to create a set of performance metrics which directly reflected both the agreed vision and relevant external benchmarks – ensuring that progress could be monitored objectively and with reference to the desired destination.

That the measures of performance used by colleagues in operational roles were directly aligned with the vision and transformation roadmap is a crucial point to note – particularly given Ofsted’s common criticism that leaders of poorly-performing colleges often fail to effectively use data to monitor and drive performance improvement.

The merits of his appetite for staff turnover are more debatable. I will talk in Chapter 6 about the balance the leader must strike between building the team they need to deliver change and creating opportunities for those already working in the organisation to flourish in a new environment.

In the chapters that follow, I will attempt to draw on the lessons articulated in this chapter, as well as the further education sector context and insights drawn out in Chapters 1, 2 and 3 to reflect on how colleges might beat the odds to deliver effective transformations.

Matt Hamnett, Director, MH+A

Over the next few weeks FE News will be publishing this research in full, and FETL will be hosting a webinar with Matt on the report later in February.

Chapter One: The further education operating context is incredibly tough / The introduction of T levels

Chapter Two: College performance compared to other sectors

Chapter Three: The 5 causes of poor performance in FE

Chapter Four: Seven lenses of transformation for FE / FE Can Learn From The Success Of Other Sectors

Chapter Five: Good Strategy Is Crucial For FE Transformation / Policy Cycle Blights FE: Colleges Leaders Should Chart Their Own Course

Chapter Six: How to unleash the talent already in your college / Aligning organisational purpose, strategy and transformation priorities with available funding 

Chapter Seven: Leading the transformation in FE

Conclusion: Government knows what effective improvement intervention in the education sector looks like: Its failure to do so in FE is a choice

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