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Time for a change?

Is your organisation likely to face significant change in the future? This in depth case study provides some valuable lessons on effective change management.

As with all aspects of management, much has been written about how to manage change within the workplace effectively. All agree that, as human beings, we don’t like change and will resist it as best we can. It is, therefore, important that managers wishing to introduce change – particularly where it is likely to make a radical difference – need to manage the process carefully.

The textbooks tell us that change comes in a variety of disguises:

  • structural – where reconfiguration takes place in order to achieve improved performance
  • cost-cutting – where non-essential activities are eliminated
  • process – where the way things are done is altered
  • cultural – where there is a shift in the operating values, norms of behaviour and/or the relationship between management and employees
  • strategic purpose – where the organisation re-invents itself with a new strategic intent, core purpose and/or mission.

I’d like to take you through a real-life change management process, linked to the text book stages and provide my thoughts on how successful the process has been.  These are my personal thoughts and may not reflect the thoughts of the organisation involved.

The organisation is an out-sourced provider of internal audit services to public sector bodies and, in common with the organisations it delivers services to, is required to significantly reduce costs as a result of the current economic climate and the overall financial state of the public sector. 

As a service provider, the majority of the costs are staff related so eliminating non-essential activities has a minimal impact on the overall costs faced by the organisation. The most effective way to reduce costs was to look at the structure of the service and identify a more efficient way in which to deliver it. It was, therefore, determined to change the structure of the organisation.

Mobilisation of the process
Having determined that costs needed to be reduced and that the best way to achieve this was to re-structure, a champion for the process was identified. This individual then worked through a number of scenarios relating to possible structures and the impact this would have on costs, service delivery and the staff involved. These scenarios were then discussed with the organisation’s senior management team where they were further refined and a final solution identified.

Having started with a structure that consisted of six discreet teams, both in terms of working practices and locations, it soon became clear that this produced an overall top heavy management structure – with more managers than auditors – making it difficult to manage costs effectively. After several iterations, the best solution appeared to be a reduction in the overall number of teams down to four without geographical boundaries and a consolidation of working practices. This new structure resulted in the need to make 12 individuals redundant.

It became clear, very early in the process, that when a re-structuring such as that described above takes place the circumstances of individual staff members cloud the decision making process and that names (personalities) needed to be removed. It soon became apparent that what was needed was to remove 12 management posts from the structure not 12 people. This meant that 24 members of staff were placed at risk of redundancy.

Communicating the change
Having identified a possible solution a formal implementation plan was written, this was then presented to the unions at the joint consultative panel where it was further refined prior to dissemination to the staff affected.

All the ‘at risk’ staff were invited to attend a meeting where the implementation plan was presented to them. The plan included the proposed new structure, the process for implementation and the proposed timetable. The staff were invited to comment and provide alternative suggestions for all parts of the process which would be taken into consideration. A final version of the implementation plan would then be presented to the joint consultative panel for formal approval.

The champion proceeded to hold one to one meetings with the 24 ‘at risk’ staff. At these meetings, staff were, again, invited to make any suggestions regarding the proposals, the decision making process was described to them and personal circumstances were discussed. The nature of these meetings varied considerably dependent on the individuals; some were very personal and emotionally charged; others were more matter of fact and recognised the need for change; some individuals made valid suggestions and presented ideas for consideration; others were unable to think beyond how it affected them personally.

It quickly became clear that the 30 staff who were not ‘at risk’ were anxious that this was the thin end of the wedge and that very shortly they would be placed ‘at risk’ and, potentially, made redundant. The champion, then, held one to one or small group meetings with these 30 members of staff as well. A small number of those not ‘at risk’ staff did speak with their feet and found themselves alternative employment.

Was this an effective way to communicate? Yes – all staff were provided with the opportunity to have their say and some took the opportunity to contribute ideas and suggestions. 

Implementing the change
Following final approval of the plan from the joint consultative panel, the organisation then moved onto the next stage which involved selecting those posts which would be made redundant. After much debate and consultation with HR experts around what would constitute a fair process, a series of tests and a formal interview were determined as the most appropriate way to make the selection. Each individual was awarded a score from this process and this score was used to grade them – effectively the individuals with the lowest score in each banding were made redundant.

Following the selection process, all the staff identified for redundancy had a series of one to one meeting with the champion and HR managers.

In the meantime, the remaining staff were allocated positions in the new structure and a one to one meeting was held with each of them where they were given feedback on their test results. These results have been used to formulate personal development plans for each of them.

Reactions to change
Of those staff made redundant some disengaged from the organisation immediately and, effectively, took gardening leave; others undertook discreet projects in their notice period and were productive members of the team until their final working day.

Of the staff remaining, for some their day to day life did not fundamentally change – they were based in the same location and reported to the same line manager. They felt able to sit back and carry on as before. For others the change was significant; both their base location and their line manager changed, and there were feelings of resentment that others appeared unaffected. 

In reality, everyone was affected by the change; the loss of 20% of the total workforce (50% of the management team) resulted in a change of responsibilities and an immediate increase in workloads. As you might expect, some reacted well to this and rose to the challenge, others had a good moan then got on with the task and the rest pretended it hadn’t happened (increasing the pressure on those that had accepted the change).

A workshop event was held; everyone was allowed to have a moan by being asked to identify the positive and negative aspects of the change. Then small working groups were asked to identify ways in which the negatives could be turned into positives and an action plan was developed with some clearly defined goals and reward strategies. 

Engaging with individuals throughout the process, recognising and responding to their concerns and keeping them up to date with what was happening all helped to make them feel involved and that they have some control over the events going on around them.

Take care of yourself
The change process in the organisation followed a very rapid timetable (three months from start to finish) and the champion worked solidly on the project for the entire period. This in itself was physically demanding and taken alongside the emotional stress resulting from the redundancies; dealing with individuals who were, naturally, upset; it was important that the champion took time to ensure their own personal well-being.

Was it worth it?
The immediate monthly cost saving was in excess of £50k. However, the cost of the process meant that this savings was not realised until some months later.

The selection process provided a robust assessment methodology that was subsequently used to identify personal development plans for all the remaining staff.

The new structure generated more cross team/boundary working which resulted in a more cost effective and efficient delivery of the service.

Given the nature of this article, the author has chosen to remain anonymous.

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