Chris Mills
Lesley Strathie, the permanent secretary at HM Revenue and Customs (HMRC), responded to the recent rather damning review from the Cabinet Office with a spirited defence of her leadership team and the changes they have already made to improve processes and structures within the organisation.
No less than one would expect, of course, and a fair recognition that the right efforts have been made by those who will further drive her vision going forward. But, as any change expert will support, the main barriers to implementing change tend to be not the visionaries at the top of the organisation, nor the 'workers' as a complete group but those who see change as a threat to their career ambitions or a challenge to a comfortable status quo.
The wrong job, the wrong way, for too long
Staff within HMRC are well known for their tenacity and passion to do a great job. However, despite all the change that the organisation has undergone over the last few years, many still feel that they have been doing the wrong job, the wrong way, for too long. The key to successful change is usually to be found in engaging key operational staff, then motivating them to drive the whole process forward quickly and effectively.
This in turn requires a clear view, not just of the strategic goals but also a comprehensively-thought-through model for the entire new organisation, which encompasses vision, strategic performance measures, organisational structures, new projects and business-as-usual activities, together with the right combination of skills, competencies and behaviours needed by all staff.
More important than any of these areas individually is the need to demonstrate clear alignment between all of them. Research shows that organisations that do not seek this rarely achieve their performance goals; whereas those that do, often achieve 200%+ of their targets.
As Strathie recognised in her comments, top-down and bottom-up alignment are vital to the future success of the organisation.
If HMRC staff understand the organisation's goals at strategic and operational level, they will also understand how their own job contributes to those goals, and they are likely to be well-motivated and strive even harder to achieve their own targets.
The Cabinet Office review stated that at least one layer of management remains more likely to be focused on building the profile of their own area (and themselves) than looking out across the silos for the good of the department as a whole.
This is unlikely to change until they feel that their advancement is clearly linked to HMRC's overall success. Strathie's comments suggest that this will be one of the first areas to which she will turn her attention.
The answer for HMRC lies in governance, leadership and culture – harnessing the passion and work ethic of the majority of staff and persuading or redeploying those who see no need for change. The kind of detailed alignment model I mentioned earlier is at the heart of such a programme – but time to implement it fully is limited, given the proximity of the General Election which tends to change everyone's priorities.
For HMRC, the challenges have never been greater nor the public scrutiny so intense. The Cabinet Office review makes it clear that internal change is required: in Strathie at least it seems they have found the right leader at the right time to meet those challenges.
Chris Mills is a partner at PIPC, a global management consultancy, which has delivered some of the largest post merger integrations in the world
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