Long before the coalition government’s radical overhaul of local authority budgets and the subsequent prolific media coverage devoted to public-sector cuts, Sir Peter Gershon was tasked with carrying out a review of public-sector efficiency. The Labour government-commissioned report, published in 2004, set out a number of recommendations, including introducing efficiencies to back-office functions, among them HR. For Essex County Council (ECC), this was the beginning of a recognition of the need to “improve efficiency, get better procurement and do things in a smarter way because of the overall budget pressures”, says councillor David Finch, deputy leader of the council and cabinet member for the finance and transformation programme. But while a number of efficiency initiatives were put in place, it was in 2008 that the council’s leadership recognised there needed to be “almost a paradigm shift” in the organisation. “To afford to provide the level of care and support to the citizen that we needed to, we had to very obviously and clearly look at the way we do things and the way we buy things,” says Finch. Primarily this meant moving from being a traditional public service provider towards a commissioning model, in which the council may choose to deliver a service itself or commission another organisation to do so, as long as the outcome is achieved and provides value for money. “To be really effective in local government in the 21st century, we have to make sure the organisation embodies and understands change, and accept that we need to recognise the cultural shift needed to move towards a commissioning organisation,” says Finch. This has meant an overhaul of the council’s departments and processes. Keir Lynch, executive director of transformation, who also heads up the HR department, puts it simply: “Four years ago the organisation decided it needed to reinvent itself.” As a result, EssexWorks was born.
As with most transformation programmes, there have been massive implications for employees. But when EssexWorks was launched, the HR department was the least engaged team in the council. “Morale was low, people were looking for direction and the function had lost confidence in itself,” says Lynch. “It had retreated to a sort of centralist ivory tower, writing policies nobody understood or wanted.” It was then that Lynch was recruited from the Bank of Ireland Group to his first public-sector role. His initial brief was to turn HR around in 12 months, so it would be a strong and progressive enough department to play an instrumental role in transforming ECC. “I found compelling the idea of an organisation that recognised that getting the people side of change right was going to be fundamental to the journey,” he says. In that year
Lynch transformed the HR department from a transactional “heavy hand-holding” department to a “strategic change function”. There are now business partners across each department within the organisation, and many of them sit on the leadership teams of the three front-line directorates across ECC. “They are embedded into the management structure and have earned the right to play a role,” Lynch says. The HR team now sit together in an open-plan office located on one floor, rather than being dispersed all over the council in cubbyholes and annexes as previously. Lynch also brought in new team members from the commercial sector who had previously worked on highly evolved business partner models, and HR staff were trained in areas such as organisational development, strategic change skills and internal consultancy. “We rebuilt capability, redefined the operating model and did an awful lot of re-engaging the HR team to get them excited again about what they were here to do, as well as to find self-belief and confidence,” Lynch says. The engagement levels of the HR team are, at 71 per cent, now the highest at ECC. And, as a result, the council’s chief executive felt confident enough to ask Lynch to take the lead on the entire transformation programme. “HR understands organisational design, change and project management,” Lynch says. “All those are core ingredients to driving any big change programme.”
Once the HR team was match-fit to lead the programme, EssexWorks began in earnest. It’s a huge project. Designed to save the council £300m over four years – or 30 per cent of its budget – the programme aims to overhaul all areas of the organisation’s operations and functions, from creating a new customer contact centre to introducing mobile technology so employees can work more flexibly. The overarching theme of the transformation programme, as set out by ECC’s cabinet, is “delivering excellent customer services”. It aims to do this by addressing goals under three headings: people, economy and world. These goals include increasing educational achievement and skills, promoting sustainable economic growth and protecting the environment.
But this doesn’t really capture the scale of the programme. About 70 different projects across the council are currently contributing to the change programme, which is among the largest and most far-reaching of its kind in the UK. Management has been revamped as part of the -programme, delayering the organisation and removing about 500 management posts, with £12.5m likely to be saved. A leadership pipeline has been created, with professionals in this -programme being drawn in to help senior leadership with different change initiatives. The council is also reducing the number of properties it has from 54 to between 12 and 15, and introducing a self-service HR system. It is also changing the way it communicates with customers – by revamping its website and communicating more online. “Just understanding the sheer scale and complexity of what we do is a challenge,” says Lynch. “We are changing everything in the council.” This includes projects to make the organisation money. ECC has set up
something called EssexCares – a local authority trading company (LATC) that can sell the council’s services in -specialist areas to other organisations. Eight hundred council staff were transferred to the LATC and any profit made goes back to the county council. There are plans to set up more LATCs. Even the HR department has been boosting council revenue. About £3m of income is made each year from selling its services externally to a combination of schools, both inside and outside Essex, and to other organisations such as SMEs. “We charge them reasonable rates for services such as Criminal Records Bureau checks,” Lynch explains.
EssexWorks, however, is primarily about saving money. Two years into the programme and it’s already saved the council £150m. The biggest savings have come from two areas. The first is procurement. “We’re a big authority, we spend a lot of money and have a lot of big -contracts,” Lynch says. “So we’ve renegotiated a lot of contracts and moved some of our staff into joint ventures with other major contractors.” The second saving has come from process efficiency, achieved by, among other things, the inevitable reduction of employees in the council. “Through good workforce planning and controls we’ve tried to mitigate the need for compulsory redundancies where we can,” Lynch says. Where inevitable redundancies have had to be made, the organisation has offered training to outgoing employees in areas such as interview skills. “We are trying to give them every chance of success,” Lynch says. Such is the sensitivity of Essex’s approach to job losses that some of those made redundant have written to thank Lynch for the support the organisation has given them throughout the process, he says.
This has been achieved through successful communication and engagement – which both play a leading role in the transformation programme. “EssexWorks is a big opportunity to win the hearts and minds of people with clear, decisive communications and to deal with staff concerns as and when they arise,” Finch says. The importance of this is reflected in Lynch’s decision to appoint an employee engagement manager, Lisa Sibley, who leads an employee communications and engagement team to support the transformation programme. Sibley’s job has included putting together a corporate action plan for engagement, which includes properly communicating with employees about the employee engagement survey at both a corporate and local level, and getting the corporate team to accept and endorse the survey’s findings. That need was driven by a low response rate to the survey of 45 per cent in 2008, a figure that has now risen to 67 per cent. Every activity on the corporate action plan is sponsored by someone on the leadership team. “This is about helping to remove the myth that employee engagement belongs to HR,” Sibley says. “My role was to kick-start it, using the employee survey and lots of other interventions.” The leadership team also communicates via a tool called “You said, we did”, to show staff the changes they’ve
made in response to recommendations by employees in the employee engagement survey. Other interventions have included an “Our Voice” forum – a network of 39 volunteers including senior leaders who represent the council’s different services – which is designed to push a sense of employee engagement across the organisation and to replicate success. The council also has an informal network of about 500 employees called Essex Engagers who encourage other employees to take part in engagement events. “I’m a great believer that employee engagement is infectious,” Sibley says. To measure the success of these initiatives, the engagement team takes regular temperature checks of the organisation to see how employees feel about the impact of the EssexWorks programme. These feed directly back to the corporate leadership team. Sibley believes that the background of employee engagement and communication has been fundamental to the success of EssexWorks so far. “If you don’t engage employees, then you are not going to deliver a successful transformation,” she says.
This doesn’t mean to say the programme has been without its challenges. Understanding that it is not easy to deliver a reasonable pace of change in a very large, diverse organisation in which many different groups are given a say has been a valuable lesson for Lynch. “The organisation is highly consultative, and quite different to more dictatorial, -particularly North American, company cultures,” he says. “The trick is to come up with the speed-dating equivalent of being consultative. It’s something I wish I’d mastered a bit earlier.” Pace is an important lesson learnt from the first half of the EssexWorks programme. If Lynch could start the programme again, he would improve what he calls the organisation’s change readiness assessment. “We have gone into certain parts of the organisation to support them on a change with an assumption of how ready they are for change, and within days have realised they are not that far ahead,” he says. “So we want to get a really true picture of where a team or business is in its journey.” But, overall, the reflective and measurable approach taken by the council has been of great benefit to the EssexWorks programme, and has given the leadership team a clear view of what kind of organisation the council will be when the programme is complete. ECC also has an aspiration to considerably increase customer satisfaction levels by then. “We have a whole number of different dimensions, and at the end of this journey we will know what good looks like,” says Lynch. Such has been the success of the measures put in place by EssexWorks, that, when the coalition government announced budget reductions for local authorities, Essex was able to “carry on as normal”, despite a loss of £15m from its budget. And the aspect that makes Lynch most proud is that “this is a really good example of where HR is not just supporting a change, but leading it”. “That’s a great message, not just for my HR team, but for HR professionals generally,” he says.
Published on Mar 17, 2013
The transformation of HR at Essex County Council was so successful that the function now leads the council’s four-year efficiency programme