Trees line a straight road leading off into the distance

Future Proofing Councils: organisational change in Australian local government

By Susan Law

There is always that dichotomous cliché: change is the only constant in the world.  As local authorities, Councils are not only part of the world, but, in the key role in providing civic leadership to our communities, Councils find themselves having to flex and adapt themselves to meet the expectations of their communities and to help them make sense of the changing world.

The drivers to change are many. Some are extrinsic to the Council; others are initiated by the organisation itself.

External Drivers

Demographics

Graph showing a declining predicted budget, eclipsed by increasing adult social care and children services expenditureThe Graph of Doom – a graph prepared by the Council the London Borough of Barnet. The chilling lesson from this graph is that by 2021/22, the Council will need to spend all of its funding and revenue on just providing services for its vulnerable adults and children. Without changes to the manner in which services would be delivered and policy settings, there would be no funding for other services such as waste, community development etc.

While Councils in Australia are not charged with the provision of social services for adults and children, the demographic trends for Australia are similar if not sharper.  This impacts upon state governments and reinforces the drive in NSW, South Australia, and Tasmania for local government sector reform. The ability of state governments to significantly contribute to the funding of local government for services is becoming increasingly constrained. In fact, local government is experiencing the reverse: services being devolved from state to local government without the corresponding level of funding to deliver them.

Similarly, Councils’ rate bases and their ability to raise revenue from ratepayers is coming under increasing pressure. In NSW, rate capping by the State Government is in place and is being debated in South Australia and Tasmania.

Customer and community expectations

At the other end of the demographic spectrum are the expectations of our communities and customers. Most services and the way they are delivered were designed for the post WWII and baby boomer generation – now we have Generation X, Y, and Z, whose expectations are quite different from those of their parents and grandparents. Traditional sectors such as the taxi and hotel industries are having to cope with surviving with disruptive technologies and organisations such as Uber and Airbnb. Nevertheless, these disrupters are setting the expectations for access, service, and response. The disruption in many service sectors is causing major re-thinking of service delivery models, even traditionally conservative ones such as banks. Local government cannot step aside from the change. 

State Government and internal programs of reform

In addition to the UK, in NSW and South Australia, pressure has been placed upon local authorities to not just consider change on an individual basis, but also to participate in a broader program of sector reform.

A collection of old fashioned globes in neutral colours

Whizzing to Oz: Global Collaboration on Local Government Reform

LKS Quaero UK Director Aidan Rave recently visited Australia and met with our Australian team. Here are his reflections on the differences and similarities between the UK and Australian local government contexts – and on the value of a global team when it comes to public service reform.

A seven day round trip from the UK to Australia can have a strange effect on the mind. The combination of jet lag, shifting from summer to winter and around 48 hours stuck in a metal tube has an effect on the most seasoned traveller. Making the trip in late June of this year, in the midst of the political upheaval and chaotic post-Brexit vote atmosphere, added a further dimension to the sense of surrealism.

Of course, attending the annual LKS Quaero hui (a Maori term meaning gathering or assembly) was exciting – an opportunity to meet in person colleagues who had previously existed on the end of a phone or as a slightly fuzzy image on Skype. Okay, the opportunity to sample some of McLaren Vale’s finest was probably a factor, too, but a professional should always be prepared to suffer for the cause!

In many ways, the conversation and debate at the hui confirmed a long-held belief that while the structure and culture of local government in the UK and Australia might differ, there are many challenges and opportunities in common and there is much each can learn from the other’s approach. The political spice on the Australian side was enhanced by the fact that day one of the hui coincided with the general election and all the intrigue, upsets, and twists that inevitably ensue (and there were several). Similarly, giving an update from the UK was inevitably going to be dominated by the fall-out from Brexit, the subsequent resignation of the Prime Minister, and impending implosion of the opposition Labour Party. In truth, it all felt just a little bit embarrassing!

While the “big politics” were certainly never far from the group’s collective thoughts, the focus of discussions remained on issues core to the business on both sides of the equator; namely public service reform, restructuring, amalgamation, culture, and leadership.

The impact of the GFC had a more immediate effect on the UK economy and subsequent public spending plans than was the case in Australia. Consequently, shifts towards structural and political reform of councils in the UK, driven in large part by a seismic reduction of around 35% in real terms spending power over the last five years, has meant that the rate of change in the UK has been determined.

Interestingly, as NSW councils embark on their journey of reform, there is some useful UK insight (not to mention a number of mistakes made and hard lessons learned), within the global LKS Quaero knowledge pool that should prove valuable.  In a similar vein, there is a considerable amount of Australian work on systems thinking and leadership, which will be critically important to UK councils as they attempt the next stage of implementation.

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Council Transition Support Expert Interview: Chris Stratten, human resources/organisational development expert

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is the last in a series of interviews in which our transition expert team members pass on some key nuggets of advice.

Chris Stratten is an experienced HR and Organisational Development Manager of many years’ standing, with specialist knowledge of industrial relations matters. He is an experienced manager of change in both public and private sector organisations in areas including HR/OD diagnosis and strategy development, industrial/workplace relations, leadership development and coaching, and service delivery analysis. Here is his advice for HR/OD managers of amalgamating Councils.

What are the key human resources/organisational development challenges for amalgamating Councils in NSW?

One of the things that many organisations stumble upon is the engagement process. Most of the time, managers get around the room and decide on a plan of action, but fail to establish a robust engagement process. This should involve both engagement within management and engagement between management and staff. I call it engagement, not communication, because it has to go both ways. The organisation has to get feedback from unions, staff, management, and the community. There has to be good planning for how the organisation engages with these stakeholders and how to get their concerns noted and readily addressed. From an HR viewpoint, HR traditionally has to pick up a lot of mess because this is not done well up front. All messages need to reach employees and other stakeholders in a readily understandable way, not just reach the leaders.

The amalgamation process needs to be managed by a team, and the HR manager needs to be part of that team throughout that process, on both the engagement and leadership sides. They need to have carriage of establishing and monitoring the engagement processes. HR managers should also be there in order to ensure that industrial instruments are adhered to – in an advisory capacity to the leadership team, not as the leader. This is vital for ensuring that decisions are made with understanding and ownership of the line management.

Peter White

Council Transition Support Expert Interview: Peter White, leadership and culture specialist

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is part of a series of interviews in which our transition expert team members pass on some key nuggets of advice.

Peter White is an experienced organisational leader with demonstrated leadership ability and a proven track record in developing employees and creating a constructive culture where working productively and continuous improvement form a way of life. Peter has an electrical engineering background, specialising in large and medium heavy industry environments. He is an Associate for LKS Quaero specialising in training, leadership, and culture. Here is his advice for leaders of amalgamating Councils in NSW.

What are the key leadership and culture challenges in the amalgamations in NSW?

The culture itself will be a big challenge. Many Councils are likely to be experiencing a passive defensive culture, meaning many will be dependent on the leadership to tell them what to do or they will be keeping their heads down, not wanting to be noticed and hoping it will all go away so things can get back to how they used to be.

A silo mentality is also common, where people are only interested in their own “patch”. A common issue here is the belief that knowledge is power, leading people to think ‘I will keep the information to myself so I will be protected’. In order to implement sustainable change, these silos will need to be identified and broken down. This can be achieved through a positive experience, provided the team members have clarity around their futures and are kept well informed of what is happening around them.

New Councils will also have to assess the skill, will, and drill of leaders at all levels. If an organisation needs to transition from the current state to a new desired future state, then it is important to determine if the organisation has the right person in the right role doing the right work. Another way to look at this is to determine if the person has the skill to do the work – have they been adequately trained? Do they have the will – do they want to do the work of the role, are they engaged in the organisation, and are they prepared to deal with difficult issues, including performance management? And finally, do they have the drill (or discipline)? They might have the skill and the will, but do they actually do it religiously every time? Are they walking the walk and talking the talk? Do they clearly demonstrate their commitment through their actions and comments?

Beyond the capability of leaders to deliver change, a major challenge is the uncertainty of what the future holds for individuals throughout the organisation. A lack of role clarity will compound this. For those in temporary roles in particular, there will be some reluctance to make key decisions for the future.

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Council Transition Support Expert Interview: Alan Rushbrook, local government finance expert

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is part of a series of interviews in which our transition expert team members pass on some key nuggets of advice.

Alan Rushbrook is a local government financial specialist whose experience goes well beyond financial management as he has sandwiched his financial career with managing community service activities. He brings a strong reputation for leading teams and providing robust policy advice. His varied experience in local government, both in senior management roles and as a consultant, in large city Councils and small rural Councils, has provided him with many skills, particularly in the financial management, corporate support, and community services functional areas. Alan is a Fellow of the Australian Society of CPAs, qualified in Myers Briggs administration and Juran quality management. Here is his advice for CFOs and other leaders of amalgamating Councils.

What opportunities are there for finance teams during an amalgamation?

Amalgamations are the time when finance staff need to shine. It is when our skill sets can provide enormous value to the new organisation.

Why do I say this? It is a time of change. Often inertia and conventional wisdom dominate Council decision making, making change hard: not just difficult to do, but hard to get started. So when there is a changing environment, your first impediment to change is overcome!

It will be a time of immense work, but be sure to take time to think strategically for your Council, your team, and yourself. It can be too easy to get caught up in the focus of moving systems, people, registers, etc, etc. and not raising your vision beyond your desktop. Take time to think beyond the next meeting.

Be clear about what you want to see change, whether it be the strategic financial direction of Council, the structure of your department, or a particular process. The favourite for me in the past has been to challenge some of those areas of waste or inefficiency that have just been accepted or have been protected. Even if many of the players haven’t changed, sometimes they may not be so passionate or committed about their programs or activities as they once were. When things don’t have the usual balance, it might be a good time to get some things changed.

Also, there will be some untied dollars around. Have a think about what you or your team could use that you haven’t been able to get funding for in the past. Set systems up for the future as best you can.

John Cawley

Council Transition Support Expert Interview: John Cawley, structural design and change management expert

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is part of a series of interviews in which our transition expert team members pass on some key nuggets of advice.

John Cawley is a change management and structural design expert, with expertise in organisational and business function system design. A qualified and highly experienced mechanical engineer and manager, John has led a distinguished career as senior executive in vocational education and in private industry. He is a proven project manager across complex projects and an experienced Lean practitioner and facilitator. John is a former General Manager of a major supply organisation to the automotive and appliance industry sectors, with extensive experience in highly technical robotic automation manufacturing facilities. He has international presentation experience in new and emerging technology, green technologies, and logistics. Here is his structural design and change management advice for leaders of amalgamating NSW Councils.

What are the key systems design and change management challenges in an amalgamation?

The key change management challenge is to establish a cultural fit. Some years ago, when a manufacturing conglomerate I worked for acquired a group of companies, it took ten years to wind out the old culture and wind in the acceptance of the new culture. In order to successfully establish a new Council, you have to properly establish a new culture much faster than that. What that means is drilling down into knowing people: what are their values? Establishing the mission and values is really important: the mission establishes the boundaries around what you can and can’t do and the values determine who you are. Strategic planning is really the starting point for determining the strategic and cultural fit.

The key challenge of designing a system is to separate out the system and the process. Once you have your strategic plan, you need to link it in with the operational plan. Underpinning that are your systems and processes. Identify what systems you currently have and determine if you have the right ones to achieve your operational plan, the right processes to enable it, and the right people to drive it through. Those are the three crucial things: systems, processes, and people.

Council Transition Support Expert Interview: Geoff Haberfeld, finance, governance, and risk specialist

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is part of a series of interviews in which our transition expert team members pass on some key nuggets of advice.

Geoff Haberfeld consults in finance, governance, and risk. A former senior executive in Commonwealth and State Government business enterprises and policy agencies, he has a good understanding of the “workings of government,” including budget processes, funding arrangements, and regulatory regimes.

Well experienced in organisational reform, Geoff has held senior roles in a variety of organisations during times of significant change. His experience ranges across local, state, and federal government, including water, health, and housing. Geoff is also Deputy Chair of the Cairns Regional Council Audit Committee and Chair of the Douglas Shire Council Audit Committee. Here is his advice for leaders of amalgamating Councils in NSW.

What are the characteristics of a successful amalgamation process?

A successful amalgamation will be characterised by a united and sustainable organisation sharing common goals and aspirations, achieved by a well thought out transition process and strong stakeholder engagement.

Early attention should be given to:

  • Appointing a transition team representing all stakeholders, meeting regularly and supported by a good practice risk based project management framework
  • Commencing a communication program involving all staff regularly, utilising face to face, email, and social media
  • Developing a new organisation structure and communicating it to all staff
  • Developing an ICT Strategy encompassing the IT infrastructure, business and technical applications, and communications applications, including customer interfaces
  • Developing position papers for addressing key factors having an impact upon long term financial sustainability, including a common rating system and common service levels
  • Commencing a financial due diligence review
Image of Nick Tobin

Council Transition Support Expert Interview: Nick Tobin, former General Manager and strategy/financial sustainability expert

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is part of a series of interviews in which our transition expert team members pass on some key nuggets of advice.

Nick Tobin is an innovative and experienced General Manager with a depth of experience in senior positions in local government, excelling across property development, efficient service delivery, financial management, and stakeholder management. Nick led the delivery of one of the largest pieces of public infrastructure delivered and funded by local government: The Concourse, Chatswood’s entertainment and performing arts precinct. The unique funding model and project plan developed for the site by Nick and his team has become a leading model across local government. During Nick’s period as General Manager at Willoughby City Council, the City was awarded the A R Bluett Memorial Award, the highest accolade available to local government. Here is his advice for General Managers and CFOs of amalgamating Councils in NSW.

What are the key management challenges in upcoming amalgamations in NSW?

The biggest challenge will be putting aside previous beliefs as many GMs were clearly against amalgamations. There have been some perceived winners and losers in the process and bridges need to be built to create an inclusive environment. Interim GMs will also need to work very closely with the Administrators and the implementation committees of former elected members.

Another challenge will be keeping the public informed on what is and isn’t changing. Getting the public onside will be essential if the amalgamation is to be successful. Elections will be held in September 2017, so major changes will be difficult to implement prior to then, but there is an opportunity to develop a new Community Strategic Plan, which will be the blueprint for the new Council. It is unlikely that major asset sales and acquisitions will occur before the new Council is appointed, but an asset strategy should be developed, to be adopted by the new Council and integrated into the Long Term Financial Plan.

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Council Transition Support Expert Interview: Sam Robinson, leadership and culture expert

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is part of a series of interviews in which our transition expert team members pass on some key nuggets of advice.

Sam Robinson works in leadership development, change management, organisational structure, and culture. As a consultant, Sam has worked in very diverse settings, including Antarctica and Malaysia; across the NFP, resources, and logistics sectors; and in local government in NSW, SA and WA. Sam is LKS Quaero’s Director, Leadership and Culture, and a lead facilitator of LKS Quaero’s training programs. Here is his advice for leaders of amalgamating Councils in NSW.

What are the key leadership and culture challenges in upcoming amalgamations in NSW?

There’s lots to do. Part of the challenge is knowing where to start and maintaining momentum on the most important aspects of culture and leadership in the new entity despite a range of competing priorities.

It is always a good idea to start with an honest look at the current state of culture in the organisation – we have seen that, in past amalgamations, inadequate emphasis on developing a new coherent organisational culture can spell disaster. In many Councils affected by amalgamation in the past, we still to this day see different arms of the organisations perceiving themselves very much as stand-alone entities, with resultant impacts on levels of cooperation and productivity.

This is not simply a matter of articulating a new set of values and behaviours; it is an honest assessment of what beliefs are currently held across the organisation – positive and negative – and why those beliefs are held. This can be about anything, including what some might think of as “small” but is that actually critically important (for example, who gets parking spaces and who gets an office). Once you understand the current state in detail, you can then work on a plan of what to keep and what you don’t want in the new organisation, as well as new shared positive beliefs. By doing this, you can build up an exciting picture of the desired state of organisational culture. The leadership challenge then becomes pretty straightforward: developing leaders to see themselves as critically important actors in changing culture.

Image of Susan Law

Council Transition Support Expert Interview: Susan Law, former local government CEO and strategy expert

LKS Quaero is offering a complete package of Council Transition Support for amalgamating NSW Councils. This is the first in a series of interviews in which our transition expert team members pass on some key nuggets of advice.

Susan Law has led and managed public sector organisations, including local government, health, and housing organisations, in New Zealand, Australia, South Africa, and the UK. Now an escapee from the Council chamber, she is using her vast experience in complex organisational management, strategic planning, and organisational transformation, particularly during periods of change, to support public sector organisations to position themselves to meet future challenges.

As a former CEO, Susan has completed the amalgamation of three Councils, from forging a new culture to reviewing and reshaping services to enable consistency of delivery and equalisation of costs and revenues. Here is her advice for General Managers of amalgamating Councils in NSW.

From your past experience as a CEO of amalgamating Councils, what are the key challenges in upcoming amalgamations in NSW?

Once the new elected members are established, it is important to align members’ aspirations for the transition with what needs to be done. Sometimes, the Council members are accepting amalgamation only because they have to. There is a need to focus the Council on the future, helping them to understand how their aspirations for the community might be able to be met.

For those elected members who will be in an advisory role during this time, it is important to help them to understand that they have a valuable role in providing support and direction in an organisation that is in transition. Whether they have a part in the new Council or not, they have a critical role to play in ensuring their organisation and community are best represented and that means paying as much attention to the transition issues as they paid to business as usual in the past.

The same applies to the employees. The leadership has to be motivated and inspired, so it is very important to be able to paint a picture of the new Council that is not just two or more bits of old organisations bolted together. Nobody gets out of bed to come to work just to save money, so pictures of working for a successful integrated community have to be painted. It is crucial to communicate that the efficiencies gained are not gained for their own sake, but to enable the Council to build the infrastructure and provide the services that the communities need, now and into the next generation. Councils are in the long term game and it is exciting to be able to play a part at a critical stage.

The last key challenge is running an ambidextrous organisation. That is, the challenge is keeping the business as usual going and sunsetting the old organisation, all while overseeing its refulgence as the new organisation.