Managing is hard, restructuring is easy
The web of incentives that keep the restructure cycle spinning
This headline is not mine, it's something that someone with a lot more hands-on experience in leading internal restructures said when we had a conversation on the matter last week. They very kindly let me pick their brain on the hidden motivations and unintended incentives in our public service that lead to re-orgs being such a common occurrence on our isles.
I have touched on elements of this in a few prior posts, but today I want to bring it all out on the table and attempt some kind of neat arrangement: why the heck does restructuring happen in the way it does?
Restructuring as a form of people management
Over the nearly five years that I've now immersed myself in the subject matter (boy howdy…), this may be the opinion that most shifted for me: what if internal restructuring is simply a form of people management?
As a manager you need the right team around you, the right mix of capabilities in the right proportions, and preferably a bit of mix of diverse characters and backgrounds. People come, people go, and so every now and then you have to blow the dust off your chess board and see that everyone's positioned in the right place.
So there's your devil's advocate. It's not really that strange of a thought to me anymore.
And it somewhat matches the cynical response that I almost always get when people tell me their view of what motivates restructures: they just want to get rid of people. I'm calling this “dark performance management” and wrote about it in detail before. My restructuring data provides some empirical evidence that this is what occurs:
10 Business Analysts are made redundant, 9 Business Advisors are added - the new reality tv show with all the drama, twist and turns!
And from the processes I've seen first-hand - everyone in the team knows who the one person is who won't make it through the ring-fenced reallocation smack-down, because they’ve never really been a good fit, right?
All that could be cool and good, were it not for a few practical issues:
Power: If we believe managers should have this power, and if we think teams of professionals should be handled like sports teams that can be chopped and changed for every season, then we might as well take a hatchet to our employment law and copy and paste from the United States. Let managers hire and fire people who are “not a good fit” based on their instincts, and stop dragging the whole rest of the team into the mire, because:
Domino-effects: Restructuring sends shock waves in all directions, no matter how much leaders might call them “surgical” or “low impact”. In my survey of 1,441 public servants, many hundreds described experiencing severe stress and survivors’ guilt even when their own role was not impacted at all. Many described how even a restructure two directorates over caused delays and extra work in their teams, because so much in public service IS interconnected and when one team’s stakeholders are “up in the air”, it can take weeks or months on hold until a process that requires their participation can continue.
Performativity: If restructuring is just a means of people management, then why all the song and dance with strategies, operating models, and vision statements? Many of which are the result of extremely costly analysis, design and solution processes that leaders and their advisors take part in, oftentimes over months. This would be a colossal waste of taxpayers money and of everyone’s life force, if restructuring really were just about getting Gary from Comms to move on.
So while there is a tantalising simplicity to this thought – and I do believe we need to understand dark performance management better from an HR perspective – it's not the whole story.
Responses to changed circumstances
I classify about 1/3 of the 494 restructures that I can document between 2018 and 2021 as “utilitarian”. I'm basing this on the narrative as represented and the consultation documents drafted by the decision makers and their support teams. Utilitarian narratives – even for the outside reader - make clear connections between some kind of impulse and the planned structural changes. The impulses range from big to small, from a new minister, new policy, new manager, falling/increasing demand, less/more budget, all the way to someone’s going on maternity leave. They credibly (and often in great detail) describe operational needs, like: “we need more delegated authority so we can move applications along quicker”, and someone times – gasp – even use REAL data to show a change in demand or direction.
As an outsider I don't know what the story behind these narratives is, and it's quite possible that there are less convincing motivations at play. But on the surface, at the very least - these restructure stories make some sense, you can see why they would propose some kind of change to the team’s structure, roles and responsibilities over other options for change. Even when that’s painful, as we well know.
But as I said, these are about a third of the lot – not nothing, but not the majority.
The expectations of the higher-ups
Changing circumstances can also include the changing whims of political leaders.
First and foremost, the public administration is supposed to work with the directions from democratically-elected leaders. This interface is a huge area of study in public management, and we have recently seen the PM and Minister Collins’ instruction to “Say yes”, and that “a culture of saying No is not acceptable” when it comes to licenses, permits, trialling AI and deliver a government app.
Ye olde chestnut that public servants refuse to deliver or make progress because of a negative or resistant culture is probably as old as time. It could be so quaint; would it not continuously lead to a swinging pendulum with sharpened edges between: “we need to plan and be strategic” and “we just need to get this done”.
Not only politicians are prone to such knee-jerk reactions, everyone is. But when ministers or executive leaders act on impulse, we’re back with the domino effects that make their way through the tiers with the destructive force of a strategy-tsunami. And to be clear, I’m citing the current government here but every party in government is fully doing their part to keep the pendulum swinging.
When the pressure is on and it’s time to act, the quickest and easiest way to do that is by BEING SEEN to be doing something. And nothing in the complex and twisted world of public service demonstrates managerial vision and resolution like a re-org.
It’s undeniable action, it’s undeniable going to change something, all the language can elegantly be linked with what the minister requested. So much paperwork, so many power-points, workshops, roadshows, an absolute flurry of activity – hey presto! Which leads me to the next point:
The lure of the org-chart redo
Imagine you’re faced with a difficult problem, you know that something in your team isn’t quite working as it should (aka, nearly everywhere in public service), the minister is breathing down your collective necks, and something needs to be done. You can analyse, you can discuss, you can strategise – but all that is pretty draining, repetitive and it’s easy to get bogged down in semantics.
In the big transformation programme that I was involved in, there was that magical moment when someone suggested we should have a look at the org chart and see what capability we already have in house, and how we might rearrange things to match our vision better. You could feel the energy, people sitting up straight, higher attendance at the workshops, heated conversations that spilled over into the catered tea breaks. It was… kind of thrilling.
One gets to feel like those generals on tv, standing over a map with figurines, move a few ones over here and another general disagrees and move another lot. Engaging, active, solution-oriented. Nice!
Where SO much of organisational change or improvement work is weighed down by complexities, it’s such a relief to just work on something that feels like a solution. A fellow researcher who works on a very similar topic shared the same story from their public experience – “you get drawn in, before you know it” they said.
And by that I want to bring attention to the behavioural psychology, the cognitive mechanisms that our sweet little monkey brains are rolling on. Choosing a restructure over more complex management methods is not some kind of rational choice alone – I think more often than not, it’s an intuitive one (in the simplest meaning of that word).
And we haven’t just reached the bottom of the barrel just yet…
Magical thinking and genuine ignorance
The same researcher described the logic that they observed in many leaders of restructures as “magical thinking”, I’ve called it “black box logic”. We mean the same thing – if only we take a reasonably invasive action, we will reap reasonable sizeable rewards. No pain, no gain!
And this is what you can see in the other two thirds of internal restructures – the same narrative logic over and over again:
New strategy/operating model/manager -> New vision & goals -> Need to enable/give effect -> here’s your new structure!
No argument as to WHY a change in org structure is supposed to get us from A to B, and – perhaps most importantly – no consideration for any other means of change.
The few case studies that I consider examples of decent organisational change have one thing in common: they approach change with a battery of methods - structural changes alongside reviews of technology, business process, policy, training, onboarding, monitoring – the works. And even such case studies like this one here about a Telecommunications company attempting to blend agile and project management find that it’s tricky to make the progress as fast and reliable as intended.
One thing that my fellow researcher mentioned stuck most with me: they found that a shocking proportion of the highly experienced politicians and public sector leaders that they interviewed were genuinely unaware of the negative impacts that restructuring had on people.
Paraphrasing here: “Who cares if Denise in Accounts is a bit upset, that’s not going to stop us from making progress”.
Even in restructure documents you can see this attitude shining through in the way that leaders respond to staff feedback – not in all of the, by any means, and I do believe particularly leaders closer to the people find restructuring quite hard on a personal level. But the more distance there is between you – the leader – and the people – the little boxes in an org chart – the less empathy you seem to have.
Meanwhile, I read the word “suicidal” 4 times in the open comment boxes in my survey on public sector restructuring.
No strings, no consequences
So why does public sector restructuring happen the way it does? Because it can.
Because there are LITTLE TO NO negative consequences to you as a manager when you run one, but there may be very real consequences if you don’t, or choose other methods.
Let’s frame that in a bit, as a said – some managers suffer quite a lot of stress when they restructure their team, and the ones in the middle tiers are subject to the same changes as pressure trickles through the system. But as I quoted a programme leader of a restructure, I was part of before: “The turkeys don’t vote for Christmas”.
Normal and Gill have cited public CEO’s as calling restructures “rites of passage”, and the restructure leader I spoke with last week confirmed this observation. They pointed to a self-selectiveness as managers climb up the tiers, the ones willing to restructure have much better odds and the ones who struggle with it are the odd ones out. To be seen to have run a “successful” restructure is a crucial part of any higher leader’s CV.
And that’s how we come to the REAL CRUX of it all, in my view. What is a successful restructure? Whatever you make it, my friend!
Because in New Zealand’s public sector, there are no strings attached, no expectations to have a meaningful monitoring of the goals you stated for the action you took (utilitarian or not). Unlike other countries, we give managers a huge degree of discretion to use methods like restructuring by their judgement.
I’ve learned through attending international conferences how unusual this path is in a public service setting. The most detailed stories I know are from like Belgium and Germany, where restructuring is seen as a substantial financial risk and investment, and therefore checked and approved by treasuries.
I’ve reported before that only 9 out of 494 restructures in my dataset ran or commissioned any structured follow-up reporting on the effects of their restructures, and most of those found some big and unintended consequences that needed resolution.
But as long as such assessment is not required, and managerial discretion is the only measure to go by – then the wheels will keep spinning aimlessly.
All adds up
None of these factors on their own is the cause of our restructuring culture – as so often in the affairs of humans, it’s all a bit of column A, and a bit of columns B, C, D, E and F.
This is why I fully agree with the statement that managing is hard, while restructuring is easy. At least under the circumstances we’ve created for ourselves.
Within that range is a big gradient of destructiveness. There are some restructures in my dataset that read by very personal, careful and considered engagements – though the majority now sound like AI-written cookie-cutter strategies.
I’m very grateful to the experts who spoke to me about their experiences, it’s all helped glue more of it all together.
In closing all that is left for me to say is the reminder that most of this – if not all of it – is a man-made construct. A system that has generated (likely unintentional) incentives and pressures on public service leaders that continuously pour water on the crushing millstones of restructuring – all the way from the top of the hill. But there is much than CAN be changed with this systemic knowledge in mind. I do believe it’s possible, though I’m not ready to say if it’s likely.