Restructuring and efficiency

A brittle relationship

Let me say this upfront: I do believe that there is “waste” in the public sector. I do think there is a big need to make administrations more efficient. After decades of a mixed bag of digitalisation, a pandemic, cost of living crisis, and with AI - in all of its bubbliness - breathing down our collective neck, it can feel like the place is a mess.

So yes, we need to talk about public service efficiency. But I’m convinced that restructuring in its commonly practiced form is not going to get us on the path to improvement. Today I’ll explain how I come to that claim, and talk about the edge cases that can show us another way.

One of the tasks in my doctoral research was reading through documents from nearly 500 restructures in New Zealand’s public service to count out what keywords were used as their reasoning (yes, I did that). There were a few words and phrases that dominated: “reduce siloes, modernise, future-fit, right-size, world-class…” and in almost every proposal “to create efficiencies”.

Let’s get this out the way early doors: “create efficiencies” can be as a euphemism for “cost-cutting”, or getting rid of certain people in the team. My restructure data is from 2018 to 2021, so from a time when New Zealand’s public sector grew, well before the big cost-cutting commands of the last years (more on that later).

But cost-cutting is the little black dress of management, never out of fashion.

So yes, there will be a coded meaning to “efficiency” goals, and restructures can be performative acts (as I have published). But the call to increase public service efficiency is anchored in strategies, political plans and leadership KPI’s. So to me, the suggestion that leaders have no genuine expectations whatsoever that restructures make their organisation more efficient doesn’t hold water. I think it tends to be a “multiple birds - one stone” scenario.

My concern with the idea of restructuring as a means for greater public service efficiency comes from its logical sequence, and from how untethered it tends to be from other forms of institutional change. Whatever the motivating context is, the core logic is always this:

If we put people in this position, and give them these responsibilities, then we will get that outcome = e.g. efficiencies.

My study showed that when staff bring up operational questions or ask how certain practicalities will be addressed during consultation, the almost unanimous reaction is: “we’ll get that sorted once the new structure is in place.”

It almost always seems to be: structure first, process and practice follows.

This may represent a self-image of leaders setting the conditions for success, like a coach placing their players in their best positions on the field. Get them out there, see how they play. There’s a logic in that…

An image of scaffolding, by the blowup

Trouble is, inefficiency springs eternal from many wells that are not necessarily related to structure.

What people’s formal roles and responsibilities say and what they do (or can do) in practice, can be entirely different things.

Not because structure is meaningless, but because so much outside of formal structure shapes how efficient an envisioned function plays out in practice. Nor because people are bad at following rules, rather, they are excellent at adapting to the circumstances they’re faced with every day.

The most respected public servants I’ve worked with were the ones best at navigating internal politics, working in between the cracks and getting things done despite the internal red tape and poor systems. All of that works almost like some kind of corporate “upside down", a lived reality beneath the formal structures – one whose real dynamics may be obscured to the tiers above as they draw up a supposedly better playing field for their players.

This is how the most undervalued factors that can determine (in)efficiency fall between the cracks: the workarounds, buddy-trained hacks and personal cheat-codes to make things work.

I’ve been in situations where I reported on this difference between formal expectation and practical reality with its workarounds to senior leaders. More often than not their reactions were allergic, representing a rationalist view of the world: “they should just be professional” was a common phrase. Rationalists get frustrated when the cogs in the machine don’t cog like they should. The idea that it’s not a machine but a living, breathing organism makes some people uncomfortable because it can seem random. Though I would claim it isn’t, it’s contextual and it follows repeating, observable dynamics.

You can redesign an org chart and negotiate carefully over the balance of functions, FTE’s and roles, but the force of habituated, locked-in mechanisms is greater than formal intent. And the greatest risk that we run with each new restructure is this:

It’s very easy to mistake “waste” and workarounds that grew (and persist) out of necessity.

We all want to cut waste. But if you cut a workaround without fixing the hole that it covered over – disaster. My growing sense is that we inevitably do the latter when we keep to the current trajectory.

Edge cases

There were a few precious exceptions to the rule in my dataset: their restructure proposals tell detailed stories of the process-improvement work, systems mapping or root-cause analysis taking place before a restructure is proposed. There are even cases in which it appears that leaders and staff worked closely together to figure things out ahead of a structural change – a cultural feat to behold. Because yes, restructures have a bad rep, so any activity that may indicate that one is looming can really throw the spanner in the works of shared problem-solving. It’s a conundrum - but one that a few manage to tackle.

Even to an outside reader like me, these documents convey why an envisioned change to the org chart is one of multiple mechanisms used to improve the team’s work. For example: our processing times are still too slow after our last IT refresh, even though our process is as good as it can be right now. We only have one manager with sign-off discretion, so propose to disestablish one of our senior roles and establish a principal one so someone else can sign off.

It’s not always that simple, the more complex the function, the harder this is to scale up. But the sheer dominance of restructures that never even mention ANY other methods of improvement outside of the proposed new structure, yet claim to “deliver” efficiencies is a concerning pattern in our public practice that needs to be addressed.

Missing pieces

What the efforts to find “efficiencies” in public services crucially need is visibility - information on those other dynamics that produce or intercept efficiency. Measuring what is and isn’t efficient in public service delivery is a heck of a task, and findings a clear through-line between all the moving parts and their public output is even worse. It’s easy to sense that something in your working environment is inefficient, but hard to be certain what lever needs to be pulled to turn things around. And restructures as a method seem to make abstract things more concrete, the formal roles and reporting lines an embodiment of purpose and functionality. Perhaps that’s another reason why we see so much of it.

But at the end of the day, restructures are not a neutral “let’s at least make a little progress” tool. They are like sculpting jelly, leading us to slice off more and more in the process. The continuous disruption through such invasive change has uncontrolled snowball effects, something I’ve seen described as “repetitive change injury”.

If the inefficiencies that exist in the delivery of public services are not removed and the additional pressure of handling a change process is put on the system – then the burden of it all gets pushed elsewhere: to frontline workers, to volunteer organisations, to the people, and – most likely – to future generations.

OK, that’s more pathos than usual for me, but I can’t express this any other way – I do believe it is that significant. And for once, there’s some good developments on that front:

Similar to “Capability Reviews” that our brethren overseas carry out, we have begun “Performance Improvement Reviews” of New Zealand’s public service institutions. I’ll be honest, I barely heard about them being started, and I have no way to judge yet what they represent and how heavy we can lean on their quality. But I’ll say this again: we need more information! Well-crafted, systemic information that that can help us narrow down on the repeating mechanisms in the very logic of how public services work, so that we can advance on the efficiency beast.

Public Service Commissions are the most logical place in which such information should be gathered, synthesised, and - dare I dream - be used to set standards and guidance for more integrated change processes.