World Bank Presentation by Dr. Andy Macdonald

1. World Bank Presentationby Dr. Andy Macdonald Washington, D.C. June 29, 2001

2. Presentation Outline • Brief Review of Work Experience • Competencies and Lessons Learned • Change Management Experience • Experience in Canada, Australia and South Africa • Purely personal observations on success strategies and relevance to development initiatives • Discussion

3. Electrical Engineer Problem analysis Project management Transportation Expert Regional development Systems costing Transportation Institute Project management Focusing researchers on results Transport Canada Strategic Planning Federal-provincial relations Results-based resource allocation Budgeting process Early Work Experience (1963-76)

4. Office of the Comptroller General • Budget and Estimates reform • Policy development & implementation (Selling the unwanted to the unwilling) • Parliamentary Liaison (leading the horse to water) • Program budgeting – early experiences • Supply push vs. demand pull – the challenge • Government Financial Management • Perceptions of senior management • Cash management • Risk approach to control • Accrual accounting

5. Comptroller General (1989-1993) • Governance issues • Functional direction in 3 communities • Financial Transparency • Financial statements • Linkages to outputs • Fraud monitoring & detection • Program performance measurement • Role of program evaluation, audit, financial managers • Management representations • Audit assurance • Human resource management issues • Targeted recruitment/development programs • Staffing of key individuals

6. CIO- Canada (1993-95) • Government-wide approach • Major cultural change • Internal and external impacts • IT Strategic Plan • Business/HR/information focus+technology • Major communications effort • Multiple stakeholders, deep-seated prejudices • Internal process re-engineering • Council for change • Procurement processes • Time to achieve change

7. CIO – Australia (1995-98) • First CIO • Challenges of government-wide approach • External change agent • Role of visible senior champion(Minister) • Strategic Plan • Service delivery focus • Significant public interest • Department involvement • Internal and external impacts • Challenges of implementation ( coming down from 60,000 feet)

8. CIO Australia (Continued) • Outsourcing Initiative • Major cultural change, strongly resisted • Approval process – “dictatorship” of the Cabinet table • Opposition • IT community • Departments and their Ministers • IT Industry – SMEs & economic development • Opposition party and parliament processes • Excellent example of change management • Communications strategy • Lessons learned

9. Change Mangement Principles* • Sense of Urgency • Develop Powerful Coalition • Create the Vision • Communicate the Vision • Empowering others to act • Get early successes • Build on early successes for fundamental changes • Institutionalize the changes* Kotter, John P., «  Leading Change », The Leader’s Change Handbook, Jossy Bass (San Francisco, 1999) p 99.

10. Principles: IT Outsourcing • Urgency – crisis can be opportunity • Incoming government’s $1 Billion IT spend reduction • Competitive Government in Asia Pacific • Powerful Coalition – inside & out • Minister of Finance, Senior Advisor, Treasurer and PM • State support politically (South Australia, Victoria) • AIIA major players • Create the Vision • Best practice in private sector- non-core • Market testing basis, not by fiat • Benefits extend far beyond cost savings • Technical currency, service levels, career paths for IT staff,scalable assistance • Key strategies – credible market testing, communications throughout exercise, cluster approach, departmental champions

11. Principles: IT Outsourcing (contd) • Communicate the Vision • Cabinet decision and resource adjustments • Role of Minister, CGIO in championing vision • Four stages of adjustment • Specific communications person – general meetings, departmental meetings, weekly newsletters, conference speaking engagements, media interviews • Political costs of communication • Empowering others to act • Many obstacles to change – departmental Secretaries, IT community, IT SMEs, Opposition party, Senate, media • Major pension policy changes required • Economic development – multiple objectives • Departmental champions and peer group endorsement • Risk management concept difficult in polarized political environment

12. Principles: IT Outsourcing (contd) • Early successes • Build momentum and credibility for initiative – risk of lost momentum • Veterans Affairs & Department of Finance – unanticipated outcome • No rewards for successes – governments tend to punish more than reward • Institutionalizing the changes • The most difficult part – bureaucracies are very immobile and tend to snap back when the pressure is relieved • Changes take a long time to implement and require constant pressure until the process becomes irreversible • The Humphrey review - 2001

13. Personal Reflections • Major change is possible in government administration • People change when the perceived cost of change is exceeded by the cost of the status quo • But, reform in government requires patience • Risk averse culture – status quo safer • NIH resistance can be quite pronounced - we’re different • Multiple & competing objectives complicate change management process • Nature of government processes • Competing stakeholders pressure to satisifice vs. optimize • Optimal solutions rare – practical trade-offs omnipresent • Criticism from opposition

14. Personal Reflections (Contd) • Major change can only occur after a strong shock to the system • Small vs. large budget cuts • Expect strong resistance from the agencies • Strength of status quo • Needs strong support from the centre • Continuous pressure to continue the process • Budget cuts get attention

15. Personal Reflections (Contd) • External change agents have greater chance of success • Greater perceived authority/experience • No baggage • Easier access to key decision makers • Unencumbered by internal constraints – tell it like it is • Senior, highly-visible and articulate spokesperson(s) • Complemented by internal champions at middle management levels • South Africa experience • Communications is critical • Your can never over-communicate • All stakeholders targeted, including affected staff

16. Personal Reflections (Contd) • Metrics are critical to monitor change • If you are not keeping score, you are only practisingInter-agency benchmarking for comparison of progress • Peer group endorsement strategy • Wide consultation with agencies • Shared project responsibility • Lead agency concept • Knowing when to stop consulting • Information is a strategic government resource that is underdeveloped

17. Personal Reflections (Concluded) • External pressures from funding agencies can be crucial • Major shock to system • External agent of change • Expertise provided • Locking it in • Requires internal senior champion and supportive agencies (peer endorsement) • Bureaucratic buy-in is important for long term changes • Benefits must accrue to the public

18. Discussion