Friday, September 22, 2017

Institutional Reform - better structures, better performance, happier people.

It is the case that many of our institutions have lost the ability to adjust to the realities of the modern world as they have evolved into existence, in some cases they have evolved over hundreds of years – we need organizations that are DESIGNED to deal with the reality that we exist in, an environment where technologies morph daily. Institutions need to be adroit and have the absorptive capacity to utilize the mass of new technologies available now and technologies that are on the horizon. The majority of our government institutions are just too big and the institutional inertia they are experiencing is preventing them from responding to demands; efforts will be directed toward their long-term financial sustainability, more adroit response to change, greater focus in their mandate, a drive to increase absorptive capacity, and better and more productive working environments for the people employed. Reforms will be effected by reducing the mass of large institutions, reconfiguring their organizational structures and introducing more opportunity for heuristics to come into play in the development of government organization. Stagnation is always a bad thing in an organization, there needs to be disruption to effect progress and improvement in the functionality of government organizations; this is especially true given the dynamics of the modern operational environment.

The key communication to make at the outset of institutional reform is to express clearly that reform is directed at better services and or more services at the same cost and or as starting the trend toward a smaller organization if warranted. For reform to find acceptance it is critical that the people who have dedicated their lives to serving the government are given full consideration, that is to say, they all need assurance that their situation will improve or be unharmed. The spirit here is to bring efficiency to the government to better serve the province and to manage costs, this is in no way an attempt at a callus reduction in the civil service. In fact, it may be necessary to consider as part of the cost of gaining greater efficiency over time to pay out people affected – at the point reform is implemented the costing would be done and pay-outs would be costed into the whole program – so rather than a cost they are an investment on an improved future circumstance.

For any given endeavour there is an optimum size of the organization. In the 1970s, the Midwest US  1400 acre family farm was considered the most efficient economic unit in the US. It was efficient because everyone involved was utilised completely and they had a complete vertical understanding of the organisation. In the early 1920s, Henry Ford built a completely integrated manufacturing plant, every aspect of the automobile was made in that plant. It was discovered over time that while it seemed a good idea, the complexity and variety of processes made the model very inefficient. This model was abandoned and the new models were developed which eventually lead to a highly integrated but segmented supply gain – so there are a series of plants doing specialized work that feed various assembly lines.


As an example, the general hospital is similar in structure to the obsolete model that Henry Ford abandoned – it attempts to perform the full gambit of medical care under one roof. It is worthy to contemplate if the general hospital makes sense or not. They seem to exist the world over, but very few services have evolved in this way elsewhere in the economy at large. This is the critique we can begin to level at the existing structures in government. What is better, however, is to design solutions from scratch drawing on past experience and taking advantage of new technologies and exercising the new quality human capital. We may find, as has been the case in nearly every other area of the economy, that fragmenting the general hospital into various service types would bring efficiency – perhaps a knee replacement clinic – or more dispersed emergency services – or emergency services integrated with frontline care. One thing that is clear, there are structures in government that use to exist in the private sector, that have been eliminated under the rigours of market forces.

The requirement for institutional reform is clear, the challenge is that people often incur fear at the prospect and understandably so, their livelihoods are at stake in many cases. That is why the most important aspect of change policy is to extend security to all affected actors; this generates an atmosphere that gains people's help in change rather than their resistance. There must be a commitment to compassion in change.       

Please notify me if you have suggestions or direction - thank you.
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