Adrian Brown: The Spending Review cuts call for transformation, not just more trimming

The Spending Review has left departments with little option but to transform their operations, says the Centre for Public Impact's Adrian Brown – the question now is how that happens

By Adrian Brown

02 Dec 2015

So the axe has swung and can now return to the Treasury storage room from whence it came. Until next time, anyway.

It says much for the political skills of chancellor George Osborne and his communications team that last week's cuts were met with relief in many quarters that they were not even more severe. Expectations management: it's a key skill in many walks of life, especially in the run-up to a major spending announcement.

But avoiding overnight controversy is one thing, actually implementing what are still eye-watering levels of reductions is quite another. Remember that last week's cuts come on top of what were achieved under the previous coalition government. Those cuts, which amounted to a fall of four percentage points in public spending as a share of national income, would inevitably been easier to make than what lies ahead – there's only so much low hanging fruit, after all.

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The projected cuts amount to another four point drop – total government spending is due to fall from 40.9% of national income in the last tax year to 36.5% by the end of the decade. The worst affected departments, like Transport (37% cut to its operating budget) and Communities and Local Government ("overall resource savings" of 29%) are facing up to very different worlds. The scale of these cuts requires more than trimming – more like a total transformation. The problem is that most transformations fail to achieve the desired impact, and some fail completely.

So, what's to be done? Although many departments have already sought to implement extensive change programmes in recent years, it is clear that more needs to be done. By definition a "transformation" is something that happens only infrequently – which means Whitehall is not exactly bursting at the seams with experienced transformation professionals. However, drawing on insights gleaned from BCG's Leadership and Talent Center we have identified a few key route markers that can help senior civil servants chart their impending journey.

Of critical importance is leadership alignment – something that sounds obvious but can often be surprisingly elusive. Different perceptions and different descriptions of what the transformation is actually aiming to achieve can occur all too easily, but without total agreement a project is far less likely to succeed. It's even harder in government than the corporate word because "leadership" includes both ministers and senior civil servants, making it all the more challenging to maintain alignment over time as a result.

In the course of a change programme, teams can also get focused on what needs to change, rather than the why or the how. Very often in the pace and urgency of doing the project, these questions can get lost. But really, a leader should spend 80% of their time on the why and the how, and 20% on the what.

Similarly, leaders should consider the impact of the changes on their departmental civil servants. Change only really happens when people see that there is a consequence for changing what they do. Pushing new ideas and expectations down onto a workforce should go hand in hand with leaders building capabilities by helping their teams prepare and adapt to change. Capability building, engagement and change should all reinforce each other.

Yet perhaps the most challenging aspect of managing a transformation comes down to the pace of change. Leaders need to intrinsically understand what their organisation is ready for and know when to speed up or slow down. Listening to what their teams are saying can help, but even then it remains a real issue.

"Doing more with less" may have once worked well as a sound bite but there's no disguising the fact that an intensely challenging few years lie ahead. Transforming an organisation amid reduced financial resources is about the most severe test of anyone's leadership skills – civil servant and minister alike – but it can be done. Aligning the team as one is a good place to start.

Read the most recent articles written by Adrian Brown - Opinion: A quiet revolution in public services has got Whitehall’s attention

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