I still remember my first day at HMRC. One of the first things someone asked me was did I come from the Inland Revenue or was I from Customs? I thought what an odd thing to ask, but reflecting back now, I realise the merger had taken place a few years before I joined.
Two very different cultures were still butting heads – "The culture of Revenue staff was heavily influenced by its cadre of fully trained tax inspectors, who held most of the mid-ranking and senior roles in the department. The culture of Customs staff reflected that of its hard-driving investigators" (A milestone in tax administration: HMRC anniversary).
It took nearly the whole time I worked at HMRC, ten years in all, for the new culture to really embed itself. I think it took that long as there wasn’t a focus on what the culture of the new organisation should be and what it might look and feel like. The priority was organisational structure, delivery and removing duplication.
Although I haven't been involved in a merger itself, I did support the set-up of two new departments during my time in the Cabinet Office overseeing the resources for EU Exit. I helped move people from across the civil service into two new departments, the Department for International Trade and the Department for Exiting the EU.
The most difficult thing I've ever had to do was help close a department down when I was at DEXEU. It was very sudden with high emotions. Doing this well and looking after people along the way is so important. These were some of the best people I had ever worked with, so retaining that knowledge and skills was essential. This is why I’m keen to share what we've learnt so far through our work at the NAO.
With all the changes happening in government such as closing DSIT, moving people and work to other departments and setting up new organisations, such as the OneGov Delivery Agency, we've pulled together the key lessons from our work on the things to watch out for when making changes. Perhaps the one that most resonates with me is the importance of culture, capability and people, as they matter as much as structures and maintaining business-as-usual delivery during transition.
Something we don't often mention that is also important is allowing people time to say a proper goodbye and to celebrate their old department. This is something we tried to do with DEXEU, aiming for people to have pride in what they had achieved while they were there. Various events were held to celebrate the successes, as well as setting up a DEXEU alumni group.
I've mentioned our lessons already focusing on people – those within the organisation and those you are providing BAU services to. Financial management is also key, tracking the costs and benefits throughout. This is particularly challenging when different finance teams are involved and people are moving to new roles. Costs and benefits need to be identified from the outset to ensure value for money is understood. The time it takes to integrate is also often longer than usual and costs more than expected.
Our final two lessons perhaps take me back a little to my HMRC example. Being clear about why the change is being made in the first place. Focus on outcomes and what it is you want to achieve and make that clear to everyone. Linked to this is strong leadership and governance. Who is making the decisions? Who will people be looking at to set the example on behaviours and the way forward?
So how we can tell whether a change has been successful or not? Reorganisations often take place without clear objectives about what they aim to achieve. And when objectives are vague, it’s difficult to judge the success of the change. Our operational delivery work across government has shown there’s often no direct relationship between making structural changes and making improvements to service delivery.
If you are responsible for overseeing and managing changes, we would be very happy to speak and share what we have learnt further.
Kate Caulkin is the people and operational management insights director at the NAO. Find out more about the NAO’s work on people and workforce