Melanie Wood and Catherine Griffiths from Birmingham City Council talk about how to take £450m out of the budget, addressing the workforce implications and creating new ways of working.

• Birmingham is the largest local authority in Europe – £3.4b revenue expenditure, 52,600 employees and has large funding cuts announced
• Excellence in people management – model which aims to improve performance, manage headcount and produce an org that is fit for purpose
• Strategic Workforce Planning – effective and aligned business strategy, drives innovation, influence Council planning in a volatile environment, creation of collaborative networks with partner orgs
• Four areas of team capability – people management intelligence, workforce planning, talent management and succession planning, innovation hubs
• Model: define plan, analyse demand, analyse supply, plan actions, implement and review
• Intranet content and e-learning are key tools
• Developing modelling tools with a local university to help understand the organisation and plan for change
• Org design function established after HR redesign at BCC
• Role is to help managers and leaders run an org capable of delivering excellent services in a time of cost-cutting
• Eliminating duplication, facilitating service innovation, removing barriers to collaboration, finding the ‘bright spots’ and replicating them
• Components of org design – model, methodology, principles, knowledge management, toolkit (by phase) and a development programme
• Systems thinking based approach.
• 4 phases – asses, design, implement, embed and revisit
• Regulatory studies case study – saved £3.5m over 4 years. Front line services maintained through technology investments. 300 staff affected.

Duncan Brown, Director of the Institute for Employment Studies, provides some lessons from research, what works in practice and pitfalls to avoid.

• How many major reorganisations have we all been through? Lots and lots, it would seem. Not many seem to have gone that well.
• Context: budget cuts, redundancies rising, private sector is still cutting costs, more partnerships, outsourcing, shared services, flexible working, service removal
• HR and OD depts are being challenged with fundamental questions around organisation structure and culture
• How many people, in how many layers, does a council really need?
• To get a 10% cost reduction, you need to target 25% cuts?
• Restructuring: it’s happening more and more, isn’t going away, high stakes activity, organisations need to be good at it – because at the moment they aren’t
• Less focus on internal issues than external which often leads to reduced success
• What do you need to consider during a restructure? Incidence and influences.
• Nature of change is shaped primarily by managers’ prior experiences, much less so on external advice
• Reductions/Recruitment/Redeployment of staff
• What are the causes of the change – what effect does this have on the nature of the change?
• Don’t just look at total cost and numbers. Consider organisation of services – and workflow and geography.
• Specialisation v co-ordination
• New forms such as networks, modular, processes and project based structures
• Get your risk management right
• Balance of internal and external, fixed and flexible sourcing
• Strategy, structure, processes, rewards and people – star model of change (Galbraith?)
• Consider competence and capability early – need for knowledge and experience
• ‘Organisation architecture’
• To be successful – Choose a team to manage change, craft a vision, connect organisation-wide change, consult stakeholders and employees, communicate clearly, support people so they can cope with change, capture learning
• Also – early planning, address cultural issues, manage risk, capable HR function attending to the basics, appropriate speed
• Success is nothing to do with numbers of layers or the scale of cuts
• What would employers do differently in reorgs? More training, better comms with staff, better project management, redesign career structures, learn from other orgs
• Difference between programmatic change and adaptive change. Programmatic more command and control. All about implementation, less about humans
• Get the strategy right first, then assess, plan and prepare, then implement and manage. Evaluate, and keep doing it.
• Removing layers not always the easy win it first appears.
• Maintain staff engagement: lower turnover, better attendance, greater initiative, wanting to develop, higher productivity, improved customer service
• Employee reductions – consider survivor symptoms – they have organisational outcomes: morale, risk avoidance, reduced motivation and commitment. Done well, the reverse can be true.
• Prepare well, drive and leadership from the top, customers at the heart of change, don’t waste a good crisis, learn from outside but find right fit for your org, invest to save (get expertise and resources you need), ensure good union and staff relationships, communicate extensively, proceed with pace, be bold

Andrew Hancox, Director of Improvement and Efficiency West Midlands introduces the day.

• The money really does seem to be running out in local government
• Leaked CLG memo – 40% reductions. Leaders and managers need to consider how their organisations operate.
• How do we preserve front line services while reducing costs?
• Changing org structures can help to produce efficiencies, so this event very timely
• Online resource available on organisational redesign, outlining key issues, case studies and guidance on change
• We must now pick up the pace when it comes to organisational change
• Sharing good practice will be vital – this must be the start of a conversation
• RIEPs very keen to support the discussions where possible.

I’m at the IDeA-organised ‘Designing a fit for the future organisation‘ event today, in Birmingham. It’s all about organisational redesign and development, and how councils can help meet the challenges they face by changing the way they work.

There are a load of interesting speakers, and I’m going to be live-ish blogging as much of it as I can, as well as catching some of the speakers afterwards for some quick video summaries of what they have been talking about.

You can also follow the action on Twitter, with the #lgworkforce tag.

Also, next week there will be http://www.communities.idea.gov.uk/c/4236123/home.do#mce_temp_url# on the Communities of Practice exploring these issues (various levels of signup required).