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Managing change in public services

  1. Specialized international session in public administration Managing Change French Cases vs. World Case studies Pr. Dr. Claude Rochet Institut de Management Public Aix-en-Provence Université Paul Cézanne
  2. Is change possible within public services?  Generally accepted ideas – Public services (PS) are reluctant to change – PS encapsulate too many vested interests – PS is no longer useful: why bother changing it? – The weberian model is obsolete: destroy it! – The problem is not to change but to reduce the size and the role of public services – Civil servants capture PS for themselves – Market mechanisms are superior to public mechanisms 22 juin 2007 Claude Rochet 2
  3. Summary  Change, Why?  Change, How?  Case study #1: BNF  Case study #2: ONF  Conclusions and discussion 22 juin 2007 Claude Rochet 3
  4. Change, Why? From institutions to organizations
  5. The big picture: the IIIrd Industrial revolutionRuling developed countries as incumbents Incoming countries (BRIC) as challengers 22 juin 2007 Claude Rochet 5
  6. A paradigm shift 22 juin 2007 Claude Rochet 6
  7. A technological revolution re-deals the cards! 22 juin 2007 Claude Rochet 7
  8. The process of change Risks of institutional freezing 22 juin 2007 Claude Rochet 8
  9. Institutional evolution is the key  Institutional evolution helps defining the new rules  Institutions are parts of the nation’s competitive advantage  Institutions help coalesce the other components of the socio-economic system The existence of systemic effects is the reason why the State exists! 22 juin 2007 Claude Rochet 9
  10. Institutions and organizations Mainstream ideas Institutions (formal and informal): rule makers Incentives for organizational innovation innovation Organizations: rule players “Both what organizations come into Managerial hypes and existence and how they evolve are fundamentally influenced by the public management tools institutional framework. In turn, they influence how the institutional framework evolves” (North, 1990, p.5). 22 juin 2007 Claude Rochet 10
  11. Summary  Change, Why?  Change, How?  Case study #1: BNF  Case study #2: ONF  Conclusions and discussion 22 juin 2007 Claude Rochet 11
  12. How change occurs in public organizations?  POs do not benefit from a feedback from the market as do private org.  Feedback relies on long term outcomes difficult to measure  Instead, they may benefit from a fiscal rent  Only two factors may boost change: – Evaluation – Crisis 22 juin 2007 Claude Rochet 12
  13. For the while, crisis is the most effective agent of change  Crisis is the fruit, as Schumpeter described it, of “that kind of change arising from within the system which so displaces its equilibrium point that the new one cannot be reached from the old one by infinitesimal steps” (Schumpeter, 1911).  Being farther from this disruption, public administrations and their structures tend to integrate the new paradigm more slowly. While the public subsystem was leading change in the golden age period of the previous cycle, it is now a laggard and this lag becomes a cause for the persistence of the disequilibrium of the global system. 22 juin 2007 Claude Rochet 13
  14. Why crises are an opportunity?  Classical weberian capabilities are not oriented towards change  Evaluation is ineffective and “listening to the citizen” is a buzzword  Strategic initiative for change is split between political and managerial power  Administrative arrangements are strongly embedded in history and culture. Change is heavily path dependant. 22 juin 2007 Claude Rochet 14
  15. An analysis framework: resilience  “The ability of human communities to withstand external shocks or perturbations to their infrastructure, such as environmental variability or social, economic, or political upheaval, and to recover from such perturbations”(Adger, 2000).  An organization must be resilient (stable) but also capable of change (adaptive learning) 22 juin 2007 Claude Rochet 15
  16. growth or exploitation (r) How does it work? conservation (K) collapse or release (omega) reorganization (alpha) Human and We define resilience, formally, cognitive as the capacity of a system to capital absorb disturbance and reorganize while undergoing change so as to still retain Local event transforming essentially the same function, global organizations or institutions structure and feedbacks - and therefore the same identity. The aim of resilience management and governance is... either, to keep the system within a particular configuration of states (system 'regime') that will continue to deliver desired ecosystem goods and services (preventing the system from moving into an un-desirable regime from which it is either difficult or impossible to recover) or, to move from a less desirable to a more desirable regime. 22 juin 2007 Claude Rochet 16
  17. Being both adaptive and resilient Bureaucratic Appropriating creative rationalization destruction process From the dominating refounding social state to the autistic consensus, state organizational reengineering. The innovative State Decoupling from environmental evolution and threats. The contested state Accumulating human capital and strategic leadership. Endogenizing the The conquering state decoupling through crisis 22 juin 2007 Claude Rochet 17
  18. Summary  Change, Why?  Change, How?  Case study #1: BNF  Case study #2: ONF  Conclusions and discussion 22 juin 2007 Claude Rochet 18
  19. La Bibliothèque Nationale de France Getting out of crisis through the information system
  20. The new TOLBIAC site: Pump and circumstances! 22 juin 2007 Claude Rochet 20
  21. MACRO ENVIRONNEMENT  Socio-cultural evolutions : – Longer studies – Internet  Technological evolutions – Internet :online books & documents (gallica), libraries network – Archiving web pages – Numerical documents conservation  Legal framework – Intellectual property – BNF mission by law – Rendering accounts (Cour des comptes, hearings) – Working law 22 juin 2007 Claude Rochet 21
  22. PORTER MODEL Entering in competition! Unexpected entrants: State Google Financing, controlling, New threats reporting Power of negotiation Providers: Editors, Competitive BNF “clients”: IT vendors, intensity students, researchers Power of patronage negotiation New products Source : M.E. Porter, Choix Products substitute : stratégiques et concurrence, internet, online libraries, Economica, 1982 foreign libraries 22 juin 2007 Claude Rochet 22
  23. The 5 forces’ model More a public policy problem than a 10 managerial one! intensity: weak 10 Competitive New entrants: weak at the beginning, then very strong 10 Users and Provider clients power: negotiation 10 power: strong 0 weak Power of the Substitute 10 10 State: very threat: strong strong 22 juin 2007 Claude Rochet 23
  24. The crisis: a mismanaged project!  A project made for prestige, ignoring working librarians conditions  I.S.: – a war machinery against old fashioned XVII° century librarians – Technically over sophisticated but functionally deficient  1998: few months after the Grand opening, the BNF went on strike! 22 juin 2007 Claude Rochet 24
  25. Crisis as an opportunity  A new management team takes advantage of this strike to put the project back on track through the elaboration of a strategic plan.  Focus groups gathered in every department, including readers and representatives of the librarian’s profession.  This participative process will help to break the arrogant image of the BNF while issuing proposals that will help pointing out key strategic objectives.  Five key focus areas are released linked to results and management indicators.  Emphasis is put on customers’ satisfaction whether physically or through the website (, associated with process improvement regarding collections and their availability to the public, the implementation of accrual accounting to allow the linking between strategic needs and resources allocations decisions and with better working conditions. 22 juin 2007 Claude Rochet 25
  26. The result: a strategic plan Dimension Objectif Projet Indicateurs Bénéfices pour les Améliorer les services -Augmenter l’amplitude -Nbre de documents de magasins usagers! rendus au public, sur d’ouverture de 61 à 66 heures autorisés pour le jour même place et à distance par semaine -% de docs communiqués en -Développer les services à moins de 45’ distance, notamment par - Amplitude ouverture 66h00 l’utilisation d’Internet 1 . Processus 1)Développer et -Atteindre les objectifs - passer de 65 000 (2001) à 80 protéger les collections, d’acquisition annuelle 000 ( 2003) A de facto les insérer dans les réseaux - Réduire le délai de catalogage du dépôt légal - descendre de 16 à 8 semaines - de 1760 (2001) à 14 000 (2003) balanced scorecard - Assurer la sauvegarde des documents sonore, audio- visuels et multimédia 2) Les indicateurs seront définis 2) Engager la 2) Projet non mature en 2001 avec le projet en 2002 rénovation des sites de Richelieu et de l’Arsenal Personnel et Approfondir le projet -Entretien annuel - de 92% à 100% apprentissage social et améliorer les - Formation - de 961 KE à 6,2 ME et nbre organisationnel conditions de travail -Promotion jours formation /agent/an -Mobilité - cible quantitative Gestion Optimiser la gestion -Délai de règlement des De 78 à 55 jours factures -Taux d’engagement du % budget -Montant des intérêts de 400 KF (1999) à 275 (2001) moratoires de 99 à 99,5% - Taux disponibilités de smoyens informatiques 22 juin 2007 Claude Rochet 26
  27. Actualiser Evaluer Concevoir Ajustement s Ob ul tat je cti Rés fs Valeur de la politique Evaluation Stratégie Gestion Activité Moyens Politique de la valeur Processus Mettre en oeuvre 22 juin 2007 Claude Rochet 27
  28. Strategic deployment : Le Projet d’établissement  Improve service, locally and at distance  Improve and protect collections and integrate it in networks  Renovate the old sites  Deepen the social project and improve working conditions  Optimize management 22 juin 2007 Claude Rochet 28
  30. LES LEVIERS STRATEGIQUES (1) : Les ressources humaines HUMAN RESSOURCES Managing Erasing Communication competences antagonisms and and coordination and careers promoting common values 22 juin 2007 Claude Rochet 30
  31. LES LEVIERS STRATEGIQUES (2) : La gestion des technologies de l’information Élevée Stratégie de la BNF  Les technologies de l’information auprès du grand public PERCUE VALEUR  Les technologies de l’information au service d’une renommée nationale et internationale Faible Faible « PRIX » Élevé 22 juin 2007 Claude Rochet 31
  32. LE DEPLOIEMENT STRATEGIQUE (4) : Le jeu d ’indicateurs équilibré du PE  Performance  Indicators goals – Surveying – Objectives strategic – Roles deployment – Examples – Examples a « balance scored board » 22 juin 2007 Claude Rochet 32
  33. From collapse to success •The crisis originated in classical technical project mismanagement due to the prevalence of political and technical arrogance. It could have resulted in a complete failure or new investments to reengineer the project. •In fact, this project had no resilience at all since it never worked. The strike was motivated by the desire of the librarians not to do their noble job is such hellish conditions. •It is the shared decision of making the strike a momentum for change that gave the project its present today resilience through the strategic process that creates mobilization of the agency’s potential and connectedness among the employees and management. •As a result, the Library is alive, but practically the business model has been reconceived bottom-up, starting from readers needs and appropriate working functions for librarians. It is very unlike to the initial politically arrogant project. 22 juin 2007 Claude Rochet 33
  34. What happened? A coherent activity A strategic model based on planning process value involving all the creation stakeholders An activity model based on prestige BSC de facto Strike Crisis as a momentum to (re)build the activity model 22 juin 2007 Claude Rochet 34
  35. Summary  Change, Why?  Change, How?  Case study #1: BNF  Case study #2: ONF  Conclusions and discussion 22 juin 2007 Claude Rochet 35
  36. ONF: before the crisis The Office National des Forêts (ONF) is the French governmental industrial and commercial agency in charge of the management of the public forests. For a long time, its business model is unbalanced: State forest – which exploitation is a ONF monopole – represents 40% of its business portfolio towards 35% for those of local communities, a semi- monopolistic activity, since communities may deal with another provider. Other activities are purely commercial (15%) Rebalance the business or purely public interest missions (10%). The first produces a surplus, which model is a tough change finances the deficit of the latter. Such a process, as well internal situation is abnormal, for it is not the ONF mission to subsidize local (people) as external (local communities forest management. communities) 22 juin 2007 Claude Rochet 36
  37. The crisis: an exogenous event  26 & 27/12/1999: The century worst tempest: 88 deads, 500 000 Ha forests destroyed, 420 000 over 1 300 000 trees knocked down 22 juin 2007 Claude Rochet 37
  38. Emotion is enormous: Versailles forest destroyed! 140 Millions m3 knocked down! (i.e. a trainload from Oslo to Gibraltar!) 22 juin 2007 Claude Rochet 38
  39. An interesting resilience case study  For the biodiversity, tempest may be good!  Biodiversity increased in holes: – New flora species – Mechanical exploitation increases biodiversity – The sun favors appearance of new species in fauna and flora.  But what about social resilience? 22 juin 2007 Claude Rochet 39
  40. Endogenizing the crisis  ONF improves its social role and image  Hard work mobilizes personal: sense of belonging increases  Selling the trees finally succeeded, giving legitimacy for the need to implement a commercial culture  Crisis provokes internal and external awareness for the need to change 22 juin 2007 Claude Rochet 40
  41. The strategic move: contracting with the state Engagements de l’ONF Engagements de l'État 30% de gains de productivité Réforme du statut des réinvestis personnels pour introduire Réorganisation lourde : réduction plus de responsabilité, plus du nombre de fonctionnaires de d’autonomie et de meilleures 7000 à 6700 à l’horizon 2006 (sur rémunérations ; un total de 13000 personnes en Versement compensateur 2001) et réduction des niveaux jusqu’en 2006. hiérarchiques par la réduction des implantations régionales Ces gains de productivité doivent être utilisables pour rétablir l’équilibre d’exploitation 22 juin 2007 Claude Rochet 41
  42. New resilience, new business model The conjugation of the crisis management and the reengineering of the business model had allowed a negotiation with the local communities and to understand what the ONF business model has to be, based on the synergy between activities, managed as a portfolio: public forests management are monopolistic or semi-monopolistic activities that must support competition in terms of costs and deal with public sustainable development issues, while other activities are fully competitive. Costs and tariffs logics are different according to each activity, but the key points is knowing costs, that is emphatically coined as ‘moving towards a commercial culture’. On such a clarified basis, negotiations with local communities and other partners have been completed on a mutual benefit basis for each part. Important investments in the information system allow to see the real costs and to link performance evaluation to operational results. 22 juin 2007 Claude Rochet 42
  43. What happened? New activity model and Making a 5Y transition natural agreement catastrophe an with the State opportunity Improving a commercial Tempest! culture Financial disequilibrium New activity model due to the activity model and hierarchical Obsolescence structure Social and political lock-in 22 juin 2007 Claude Rochet 43
  44. Lessons learned The key success factor is in this case the previous clear vision within the management of what has to be the new business model, which is classically an r to K phase job. But without managing the crisis as a momentum for change, it would not have benefited from an to phase which created the condition of a new vision of the agency role and tangible elements it was based on. 22 juin 2007 Claude Rochet 44
  45. Summary  Change, Why?  Change, How?  Case study #1: BNF  Case study #2: ONF  Conclusions and discussion 22 juin 2007 Claude Rochet 45
  46. Making crisis a momentum for change  Crises must be managed: they do not act by itself but must be endogenized by managers: a Schumpeterian innovation process!  Managers must have a strategic vision before the crisis  Managerial techniques are useful but organizations and managers may find their way on an inductive and learning by doing basis Strategic intent is the key, not managerial techniques 22 juin 2007 Claude Rochet 46
  47. Institutions and organizations Political leaders and institutional change relies on change in mainstream ideas Institutions (formal and informal): Incentives for rule makers are ideas driven innovation remain poor when mainstream ideas mismatch the reality of organizational learning Organizations: Strong adaptive learning is the key Crisis and adaptive work to improve resilience 22 juin 2007 Claude Rochet 47
  48. The floor is yours!  What amazed me?  What idea(s) am I desired to dig?  How is this relevant in my country/job?  Find examples where this approach could have applied?  I do not feel concerned by this approach: Why? 22 juin 2007 Claude Rochet 48
  49. Thank you! Have a nice stay in Paris and a good way back home! My web site: