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This article was co-written with Aya Hallak, Principal at Strategy& Middle East, part of the PwC network.
GCC governments are launching a wave of large-scale public sector transformations to increase efficiency, improve the quality of services, and reduce the operational burden on ministries. These efforts require overcoming deeply engrained mindsets and behaviors among public sector employees, and governments can improve their odds of success in this regard by applying the principles of organizational culture change and change management.
More than 100 transformation programs are planned or underway in Saudi Arabia alone, part of Saudi Vision 2030. Other GCC countries have similar ambitions to carve out new private or government-owned corporates that function as profit centers, rather than cost centers. This shift requires revamping the culture and mindset among employees. These workers were once public officials with secure jobs. Now, however, they need to operate in performance-based, customer-centric environments.
Change can be stressful and difficult in any organization. According to our research, only 54% of major change initiatives succeed. Change may be more difficult in the GCC public sector, which comprises a much bigger share of the overall workforce than in similar high-income countries. GCC nationals often believe that their governments should be responsible for their overall welfare and employment. In addition, GCC public sector jobs are coveted and hard to eliminate. Perhaps the biggest challenge is the sheer size and number of transformations happening concurrently.
Traditional change management offers potential solutions. Indeed, transformations that apply change management are far more likely to achieve their objectives while staying on schedule and on budget. However, traditional change management alone is not enough. Organizations should also transform their cultures to improve productivity, efficiency, innovation, and customer focus, thereby realizing their strategic aspirations and transformational agendas. Indeed, the following five principles can help governments transform the culture of public sector entities.
First, leaders should align the organization’s culture with the broader strategic goals of the transformation. Entities that possess a strong culture that is coherent with their strategy typically outperform their peers. The difficulty is that traditional change management plans focus on addressing resistance from individual employees. Consequently, they fail to consider the collective behaviors and mindsets of employees- that is the organization’s culture. Instead, governments need to ensure that the organization’s culture is aligned with the transformation objectives. A thorough diagnostic can assess the dominant cultural traits and behaviors in an organization and compare them with the target state. Governments can then identify a few critical behaviors to enable the change, and leaders can start to spread these behaviors across the organization.
Second, organizations should train and engage a peer-selected network of change champions. Rather than trying to mandate change from the top down, organizations should identify change champions. These are influential employees that other people look to for information, whether formally or informally. In a change program, these individuals -nominated by their colleagues and peers, rather than by senior leaders- can help push new ideas out into the organization. Ideally, they already exhibit the critical few behaviors, are enthusiastic about the changes happening, and are eager to help accompany their colleagues through the change journey.
Third, organizations must engage leaders. Engaging the front-line workforce is necessary, but not sufficient. Culture and change programs must engage leaders to signal buy-in and generate enthusiasm that affects all levels of the organization. The visible engagement of leadership is particularly important in the public sector, given a hierarchical culture in which employees may be discouraged from enacting changes that their superiors do not practice publicly. For that reason, leadership initiatives should occur in tandem with bottom-up initiatives.
Fourth, leaders should start early. They should avoid postponing change management. In an organization with many transformations occurring simultaneously, leaders can be preoccupied with technical milestones. That can make change management appear to be a secondary priority linked exclusively to HR-related activities. However, any postponement to change management program limits its success. Instead, leaders should activate the change management effort early and in parallel with other project activities.
Fifth, organizations should adapt the governance structure to the needs of the program. The most effective organizational structure for change management depends on the scope, complexity, and timeline of the transformation underway. It requires the right mix of centralization and decentralization. For example, a makeshift model offers the most flexible structure for transformations that are limited in scope and timeline. The organization activates change management task forces temporarily at the level of the affected function or project. Conversely, a formal change management unit is best suited to the large transformation initiatives common to the GCC region. Such an effort often involves an entire organization for multiple years, including a center of excellence acting as the coordinating entity, building change management capabilities over time and using a dedicated team to implement them.
GCC governments must devote resources and attention to the human component of transformation, by applying change management and culture-change principles to achieve these goals. In doing so, they can improve the odds of success in these efforts, and ensure smooth implementation of their transformation programs.
