However, innovation in the public sector is less about new products and more about improving efficiency and quality of outcomes. Innovation can therefore not only be linked to technological innovation leading to “Product Innovation”, but it can involve internal organisational processes and structures leading for example to new approaches to client services – “Client service innovation” – or new approaches to reaching clients – “Marketing Innovation” – or new methods for transforming information – “Information Innovation” – and so on.

The Publin report D20 introduces the concept of innovation in the public sector as a “…deliberate change (in behaviour) with a specific objective in mind “Innovation and change share a common DNA and in the public sector innovation and change are linked to improvements and novelty in systems, processes and products that add value to the public by allowing them to be more efficient and effective. In other words, innovation in public sector organisations involves the successful implementation of change.

So what can the private sector learn from the experiences of the public sector about the challenge of changing organisational structures, processes and behaviours?

Innovation examples in the public sector include: the use of new technology; the drive towards public-centric processes with the view to deliver simpler services and greater convenience; or the empowerment of staff and the public to better engage and participate in the design and implementation of new policies/services. To enable all these innovations to be successfully delivered in the public sector organisations we need effective change management methodologies and approaches.

Many of the barriers to innovation are common to both the private and public sectors; resistance to change, risk adverse cultures; centralised structures, internal politics, etc.

Some of the lessons learnt from the public sector innovations are:

1. Promote collaboration and collaborative working cultures within and across divisions and departments by identifying clear accountabilities and mapping (sometimes even creating) the cross-organisational interdependencies that need to work in order for the desired outcomes to be achieved
2. Beware that ‘fear of failure’ stifles innovation and change in organisations: in fact successful change organisations tolerate failure as part of learning, and growing change capability
3. Articulate an all-encompassing vision of what the change initiative will accomplish and align all stakeholders behind the vision
4. Capture all the expected benefits and the changes in the organisation that will realise the benefits and then establish the right metrics to monitor and track benefit realisation following the end of the change initiative
5. Smart individual and group incentives are needed to instil the desired culture. The most successful of these are about recognition of efforts and achievements, rather than financial reward.
6. Finally, be careful what you measure and what you reward, as this it will strongly influence behaviours, sometimes in unintended ways.

CITI, over the last 25 years, has developed and practiced robust and effective change methodologies and tools that enable change initiatives to be delivered successfully.

One of these models is the Change Diamond that assists organisations to view change through its different and inter-related viewpoints generating robust projects, programmes, and portfolios designed to bring the expected benefits into reality.

The Change Diamond takes a holistic view of the change journeys that organisations initiate; it is relevant not only for changes that involve organisational systems, processes and structures (the “hard” aspect of change), but also the changes that are needed in behaviours and organisation culture (the “soft” aspects of change) to enable change to be successfully embedded and realised.

CITI has supported many clients, from public and private sector markets, to achieve maximum value from their change initiatives and investment designed to bring innovations into the market place or introduce major technological change to enhance value to customers. It has done so by developing their programme, project, and change management communities.

Some recent examples to indicate the depth of our experience and support we provide to our clients can be found here http://www.citi.co.uk/case-studies/public-services/

Not long after the completion of Terminal 5, Development Projects launched a business transformation programme. They were seeking quicker, lower risk and more beneficial implementation of their projects. Whilst they were shrewd enough to recognise that altering procedures alone would not achieve the necessary behavioural changes; they also recognised that trying to achieve the changes off the back of inconsistent methods and processes would not be sensible.

One set of processes in need of updating existed around the project lifecycle and it’s supporting assurance functions. With LHR’s overarching transformation to a benefits led programme organisation, aligned to recognisable industry standards, this lifecycle refresh was a critical undertaking requiring buy-in from all levels of the organisation and also needed to be done with pace, a challenging undertaking but one LHR took head-on.

Because of this and especially the need to move at pace it was decided to conduct a ‘Blitz’ week; key stakeholders from the delivery and operational interface communities were invited to participate in an intensive five day exercise. This would culminate with a live presentation at the end of week, to the senior leadership team of the Development Projects division, of the proposed lifecycle. The presentations objective was to gain their endorsement for developing the detailed view and supporting sub-processes of lifecycle management and project assurance.

CITI was engaged to guide and facilitate the ‘blitz’ week for several reasons; our acknowledged expertise in industry standards (Cabinet Office, APM etc), a proven track record in assisting other large organisations with similar challenges and expertise in delivery of change management initiatives and their governance. This would all prove valuable and is also coupled to a strong ethos of practical application. This meant they could quickly translate external best practice and fundamental principles into LHR’s language and existing processes. Working from first principles the team started by matching existing practice to a stage gated process; the client quickly came to re-discover the value of some fundamental ‘rules’ that had been lost in the development of their current processes. Three particularly valuable points were:

1. The primacy of the business case in steering projects to a successful conclusion
2. Differentiating approvals from authorisations, and
3. Early and consistent involvement of the users to achieve benefit.

They also discovered some new techniques; how to effectively tailor the processes to individual circumstances and the necessity for partnership between the project manager, sponsor and the affected lines of business to agree appropriate courses of action within the framework. This included identifying ways of shortening the project durations through tailoring the assurance processes that supported the project lifecycle. This was achieved by tailoring the level of assurance through a semi-automated approach, dependent on the risk and complexity of the project; this would ultimately break the dependence on ‘heavy-duty’ formalised board reviews of all projects.

Of course, process alone wouldn’t deliver the benefits. These would depend on the project management and sponsoring community adjusting their behaviour to a more cost and risk balanced approach to the establishment of governance for each piece of work. Further development was needed to start making this change but the lifecycle and processes started to act as pull-through for this to take place. Foremost amongst these additional changes were the development and delivery, by CITI, of sponsor and senior management capability in leading change initiatives from a benefits and outcomes based perspective. Of similar importance was the work, on developing and delivering, for both the programme/project management and also the sponsor and business functions, the material to understand and craft effective business cases – a significant and ongoing initiative.

The far-sightedness and wisdom of Heathrow’s investment is paying off. During a recent best-practice seminar the sponsor of the work was able to publicly identify several critical changes in the organisation’s behaviour. Foremost amongst these was the ability to take a forward looking view of why a piece of work should or shouldn’t proceed. The convention still operated by many organisations is that proceeding is based on approval of what has gone before rather than authorisation of what is to come. To get to this point different questions, different areas of expertise and different mind-sets need to be applied – if they are, benefit delivery becomes much less challenging.

Opportunity

The challenge facing Network Rail managers is considerable. They have to deliver commercial benefits within demanding financial, quality, health & safety and legislative parameters, within a complex stakeholder environment.

This presents challenges far beyond the traditional understanding of engineering programmes, whose principal goal is frequently seen to be the delivery of engineering solutions.

Approach

In the face of tough competition, CITI was delighted and proud to be selected as the supplier for all project, programme, and sponsor level development for Network Rail.

“We have already piloted six of the core courses – each followed up by a course review day to establish the impact and effectiveness of the programme. Of particular note from the reviews is the fundamental importance that the role of portfolio manager has to overall programme and project delivery,” remarked Thomas Docker, CITI Client Director for Network Rail.

CITI’s portfolio management course was tailored to include Network Rail specific cases. As Alistair Kirk, Director of the Programme Control Office identified, “The long-term goal is to have in place a centre of excellence, and we are currently assessing how to implement it. In the short term, we are focusing on increasing the level of competence prior to rolling out best practice systems and practices”.

Outcome

Network Rail’s commitment to improving project management is reflected in a series of one-day seminars that the organisation puts on, at which invites are extended to other enterprises. CITI is working with Network Rail on the next seminar to be run later in the year. The topic area will be project controls – seen through the eyes of portfolio, programme and project managers.

Opportunity

As part of its alignment to the APM, EC Harris has embarked on a development programme for its wider project community based on APM’s Project Management Competency Framework (PMCF). The highly pragmatic approach has seen CITI working alongside EC Harris to produce mappings between the PMCF and EC Harris project community roles. For each role, some of the competence areas in the PMCF have been identified as core, while others have been identified as supporting competences.

Approach

Individual role holders self-assessed against their core and supporting competences. This was followed up with each person being interviewed by a CITI consultant to evaluate their self-assessment of core competences and identify potential development needs. The analysis of those that have participated so far has been used to identify individual development needs. Many of these needs are shared with others and a development programme has been planned to address both individual and group activities. A blend of learning events is being used, with a focus on support within the workplace, to ensure that the desired impacts are made.

Outcome

This approach is also being used to the benefit of EC Harris’ clients. Most recently it has been deployed for the teams working with BAA at Heathrow, ensuring that EC Harris meets critical client requirements of alignment to, and excellence in, industry best practice such as APM and OGC.

As a company that provides managed services, EC Harris has identified other competences that are relevant to their project community and these have been included in the development plans. Brian Snowdon, EC Harris Professional Services L&D Consultant observed that, “To be famous for PPM, EC Harris has to be able to demonstrate it is at the forefront in project and programme management. In particular, it is important to us that any development has a focus on building best practice, so that we deliver successful outcomes for our clients.”

Opportunity

For most organisations an accurate appreciation of the status and performance of live projects is beyond their grasp. This carries a high burden of cost. Projects which should be terminated limp on; those deviating from plan are identified late in the day, if at all, when wastage is already high and the cost of remedy is higher still.

Approach

Littlewoods were better placed than most; they had in place robust monitoring mechanisms and reports. However there was a suspicion amongst their project support team that the use of these tools was too reactive and not achieving the added value that they should. They wanted to achieve more than just reporting cost and progress to the board.

Their objective was to have current and reliable information, in order to succeed this meant that it had to give confidence through its credibility and demonstrate that projects were delivering more consistently and safely. Status should be capable of immediate and accurate interpretation and the information should be of use to the project teams as well as the sponsors. It was for these reasons that they engaged CITI.

Outcome

A combination of a consistent approach and simple but effective reporting has seen a halving of increases in cost over original estimates. Alternatively, before the changes half of their projects had a variance exceeding 50% of plan and only 3% could be expected to come within 10% of plan.

Within a year of implementing the CITI approach nearly 20% of projects came within 10% of plan and the number exceeding 50% variance was beneath 30%. The sheer financial impact of these advances is not the only advantage that Littlewoods gained; heightened confidence in the planning and execution of projects reflects right through to board level where outcomes are more predictable and decisions are therefore more focused.

Opportunity

Changes caused by technology, alternative purchasing channels and John Lewis’s own drive in the vanguard of influential retailers has caused it to become increasingly interested in, and increasingly dependent on, projects.

Approach

CITI first became involved with the computer services department, within the Partnership in 2000. A major relocation project was underway and it had to be successful. Governance was recognised as a critical concern and the key stakeholders became involved in an intensive session on what and how to create the necessary support environment for the ultimately very successful project.

With that experience and with the growing portfolio of projects the computer services senior management group accepted the need to develop the computer services project office (CSPO) function. Never a simple proposition, impacting as it does on both senior managers’ need for information and project managers’ need for support, the CSPO uncovered the requirement for several connected initiatives.

The CSPO makes it’s influence felt by giving guidance rather than by command and control. As their interests and types of projects become known the Partnerships “body of knowledge”, about how it runs projects, has grown. CITI has been there working with the CSPO delivering project management education, a range of management briefings and suggesting sources of knowledge and ways of working.

Outcome

As the computer services project community matures, with partnerships between sponsor and project manager developing, CITI sees the growth of a new core competency, valued and trusted with ability to run projects successfully and predictably going forward.

Opportunity

As part of its strategic review Diageo acknowledged the need to overhaul, reorganise and standardise its processes. It was recognised that a key element was to differentiate between global processes (marketing a particular brand) and local processes (purchasing newspaper advertising).

Despite the practical and action orientated culture of the organisation, the debate between ‘global’ and ‘local’ was fast becoming esoteric. Senior management, frustrated by the circular nature of the debate, decided the discussion either ceased or was brought to a satisfactory conclusion. Their preference was the latter as it was apparent there were significant cost savings to be made by differentiating between the two.

Approach

CITI was invited in to solve the issue. Following discussions with Diageo’s Chief Operating Officer, the solution was found using CITI’s strategic implementation planning (SIP) approach facilitated by one of our senior programme managers, Simon Peach.

In its simplest form, CITI’s SIP approach identifies and ‘proves’ the relationship between the blueprint of the new organisation (its target operating model), the customer value proposition and benefits case for the transformation. The process involved can be a challenging time for the executives and senior managers as ideas are exposed to a constructive, but necessarily ruthless, analysis process.

The outcome is an executable plan for implementation that links and tracks benefits → impacts → products (deliverables). The core element is the ‘As-is’ and ‘To-be’ modelling process. The ‘As-is’ identifies Diageo’s current operation, while the ‘To-be’ focuses on the future – the blueprint. Unlike approaches adopted by others, CITI’s approach identifies the implications of decisions made regarding process ownership and location and does not concentrate on process mapping alone. This makes it real and permitted Diageo to develop a coherent and comprehensive target operating model.

Together with Diageo’s senior management and analysis teams, CITI produced an operating blueprint which facilitated resolution of the global verses local process debate. It also proved that an operating model is not ‘shelfware’! In fact Diageo established an internal Design Authority group to become the guardian of the new operating model. Of additional, critical importance and value to Diageo, the SIP process identified a number of standalone programmes that did not contribute towards the new operating environment.

Outcome

Following this, CITI undertook a full analysis of the benefits claimed by all programmes currently underway at the time. It became evident that a number did not have a robust business case and were driven more by inertia than value to Diageo. As a result of CITI’s involvement, Diageo decided to close those programmes with no clear benefits case and align others into a more coherent programme of change. This included the exhaustive revamping of a North American portfolio of projects. The board has since demanded that the CITI approach is adopted throughout Diageo for all of its corporate projects.

Opportunity

Six months into the change programme there was little discernable progress and a lot of dissent among stakeholders. Projects were competing rather than collaborating in bringing about the necessary changes.

Resourcing was difficult and the impact on stores and their performance was often negative, and the project activity was failing to deliver business benefit. Senior management were extremely frustrated at rising costs, delays and the absence of any investment payback.

Approach

Through contacts within the retail organisation, CITI were asked to help with the change programme. We assessed the programme using our programme evaluation methods, and it soon became apparent that, although the business benefits were well articulated and financially robust, there was no clear linkage between the benefits to be realised and the projects being undertaken.

We used our proprietary BIP mapping (benefits > impacts > products) toolkit to establish clear connections between projects and their deliverables, and the benefits sought. This identified that many of the projects were not aligned to the business benefits and some of the benefits did not have any means by which they could be achieved – this led to a major restructuring of the projects, and a fundamental adjustment to the governance of the projects.

Outcome

The BIP mapping tool showed the client how to restructure the change programme based on achieving the business impacts required, ranging from improved customer service, to more valued staff, through to improved distribution processes. The new set of projects each had a clear link between what it delivered in terms of outputs, the impacts or changes to people and processes they would cause, and the benefits.

By taking this approach, we were able to reduce the number of interdependencies between projects and therefore reduce the possibility of delay through projects ‘competing’. By restructuring the projects in line with the business impacts the most challenging task, realignment of business sponsors was undertaken. Their traditional approach to project sponsorship had been based on functional alignment – a problematical approach when large-scale cross-functional change is the outcome sought. The approach used showed the nature and degree of cross-functional dependencies and allowed a more appropriate governance structure to emerge.

The programme was re-organised into three delivery tranches, each with its own set of projects, which would leave the organisation is a new, stable state. The first two tranches have now completed and the original benefits from the business case have come through, despite the delayed start.

In conjunction with CITI, the client developed a new approach to managing complex change based on the toolkit we provided them as part of the process of creating a coherent programme of change. Along with the associated skills transfer from CITI to the client, this has allowed them to successfully embark on other change initiatives with confidence.

Opportunity

But the world has changed in the past six decades. The latest thinking among disability groups and leading charities is that many disabled people will have better prospects working in mainstream employment, rather than on specialist sites.

For example, Jo Williams, Chief Executive of Mencap, has said: “When the factories were started 60 years ago they were making an important contribution. Those days have gone really. We’re looking forward to seeing people with disabilities fully integrated into society.” Bob Warner, Remploy’s Chief Executive, shares Mencap’s views.

As he says, “Remploy have a great opportunity to help more disabled people find jobs, but we have to change how we work in all areas of Remploy. There is now an acceptance that disabled people would prefer to work in mainstream employment alongside non-disabled people rather than in sheltered workshops from which they do not progress and develop. Therefore the company had to change.”

Remploy realised that, with the changing dynamics of employment today, for the cost of employing one person in a Remploy factory it could place four people in jobs with mainstream employers. Furthermore, some of the businesses that had been set up in the post war years were in urgent need of refocusing to ensure that they were meeting current market needs.

Approach

Bob faced a formidable challenge: first to convince all those who had an interest – including politicians, disability groups, the media, disabled employees and their families, and unions – that the company had the right approach.

“The vision was clear and the change made complete sense. It was a great day for Remploy when we were successful in securing government approval for our modernisation plan. It meant that we could increase the number of disabled people supported into work from less than 2,000 a year currently to 20,000 a year by 2012.”

“Planning, preparation and discussions took three years of detailed work”, said Bob. “Even with the green light from government and agreement from other stakeholder groups, we were faced with a major logistical challenge.”

Following a rigorous supplier selection process, Remploy turned to project and programme management specialists CITI for advice on how to manage a change programme of this kind, and for help in bringing it about. Remploy had to merge factories, close some sites and transfer people and production within a limited time and a defined budget, in the media spotlight and in a highly charged climate where emotions, understandably, were running high.

“Throughout its history, the company had never executed a programme of this scale and complexity.” said Bob. Building a foundation for Remploy to master change and develop its true potential was essential.

An early decision was made that, rather than bringing in external project managers, CITI would train and develop Remploy’s own staff as project and change managers, and would provide appropriate systems and support to allow Remploy’s own people to undertake this major change programme for themselves.

Geoff Vincent, CITI’s Principal Consultant leading the engagement said, “Transferring capability is exactly what CITI is about. We strive to give our clients the confidence to manage major change and are delighted that we have been able to ensure the change programme was a success, and also leave Remploy in a much stronger position to tackle the future challenges that may lie ahead”.

Outcome

Over the 12 months to the end of March 2008, Remploy has found 6,600 jobs in mainstream employment for people with disabilities – an increase of 27% on the previous year. The figures include 4,600 jobs under the government’s Workstep programme, which is aimed at those who experience the greatest barriers to finding and keeping a job – a rise of 47% on the previous year.

Bob Warner, pleased with the outcome of the modernisation programme so far, added “Remploy with its own project and programme management capability, working to the highest professional standards, has what we need to meet the new challenges the company faces, including the building and development of successful businesses following the restructuring. Refreshed and revived, Remploy are now in the ascendant and can apply its skills to helping many times more disabled people into employment, for the next 60 years and beyond”.

Opportunity

Following the 1964 Labour election win Prime Minister Harold Wilson appointed Jennie Lee to take on the ‘University of the Air’ project. Since then the OU has changed the face of the higher education system through the exploitation of technology as a tool to make distance learning accessible to all. Fundamental to this achievement was the ability of the organisation to manage innovation and change through projects.

Its immense success has in recent years been to a large degree based on its advanced ability in online technology development. So it was only natural that when the OU embarked on a project to review and refresh its in-house project and programme management methodology it wanted to support it by a ‘best in class’ online project management resource. Rather than reinvent the wheel it turned to partnering with CITI, the UK’s leading experts on project and programme management.

Approach

Having seen demonstrations of CITI’s online project management best practice tool, the e:PMguide, the OU saw a unique opportunity to further develop and tailor the guide for its internal use. A vital factor in the OU’s decision to partner with CITI was their ability to tailor the online resource so that the OU style, standards, approach and templates could be seamlessly integrated into the existing guide, greatly enhancing its business relevance and thus ability to obtain the support of the many stakeholders across the University.

Dean Taylor, Head of Strategic Projects Support at the OU, recognised the need for consistency of approach and terminology, given the many changes the OU is undertaking to expand its services and improve efficiency. “In collaboration with our Human Resources Development Team we have embarked on a University-wide project management best practice programme which encompasses many facets, including developing project leadership and project management capabilities and enhancing project governance and assurance practices. The foundation of our work is the refinement of the OU project management methodology and approach which will be embedded through the online e-PMguide and linked resources.”

Outcome

The e-PMguide has been structured for everyday use, with the emphasis on what must be done to achieve a project’s objective, as opposed to all the things that could be done. The guide provides an essential set of templates and examples of their use. Again, the focus is on success and flexibility, with each project receiving an amount of management effort that is optimally geared to its size and complexity.

As well as best practice guidance, the e-PMguide contains a method ‘handbook’, which is based on ten project disciplines and seven project roles. This enables all members of the project community to understand their responsibilities within projects so that they can contribute to successful project delivery.

Nigel Pigott, Strategic Projects Manager at the OU commented “The great thing about the guide is that it combines very rich content with the flexibility and ease of use which make it accessible and helpful to managers across a wide range of projects.”