Thursday, 24 June 2010

Cutting without bleeding

Advice to senior leaders on how implement cost savings in the public services

The public services are facing an unprecedented challenge to reduce costs by upwards of 25% whilst maintaining frontline services. There are some who would say this is impossible and that, after years of efficiency savings, there is simply no more ‘fat’ left to trim. This article says the opposite and offers you 10 progressive ideas to assist you in making these cuts without doing any long term damage to the social and physical fabric of this country, or indeed the public services we have grown to depend upon. 
  1. In all of your communications about your strategy to implement these cuts make sure that you only discuss the costs of services, never the benefits. For example when you come to publish expenditure on the web, as progressive councils are already doing, do not outline what the money was spent on. Staff and public alike are only interested in what cash (their cash of course) is going out and not on what has been purchased or provided.
  2. Beyond telling the public and staff what you are doing (mostly, of course, to avoid Freedom of Information enquiries and comply with statutory consultation requirements), do not seek to involve or engage them in ‘thinking’ about how the resource challenge might be met. They will only bleat on about ‘saving jobs’ or ‘saving services’ and offer no constructive ideas whatsoever. They are not paid enough to be creative. You, however, are paid enough to have all the ideas, take action and be a decisive leader.
  3. Make sure you hire a team of expensive, but valuable, consultants to do most of the unpopular leg work for you. Many of them are very bright economics graduates who will have spent all of 8 months or so learning their consultancy craft and gaining experience of the ‘real world’. They will get to understand your organisation inside out in a matter of hours. Do not worry that the partners who sold you the consultancy assignment now seem to have disappeared as they are there in the background closely ‘supervising’ the team that are now working with you.
  4. Absolutely do not let smooth talking ‘process consultants’ lure you into thinking that the public services can be ‘reshaped’, ‘redesigned’ or indeed ‘re’ anything. They may even try to suggest that if you work in partnership with other public service providers that ‘things can be done differently and more cheaply’. This is a distraction from the main task of reducing your budget and your budget alone. You did not get to where you are without being fiercely parochial! Be on guard against any talk of ‘whole systems’, ‘total place’ or members of the public ‘living joined up lives’. Dismiss all talk of 'radical efficiency' as well, as this is full of daft ideas like 'empowering consumers'.
  5. Sometimes you may get to hear of ministerial announcements or emails from central Government Departments advocating ‘collaboration’. This is a clever ruse to persuade you to give up some power and control. This is to be resisted at all costs. After all, since when did Whitehall Departments ‘collaborate’? Never of course! So their attempts to get you to do it, is clearly designed to weaken you and strengthen them.
  6. The best way of achieving cuts, of course, is to demand that every budget holder makes a similar percentage cut no matter what their department, unit or function does or achieves. Although you may be aware (or not) that some functions provide more vital services to the public than others, and indeed some units have already been cut within the last 12 months, this is no consequence. A uniform ‘salami slice’ taken off everyone is the only fair and responsible approach. There are several accountants who will support this strategy.
  7. This is not say of course that you do not have a few favoured functions who have shown over the years to be of huge value, who may have invited you to open a new facility or indeed have asked you to speak at their ‘team away days’ etc. The heads of these functions will have shown themselves to be of particular value for money in that they have never challenged any of your decisions. These value for money functions should of course be allowed to cut their services by slightly less than the others. But this should not be widely known until after the event.
  8. Whilst you may talk about accountability and empowerment (always very good words to use during downsizing) and that you will ‘leave it up to the budget holders to make their own decisions’ about how to implement their contribution (another very good word) towards the cost reductions, do make sure that you put in place a few ‘no go’ areas. Yes of course it may be cheaper and perhaps better to empty bins once a fortnight, you will know that this is not popular with certain parts of the news media. There are other examples too. Therefore it is your leadership responsibility to make sure these ‘no go’ changes are clear to all concerned. Some managers may moan about having ‘no room for manoeuvre’ but dismiss these people as ‘troublemakers’ who do not really understand what empowerment is all about.
  9. Although it might seem like a soft target, one function that must not be cut more than the very minimum is ‘public relations’. These are the people you must rely upon to get your message across to a sceptical public and staff. Money spent on glossy publications and road shows explaining how frontline services are not (really) being cut and only the ‘chaps and chapesses in the jolly old backroom are having their belts tightened’ is money very well spent.
  10. Above all, whatever you do, do not let anyone including even your most trusted lieutenants suggest that your assumptions should be examined. You are a senior leader and therefore all that you believe and say must be correct, if not enlightened. 500 years ago Machiavelli may indeed have suggested that true leaders need people around to tell them the truth. But he was clearly wrong as evidenced by the fact that he died a long time ago. Be certain, be sure and be confident: the strategy that you are implementing is unavoidable. (You may wish to write this last statement out and place it on your bathroom mirror.)
UPDATE:

On 26/6/10 this post was mentioned by Eric Pickles, Secretary of State for the Department for Communities and Local Government who tweeted "Without endorsement, I loved this" (http://twitter.com/EricPickles). Thank you Mr Pickles!


And today I noted that this blog is now listed on http://mcarthursrant.blogspot.com/ McArthur's Rant - Human Resources, Organisations and HR 2.0 as one of a number of blogs that rant!! I am tickled! Thank you Scott McArthur!

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