The pandemic can be used to drive change
How can the administration of local government become more agile, increase productivity, and reduce costs – as will be required – in post-pandemic Canada? The impact of the pandemic on ratepayers, including stalled development, reduced incomes, and additional demands on the resources of municipal government, means revenues are likely to decrease while expenses go up. In addition, there is the looming question of how the COVID-related budget overages incurred at the federal and provincial level are going to impact local governments.
The need for change was already emerging for many municipalities even prior to the pandemic, as provincial grant money was being cut back and economic downturns, like the one in Alberta, meant development was stalled and expected additional tax revenues did not materialize. Municipalities were starting to feel the impact of reduced revenues and the pressure to align people management with the reality experienced by ratepayers, not by comparable municipalities. Add in the additional financial and Human Resources consequences of a prolonged pandemic and the reality is that significant change is imminent for many Canadian municipalities.
Three Steps to Driving Change
It is very difficult to effect large-scale, meaningful change in municipal government. One reason behind this is the lack of desire to change by employees – largely because they don’t see the need. Why change what they believe is working? (“If it is not broken, why fix it?”) While resistance to change cannot be underestimated as a factor in the failure of change initiatives, it can be minimized with good change management practices.
As we start the third year of the pandemic, many municipalities are back to business (most with some modifications), recognizing that services still need to be provided and that they are doing what they can to manage the ongoing impact of the pandemic. The crisis mode of leadership (command and control) required during the initial waves of the pandemic may have receded, but there is still a crisis, and the need for change is never more obvious to stakeholders than during a crisis.
Instead of waiting until the pandemic is over, municipalities could be forward-looking and use the momentum of the crisis to drive the necessary long-term changes to stay viable and continue to service ratepayers. This may seem like an insurmountable amount of change in the ingrained, deeply rooted culture of the municipal organization, but very few municipalities will disagree that there is (or will be) a need to reduce expenditures and improve efficiencies in their organization. Change is imminent.
1. Employee awareness
The first step to drive successful change is that employees must be aware of why the change is occurring and clear on the need for change.
It is not enough to say that compensation programs or hours of work are going to be changed because of the pandemic. Communication with employees should be specific – what exactly is the impact so far, and what can be expected in the future? The idea is to make employees aware of the need for change first – not bring a change to them and say this is the change and this is why we are doing it.
Change is less likely to be accepted if employees are told what the change is going to be before they clearly understand and accept that it is needed. Successful change management requires time.
2. Employee buy-in
The second step in driving successful change, after making employees aware of the need for change, is to get them to buy-in to the change. They may not want to change, but they will understand that things need to be done differently. It is important to allow input into the changes that will be needed – not about whether change is needed but more focused on how to achieve the goals.
All change management models talk about the importance of allowing stakeholders (not just employees but also ratepayers and management) the opportunity to provide their input into the change. If employees understand why change is required – if they are allowed to provide input into what changes will occur – there is a much larger chance of change being successful.
Some leaders will shake their heads and ask why they must go through all this work when they are in control and should have the power to change things. As many a project manager has discovered, do not underestimate the power of resistance to derail change initiatives. Take the time to do it right – the crisis of the pandemic has provided awareness of the need for change, and input will help employees accept the change. The fourth and fifth waves of the pandemic will provide a bit of a time cushion to allow a good change management plan to be developed and implemented.
3. Identify and plan for change
Now the organization can move to the next step and identify the changes that will occur, then formulate a plan on how to enact the changes. A typical process is to review the existing state and identify the desired future states, followed by an analysis of the gaps and a plan on how to get there. Some of the areas looked at could be include:
- organization restructuring;
- review of salary grids and the compensation program (including comparisons with the private sector, not just other municipal governments);
- privatization of some functions;
- process and efficiency reviews and recommendations; and
- system changes.
When developing the plan on what needs to change, when, and how, municipalities should try to avoid the common practice of comparing themselves just with other municipalities. Some municipalities have gone as far as trying to effect changes in their organizations to mirror the private sector, which is significantly different in many of their compensations systems and practices. This can require significant changes in multiple processes, systems, and practices.
A word of caution about this, however – experts caution against implementing too much change too fast. The culture is very ingrained in local government. Never underestimate the impact of employees quitting and publicizing why, resisting change, and unionization can have on the organization. For example, in one Alberta municipality, the new CAO came from the private sector and was given a mandate from council to make the organization more efficient and cost effective. The CAO developed a plan to implement private-sector type systems and then presented this to managers to have them implement the new systems. This included:
- changing the salary system from a step-based grid to a merit-based system;
- releasing people based on redundancies or performance issues;
- extending workdays from seven to eight hours a day, with no increase in compensation; and
- stopping the earned days off program.
The organization found itself in turmoil, with exceptionally high turnover of key talent, bad reviews on employment sites, and the implementation of the new processes stalled. Then the suicide of an employee who had just been terminated shook the organization to its core, and the CAO was let go. It was too much change too fast, but also the change was not managed well.
Employees were not aware of the need for change and thus resisted it strongly, wasting time and resources while dealing with absenteeism, turnover, and complaints that could have been better spent implementing the changes.
Change is the Only Certainty
Regardless of whether it is required because of the pandemic or the need was evident prior to COVID, change seems to be the only thing that is certain these days. No municipality will be immune to the requirement for change going forward. Anyone who has been through organizational change will caution against trying to implement too many changes all at once. Having said this, it is important to keep the momentum and opportunity created by the pandemic crisis going.
Balancing the need for rapid large-scale change with the probability of the change being successful will be important. Have a change plan. Ensure that employees are aware of the need for change – and get their input into the changes. Then establish a schedule of changes that is communicated repeatedly to employees and related directly to their input. The reason for change will be a contributing factor to its success. MW
✯ Municipal World Insider and Executive Members: You might also be interested in Peter de Jager’s article: How to embrace the ever-present challenge of change.
Dawn McCoy is a well-known Canadian Human Resources expert with over 25 years of senior level experience in both the public and private sectors. She is also a university instructor in Human Resources and Business, an HR Consultant, and an accredited Coach.
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