Leading change in the public sector 2010

1. Please feel free to add your organisation�s logo to the first screenPlease feel free to add your organisation�s logo to the first screen

2. The issues In the current tax year, the UK budget deficit is forecast to be �178bn Spending cuts of �60bn are being forecast So� How well prepared is the public sector to deal with the challenges this presents? This is the context in which the public sector is operating. Can the public sector cut costs so significantly without harming quality of service? Deficit figures (Source: Office for National Statistics) Cuts forecast (Source: FT.com)This is the context in which the public sector is operating. Can the public sector cut costs so significantly without harming quality of service? Deficit figures (Source: Office for National Statistics) Cuts forecast (Source: FT.com)

3. Research aims We asked 1,554 practising managers from across the public sector� We set out just before Christmas to ask a sample of public sector managers how well prepared they felt for the challenges they will face There has been a lot of comment and speculation about public sector management, and capacity for change, with advice coming from all quarters. We sought PS managers own experiences and views on what needs to be done. We set out just before Christmas to ask a sample of public sector managers how well prepared they felt for the challenges they will face There has been a lot of comment and speculation about public sector management, and capacity for change, with advice coming from all quarters. We sought PS managers own experiences and views on what needs to be done.

4. The sample Sample National Health 19% 25% Education 18% 22% Military 5% 3% Nat gov 5% 11% Justice 4% 1% Loc Gov 31% 18% Sample National Health 19% 25% Education 18% 22% Military 5% 3% Nat gov 5% 11% Justice 4% 1% Loc Gov 31% 18%

5. The sample Labour force survey shows much lower proportion of managers in public sector compared to private (but many managers in the Public Sector may define themselves by their professional status rather than as a manager). Public Private Managers and senior officials 8.0 17.1 Professional occupations 22.5 10.3 Associate professional and technical 24.0 11.3 Labour force survey shows much lower proportion of managers in public sector compared to private (but many managers in the Public Sector may define themselves by their professional status rather than as a manager). Public Private Managers and senior officials 8.0 17.1 Professional occupations 22.5 10.3 Associate professional and technical 24.0 11.3

6. The sample Surprised by the proportion � most commentators aren�t aware of this level of experienceSurprised by the proportion � most commentators aren�t aware of this level of experience

7. Management talent Public sector managers are highly motivated, dedicated and ambitious 56% actively chose management 65% had private sector experience 70% are satisfied in the public sector. Our research in 2008 showed that only 40% of managers (across all sectors) had chosen management as a career � suggesting that the public sector has more committed managers than the private sectorOur research in 2008 showed that only 40% of managers (across all sectors) had chosen management as a career � suggesting that the public sector has more committed managers than the private sector

8. Management talent Our research shows a committed, experienced and talented cadre of management professionals who are highly motivated to make a difference. Of those with private sector experience, 61% are more or much more satisfied in the public sector. These managers are a huge asset for the public sector, and retaining this talent, and maintaining that engagement and motivation will be key to meeting the challenges it faces. Our research shows a committed, experienced and talented cadre of management professionals who are highly motivated to make a difference. Of those with private sector experience, 61% are more or much more satisfied in the public sector. These managers are a huge asset for the public sector, and retaining this talent, and maintaining that engagement and motivation will be key to meeting the challenges it faces.

9. Feeling the pinch Public sector has not been immune from the recession 69% of managers had experienced budget cuts in the last 12 months, bringing a range of challenges

10. Feeling the pinch Managers already struggling with budgets, resources and workload. 74% of managers believe their team operate efficiently, with minimal scope for cost savings. Suggests there may not be the capacity for uniform cuts without harming services. Managers already struggling with budgets, resources and workload. 74% of managers believe their team operate efficiently, with minimal scope for cost savings. Suggests there may not be the capacity for uniform cuts without harming services.

11. Facing the future

12. Facing the future Managers are particularly concerned about staff health wellbeing Also a major worry over quality of service. We identified a real concern that uniform or blanket cuts � �salami slicing� � could only impact negatively on services. Managers are particularly concerned about staff health wellbeing Also a major worry over quality of service. We identified a real concern that uniform or blanket cuts � �salami slicing� � could only impact negatively on services.

13. Upcoming challenges When we compare the challenges managers face now, with those they expect in the future, we see clear consistency. Managers are already struggling with workload, budgets and resourcing constraints � and these are only going to get worse. With budgets set to become the biggest challenge of all � up 13%. Two other challenges also grew substantially - Personal job security +13% and Demonstrating value +11% - elsewhere in the research, nearly one third of managers said that they felt unsure about still being employed in a year�s time.When we compare the challenges managers face now, with those they expect in the future, we see clear consistency. Managers are already struggling with workload, budgets and resourcing constraints � and these are only going to get worse. With budgets set to become the biggest challenge of all � up 13%. Two other challenges also grew substantially - Personal job security +13% and Demonstrating value +11% - elsewhere in the research, nearly one third of managers said that they felt unsure about still being employed in a year�s time.

14. Over half said senior management didn�t understand what their teams did Half criticised senior management�s communication ability Real concern over senior management�s capability to deal with budget cuts Management concerns Reference ILM�s Index of Leadership Trust (report and other materials available from the ILM website), where public sector leaders scored lower than private sector on trust � perhaps due to org size, and perceived distance from frontline.Reference ILM�s Index of Leadership Trust (report and other materials available from the ILM website), where public sector leaders scored lower than private sector on trust � perhaps due to org size, and perceived distance from frontline.

15. Management concerns Reference Index of Leadership Trust, where public sector leaders scored lower than private sector on trust � perhaps due to org size, and perceived distance from frontline. Reference Index of Leadership Trust, where public sector leaders scored lower than private sector on trust � perhaps due to org size, and perceived distance from frontline.

16. In their own words We asked the managers to sum up their feelings about the future with one word. When we combined the responses to create a word cloud, we saw the overwhelming feeling was challenging, followed by uncertain, concerned and, change. (NB: Size of word reflects number of mentions) The term challenge can be viewed in a positive or negative light, and it seems our managers are very much a �glass-half-full� bunch of people. We asked the managers to sum up their feelings about the future with one word. When we combined the responses to create a word cloud, we saw the overwhelming feeling was challenging, followed by uncertain, concerned and, change. (NB: Size of word reflects number of mentions) The term challenge can be viewed in a positive or negative light, and it seems our managers are very much a �glass-half-full� bunch of people.

17. Opportunities for change

18. Opportunities for change Innovate and develop creative solutions 51% - rather than simply salami-slicing services, look for creative ways of redesigning service delivery to minimise the impact on the public Improve teamwork and communications 48% - managers need to be open and keep people well informed and work hard on building up their teams to make them better able to respond to the challenges they face Deal with inefficiency 42% - managers know these exist (although tend to lie elsewhere in the organisation!) � now is an opportunity to root it out Make key decisions 31% - hard times require hard decisions, perhaps decisions that have been put off because they are too sensitive. Now is the time to make them Increase staff morale 29% - managers need to work hard on keeping morale up when times are hard, to support better team working and to encourage innovative solutions Innovate and develop creative solutions 51% - rather than simply salami-slicing services, look for creative ways of redesigning service delivery to minimise the impact on the public Improve teamwork and communications 48% - managers need to be open and keep people well informed and work hard on building up their teams to make them better able to respond to the challenges they face Deal with inefficiency 42% - managers know these exist (although tend to lie elsewhere in the organisation!) � now is an opportunity to root it out Make key decisions 31% - hard times require hard decisions, perhaps decisions that have been put off because they are too sensitive. Now is the time to make them Increase staff morale 29% - managers need to work hard on keeping morale up when times are hard, to support better team working and to encourage innovative solutions

19. Dealing with underperformance Performance management was shown as a key area to focus on in coming months 25% of managers felt their organisation was failing to deal effectively with underperforming staff 28% of managers were looking forward to the opportunity to manage out poor performers in the future. ILM comment � public sector traditionally removed from market forces � the forthcoming squeeze will sharpen focus and require them to address performance issues. ILM comment � public sector traditionally removed from market forces � the forthcoming squeeze will sharpen focus and require them to address performance issues.

20. The role of targets The higher the respondent�s management level, the more positive their stance towards targets. More females (66%) agreed that �targets enable effective performance management of people� compared to males (58%). �Housing� sector respondents were the most positive towards targets and those from the �Health� sector were the most negative. Those who feel they �have the authority to set realistic targets� tended to believe that targets play an important role in providing direction and are not a distraction. The higher the respondent�s management level, the more positive their stance towards targets. More females (66%) agreed that �targets enable effective performance management of people� compared to males (58%). �Housing� sector respondents were the most positive towards targets and those from the �Health� sector were the most negative. Those who feel they �have the authority to set realistic targets� tended to believe that targets play an important role in providing direction and are not a distraction.

21. Conclusions The public sector has a core of talented managers who are up for the challenges ahead They are already under pressure, and warn that centralised cuts could cripple service delivery Instead, they want the freedom and support to develop innovative solutions to reduce costs. Recognise the experience and commitment of public sector managers and harness their enthusiasm and ability to develop innovative and creative solutions to the resourcing problems they face. Recognise the experience and commitment of public sector managers and harness their enthusiasm and ability to develop innovative and creative solutions to the resourcing problems they face.

22. Conclusions They have the appetite to manage underperformers, but need support and development to do this successfully Targets have an important role to play. Set high level goals and allow managers the freedom to translate these into local targets Invest in organisational leadership and communication � leaders need to spend time and energy connecting with their staff. Ensure public sector managers have the skills and confidence to address performance problems in their teams, and that they will be supported by their own managers in doing this Establish clear policy goals that service deliverers are expected to achieve, and allow them to translate these into local targets that reflect the realities of the service on the ground Senior managers need to spend time and energy connecting with the people they lead, communicating with them and making themselves as visible as they can, to help build trust in troubled times. ILT 2009 showed that trust in CEOs is lower in public sector than private, in part due to the size of organisations and the relatively short periods spent in post Ensure public sector managers have the skills and confidence to address performance problems in their teams, and that they will be supported by their own managers in doing this Establish clear policy goals that service deliverers are expected to achieve, and allow them to translate these into local targets that reflect the realities of the service on the ground Senior managers need to spend time and energy connecting with the people they lead, communicating with them and making themselves as visible as they can, to help build trust in troubled times. ILT 2009 showed that trust in CEOs is lower in public sector than private, in part due to the size of organisations and the relatively short periods spent in post