CFOA(S) Event, 17-18 th March, 2008 Graeme Martin

1. Understanding Strategic Leadership in the Public Services: Some thoughts and evidence relevant to people management, HR and leaning & development CFOA(S) Event, 17-18th March, 2008 Graeme Martin

2. Introduction • Three points of departure • The nature of good management and leadership – are they different? • Leadership in the public services – is it different? – your leadership development framework for FRS says so • The applied problem of HR leadership in the public services in Scotland – ‘is it too operational and not strategic enough’ • An exercise, some thoughts and some evidence

3. Analysing Managers’ Jobs: • Think about good managers you have worked with in the past. • What personal qualities do they exhibit? • How would you describe their style/signature behaviours? • What were their shortcomings?

4. The Well Rounded, Thinking and Performing Manager? Managing conflict LINKING Building teams Communicating effectively Interpersonal effectiveness COMUNICATING Outside Creating and innovating CONCEIVING Cultivating emotional intelligence & wisdom Across Across SCHEDULING DOING DOING CONTROLLING Project management Strategic flexibility Coaching Dealing with ambiguity Building teams LEADING Creating a performance culture Delegating Giving feedback Managing change Inside

5. Mintzberg, Weick, Morgan, Goleman (and me) on ‘Rounding out the Manager’s (Leaders?) Job’ • The Person in the job • Values, experience, competence, knowledge and mental models, • Emotional intelligence • An attitude of wisdom • The Frame of the Job • Its purpose, perspective and position • The Agenda of the Work • Figuring out what to do inside and outside the organization • The Context • Inside the unit, within the organization, outside the organization • The knowledge context, the technology context, the corporate context, the strategic context and the international context

6. Personal Competence Self Awareness Self-management& regulation Social Competence Social Awareness Relationship Management Self Awareness - accurate self-assessment, self-confidence Self Management & Regulation, self-control, transparency, adaptability, achievement, initiative, optimism Social Awareness empathy, organizational awareness, service awareness Relationship Management inspiration , developing others, change catalyst, conflict management, teamwork and collaboration Four Domains of Emotional Intelligence and Leadership(Goleman, Boyatzis and MacKee, 2002)

7. To Complete the Rounding Out, What about Wisdom? (Karl Weick…and Plato…and Socrates) • Wisdom as distinct from ‘book learning’ – commonsense? • ‘Never hand over a fire during the heat of the day’ • Wisdom as thoughtful reflection – • the capacity to make good judgements • Wisdom as an attitude • ‘The essence of wisdom is in knowing one does not know, in appreciating that what we think we know is fallible, and in the balance between knowing and doubting’ A balance between excess confidence and excess caution - ‘the achievement of ignorance’ • The need for improvisation (‘bricolage’) and action

8. Managing on Three Levels • Managing by Information • Communicating – collecting and disseminating information, • using it to control by developing systems, • creating structures and directives • Managing through People • Leading, linking, networking • Managing Action • ‘Doing Inside’ – doing projects and solving problems, substituting, doing regular work • ‘Doing Outside’ • Doing deals, handling negotiations • Styles of Managing

9. The distinction between management and leadership • In Table 2. 2 is a list of activities, some of which could be classified as managerial, some of which could be classified as leadership and some of which could fall into both categories. Use Table 2.3 to position these activities • On what basis have you classified them into management activities and leadership activities?

10. Strategic Leadership in the Public Services More than £20m spent, but do we know what it is, how does it differ from the private sector, and can we measure its effects?

11. A development model of strategic HR leadership in healthcare What’s the public services problem? • Specifying the outcomes of strategic leadership in public services • ‘Enterprising public services’, client satisfaction and the creation of public value • Broader reputational (branding, governance, CSR) outcomes • A ‘demands, constraints and choices’ model for senior HR directors in the public services

12. Key Questions • What do we mean by strategic leadership in HR? • How does it differ in a public context? • What are the demands, constraints and choices that might explain effective HR leadership in a public services context? • How do NHS HR Directors interpret/make sense of their jobs and how do their bosses make sense of them?

13. What have we learned from new research? • Innovation and how to get it • High energy organizations and new models of management • The enterprising public service and public value • Mark Moore, the Scottish Government and your leadership and development framework • Dynamic organizations as a model for enterprising public services in times of rapid change and the type of HR/leadership needed in such organizations • The need for ‘serial incompetence’ (breadth as well as depth) in ‘dynamic organizations’ • Dynamic capabilities (local organizations and the public creating demands for continuous improvement), sustainability and less reliance on powerful and knowledgeable individuals • A collaborative mindset

14. What are we trying to explain? An Enterprising Public Service System: Innovation and Change in HR, client services and public value • Types of innovation • New/proved services and products • New/improved processes • New/improved forms of organization • New markets/customers – the community • Degree of Novelty • Incremental - exploitation • Radical - exploration

15. Two Different Concepts of Public Value • Client Satisfaction • Client beneficiaries – deliver best possible levels of community safety, well-being and an integrated risk management strategy • Client obligatees – to sustain community safety by promoting preventive measures (as an individual and collective responsibility) • Social Outcomes • Contributing to social, economic and environmental well-being through effective community planning • Indirect beneficiaries – tax payers, employees, local economy, education, etc • Achievement of collectively defined purposes • Government’s five strategic aims – what are they?

16. The Scottish Government and Public Value – its Strategic Objectives • Wealthier and Fairer • enable business and people to increase and share fairly in wealth • Healthier • help people sustain their health, especially in disadvantaged communities, ensuring better local and faster access to health • Safer and Stronger • Help local communities flourish, become stronger, safer places to live, offering opportunities and a better quality of life • Smarter • Equal opportunities for Scots to succeed from nurture through life long learning ensuring higher and more widely shared achievements • Greener • Improve Scotland’s natural and built environment and the sustainable use and enjoyment

17. The truth about markets: why some nations are rich but most remain poor? ‘The distinction between the role of shareholders and employees was clear when shareholders bought the plant and employees worked in it. But the principal assets of the modern company are knowledge, brands and reputations, which are in the head and hands of employees…’ (John Kay, 2004, p. 58)

18. Four Pulls on the HR Function • to make itself more cost effective (the operational driver) • to improve internal relationships and reputation by creating value through transactional services (the relational driver) • to address the strategic objectives of the organization for innovation, satisfying ‘customers’ and achieving value for money (the strategic drivers) • to meet longer term/wider demands to be different and legitimate (the reputational drivers)

19. Externally-focused • The Key Strategic Drivers • Innovation • Service Delivery • Value for Money • Place The Reputational Drivers Corporate branding & legitimacy through CSR, governance, human capital accounting HR LEADERSHIP scorecard Unitary, ‘Business’-focused Pluralist, Stakeholder-focused Cost Drivers HR efficiency and organization HR headcount Internal Professional Service Drivers Demands from staff Managers Agencies & Outsourcers Internally-focused Martin, Reddington & Alexander, February 2008

20. HR Leadership and Innovation: Two Connected but Separate Approaches(see AIM, 2005) • Increasing (mis)use of the ‘leader-centric’ view of HRM(Caldwell & Storey, 2007) • Leadership competences/traits/brands (Ulrich & Smallwood, 2007) • Leading distinct from managing (Zaleznick, 1977; Kotter, 1992) • Cult of charismatic CEO/leader (Mintzberg, 2004; Khurana, 2002,2007) • What is involved in leadership – leaders and followers • Leaders motivate employees • Transactional and transformational leadership, • Leaders design effective leadership processes, organizational architectures, and intra-and-inter-organizational networks (e.g. Roberts, 2004)

21. Effective Strategic HR Leadership? The far context The style the favour The social capital they invest in and draw on The near context ENACTED PERFORMANCE • Effective • Performance as • an HR Leader • Dynamic capabilities • Efficiency • Client outcomes • Public Value The Competences they Demonstrate The Roles they Perform The Person in the job The frame of the job Levels at which they choose to operate The HR architecture

22. Interview Findings: Demands and Constraints and Choices for HR leadership • Competition rather than collaboration • Different missions, sizes, etc leading to different agendas – CEO influence important • Different sensing-making of environment • HR innovation constrained by Government agendas – targets on absence, agenda for change, etc • Complicated dual reporting relationships to NHS (Scotland) and the NHS Boards • Succession seen as a key issue – lack of dynamic capabilities • Choices exercised in how they interpreted their roles and what aspects of the national agenda to focus on • Differences in how they chose to ‘architect’ the HR function • Differences in their use and creation of bonding and bridging social capital

23. Some Key Questions for HR Leaders: The Survey • How do we interpret the environment: what are the big agenda items for us and are they the right ones? • What forms of HR architecture should we use to deliver effective performance? • What are the qualities of effective strategic HR leaders: what styles should we adopt, what roles should we perform and what competences should we demonstrate? • How should we evaluate HR: what does/should effective performance look like?

24. Interviews with Chief Executives/ Chairs • Natural competition and collaboration over strategy, reputations and labour markets • Dependent on type of Board • No set definitions of strategic objectives for HRDs, nor definitions of strategy • Some embrace broader conceptions of public value/ reputation management/contribution to community, others less so • Some have an understanding of what strategic HR can contribute; others have less knowledge/interest • Tensions among simultaneous demands for strategic thinking, operational delivery and personal assistance in solving senior management/board problems simultaneously • Wide recognition of the talent pool problem for HRDs and the need to do something about it – the sustainable leadership problem • Widespread belief that NHS (Scotland) isn’t providing enough support and tensions between employers and Boards

25. Survey Results (1): Environmental sensing • Top 4 HR Drivers • Balancing change while maintaining morale and commitment • The need to re-align culture and values to meet service user satisfaction • Talent management • Reputation of the organization • Outsourcing, media accountability and demographics seen as relatively unimportant

26. Survey Results 2: Architecture, background and sources of knowledge • Delivering HR • Creating a more specialised HR structure, OD/HR consultants and delegation to line, business partnering are top three • Using e-HR on the hit list, with interest in more delegation and strategic HR leadership teams • Departments in relatively good shape, with reasonable support from senior management but morale among staff not helpful • Little use of competence frameworks, strangely? • Marginal preference for experience outside of HR in top team • Legal sources, CIPD websites and academic articles used to shape policy • Select group who read books and articles, but don’t rate consultants’ outputs

27. Survey Results (3): Self-rating of competences • Of personal competences, self-management a key issue for some • Of strategic competences, political astuteness and networking seen as relatively weak along with setting and achieving ambitious targets. Respondents saw themselves as highly receptive to new ideas • Of leadership competences, least well rated was leading change through people and aligning them behind an HR vision

28. ART (Vision) HR Leadership Narcissistic style Visionary style This is you Disorganized management Disconnected management Too Balanced? Heroic style Engaging style Problem-solving style SCIENCE (analysis) Calculating style CRAFT (experience) Tedious style Dispirited management

29. New Competencies for HR(Ulrich & Brockbank, 2007) • Deliver results with integrity • Share information • Building relationships • Doing HR with an attitude (risk-taking, providing candid observations, influencing others) • Board OD facilitator • Personal fixer The Competent HR Leader The Credible Activist The Strategic Architect The Cultural Steward The Talent Manager/Organizational Designer The Business Ally The Operational Executor

30. Survey Results (4): Use of new ideas • Almost no formal approach to talent management or focus on this language/practice • Employer branding and employer of choices schemes high on agenda for for some, but not segmentation

31. Survey Results (5): Evaluation and human capital measures • Make use of on-going reports on attitudes, absence, turnover and performance • Benchmarking also used • Little use made of correlation and predictive studies • Absence, recruitment, diversity and training costs measured regularly • ROI and reputation on hit list, along with recruitment and diversity

32. Conclusions and Next Steps • Complex interaction between demands, constraints and choices of these HR directors as they struggle to balance operational and strategic demands for satisfying internal and external clients • Developing Knowledge Networks and Bridging Capital • The Public Services HR Knowledge Networks Project

33. HR leadership: a key question? How do I become an effective member of the senior management team? ‘…to be a respected business partner, helping the (organization) achieve its goals by providing an outstanding service to help manage the (organization’s) most important assets, its people’ (Boudreau & Ramstad, 2007:9)

34. HR leadership: the key question? How do I help create an enterprising public service system? ‘…to increase the success of the organization by improving decisions that depend on or impact people’ (Boudreau & Ramstad, 2007:9) • Client satisfaction • Broader conceptions of public value (Moore, 2007)