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When government agencies need to adapt – Experiences of rapid restructuring

In some cases, government agencies may need to quickly scale up or down their operations based on changes in funding or assignments. Agencies may also be otherwise forced to change their operations in a short time. The aim of our study was to identify general challenges that arise during rapid restructuring and how these challenges can be managed. We focused on restructuring that takes place as a result of political decisions, i.e. not change processes undertaken by the agency on its own initiative.

We note that agencies take on new tasks and changes quickly. But we also note that there are several risks and challenges that the Government and agencies need to manage.

The aim is to provide a knowledge base for future restructuring

The study was conducted based on our directed assignment to assist the Government with data to develop administrative policy. Our aim was to produce a knowledge base that can be useful to both agencies and the Government in future restructuring. An agency facing restructuring needs to analyse our observations in relation to its own circumstances, as the nature of restructuring and the conditions for managing it differ from one agency to another. During our work on the study, the Government announced several changes to the agency structure. We believe that our study may in many respects be relevant to those agencies that may now need to make adaptations based on a changed assignment or that need to merge with another agency, even if the planned changes do not fully correspond to the kind of restructuring that we focused on in this study.

A holistic approach within the State becomes even more important in restructuring

When agencies need to rapidly adapt their operations, it is particularly important to make use of experience or support from other agencies. It is not certain that the agency that is to carry out the restructuring has the resources or necessary expertise to implement all the changes required for major restructuring.

There are several good examples of how the Government and agencies can take a holistic approach of the State. These include agencies being able to borrow staff from each other and agencies sharing their experiences with other agencies in similar situations. But our study also shows that there is potential to further develop cooperation between agencies during restructuring.

Several conditions can make the agency better equipped

We have identified several conditions that can make an agency better equipped for restructuring. For the new control signals to quickly reach the entire agency, it needs to be clear to the staff how the different parts of the governance are connected. It is therefore helpful if the internal governance is coherent and the managers know the framework within which they should govern and prioritise. Previously implemented internal change processes can also make the agency better equipped. An agency that has carried out an internal change process may have developed expertise, working methods, and infrastructure that it can use if it needs to adapt. It also helps if the agency has an organisation in which it is relatively easy to transfer resources between different operational areas. Another advantage is if the agency already has good relationships with employee organisations and procedures for handling various forms of personnel issues. Among other things, this can help to avoid various processes dragging on for too long.

Major challenges for the agency's skills provision

We have seen that it is difficult for the agency to ensure that it has all the expertise it needs when it restructures its operations. The agency needs to have strategic skills provision to manage the challenges that arise during restructuring.

When an agency makes major reductions in staff, it often leads to the agency losing important skill sets. It may then be a good idea to consider whether reskilling may be an alternative to redundancies in certain cases. The agency may also need to consider how it can prevent people - who are not directly affected by the restructuring - from resigning. This may involve maintaining a high pace of change and, as far as possible, making it clear to managers and employees what the labour shortage looks like and how it will affect them.

When an agency needs to grow rapidly, on the other hand, it may find it difficult to find new employees with the right skills. It is an advantage then if the agency can seize opportunities to transfer staff within the agency or get support from other agencies, for example, by borrowing staff. Using consultants can also be a way to quickly acquire skill sets. In such cases, there are several things that agencies need to think about, such as how knowledge transfer will take place between consultants and the agency.

Staff need to understand what the restructuring entails

Well-functioning internal communication can reduce staff concerns and as well as motivate staff to implement the changes the agency is facing. Agency management therefore needs to be clear about what it knows and what it does not know. Managers and employees in the agency need to understand what the restructuring means for both the agency and themselves. First-line managers are key players in change processes and may therefore need special support in terms of how to communicate during a restructuring.

There are measures that can support efficiency within operations

We have seen that there are measures that in some cases can contribute to the agency being able to implement restructuring in a more efficient way or maintain efficiency in the part of the organisation that is not being restructured. Agile working methods can enable the agency to implement changes more quickly and adapt its development work to new conditions better than otherwise. The agency may also want to consider whether there are IT solutions, such as automation, that could help to implement new and efficient operations in place. Setting up a new operation separately from other operations can also contribute to the efficient introduction of the new operation or to reducing the burden on other parts of the organisation.

Consequences and risks for other parts of the organisation

When the agency concentrates on and prioritises a restructuring, it can lead to other operations being sidelined. For example, ongoing development projects may need to be slowed down or postponed. In some situations, the agency may need to make trade-offs between getting an operation up and running quickly and the quality of the operation. The agency needs to monitor the progress of the work, conduct risk analyses, and be prepared to manage the consequences and risks that may result from rapid restructuring.

The Government needs to make several considerations in its governance

With rapid restructuring, the Government Offices need to have contacts with the agency to clarify the conditions for and consequences of the restructuring. The dialogue with agencies is important for the Government to be able to govern appropriately and enable the agency to conduct as much advance planning for the restructuring as possible.

In order to provide the agency with good conditions for the restructuring, the Government needs, among other things, to have realistic expectations of the agency's ability to fulfil efficiency improvement requirements, as well as decision-making data to be able to make a good assessment of this. The Government may also need to consider whether it is possible to design the regulations so that they improve the agency's ability to streamline and automate during restructuring. In addition, the Government needs to monitor the agency's restructuring work and be prepared to change its governance.