Culture shock: the case of setting up the Competition and Markets Authority
There are many challenges in setting up a new government agency.
There are many challenges in setting up a new government agency. How do you ensure that the organisation is fit for purpose on day one? How do you rally staff behind its vision and mission if it has no history? If the new body is formed by two or more organisations merging, how do you import the good of the “legacy” bodies while leaving the bad behind? At a recent event, Alex Chisholm shared his experience of tackling these problems as the Chief Executive of the Competition and Markets Authority (CMA). Jonathan Pearson reports.
The CMA is the UK’s competition watchdog, charged with safeguarding consumer interests and ensuring that markets work well for consumers and businesses alike. The CMA is the product of a merger between the Office of Fair Trading (OFT) and the Competition Commission (CC) and officially came into being on April 1st 2014. Like the now-defunct OFT, the CMA is a non-ministerial department (NMD) which grants it a level of independence from government. As a regulator, this independence is essential, though not all regulators are NMDs and as we have previously noted, the accountability arrangements of NMDs are confused.
Alex Chisholm speaking at the Institute for Government event
However, running a major change programme is less about structures and more about people. Chisholm summed this up with his opening observation that “setting the right direction for the organisations that we lead and helping colleagues through the process of change” is a core discipline for leaders. The importance of leadership in organisational change is a recurring theme in the Institute’s research, particularly when it comes to changing culture and bringing employees through what can be unsettling and anxious times.
Keeping employees motivated and gaining their buy-in to the mission and strategy of the new body are the foundations of a successful change programme. On this count Chisholm believes that others could learn from the approach the CMA took. It inherited staff from both the OFT and the CC and recruited staff externally. Creating a vision for the organisation that could speak to these groups would be hard. The CMA’s solution was to take staff through a series of informal workshops they called “cafes” which asked questions like “in five years’ time what do you want to read about the CMA in the newspaper?” The result of these sessions was a strategy that the whole organisation could buy into from day one.
Designing a vision is one thing: putting into practice is quite another. On this point Chisholm was unequivocal: to bring about change you have to be willing to listen to your staff. Two-way communication between leadership and staff is essential. Balancing this with the need to instil confidence in the new organisation and its goals can be tricky. According to Chisholm, the lesson from the CMA’s experience was “tweak, don’t retreat” – be receptive to concerns or suggestions, but don’t undermine the confidence in your process or leadership by constantly changing course and introducing further uncertainty. Chisholm also detailed their efforts to quickly build a positive organisational culture through storytelling. To give employees a sense of what CMA’s values look like in practice – winning the “hearts and minds” as Chisholm put it – they focused on early successes and developed a story around them. A radio interview about a successful prosecution carried out by the CMA introduced the phrase “greedy grannies” to the organisation and the five o’clock shadow on a staff member fresh from an all-nighter gave rise to “Dan’s lost razor”. Using these stories to help employees process cultural change was a key feature of the CMA’s change programme. Not everyone will want to come with you.
Chisholm described the make-up of most organisations as being: 20% up for change, 50-60% who will come with you if you “treat them nicely and make a good case” and 20% who are reluctant. In terms of reaching the latter, Chisholm felt that the clarity of the CMA’s statutory mission was an enormous benefit. Chisholm’s concluded by noting that in both the private and public sectors, organisational change is expensive, disruptive and risky so it should be used sparingly. The Institute has previously written about the pitfalls of substantial structural changes in government. Too often the legacy of a restructured body is a large bill for taxpayers and an extended period of avoidable disruption. Chisholm noted that in contrast to many other professions, there was no standing team of experts in the centre of government which he and others running change programmes could go to for advice. If the next parliament demands as much organisational change as this one has, developing the capability to advise on structural change from the centre of government, as we have recommended, will become a pressing priority.