A key part of our Business Transformation (BT) was looking at our organisational design.
The Executive Leadership Team was essential to the design process. The time commitment required from this team for consultation and engagement was considerable. Our Commissioner was also the sponsor for organisational design.
Having the right people
Like other areas of the transformation, we needed people who had done this before. We brought in a highly experienced Organisational Design and Change Director to run the organisational design process.
The design team was made up of a mix of people with deep knowledge of the organisation, supported by change managers that included internal and external consultants.
Rigorous design governance is crucial.
Design approval process
We used 3 steps to confirm our design process.
- The Organisational Design Council, a subset of the Executive Leadership Team, reviewed and recommended our initial design.
- The Executive Leadership Team signed off on this.
- The Commissioner, our organisational design sponsor, gave final approval.
Each part of the transformation programme including the design was reviewed by management consultants KPMG, as part of the external independent and technical quality assessment.
Top-down, bottom-up design
The Executive Leadership Team led the top-down design, focusing on the future state of the organisation structures. These were based on what we expected to be doing in future, rather than what we did at the time.
Bottom-up design focused on what we wanted our future business processes to be. This defined the roles, teams and workforce capacity. We then reviewed this and lined it up with the top-down design.
For true transformational change, every role within the organisation needed to be looked at. The Commissioner made sure the second-tier roles were reviewed and lined up with the new structure.
We worked closely with unions, investing time in consultation and engagement. We also brought our union colleagues into the design process, specifically around task-based and broader roles.
Large or incremental change?
In February 2018, we made significant changes to the organisation and we did it quickly. We moved more than 3,900 operational people into roles within the new operating model all at the same time and the impact on our people was huge.
As we close out the transformation, the Leadership Team acknowledges that it was a big stretch for our people but agrees that it made the right decision.
By starting the transition to become a customer-centric and intelligence-led organisation early, we were able to deliver some early benefits as well as on our promise to make tax and social entitlements more simple, open and certain for New Zealanders. For example, the first Individual income tax assessment process in 2019 would not have been possible without having set up the new organisation in 2018.
Improving along the way
Looking back at the first change, some parts of the process needed improvement.
In July 2018, stage 1 of the organisational design was independently reviewed. This review led to us changing the delivery approach, and the change in leadership to the Deputy Commissioner, Corporate Integrity and Assurance.
The recommendations from this review played a big part in each of the following organisation design and delivery phases. These all ran successfully, although they involved much smaller groups of people.
The changes included:
- building a change integration team to bring together the many pieces of this kind of change and coordinate the timing and communication
- making sure people were aware that the Inland Revenue’s Executive Leadership Team were leading the change, and there to support them
- sharing the likely impacts of change with our people earlier, giving more time for feedback
- when high-level impacts were known, helping our leaders to communicate these to their people
- having more people in the change process - including HR professionals and change people
- improving the selection and assessment process we used to recruit people into roles
- supplying the ‘people transition team’ with better tools to support the transition, including fixing data issues that caused problems for our people
- focussing more on supporting our leaders, helping them transition and get used to their new roles before their teams came on board.
Moving to business as usual
In the later stages of the organisational design, we created new functions to include areas and tasks carried out by the programme team over the over the life of the Business Transformation programme. These were Strategic Architecture, Strategic Portfolio Stewardship and Planning Design and Delivery.
We also set up a Transition and Business Integration workstream within the programme. This supported the transition of knowledge, processes, and practices from the programme to the organisation and enabled a more gradual transition of responsibility to the new functional leads. In turn, this allowed them to focus on setting up their teams, keeping a large number of our Business Transformation people and the intellectual property within Inland Revenue.