Change Management & Organizational Transformation Thesis

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(GAO, 2008)

These criteria are stated to "inform many other elements of the positions, including roles and responsibilities, job qualifications, reporting relationships, and decision-making structure and processes." (Dejewski, 2007)

Three types of COO/CMO positions were identified as follows:

(1) the existing deputy position could carry out the integration and business transformation role. This type of COO/CMO might be appropriate in a relatively stable or small organization;

(2) a senior-level executive who reports to the deputy, such as a principle undersecretary for management could be designated to integrate key management functions and lead business transformation efforts in the agency. This type of COO/CMO might be appropriate for a larger organization;

(3) a second deputy position could be created to bring strong focus to the integration and business transformation of the agency, while the other deputy position would be responsible for leading the operational policy and mission-related functions of the agency. For a large and complex organization undergoing a significant transformation to reform longstanding management problems, this might be the most appropriate type of COO/CMO. (Dejewski, 2007)

Stated as GAO recommended considerations in regards to the criteria and strategies for development of COO/CMO positions in major federal agencies are those stated as follows:

(1) the GAO has long advocated that DOD and DHS could benefit from a senior level COO/CMO position, with a term appointment of at least 5 to 7 years, and a performance agreement. GAO continues to identify DOD's approach to business transformation and implementing and transforming DHS on GAO's biennial high risk list of programs. DOD dominates GAO's list of agencies with high-risk programs designated as vulnerable to waste, fraud, and abuse of funds, bearing responsibility, in whole or in part, for 15 of 27 high-risk areas;

(2) as Congress considers COO/CMO positions for federal agencies, the criteria and strategies identified should help to highlight key issues that need to be considered, both in design of the positions and in implementation; and (3) While Congress is currently focused on two of the most challenging agencies -- DOD and DHS -- the problems they face are, to varying degrees, shared by the rest of the federal government. Each agency, therefore, should consider the type of COO/CMO that would be appropriate for its organization, either by designating an existing position as the COO/CMO or creating a new position, and adopt the strategies we outline to implement such a position. (Dejewski, 2007)

The following illustration shows the implementation timeline in the initiative of MHS Pre-Certification Authority Designation.

Figure 2

Implementation Timeline

Source: Dejewski (2007)

Organizational changes and transformation such as these which are being reported to have been implemented by and within the defense branches of the federal government are only part of the continuous and ongoing changes required in the organization for example the work published by the Medical Group Management Association of Greater St. Louis entitled: 'Organizational Transformation: The Dynamics of Change states that organizations are required to "continually reinvent themselves in response to an ever changing and continuously more complex environment. This presentation offers insight on the dynamics of change through organizational transformation. There are two approaches to change management, namely, reactive and proactive." (nd)

It is stated in the testimony of the Comptroller David M. Walker that a department-wide information technology (it) governance framework -- including controls (disciplines) aimed at effective management of it-related "people, processes and tools is vital to DHS's transformation efforts." (Walker, 2007) Inclusive in these controls and disciplines are the following:

(1) having and using an enterprise architecture, or corporate blueprint, as an authoritative frame of reference to guide and constrain it investments;

(2) defining and following a corporate process for informed decision making by senior leadership about competing it investment options;

(3) applying system and software development and acquisition discipline and rigor when defining, designing, developing, testing, deploying, and maintaining systems;

(4) establishing a comprehensive information security program to protect its information and systems;

(5) having sufficient people with the right knowledge, skills, and abilities to execute each of these areas now and in the future; and (6) centralizing leadership for extending these disciplines throughout the organization with an empowered Chief Information Officer. (Walker, 2007)

Walker states in his testimony that the Department of Homeland Security has progressed somewhat in the transformation of its human capital systems but that however, much more work remains to be done.

Stated to be the most pressing of all challenges related to human capital are those as follows: (1) successfully completing its ongoing transformation; (2) forging a unified results-oriented culture across the department (line of sight); (3) linking daily operations to strategic outcomes; (4) rewarding individuals based on individual, team, unit, and organizational results; (5) obtaining, developing, providing incentives to, and retaining needed talent; and most importantly, (6) leadership at the top, to include a chief operating officer or chief management officer.

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(Walker, 2007)

The problem that is stated to be most urgent is the low morale of employees and the Department of Homeland Security is stated to score "at the bottom or near the bottom of all federal agencies in the four areas which provide the standards of success for agencies to measure their progress." (Walker, 2007)

Furthermore, there is a critical need for organization of it leadership and responsibilities as well as for the initiation of strategic planning for it human capital. Strategic human capital management is stated to be "...the centerpiece e of any transformation effort." (Walker, 2007)

DHS is reported to have finalized "its human capital regulations and it is vital that DHS implement its human capital system effectively." (Walker, 2007)

DHS is reported to have identified five department priorities including those of:

(1) hiring and retaining a talented and diverse workforce;

(2) creating a DHS-wide culture of performance;

(3) creating high-quality learning and development programs for DHS employees, implementing a DHS-wide integrated leadership system;

(4) and being a model of human capital service excellence. (Walker, 2007)

Still needed are efforts on the part of DHS to:

(1) create a clearer crosswalk between departmental training goals and objectives and DHS's broader organizational and human capital goals, and (2) develop appropriate training performance measures and targets for goals and strategies identified in its department-wide strategic training plan. (Walker, 2007)

Recommendations have been made for specific program offices and organizational entities for the purpose of ensuring that "...human capital resources are provided to improve the effectiveness of management capabilities, and that human capital plans are developed that clearly describe how these components will recruit, train, and retain staff to meet their growing demands as they expand and implement new program elements." (Walker, 2007)

Policy decisions have slowed down the creation of a unification acquisition organization and it was reported that the management directive 'Acquisition Line of Business Integration and Management" which emphasized the "need for a unified, integrated acquisition organization, relies on a system of dual accountability between the chief procurement officer and the heads of the departments to make this happen.16 This situation has created ambiguity about who is accountable for acquisition decisions." (Walker, 2007)

Further stated are findings that DHS acquisition organizations in DHS "are operating in a disparate manner, with oversight of acquisition activities left primarily up to each individual component." (Walker, 2007)

Those components were stated to be as follows:

(1) Components exempted from the unified acquisition organization,

(2) the chief procurement officer had insufficient staff for department-wide oversight, and (3) Staffing shortages led the office of procurement operations to rely extensively on outside agencies for contracting support. (Walker, 2007)

The McKinsey Quarterly reported in August 2008 in the work entitled: "Creating Organizational Transformations: McKinsey Global Survey Results" that there is a need for organizations to constantly change and for many reasons but that achievement of a "true step change in performance is rare." (McKinsey Quarterly, 2008)

In fact, a recent McKinsey survey of executives worldwide relates that only "one-third say that their organizations succeeded in doing so." (McKinsey Quarterly, 2008)

The McKinsey survey revealed that there are various goals at focus in organizational change and transformation. The following responses were provided by executives responding to the survey conducted by McKinsey:

Question: What overall objective, if any, was your company trying to reach with its transformation?

Moving from good performance to great performance

35%

Reducing costs

15%

Turning around a crisis situation

12%

Completing or integrating a merger

12%

Expanding geographically

9%

Splitting up or divesting part of the organization

4%

Preparing for privatization or market liberalization

2%

Other

7%

I have not experienced a significant transformation in the last five years.

5% McKinsey Quarterly, 2008)

It is important for the purpose of this study to emphasize that the GAO report acknowledges power vested in the COO/CMO created position in federal agencies and this is stated in the GAO report (2007) as follows:

The case-study officials and the forum participants broadly recognized that a COO/CMO should have a high enough level of authority to ensure the successful implementation of functional management and transformational change efforts in the agency. However, the….....

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