In New Zealand, as in other countries that have sought to reform public management, much emphasis has been placed on the need to change the operating culture of government organisations. The assumption of reform is that the inherited culture gets in the way of responsive, high-performing organisations. Culture, however, also can be a positive force, as when new employees are socialised into the values of public service. Efforts to fundamentally change organisations should be undertaken with due consideration to what might be lost.
Culture is distinctive; it distinguishes one organisation from others. It may be manifest in everyday routines, such as when and how workers take tea or coffee breaks, as well as in weightier matters, such as how workers are supervised and their performance assessed. The cultural manifestations that concern me here are patterns of behaviour that are said to stand in the way of reform. These include emphasis on compliance with ex ante rules that restrict managerial initiative, norms that discourage innovation and risk-taking, the tendency to spend up to available resources, rigidities that impede the shift of resources to new priorities, the focus on inputs and inattention to outputs, and other "baggage" of traditional public administration. The New Zealand reforms rest on confidence that these tendencies can be purged by strong leaders armed with new management tools.
To the extent that managerial culture is anchored in rules and procedures, it is easy enough to change behaviour by installing new management and information systems. But even when formal practices have been modified, everything really important about an organisation may remain the same. The culture of an organisation is transmitted from one generation of employees to the next, from those who shaped the organisation at its inception to those who continue in it years later without quite understanding why things are done the way they are. Culture is what persists even when a department has been reorganised, new techniques introduced, its leaders and managers replaced.
New Zealand uses three approaches to uprooting the old administrative culture. First, it has brought in new leadership with a clear and strong mandate to overhaul operations. Second, it has shocked government departments with an avalanche of change, not just isolated innovations, but a critical mass of new procedures that can break old habits. Finally, many departments have been rearranged or broken into pieces, so that the old organisation is no longer recognizable in the new.
How would one determine whether a department or other governmental entity has been truly transformed? Productivity rates and measures of service quality might provide some clues, as much as surveys of customer and employee attitudes. But the changes have to be dramatic; small improvements can occur without penetrating organisational bedrock. Moreover, unless improvement is truly dramatic, it is prudent to defer judgment until compelling evidence has been gathered. When it comes to culture, staying power is the all-important indicator. Only after a lapse of years can one ascertain whether the reforms have become the new operating culture or merely the passing fashion of public management.
My sense is that measured against the cultural upheaval in the state-owned enterprises, change in most departments has been significant but not revolutionary. Many departments have become more efficient, but the old operating culture has not been completely vanquished. Yet, in some departments, or units within them, the signs point to a transformed organisation. These typically are headed by a wilful, hard-driving chief executive and managers who have been unafraid to uproot established practices. These transforming leaders have left their mark in the self-image of the department and those who work in it. But even in these instances, the chief executive may have great success in transforming some operating units and encounter enormous resistance in change in others. Final assessment of how much New Zealand departments have been transformed must be reserved, for it remains to be seen whether the new management style will survive one or more changes in leadership.
When culture is purged, there is some risk that positive features will be lost. It is essential to keep in mind that culture fosters a sense of common purpose, a professional ethic, and public-regarding values. I wonder whether in the rush to change, departments have been sufficiently sensitive to established values. I have no basis for judging what has been surrendered, but the issue should not be shoved under an organisational rug by assuming that reformed departments are superior in every regard to the entities they replaced.