Periods of economic and political tension unsettle people, companies, public institutions, civil society… they affect all of us. And yet, at times like these, we need more reason and maturity, even though emotions sometimes overwhelm us. We talk about layoffs and the need for performance, especially in times like these, with crises acting as catalysts for decision-making and action.
The private and public sectors need high-performing people, and tolerating the underperformance of some develops over time, the apathy of high-performing people that we feel in the statement: “there’s no point in doing anything, it doesn’t matter anyway, nothing will change.” Covering up poor performance and the existence of “ghost workers” in public institutions—employees who are on the payroll and physically present but have no positive impact on the work of public institutions—only punishes the high performers in the same public institution. And in this scenario, we should not expect to have better public services or to be competitive in an increasingly demanding market.
We mention in the article published in Economedia, Layoffs in public administration: lessons from the crisis for the state and the private sector, elements needed in managing layoffs. But tomorrow we will still be here, we need that organization/institution to be performant.
The large number of views on the previous article, as well as the feedback received on the definition of a high-performing organization, prompted me to write this article.
Let’s clarify the concepts:
- Downsizing – restructuring an organization – a short-term tactic that improves financial efficiency (measured by indicators such as EBITDA and net profit), a tool used to survive economic crises. Unlike the private sector, which focuses on profit as its main indicator, the public sector does not pursue direct economic benefits, but the provision of high-quality goods and services in a cost-effective way to stimulate long-term growth of the economy and the public welfare of its citizens.
- Rightsizing, also known as operational restructuring, is a long-term strategy that involves a complete reassessment of the processes, structure and competencies needed to achieve the revised organizational objectives, with the goal of optimizing performance, not just reducing it. It involves a series of strategic activities undertaken by an organization’s management to increase efficiency, productivity and/or competitiveness.
In the public sector, rightsizing is mainly about increasing efficiency – it refers to the use of resources to maximize the results of an action and the ability to provide cost-effective goods and services, effectiveness – the ratio of the result achieved to the intended result, and the performance of public services. - Accountability – the cornerstone of public governance and public management, requires measuring performance and continuously producing information about an organization’s actual results measured against its objectives.
- Transparency – the public sector component, essential to enable citizens to obtain information and make informed decisions, thus ensuring the legitimacy of institutions as well as fiscal discipline and promoting individual accountability.
I operationalize this rightsizing by drawing a parallel with building a house.
The public or private organization is a house built many years ago. It was designed for the needs of those times: the rooms, the structure, the facilities, etc. All of these reflect the way people thought, lived and worked at that time.
Over time, however, needs have changed: families have grown, technology has evolved and lifestyles are different. New demands are also emerging in the organization: digitalization, efficiency, customer orientation, new services and products, much clearer quality and efficiency requirements, a citizen who pays his taxes, is demanding when it comes to the quality of public services received, education and health.
In house we have a team of architects, designers and builders who, in a planned manner and knowing 70-80% of what the final project should look like, take the following steps:
- They start to demolish wings of the house where the infrastructure is no longer adequate, being unused areas or whose existence consumes unjustifiably large resources, given their reduced usefulness.
Demolition of some wings means eliminating unnecessary processes or procedures, reducing redundant functions (bureaucratic processes, overlapping departments) and outsourcing activities that are no longer strategic, but where external suppliers can offer much better results at competitive prices.
- Functional redesign means reconfiguring the flows and the roles within the interior so that, from the entrance to the final destination in the house, the path is smooth, with minimal stops or inconvenience. With the space freed up from step 1, we also start redesigning the floor plan of the house, with more efficient circuits, more light, new creative open space etc.
In organizations it means redesigning workflows to remove bottlenecks, clarifying responsibilities and creating roles to suit new objectives, introducing technology for automation and collaboration.
- Strengthening the foundation before expansion. Organizations define a meritocratic culture, transparency in flows, decision levels, meritocratic access criteria, clear competencies for each role and expected results. The access code to the entrance doors is defined by the level of skills and performance, by the values that support change, by leadership that guides and develops. It is the stage when we make decisions; we have had time to see the teams, to assess them, to understand their attitude, their potential to perform or to hold back. Now we decide who we go forward with. We are also selecting and recruiting new people who are ready or willing to learn, with the right attitude for a a challenging undertaking, but eager to feel that their work is meaningful and produces results. Those people who step outside and look with pride at what they have achieved, see possible improvements and are determined to continue the work.
- Expansion, adding new rooms, a terrace, study or play area, leads to the creation of new functions or services. Introducing new services means:
- Digitalization and digital transformation, process automation and implementation of online platforms for customers/citizens.
- Data analysis and business intelligence, reporting and forecasting, monitoring performance indicators.
- Innovation and development, R&D, design thinking for new products/services.
- Advanced HR with strategic value – developing critical skills for the future, integrated HR service platforms and predictive analytics on turnover and performance; an internal dynamic of change – role stability has decreased from 5 years to 2.5 years – in other words, this is the interval at which we make changes in an employee’s career, correlated with the level of competency development (upskill and reskill). This speed of movement will also allow us to keep up with market changes.
- Customer/citizen experience – support centre, personalization of interactions, monitoring satisfaction indicators and feedback.
- Risk management and compliance – internal audit, monitoring the application of regulations and policies of the organization, operational and financial risks.
Resizing the organization means building the “new normal”, which in the private sector uses profitability as a barometer and in the public sector uses a constellation of indicators designed to show whether the goal of delivering quality public services efficiently, transparently, and responsibly, contributing to the good of society, has been achieved . Implementing principles and elements from the private sector, such as competition, outsourcing, results-based management, and decentralization, helps public organizations.
In conclusion, the private and the public sectors have the opportunity to empower each other when they achieve their goals: the private sector creates jobs, generates profit and innovates, contributes to the public budget through taxes, provides technological solutions and know-how to make public services more efficient; the public sector provides infrastructure, safety, education and health services, ensures a predictable and transparent legislative framework, supports the private sector through public policies and strategic investments. We are building that virtuous circle – economic and social – as a self-sustaining process, where each step generates beneficial effects that reinforce the next step, creating an upward spiral.
The experience of other countries shows that strong political support is a necessary condition for successful public service reforms. It has a defining and strategic role as it not only initiates change, but also sets the legal framework, the implementation targets and most importantly ensures the social acceptance needed to avoid reform failure. We need political parties with mature and responsible behavior in a critical period for Romania.
Let’s harness knowledge and courage to accelerate our actions, both in the public and the private sector!
Article published in Economedia, you can find it here.
PhD Claudia Indreica – CEO Psihoselct & Psychologist with specialization în organizational psychologyțs Communicationș și a work, with over 25 years of experience in executive search and recruitment for top and middle management positions, intervention projects and organizational development, leadership, psychological profiling and assessing compatibility with organizational culture.
She is a member of Romanian Business Leaders, Leader of the Labour Market Task Force, member of the Board of DWNT (an organization that represents German and affiliated companies at regional level), contributes to labour market studies, investor projects and large-scale events, in a space of dialogue with business, NGOs, public institutions, politics and civil society. She promotes expertise-based education and is the author of articles on the labor market in the European business context.
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