Closing the gap between theory and practice | My Assignment Tutor

Landingtransformationalchange: Closingthe gap betweentheory and practiceCase study – HMRCSeptember 2015The CIPD is the professional body for HR and peopledevelopment. The not-for-profit organisation championsbetter work and working lives and has been setting thebenchmark for excellence in people and organisationdevelopment for more than 100 years. It has 140,000members across the world, provides thought leadershipthrough independent research on the world of work, andoffers professional training and accreditation for thoseworking in HR and learning and development.1   Landing transformational change: Closing the gap between theory and practice – case studyAcknowledgementsThe report Landing TransformationalChange: Closing the gap betweentheory and practice was written byProfessor Julia Balogun, ProfessorVeronica Hope Hailey and DrImogen Cleaver, with help fromRuth Stuart, Lead Consultant forStrategic Projects at the CIPD. Wewould like to thank Julia, Veronicaand Imogen for providing such adepth of expertise on the topic.In particular we would also liketo thank the four organisationsthat participated in the report,generously sharing their time andtheir experiences. These includeBBC Worldwide, HMRC PersonalTax, News UK and Zurich UK Life.We would also like to extend ourthanks to the individuals withinthese companies who madethe research possible. At BBCWorldwide we would like to thankKirstin Furber, People Director, andNoreen Riordan for managing thearrangements. At HMRC we wouldlike to thank William Hague, ChiefPeople Officer, Caroline Murray,Head of Employee Engagement& Culture, Judy Greevy, DeputyDirector Talent, Engagement andDiversity (recently retired), GillNicholson, Deputy Director Talent,Engagement and Diversity, DebraLowery, HR Business Partner inPersonal Tax Change, and SarahJayne Williams, HR BusinessPartner. At News UK we wouldlike to thank Sophie Knight, theProgramme Director, Robert Hands,Executive Managing Editor at TheTimes and The Sunday Times, andNatalie Rider for managing thearrangements. At Zurich UK Lifewe would like to thank JamesSutherland, Head of CorporateGovernance.2   Landing transformational change: Closing the gap between theory and practice – case studyHMRC case study1 ContextThe Personal Tax (PT) divisionof HMRC handles tax relatingto individuals, such as PAYE,Self-Assessment and NationalInsurance. PT Operations employsabout 14,000 people:‘We run all the customer-facingcontact centres for HMRC, so thatis for the whole organisation andnot just for personal tax. We dealwith about 70 million contacts ayear through the telephony contactcentres. We handle around about10 million or 12 million items ofpost a year.’Their work is intertwined,therefore, with other parts ofHMRC, such as Benefits andCredits. PT is based in officesacross the UK, from Cornwall toScotland. There are 12 large officesand a number of smaller ones.During the recession HMRC weretasked with cutting 20% from thecost base:‘We lost 5,500 people out of PTOperations last year.’Both customers and the workforcewere frustrated. Often customerswould not be able to get throughon the phones. When they didget through, the advisers onthe telephones were highlyknowledgeable and experiencedbut had to stick rigidly toprescribed scripts and guidance.Customers would be asked towrite in or would be referredto a different office, leaving thecustomer query unresolved afterthat first contact and the callhandler frustrated because theycould see how to progress thequery but were not allowed todo so:‘Our contact centre staff weretelling us how awful it was tohave to say to somebody, “I’mnot allowed to give you thatinformation over the telephone,”or, “I can’t see the letter that yousent in … while you are here on thephone now.” … It was also causingrepeat demand into our system.’In addition, customers wanted tobe able to interact with HMRC innew ways, such as online, and atdifferent times of day, for examplebetween 7pm and 9pm. HMRCPT needed to be more customerfocused.2 Preparation for changeOverviewThere were a number of changeinitiatives running concurrently:automating work items, suchas scanning in the post; a newtelephony platform; and usingdigital technology, for example toenable someone who is ‘a normalPay As You Earn employee … to goonline and serve themselves’.Alongside these was Once andDone. Once and Done looked atchanges which were more in thehands of PT and not dependent oninvestment approval. It looked atthe culture and ways of workingneeded to reform PT and wasrun simultaneously with a massconversation across HMRC calledBuilding our Future. Both of thesewere in the top leadership team’stasks for the year.Once and Done: May 2013Ruth Owen arrived as the newdirector general for Personal Taxin 2012. She had seen a schemein the Department for Work andPensions which sought to reducehandovers, that is, the experienceof being passed from departmentto department without the issuehaving been resolved, wasting thecustomer’s and adviser’s time.In PT she found the guidancefor contact centres had becomecomplex and unwieldy. As amember of the change teamdescribed:‘We’ve had more and morestakeholders build into our variousprocesses, from “musts” to “niceto haves”, and it’s created somemonsters.’PT needed to find a better balancefor customer experience versuspreventing error and fraud: anincreased focus on the customerjourney; giving the workforcegreater discretion in how to handlecalls; and simplifying processes.To do this, potential improvementsneeded to be identified, guidelineschanged and people managementsystems reformed.The adviser of the future wouldbe able to work flexibly, ontelephones, post and online, ratherthan being allocated to just oneof these. Advisers would be incustomer service centres in fewerlocations. In the future the levels oftrust between the workforce andsenior leaders would be better.Big assumptions would need to betackled. Was there any real benefit3   Landing transformational change: Closing the gap between theory and practice – case studyto requiring a piece of informationto be provided by letter ratherthan by telephone? The risk-averseculture and governance processeswould need to be changed.The teamThe senior manager appointed tolead Once and Done was chosencarefully:‘He’s got this kind of inspirationalleadership quality.’‘[He] is brilliant at being (a)persistent but also (b) helpingpeople understand that this is agood thing we are doing togetherand that they want to be involved.’Ruth gave and continues to give herpersonal backing to Once and Done.‘Ruth said to me … “I absolutelygive you an undertaking, now. I willsupport you.”’Ruth wrote a letter confirming this,to which he could refer people.He would report in to the directorof all the change programmes inPT. Ruth recruited a new directorof change in to PT, who had alsoworked at DWP.Until August 2014 the set-up wassmall, initially only about fivepeople. The group set out to:‘…allow our staff to put their ideason the table, turn the guidance onits head … not quite renegades, buta few people together who had adifferent mindset.’Idea generationThere were three parts to this.Essentially idea generation wasfrom the bottom–up.The initial focus was on telephony.‘So we … started on Manchester andwe said, “we need you to give peopletime off the phones to come andconcentrate” … To ask them, what arethe ideas that will make a difference?’‘We all got into a room … andjust talked about things that wecouldn’t do over the phone andthings that they did with the post …things that frustrated us.’It was like opening a fizzy drink;the ideas shot to the surface.Second, in 2014 HMRC tested FreshThinking, an online idea generationsystem. Anyone in HMRC can entera suggestion. Fresh Thinking thentriage the suggestions, decidingwhether to send them to Once andDone or a different change team.People can track the progress oftheir idea, comment on each other’sideas and vote for ideas. The icon ison the desktop of all staff.Third, in March 2015 Once andDone set up a review team:‘It’s a small team of six front-linepeople … reviewing all of ourguidance and all of our processesto see which … tells the customerto write in, tells the adviser to tellthe customer that we’ll write tothem, or we have to do a referralto another part of the business. …They’re the churn team … alreadythey’ve made 55 key changes.’This team turns the pages of theguidance and can identify ‘easy’changes, within remit, to maintainmomentum and to keep alive themessage that change is happening.The following is an exampleof the type of thing Once andDone might tackle: a customertelephones about a company, ABCServices, which was closed downthree years ago and the tax affairsneed closing down. When askedfor the name of the company,the customer says just ‘ABC’ andautomatically fails security for‘Customers wantedto be able to interactwith HMRC innew ways, suchas online, and atdifferent times ofday, for examplebetween 7pm and9pm. HMRC PTneeded to be morecustomer-focused.’4   Landing transformational change: Closing the gap between theory and practice – case studyfailing to say ‘Services’ as well.Under the old guidance the advisercould not tell the customer whythey had failed security so thecustomer and the adviser both gotfrustrated. Once and Done mightask: can we give the adviser thediscretion to say, ‘Is that the fullname of the company?’Not all ideas have merit and thathas to be acknowledged, but allideas are logged. The energygenerated even by asking frontline staff for ideas is palpable.The first trials: August 2013Ruth visited Manchester tofind out why the team hadmade just one change in threemonths. They were strugglingto get changes implemented.Although stakeholders mightagree in principle that Onceand Done was desirable, whenan idea was actually put on thetable, objections would be madeby stakeholders. As DirectorGeneral PT, Ruth could go to heropposite number at, say, Benefitsand Credits, and draw on thephilosophy of Building our Futureas One HMRC to seek help onclearing the stakeholder obstacles.However, what the team neededwas test data. She said:‘From Monday you can do this onthe phone; I’ll take responsibility.’Ruth gave the team permission tostart trials in a live PT Operationsteam in Manchester, without gettingstakeholder agreement first.‘She’s put herself out.’Once the team had the data, theygot the stakeholders together andgave them the evidence that therewas no impact on error and fraud.The meeting took four hours.That early success showed it couldbe done.3 The change processTrial dataThere are now over 150 advisers inManchester doing trials and morein other locations. The trial teamshave a list of Once and Done trialtopics. During a call the adviserwill be scanning the list to see ifan item is there, switching fromthe guidance to a crib sheet if itis, and completing a log of the callafterwards so data on the trial canbe generated.As the number of trial teams grew,advocates were appointed in thetrial teams with allocated time inthe week to concentrate on theupdates from Once and Done toget a deeper understanding, and inturn to channel questions back tothe Once and Done team.Challenges included the impact onthe trial teams’ call handling times.The change team had to agreewith Operations that the trials weresufficiently important for the strictcall handling times to be relaxed,but the service still had to bedelivered. As these challenges arosethey were addressed, for example,with different ways to log the calls.Also, trials were dependent onpeople ringing with relevantqueries. For topics which get fewercalls there is now scenario testingwhere teams can try to breakguidance changes.If a trial was successful, theidea would then be worked intoguidance and help cards would becreated. The idea would go live inManchester initially before goinglive nationally.Phone First is an example of aninitiative which was trialled inManchester and has since beenrolled out nationwide. It was nota Once and Done generated idea,but it later came under the remit‘Not all ideashave merit andthat has to beacknowledged,but all ideas arelogged. The energygenerated even byasking front-linestaff for ideas ispalpable.’5   Landing transformational change: Closing the gap between theory and practice – case studyof the team. Phone First was adrive to get advisers to telephoneinstead of writing a letter torequest further information,potentially saving time and money.To get approval to go from trialto live, the report on the trial hadto be of a sufficient standard tosatisfy the executive committee.The resource implications hadto be considered carefully, forexample needing more peopleon the phones and fewer peoplehandling post. Small changes tocall handling times can have a bigimpact when there might be 70million calls a year.Customer and employeesatisfaction levels in the Once andDone trial teams improved andthese improvements were thetrigger for nationwide rollout ofmany of their ideas. Evaluation ofthe changes continues.Clearing obstaclesRuth could not personally clearevery obstacle. Director-levelsupport helped. One director recallsa lack of progress in a particularPT office. The director visited thesite, tackled a stakeholder issue bywriting to them to get the guidancechanged, addressed a personnelissue and then went back torecognise the progress:‘They were really proud to show meall of their things that were movingon.’Finally, the director publicised thegood work of the new manager toseveral hundred senior managersat an event, saying:‘Instead of just being a victim ofthe fact that everybody was really,really busy, the manager in that sitepulled somebody offline, helpedto redraft … the guidance, andeverybody had a win-win becausethey got the changes through thatthey needed.’All these actions of the directorsent a clear message that Onceand Done work had support fromthe top.More generally, a directorcommented:‘We were all very visible, going tomeet the teams … making sure thatwe were celebrating successes andputting our own shoulders behind itas a senior management team.’Agreeing a methodologyOver time the team has developeda detailed methodology forgetting ideas processed. Thereare protocols for consultingstakeholders and time limits withinwhich stakeholders must respondto suggested changes. Likewise,there are protocols around howquickly Once and Done mustrespond to Fresh Thinking.‘It holds us to account that in eightweek tranches, we’ll get these ideasout.’Using the methodology, they arecollaborating successfully withstakeholders and regularly landingchanges to guidance.Using discretionOnce and Done also wanted frontline staff to be able to use theirexpertise more flexibly. The desireddirection of travel was towardsa place where the boundaries ofan experienced adviser’s remitare clear and within that theycan use their discretion to reachthe right answer. If they make amistake, put it right and say sorry.The director of operations issueda written instruction three timesto Operations staff to think moreabout the end result and less aboutwhether the guidance was adheredto rigidly. The rule is known as‘Dorothy’s Law’. However, changeproved difficult.Metrics and staff performancereviewsThere were two problems here: callhandling times and the assessmentof the quality of a call. The metricsby which PT people were assessedwere devised under a differentphilosophy.The challenge was to look at thewhole picture, not just the callhandling times in one contactcentre or at one time of year.However, the manager of a contactcentre team was used to beingassessed more narrowly.The second challenge was callquality:‘Part of those quality checks will beto have followed the guidance asset out.’Quality checks are still importantbut made in a different way:‘And, as people have got moreand more confident, then thosechecks have gone through a lotbetter. And I think people feel a lotmore secure, that they won’t bereprimanded in any way for makingeither a mistake or going a differentway … to get the right answer.’The Director of Operations PT, towhom each manager reports, hasrepeated this message through thevarious communications channels:‘For example, Building our Future… the front-line staff had some realissues about checking and peoplebeing failed. They raised it in theopen forum and I very publicly said,“This is unacceptable and I havewritten to managers. If you aretelling me it is still happening then Ineed another conversation.”’This challenge was still beingtackled in summer 2015:6   Landing transformational change: Closing the gap between theory and practice – case study‘We have introduced a new qualityapproach. … About three weeksago I did a dial-in inviting everysingle manager in PT Ops … soseveral hundred dialled in, to say,“Let’s talk about … what you areallowed to do and why it is okay.”That made a really big difference;you just have to keep giving themessage and keep reassuring.’(Director of Operations, PT)LeadersFor Once and Done to besuccessful, everyone needed tochange the way they worked. Theleaders in the middle, however, hadnot, perhaps, been brought on thejourney.There were two elements to thisproblem. The first was how tofacilitate leaders allowing theirpeople to use more discretion,discussed above. The second wasthat Once and Done needed theleaders with people managementto be creating an atmospherein which idea generation waswelcomed, rather than treated asless important than getting on withthe job.PT used a workshop. The leadersat deputy director level, whonumber about 100, experiencedthe workshop first. They in turntook the workshop to the nextlevel of leaders and so on:‘This is what it means to lead in aOnce and Done way. This is … whyit’s good.’They received a deadline fordelivering the workshop and apack with PowerPoints:‘They can use storytelling to advisetheir staff on how they’ve beenimpacted by ideas generation.We’ve asked them to sit down andlisten to calls … to demonstratewith some ideas.’Senior leaders who have goneback to the phones and seen theproblems for themselves have thenengaged fully with the programme.In the pack:‘We talk about what our aim is …the challenges that as a businesswe face. … We give them hintsand tips on how they can perhapsdevelop their people and developthemselves … by being open tochallenge and being honest inour answers, by empoweringour people, allowing them to becreative.’It used leadership statements:‘We’ll be visible and approachableand welcome challenge, howeveruncomfortable.’They were encouraged to getmentors for themselves and theirpeople. PT Ops has committedto every person having ten daysfor learning and development inthe next 12 months. Leaders werechallenged to think creativelyabout ways of meeting keyperformance indicators:‘They think it’s really good.’The creator of that workshop is aformer PT tax professional, who isnow on the Once and Done team.Finally, the Director of OperationsPT and her deputy directorsstarted ‘manager cafes’:‘The middle managers are theones you don’t see as much andactually need your help a bit more.We … listen to them and whattheir frustrations are … things likeperformance management, havingdifficult conversations, engagementand managing attendance.’They want to know they will besupported by senior managementand to understand how, forexample, to blame less and engagemore.Line of Business HubsThe Once and Done team was nowbeing replicated:‘We’ve created what we call Line ofBusiness Hubs … to roll out Onceand Done more widely into NI,employer helpline, tax credits.’Expansion required buy-in becauseanything to do with VAT is ‘owned’by Business Tax; anything to dowith tax credits is ‘owned’ byBenefits and Credits. However,there are more calls each week onPAYE and SA than these so it couldbe said that HMRC have tackledthe biggest challenge first.The Hubs were groups of three orfour people. Fresh Thinking wouldnow send ideas to the relevantspecialism Hub and the Hub woulddecide whether it had merit.These were sources of expertise.The members of a Hub groupwere given the Once and Donemethodology. They trained bydoing a work-shadow in Manchesterfor a week, to learn how to weighthe merits of an idea, consultstakeholders and, if appropriate,organise a trial of an idea.The National Insurance Hub hadalready implemented about 30ideas. Within local office Hubs theycelebrated their own successes:‘What the teams tend to do is, onbattle boards and walls in corridors,have the visuals. … “These are ourtop ideas, here are our successes,get involved, come and see us.”’CommunicationOnce and Done always thank theperson who had the idea:7   Landing transformational change: Closing the gap between theory and practice – case study‘When that idea goes live,nationally, that day you get acertificate saying, “Your idea,well done. Today, everyone in thecountry is following your newapproach.”’A problem with previous schemeshad been that advisers felt theirideas disappeared into black holes.Once and Done also publicisethe ways in which individualscontribute to change:‘On our intranet pages we havelittle storyboards and pictures ofthe people who’ve been involved insome of the success.’Mass communications of changewere managed carefully to avoidoverwhelming staff. Communicationswere, say, fortnightly instead ofweekly; indeed, a minor changein the guidance might not beproclaimed to all, for example,moving ‘how to make a change ofaddress’ from ‘D’ for ‘designatory’ to‘C’ for ‘change of address’.As well as communications fromthe change team there are alsocommunications about the Onceand Done team. As one directorobserved:‘We were saying, very visibly, this isimportant to us because we’ve gotthem up on stage and they are partof our nominations, so those bignational awards that send a lot ofsignals across the organisation.’Building our FutureConcurrent with Once and Donein PT, there was a programmeof mass communication aboutthe changes across the whole ofHMRC. Building our Future involvedeveryone in a conversation aboutthe future, not only what wasknown (such as online serviceswere launching imminently) butalso acknowledging what wasuncertain (such as which officeswould close when they mergedinto fewer sites).This programme sought to improvecommunication between seniorleaders and the workforce. It wassharing information with andgathering information from theworkforce:‘When we did Phase 1, from April2014 through to September 2014,all 50,000-plus staff attended anevent.’Prior to April 2014, there had beenten months of work on it at HMRCExecutive Committee to clarifywhat the future might hold for theorganisation, what the culture wouldneed to be, and so on. They did notuse consultants. They developeda narrative and agreed it wouldbe delivered face to face to everyemployee and captured in a booklet:‘[HR] did a lot of the practicalstuff too. The upskilling of peopleto deliver this story and helpingcomms write the story.’Each phase started at the top withthe chief executive and cascadeddown:‘We … went to a senior leadershipgroup event, where Building ourFuture was delivered. … We werethen required to … develop adelivery programme, using thepeople who were at that event aspresenters and facilitators.’The logistics of working through50,000 HMRC employees in a fewweeks were complicated. In thecall centres in PT, with offices fromPortsmouth to East Kilbride, beingsensitive to busy times meant:‘We had about 17 or 18 workingdays, because we couldn’t doMondays and Fridays, to get 10,500people through.’They were taken away from theirdesks for two and a half hours andtold about the future of HMRC andhow it might impact them. Therewere directors at every event andthe attendees could interact withthem:‘People were allowed to ask youany question they wanted and youwere not briefed.’The presentations were followedby table talk sessions. Thefacilitators on each table gatheredinformation from the eventsand the feedback improved thechange programmes; for example,feedback from one of these eventsled to changes in the trainingaround the new digital scanningof post.Since then Phase 2 has beencompleted and in 2015 Phase 3was being rolled out to all 50,000.Phase 2 focused on the successesfrom Phase 1. By providing promptfeedback to the staff in Phase 2on the changes made as a resultof suggestions gathered from thestaff in Phase 1, Building our Futurefacilitated the staff experiencinga sense of having made a realcontribution:‘You said this training wouldn’twork for this particular project, sowe’ve changed it, and we changedit the week after you told us itwouldn’t work. You told us youwere having a specific problemwith IT in Dundee, so we got the ITteam up in Dundee the week after.’Having this programme ofcommunication running at thesame time as Once and Donemeant that employees acrossHMRC felt informed about thechanges to come, understoodthe role of Once and Done in theoverall change programme andsaw the directors’ support forworking in a Once and Done way.8   Landing transformational change: Closing the gap between theory and practice – case studyEvaluation of changeIn terms of measuring the changeachieved, there are various sourcesof data, for example the number ofideas implemented. For 2014–15, theteam smashed through the target of100 to successfully implement 137ideas nationally. It is estimated thechanges have resulted in 100,000fewer referrals, stopped 600,000letters to HMRC and avoided100,000 letters being sent out.However, it is difficult to evaluatethe impact in the last few months:‘We had a new telephony platformintroduced at the end of lastyear that had some real technicalproblems in the early days. … Wehave also had a new scanningsystem put in … and that had aneffect on performance.’For evaluating increased customerfocus, customer exit surveys trackcustomer satisfaction:‘The evaluation of the Phone First… customer satisfaction … it’s gonefrom quality 82 to 92, that’s huge.’Customers are enthusiastic:‘We get customers calling saying, “Iwant to speak to a Once and Doneteam.”’Finally, to assess the impact onemployees, absence rates weretracked. Between 2012 and 2013 inthe teams in the contact centrestrialling Once and Done, thenumber of days lost to employeeabsence fell by 19%.4 Change achievedThe new philosophy is to try todeal with everything in one contactwith the customer:‘We make sure that we dealwith everything that might beoutstanding on that record andmake sure that the customer goesaway a lot happier.’‘What it is has done is let peoplefollow their own initiative, using theirown knowledge and guidance, toactually deal with the customer’squery; which has actually sort of tornapart the previous way of working.’‘To date, we’ve [had] over 200 ideasin the last two years and we’velanded every one of those safely.’The experience of both customersand staff is improving. As a result,trust between staff and leaders isimproving:‘I think it tended to generate trustamongst our people, because theysaw … senior leaders like Ruthtaking action.’Building our Future has alsoimproved trust as HMRC hasbecome ‘more open, more honest,more transparent now’.The employees feel valued:‘A sense that they’re … beinglistened to, and their concerns andideas have been acted upon.’In addition:‘I think actually it has broken downa lot of barriers between contactcentre and processing.’There are now ideas comingthrough in other HMRCdepartments:‘We’ve got two huge ideas on thego in Benefits and Credits … whichwill hopefully shave quite a bit oftime off the call handling time.’The mass conversation with theHMRC workforce is itself a bigchange:‘We’ve never done anything likethat before. … “This is what we’regoing to look like … What do youthink?”’Across all the change programmes,there is an increased emphasis onthe customer experience:‘We’ve implanted, in Personal Tax,customer insight in every single oneof our change programmes. So thathas begun to make a difference… we won’t sign off a changeunless we’ve done that customerresearch.’With regards to Once and Done,the Director of Operations PTsummarises the change as follows:‘It is considered a huge success,Once and Done, because we haveimplemented those 140-plus ideas.We have changed the culture and weare now rolling it out. Staff love it.’The Once and Done team havebeen nominated for the PTAchieving Excellence Awards,HMRC People and Civil ServiceAwards.Chartered Institute of Personnel and Development151 The Broadway London SW19 1JQ United KingdomT +44 (0)20 8612 6200 F +44 (0)20 8612 6201E [email protected] W by Royal CharterRegistered as a charity in England and Wales (1079797) and Scotland (SC045154)Issued: September 2015 Reference: 7101 © CIPD 2015


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