Change management: how one government department upped its game

17 October 2017 -

Martin DonnellyCMI Companion and former permanent secretary Sir Martin Donnelly led the Department for Business, Innovation & Skills through a period of profound and painful change. At a recent CMI Companions roundtable, part of the new “Shape the future of management” event series, he told the story for the first time...

Insights Team

Martin Donnelly joined the Department for Business, Innovation & Skills (BIS) as Permanent Secretary in the autumn of 2010. With 60-plus agencies reporting into it, this was a large, complex organisation.

And it was about to face a period of momentous change.

“When I arrived, the Treasury had just imposed 25% spending cuts,” Sir Martin recalled at a recent “Shape the future of management” event for CMI Companions, hosted by new CMI president Bruce Carnegie-Brown at Lloyd’s of London.

The change process was rapid and difficult, says Donnelly. To slim down the management structure, all senior staff had to reapply for their jobs. While every effort was taken to make sure the process was fair, there were inevitably significant numbers of redundancies, particularly at the top of the department. Looking back at the time, Sir Martin reflected that, “If you are going to have to reduce numbers, it is best to move quickly to limit the inevitable uncertainty that people feel about their future.”

The initial six-month timetable for the first phase was met, and there followed a three-month programme of departmental reorganisation. By the summer of 2011, Sir Martin admitted that, “I thought we had done quite a good job, and were able to reassure the majority of staff about their continued place in the organisation.”

But a difficult senior leaders awayday revealed that morale was seriously low in the department. “As the old saying goes, the operation had been successful, but the patient was practically dead. Everyone felt a victim of change.” said Sir Martin. “So we started on the tougher job of renewing the department’s culture and ways of working.”

This time, he enlisted many less experienced – and less jaundiced – managers into the process. They engaged with staff and injected a new energy and creativity. Between them, these managers came up with 57 ideas, of which 50 were swiftly implemented.

“But I knew that while things were improving there was more to do to build a real sense of trust and teamwork,” Sir Martin said.

Sir Martin detailed the change programme to a group of CMI Companions such as RBS’s director of strategic partnerships and chair of CMI Women Heather Melville and Professor Abby Ghobadian of Henley Business School.

The key elements of the change programme included intensive coaching of the senior management team to build a coherent view of where the organisation was going and the values we shared, before starting work on values statements for the organisation.

Another important decision was to start meeting staff in small groups. “We needed to build more trust in management, and that meant being more open about the people we really were. So I started engaging with small groups of staff personally, sharing what mattered and how work and our lives fitted together.” Through these conversations it became clear that often staff would only come forward with their concerns if they were offered “an environment of trust in which they could prosper.”

Building authenticity and openness was a process that had to involve all the leadership. One particularly successful senior team awayday focused on how to tell the story of the work the team did together, with managers  encouraged to be open about personal as well as professional challenges. Sir Martin spoke about his own career challenges, including a period as a single parent worried about whether he could carry on in his job.

That session, which was held at the Oval cricket ground, was a real turning point in building trust and mutual support, said Sir Martin. Managers  joining the department commented on the sense of teamwork and lack of a blame culture. Younger staff were given roles in reverse mentoring the executive board, and appraisals focused on how leaders had built capability across their teams.

Looking back over a  complex change process, Sir Martin said that: “The big learning was that you can only truly connect with colleagues if they really know who you are.” Government departments, he said, are full of hugely talented people, but it had to be recognised that success was about more than just policy and technical skills; it was about getting to know each other better, getting to “a place where we were all mutually supportive – the opposite of baronies.”

He also acknowledged that, in any effective change process, “people must want to succeed and do their part – that’s a contract that we all understand.”

Diversity and change

Throughout his career, and latterly when setting up the new Department for International Trade, Sir Martin Donnelly was mindful that the civil service must open up to new ways of thinking and working. There was a lively discussion about this, hosted by CMI’s chief executive Ann Francke, at the Companions roundtable.

When at BIS, Donnelly explained that he set ambitious diversity targets for the department – “We didn’t want to aim for the 30% Club, we wanted 50 per cent of our senior leadership to be women!” he said. He also introduced unconscious bias training, led by the business psychologist Binna Kandola, to help managers increase self-awareness and “unlearn macho behaviours.”

Sir Martin’s advice to other organisation that want to improve their diversity? “You must know what’s going on,” he said. At BIS, they examined the data to discover which senior women leaders were paid less than their equivalent male peers, and set about fixing it. And, as he pointed out, “you just can’t have a successful and efficient organisation that doesn’t welcome people who want to work part-time or job-share at all levels, including the board.”

In response to a question from chair of CMI’s Companions Patrick Dunne, Donnelly explained that in recent years, the civil service has started to show a much more diverse face to entry-level staff, but still faces big challenges in attracting and recruiting talented people from diverse communities.

The situation will be helped by the changing perceptions around apprenticeships. “Apprenticeships can be a good way of picking up people who wouldn’t otherwise be attracted into the civil service,” Sir Martin said. He also believes that professional role models are vital, especially in attracting people from black and ethnic minority backgrounds.

Deep down, enhancing diversity is about “commitment to the values we express.” Leaders in the civil service must be prepared to “call out” unacceptable behaviours, even at the most senior levels. “You can’t have any exceptions; behaviours must reflect your values. Otherwise it’s all just rhetoric.”

This is the first insight from a new monthly series of CMI Companions roundtables. Bringing together leaders from all sectors, ‘Shape the future of management’ will cover strategic issues ranging from organisational purpose, to cultivating entrepreneurialism and the rise of robotics and AI. For more on the work of CMI Companions visit

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