The Times They Are A-Changin’
The employment related services sector is facing rapid change. In the recent Spending Review, we learned that the Department for Work & Pensions budget for contracted employment programmes will be reduced from over £700m per year to less than £150m per year.
Some prime contractors currently have annual revenues from DWP contracted employment programmes that equal the size of the entire market by 2018. There are small, local and regionally based subcontractors, with revenues of less than £5m who have more then 60-70% of their revenue tied up in DWP contracted employment programmes. You can see the current lie of the market in this report, published by ThinkWinDo in December.
At either end of the scale, the coming change is dramatic.
This goes throughout the world of public service delivery. Local authorities have faced budget reductions of around 40 per cent since 2010. Transforming Rehabilitation is doing just that, bringing radical change to the structure, culture and delivery of probation services. The NHS is in the middle of the ‘most wide-ranging reforms… since it was founded in 1948’ (King’s Fund). The (long, slow) roll-out of Universal Credit is changing the relationship between the citizen and the state and taking government into a part of the economy that it hasn’t been before.
More broadly, the pace of technological, cultural and economic change around us seems relentless. We live in a very different world to that of even ten years’ ago.
How do you respond to change?
We hosted a workshop on behalf of the Employment Related Services Association last week, helping organisations get to grips with the scale of the change coming and how to respond to that. Having been through a few cycles of massive change – internal and external – over the years, I’ve learned a few things on how to deal with it.
There are four things you MUST do to respond to massive change successfully.
1. Change your perception
There are people and organisations out there right now who are in a state of denial over the future. ‘It won’t happen’, ‘They’ll find some more money from somewhere’, ‘If unemployment begins to rise again, they’ll change direction.’
Well, yes, maybe. But you can’t run a business or a charity on hope. Not successfully anyway.
In 2010, we saw the same thing. Lots of people in the employment related services sector refused to believe that the Conservatives would terminate their lucrative Flexible New Deal contracts early to bring in their new Work Programme. Despite the fact that we’d heard them say it over and over again that they would, in public and in private. Well, guess what happened?
If you can’t change your perception and accept reality as it is, you can’t respond to change. More likely, you are going to sail, open-eyed, straight into the iceberg.
2. Change your attitude
There are people and organisations out there right now who refuse to accept the situation that they are in. ‘It’s a disgrace’, ‘This shouldn’t be happening’, ‘This isn’t fair.’
Well, it’s at least some of those things – as I wrote about here. But you can’t run a business or a charity on resistance and refusal.
You’ve got to accept and then embrace the situation that you are in. This is maybe even tougher than the first step, because it’s about changing your mindset. What opportunities does this situation present and how are you uniquely placed to take hold of them?
3. Change your direction
There are opportunities out there. You need to look for them.
If you are a provider of contracted employment services, yes, the DWP market might well be about to go through a massive contraction. But the market for outsourced public services remains over £80 billion in the UK. And government needs help to deliver better social outcomes for a reduced cost.
Get your smart people in a room, work out why your organisation exists and what it does. Rethink how it does it. Use your expertise to come up with new services, new ways of making an impact. Look for new ways in which you can attract and generate revenue.
We’ve been working through this with organisations in recent months and its amazing to see the creativity that working through step 1 and 2 can release.
The question I’ve been posing to employment related services providers is pretty simple: are you a ‘getting people a job’ service? Or is your expertise broader and deeper? Is getting people a job just one of the many different outcomes that expertise can and does deliver?
Until you know where you are going, it’s impossible to navigate a clear course. Once you know where you are going you can work out exactly how to get there.
4. Change your allocation
Once you know where you are going and how you are going to get there, you’ve got some difficult choices to make. Where are you going to allocate your limited resources? Do you have the right people in the right places?
Time and money are finite resources and you’ve got to make sure you are putting them both in the right places – especially when you don’t have much to waste.
We’re helping organisations work through this step right now as well. It means tough decisions.
It might mean accepting that you are not going to try and maintain existing infrastructure in places where you don’t have the resource to bid or the chance to win. It might mean investing capital that you’ve been saving for a rainy day. It might mean bringing in new people with the expertise you need to achieve the vision you’ve laid out in step 3. It might mean giving people within your organisation new roles and new responsibilities. It might mean closing down departments or programmes that have heavy emotional weight in the organisation, but can’t help you get to where you need to be.
The quick and the dead
You can’t afford to delay, because time is moving on. The changes I outlined at the top of the post are all around you. If you don’t move quickly, you’re going to get left behind. This – I think – is the opportunity for smaller organisations. I’ve worked in SMEs and FTSE-100 companies and there can be an inverse relationship between the urgency of an organisation and its size. When your revenues are in the billions of pounds, a sea change in one of your many markets doesn’t necessarily seem like a crisis, it can appear as a blip. Unless you see the wider pattern…
So, my question for this week is this:
Where is your organisation on the four steps of change?
What is the one thing you could do today to take the first or next step on the journey?
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