The cost of restructuring is too high

In Wellington, restructuring seems to be the only game in town. Many organisations are in disarray after two or three years of constant change. Traditionally, when counting the cost of restructures, the focus is on the redundancy payment. However, in the public sector, many more costs should be taken into account. These include: lost productivity, lost institutional knowledge and lost goodwill. These are the very attributes that enable an organisation to run effectively. While productivity can be regained, institutional knowledge rebuilt and goodwill restored (all over time), I think the public sector is now entering dangerous territory: we are losing future generations of leaders.

Ponder a moment the personal cost to public servants. Many are motivated by the intrinsic value of the work they do: they are there because they care about delivering vital services to the people of New Zealand. When you take that ability away, you lose much more than just an FTE, a bum on a seat, a headcount. You lose the goodwill of people who are true public servants. While some return as contractors, at double the cost to when they were merely permanent employees, we don't simply get the same skills for more: we get a disengagement from the future of the organisation, a determination to do merely the job at hand (no matter its value) and a constant loss of institutional knowledge as these people move to the next organisation and the next short-term job.

I know too many people (disconcertingly, mainly women) who have found themselves on the outer. These are the very people who had the integrity to stand up to their managers and challenge the need for the restructures, who put forward alternatives, the people who cared about their staff and the work they were doing. Often, when given a chance to take stock, these women and men are reconsidering their work-life balance, they find they can survive on a reduced income, can be there for their children, can move to a smaller town without the Wellington wind, can retire. We have lost too many of these people already but these are the very people who could lead organisations effectively in the future.

The current round of restructuring has caused pain: it has cost money, productivity, institutional knowledge, goodwill. We need several years now to regain, rebuild and restore. To get back to zero. However, the future of the public sector looks even more bleak: we have removed many of the people who would have been senior leaders in the short term and in the future. Without a cohort of experienced, effective, New Zealand public sector managers to lead our way into the future, what will we have instead?