A case study of the development of corporate management in the Department of Agriculture

 

Comment:

I wrote this essay on the evolution of corporate management in the Department as I saw it in 1985.  It was originally published as an appendix to a small management text on the development of corporate management in the Victorian public sector that I was invited to contribute to.    “Corporate Management: The Australian Public Sector,  Ivan Beringer, George Chomiak and Hamish Russell, Hale & Iremonger P/L,  1986”.

The case study focuses on management initiatives over the eight year period from 1976 to 1984.

My thinking at the time is summarised in the last paragraph:

“This case study is not presented as a model to be followed by other agencies or as the ultimate approach to management in this particular organisation.  It is instead a study of evolution and a commitment to management principles.  Negotiation, compromise, persistence and commitment to a few key principles are features of this attempt to make an organisation more flexible, more accountable and better able to respond to changing requirements.”

Whether OBMS/VAMIS lived up to these aspirations was hotly debated at the time and may still be seen as a very mixed blessing.  However, at the time, there is little doubt that core agencies of Government, including Treasury and the Public Service Board, saw the Department as a leader in the development of corporate management.

Hamish Russell, Sept 2010

 

Corporate Management Structure in the Victorian Department of Agriculture, 1986.

 

Reproduced from Corporate Management The Australian Public Sector,  1986 by I Beringer, G. Chomiak, H Russell. Published by Hale & Ironmonger Pty Limited, Sydney NSW

 

 

 

A case study of the development of corporate management in the Department of Agriculture.

 

Within the Victorian inner budget sector (that is those agencies that are substantially dependant on annual appropriations from the State budget), the Department of Agriculture has been recognised as having been at the forefront of several developments in corporate management.

A number of factors can be suggested for this initiative. Some un­doubtedly important influences were:

(i) the fact that the Department had not been set up under a specific Act of Parliament and therefore had no encompassing Act to define its functions or mission;

(ii) the fact that the industry that it worked with was moving from its historic place in the economy where it was broadly concerned with producing for the British and other well established overseas markets to a more competitive situation where market protection and oversupply were becoming dominant features;

(iii) the fact that some members of senior management saw a need to critically review issues such as efficiency, effectiveness and equity; and

(iv) the fact that similar government services in other parts of the

world were being challenged to justify their continued role.

 

The first series of interventions and initiatives occurred during the early seventies and involved a major review of research services, the establishment of a major thrust in staff development and the setting up of an informal and later a formal procedure to develop a set of cor­porate objectives for the Department.

These initiatives created a core of individuals who were involved in several organisational development tasks. This core provided a positive impetus for change and also a vital link between the range of initiatives. This complex of interrelated activities has been documented by Russell and by Kefford.

In 1973, three Assistant Directors were appointed to work with the chief administrative officer and his deputy. This corporate manage­ment team was expanded to seven in 1975. The appointment of a directorate with broad responsibility across the whole organisation was a major step in providing the energy and leadership for sub­stantial change. Over time this group was progressively reduced until in 1985 it was again a directorate of five. This was an apparent recog­nition that the energy required to maintain a corporate approach to management is less than that which was required during its introduction.

A critical decision with major ramifications was made at the begin­ning of 1976. This was the decision to adopt objectives based manage­ment system (OBMS). The Department had looked in detail at management by objectives and managers had rejected the classic ap­proach. Concerns about the enormous amount of documentation, the personalisation of objectives and resistance to a system that was seen to be too closely linked to individual evaluation were associated with the rejection of management by objectives. The OBMS approach was built around a limited set of key principles:

(i) that the Department would be planning organisation and that it would plan in relation to objectives;

(ii) that planning would primarily be undertaken at two levels —corporate and operational; and

(iii) that there would be a management information system to sup­port planning and review.

Over time, these principles were consistently applied and can be seen in the set of principles that were being applied at the beginning of 1985 (Table A.1).

The fundamental principle was the commitment to planning. This represents an explicit acceptance of change and the need to manage change in a positive way.

The commitment to develop a management information system to support planning meant that the organisation had to adopt a logic for grouping objectives. The logical framework of objectives will always be a key decision because it determines to a large degree how work will be described and thought about. The Department of Agriculture, as it then was, initially adopted a framework that had been developed in the United States of America to describe research projects that were being funded by their Department of Agriculture (USDA).

 

Table A.1

Corporate management principles adopted by the Department of Agriculture

 

  1. Program (product) structure should be politically comprehensible.
  2. Objectives should aggregate hierarchically.
  3. There should be a systematic management process involving the Minister for corporate planning and promulgation of corporate priorities.
  4. The system of management should be logical and predictable to government, staff and clients.
  5. Structure should facilitate change and the redeployment of resources.
  6. There should be a project-based (objectives) management information
  7. system.
  8. There should be a clear distinction between corporate and operational (im­plementation) responsibilities.
  9. There should be a clear distinction between service delivery (efficiency) and program management (effectiveness).
  10. There should be explicit recognition of negotiation and balance of power be­tween program and service delivery managers.
  11. Corporate delegations should be flexible.
  12.  

The system that was called the Current Research Information Sys­tem (CRIS), met the basic requirements:

(i) that it was based upon a series of goals or objectives,

(ii) that it covered the full scope of activities that the Victorian department was involved in,

(iii) that it was based on projects, and

(iv) that it encompassed units that were geographically separated.

 

The CRIS system was, and still is, restricted to co-operative research projects but the Department of Agriculture decided to incor­porate all functions — research, extension, education, diagnosis, regulation and administration from the beginning.

The decisions relating to the adoption of OBMS led to the develop­ment of the Victorian Agricultural Management Information System (VAMIS). VAMIS was designed to be a computer data base with details of staff, finance, objectives and achievements for projects. The primary structure was based on the OBMS objectives but each project was also to be classified by controlling unit, work location, function, source of funds, commodity and discipline. The process of implemen­tation was firstly to ask all divisional managers to nominate a series of programs that they were working in and the program objective within the broad framework of CRIS goals. Similar or overlapping programs were suggested in a number of cases and a common set was then negotiated. The aim at this stage was to achieve comprehensive cover­age and judgements on priority were deliberately avoided. Once a set of programs was established, each unit manager was asked to describe all of the work of that unit in terms of a series of projects that related to the agreed programs.

The process of developing the framework of programs and projects was supported by a major communication strategy involving a series of specially identified OBMS documents and a major program of meetings of staff at appropriate locations throughout the State. Each of these meetings involved a member of the directorate and the officer who had particular responsibility for implementing the management information system.

VAMIS was progressively adopted over two years with project infor­mation being updated on an annual basis. The initial reporting of progress included such gems as 'progress as expected'. However, enormous benefits were gained from the grouping of projects from different units and functions where they related to the same program objective. This ability to place work in a context was profoundly important in enabling staff and management to assess priorities and identify gaps and overlaps. The visibility of work led to considerable resistance from some groups who rightly saw it as a threat to their autonomy. Persistence in the light of passive resistance and active opposition was a key factor in the ultimate success of the system.

The directorate undertook their first attempt at prioritising pro­grams in 1979 and this was followed by a major longer term planning exercise. With assistance from external management consultants, a corporate planning process was established and a general perspective was developed for the decade.

Two major offshoots from this process were the strong involvement of the Minister for the first time and the revision of the program struc­ture to make it more meaningful to clients and consumers. The importance of these developments was the increased awareness of the role of government and other external stakeholders. Figure A.1 shows the basic structure that was in use at the beginning of 1985. Corporate

planning was formalised as an annual process and priorities were set by the minister and directorate to direct operational planning and budgeting for the forthcoming year.

Agriculture and Community Welfare Services were selected to par­ticipate with the then Treasury in 1981/82 in a pilot program priority budgeting project. This essentially completed the development of OBMS to encompass the setting of objectives and priorities at the cor­porate and operational levels and then implementing a budgeting mechanism to carry this through to an explicit negotiating process in determining unit funding for the forthcoming year. Details of this process are described in Chapter 4.

Following a change of government, program budgeting was adopted for the Victorian public sector and this led in 1983 to a small revision of the pre-existing program structure and a change to the organisational structure to give a much greater role to program co­ordinators.'Program management and line management were split as shown in Figure A.2. This last step gave program managers control over the allocation of resources whereas previously program co­ordinators only had the power of persuasion.

The organisation development that led to the adoption of corporate management occurred in Agriculture over a period of over ten years, as is shown in Table A. 2.

Undoubtedly, one of the reasons for the length of time involved was the lack of other organisations doing similar things. However, adop­tion of a corporate perspective and development and implementation of appropriate systems and processes takes time. We are essentially looking at a profound change in organisational culture or style.

The process was still on-going in the Department of Agriculture until mid-1985. A data base of government policy commitments was developed to ensure that program priorities and strategic goals were developed to meet government priorities, program component goals. and associated performance indicators were being formalised and accountability to government was being formalised.

These developments reflect the evolutionary nature of organis­ation. Agriculture developed a capacity to review its current activities and establish priorities. It also developed a sophisticated capacity to report in terms of programs and objectives. These initiatives can be seen in the goals that are set out in Table A.3. This flexibility to respond to change and to be held accountable for achievement of objectives is at the heart of current thinking on public sector management.

 

 

Fig A.2

 

 

 

 

 

 

Table A.2

Table A.3



 

 

Putting it all together can be a major task as is shown in the management cycle set out in Figure A.3 which reflects the decisions and tasks as identified in 1984.

This case study is not presented as a model to be followed by other agencies or as the ultimate approach to management in this particular organisation. It is instead a study of evolution and a commitment to management principles. Negotiation, compromise, persistence and commitment to a few key principles are features of this attempt to make an organisation more flexible, more accountable and better able to respond to changing requirements.