Q24). What lessons can be drawn from the PPBS implementation at the Ministry of Planning (MOP)?

Many lessons have been learnt from the PPBS implementation. These include:

q The desire for reform: To undertake a reform as massive as PPBS, there must not only be a need to reform but the desire to do so must be strong. Mere implementation because it is a central agency directive – as, for example, the Ministry of Finance – will not do. The desire must come from within the organization as well. It is this desire that would sustain the reform during the difficult period of implementation. Otherwise, reform would be mere rhetoric without any substantial impact. Management at all levels must be convinced that reform is the way to go.

It is this desire too that will ensure that the reform is applied to the management practices of the ministry. Only when a reform is implemented and used in the way intended would it be able to survive the pull of the status quo.

q Planning for change. Before change is implemented, an agency will have to set a specific purpose and a detailed action plan that carefully charts the implementation effort. The features and the benefits of the reform too would have to be neatly spelt out. The action plan may evolve as the implementation proceeds. But there must be a blueprint for implementation before going ahead with the reform.

There also needs to be a planning structure, such as a steering committee and a project team. Organizations may hire outside experts to help design their change strategy with the help of champions within. No matter where the expert is found, two important rules of human behaviour must be remembered:

1. The plan must be owned and operated by people within the organization who have the authority to make the change happen. They must make the effort a priority, define its general purpose, and establish the broad principles to guide the implementation.

2. The best source of expertise comes from people within the organization who are actually doing the job each day. In the case of PPBS, these people include the managers and staff of the Finance Sector and managers in the other sectors.

q Leadership: It is important in any change effort that the agency top management shows sustained leadership to the change effort for it to work. Sustained leadership involves several critical dimensions, including vision, commitment, conviction and the ability to bring about change. Leaders must have a vision of the desired state after the reform implementation. They must be committed to making changes in the culture and management processes and to sticking with these changes.

The leadership can be manifest in a central committee that steers the reform and monitors the implementation progress. That steering committee should ideally be under the leadership of the agency head.

q Product champion: There must be a champion for the reform. Preferably, the agency head should be the product champion of the reform, as is the case of the MOP. Such a position would cause managers further down the hierarchy to rally round the reform effort. .

q Communication: The reform effort must be communicated to every one in the agency who would be directly or indirectly affected by the reform. Effective communication involves explaining clearly to the staff the principles, elements and benefits of the change. The staff must be told how the system is to be implemented and their relative responsibilities.

This communication should also build allies for the reform. The communication should be two-way where the opinions, concerns and observations of the staff are carefully considered.

Constant communication can also take place over the electronic medium. MOP, for example, has created a PPBS web page in its web site. That page houses answers to the frequently asked questions on PPBS. It also contains the training programs that have been conducted to upgrade the skills of its officers on PPBS. Such communication is vital to show the staff that the reform is being pursued with vigour.

q Building commitment to change: Apart from an effective communication strategy, the change effort would require a core group (the project team) who are also trained to provide training and guidance to managers involved in implementing reform. One person acting alone, even a committed agency head, will not be able to bring the reform to fruition. Ideally, this core group should comprise members from the various sections of the agency. This core group will have to:

o produce training and information material on the change effort;

o communicate the reform process to educate the staff and publicise the implementation progress; and

o provide the necessary training and support to managers implementing the reform effort.

Ideally, the Undersecretary of Finance and Administration should head this core group. The authority of the working group must be clear. The rest of the organization must understand its role and responsibilities.

Apart from this core group, the agency should engage key players who can influence a broader range of people and convert them to the reform. These key players must necessarily include those who control resources. Anyone involved in and committed to a change effort will want to see his or her mark on it. Negotiating these points of view from the start will make the process more viable, increase commitment to the change effort and save time in the long run.

q Training: Building expertise on the reform is vital to ensuring its continued implementation. Training can be formal and informal. It could be in a large setting or in small core groups. But knowledge and skills must be passed on to managers if the reform is to function as it should.

Education and training is also important to establish a mental frame among managers that is conducive to the sustenance of the reform. Reorienting the way managers think is as important as changing the way the budget is assembled. When positive attitudes to the reform are internalized among management, the reform has considerable chance to succeed.

q Willingness to develop performance measures. Incorporating performance measures into budgeting will initially inspire some fear and resistance. Performance measures are quantitative and qualitative tools for assessing whether programs are contributing to the achievement of results. The Finance Sector must be able to work with the program managers to develop meaningful indicators against which to set specific targets and measure achievement.

Without the ability to measure and report on performance, performance budgeting and performance management are like good intentions. They may feel better in the short run, but they will make little difference in the long-term. Performance measurement systems are crucial to enable managers to be accountable for the resources allocated to them.

q Culture of performance. Related to the above, persistent efforts to install PPBS will slowly help evolve a culture of performance within an organization. This is important for the continued sustenance of PPBS.

q Willingness to apply to the whole organization. Reform must extend across the whole organization. Every manager must be made to feel that he is part of the reform process.

q Willingness to allocate resources. The allocation of substantial resources for consultancy, education and training is necessary if senior management wants to be seen to be committed to the reform. Also, the time and effort of the core group – the project team – to keep the reform afloat are equally important.

q Monitoring and feedback. The reform has to be periodically monitored by senior management. A high level steering committee might prove useful in monitoring the implementation and offering advice on the direction of the reform. Such a high level committee would also reflect the commitment of senior management to reform.

q Managing resistance to change. Normally, people within an organization are wary of change. Sometimes resistance to change from staff is the result of a history of changes that have been more cosmetic than real. Sometimes, managers are resistant to efforts at measuring performance for fear that they will be unfairly criticized should there be a performance deficit.

To overcome this resistance to change, an open two-way discussion on change is essential. We must be clear about what why we seek to change and how we propose to bring about it. Managers’ fears must be allayed. They must be assured that what is being measured is not their own performance but the performance of the program. And performance measurement is to ensure that the program is on track to achieving its objectives.

q Offering incentives. Managers must be motivated to implement the reform. One way of doing it is by providing incentives such as training locally and abroad, simplifying rules and regulations that allow them to budget easily under the new system and offering greater budget flexibility in how they use their budget.

q Keeping the interest alive for reform: Senior management should not become complacent once the reform is formulated and implemented. The interest in the reform must be sustained. This can be done by rewarding the staff who have made it happen. These rewards can include a simple ceremony honouring them and presenting them with a certificate of appreciation.

Early successes in implementation must also be publicized to keep the interest alive. That way too the sceptics can slowly be won over to the reform effort

Figure 5. 1 summarises the critical success factors for reform.

Figure 5.1: Critical Success Factors for Reform Sustenance