Wednesday 12 June 2013

Remembering Public Sector Restructuring in Germany, 1992-1993

In April 1992, the company I had been working for made me the offer of moving to Germany for a year after my Junior year at Princeton to work on the extension of a UN consultancy project. I accepted, and spent three months in intensive German classes in Cologne, before reporting for work in Dusseldorf in early September 1992.

I remember walking into the MD’s office and getting my first assignment. It was the organisational merger of the Kriminal- and Schutzpolizei of the Federal State of North Rhine Westfalia. The Kriminalpolizei were the detective force dealing with crime; the Schutzpolizei were the uniformed police who comprised the first-responders and patrol force. 

East and West Germany had joined into the Federal Republic of Germany in October 1990. Since that date, the Federal, State and Municipal governments embarked on a massive programme of cost-cutting and organisational restructuring in an effort to manage the costs of reunification.

That first project was excruciating: my job was to wade through dense reports on operating procedures and develop an organisational analysis of these two police forces, and in conjunction with the senior consultants determine what kind of organisational merger and synergies were possible.

Over the years, I was to work on any number of public sector restructuring projects. In 1990-1991, I worked as a research assistant on the UNDP Senior Management Restructuring in New York. In 1992, after the NRW police project, I worked on a team studying the organisational and cost effects of moving the UNDP and UNFPA from New York to Bonn. After that, we worked on the strategic restructuring of the Cyprus Tourism Organisation.

The lessons I took from that time are that if you want to restructure an institution, it is absolutely necessary to take a systems approach to the case. In our work, we would develop extremely comprehensive workflow modelling, decision mapping, headcount analysis, alignment of workflow with organisational strategy, financial analyses and IT systems audits.

When it came time to make recommendations, we started with the organisational mission and strategy, and then moved down into details. At the end of the process, we could quantify and qualify the organisational impact of a restructuring, whether this was expressed in headcount, budget, decision-time, or other factors.

This is not rocket science: it calls for a systematic and clear-headed approach.

Ever since moving back to Greece, I have been hearing repeated calls to “restructure the public sector”, “improve efficiency”, “reduce bureaucracy”, etc. The latest move to close the Greek public broadcaster is only the latest manifestation of this, although there are any number of nontransparent political issues involved as well.

But in all this time, I have never seen an actual strategic and organisational analysis on the scale necessary to make a sustainable and logical change to public sector operations.

·       There is no assessment of what its strategic goals should be in practise, and how these translate into performance indicators.

·       There is no agreement on how the organisation should be financed to an acceptable degree or what a public broadcaster should cost. There is no agreement on what a Greek public broadcaster should invest in, or what its financial return should be.

·       There is no framework as to the general operation of media in Greece. Given that neither the justice system nor the media regulatory authority are working effectively, it is impossible to understand how the basic value system and competition in this sector should operate.

·       The public sector as a whole no longer has the financial resources to reward successful performance or attract competent staff, even if could agree on what the definition of successful performance or competent staff are.

·       There is no acceptance of a public sector employment code and code of operations which bears any resemblance to state-of-the-art in the European public sector. As a result, unacceptable behaviour, most of it due to political interference, is the norm.

·       Public broadcasting is particularly sensitive: a broadcaster needs to find the right balance between investigative journalism, creativity, objectivity and risk-taking to be relevant in a very fast-changing, difficult world. I don’t know anyone who believes this balance is possible in the Greek public sector.

·       The role of accepted productivity solutions, e.g. IT-based workflow, transparent recruitment and procurement processes, arbitration or resolution mechanisms, or any other facets of work in a modern organisation.

·       When changes are made, they are spasmodic, politically-motivated, and unsustainable. Even when not motivated by some nefarious ulterior intent, they are usually totally miscommunicated. There is no effort to build consensus or a clear vision of the present and future.

·       There is no sense of ownership or over-riding motivation for why changes are necessary. There is no strategic vision discernable which works in the real world. There is no understanding of where Greece will be 5 or 10 years from now, and why change is necessary.  There is never a single reference to the fact that Greece has competitors, and that unless a real competitive advantage is developed, it doesn’t matter how many loans or EU funds Greece receives: it will continually fail.

Quite simply, the basic homework is not being done. And in the cases where someone else does it, e.g. by the efforts of the Task Force to Save Greece, McKinsey and Boston Consulting Group initiatives, or other projects, it is often simply ignored.

It took Germany 20 years to digest the costs of reunification. The process was extremely messy, often corrupt and often inefficient. But to their credit, the first round of reforms which occurred in 1991-1998 were done largely using their own resources.

I have yet to see the same level of preparedness in Greece. Whether we look at the privatisation efforts of TAIPED; the perennial restructuring of the public education sector; the various public sector IT projects; the public sector restructuring announced: the results are the same.

Albert Einstein said that “The definition of insanity is doing the same thing over and over again and expecting different results.”

I usually see this used to justify why various Troika initiatives should not be followed.

Yet sticking to the same politically inept and corrupt system is exactly the same behaviour. Are we really so happy to be insane?

© Philip Ammerman, 2013


  1. We are tired and exhausted to pay "haratsia" (from the turkish word "haraç", the capital tax paid by the non-muslim subjects of the Ottoman Empire).
    The fuctioning of ERT demanded a tax paid by the DEH bills.
    Do you want electricity in your house? You have to pay the ERT "haratsi".
    ERT is not like police or hospitals. Nothing really important will change in Greek's lives if ERT just simply CLOSE:
    With the advent of internet very few people watched ERT.
    The one who protest are people who know nothing else in their lives than "working" for a party, to have them appointed for life in a public organisation.
    Or people like Maria Tsokli who wandered all around the globe to make documantaries about countries - with the "haratsia" paid by the unemployed worker of course.
    Their rage is understandable.

    1. To GCS: I don't argue with what you say about the "ratings", nor with the rage people have for the deadwood of the civil service sector. What is frightening here is that these failures lead to a failure of legitimacy in Samaras's decision to simply do away with a public broadcasting system. I protest -- and I have never taken a penny from the government, any government, and hey I don't even watch TV. With all courtesy, I suggest you think beyond the "comfort zone" -- Seeing the implications for the future takes some research, reading, and thought. I am sure you can.

    2. The BBC's director general, Tony Hall, has called on the Greek government to reopen the state broadcaster immediately condemning its sudden closure as "undemocratic and unprofessional".
      In a petition to the Greek prime minister, Antonis Samaras, the directors general of 50 European TV and radio broadcasters including the BBC urged him to see sense pointing out that "public service media and their independence from government lie at the heart of democratic societies".

      The other signatories included the heads of German, French, Swiss, Danish, Spanish and Italian TV.

  2. I don't know what hurts more - having to pay the massive amount of EUR 4.50 a month for ERT, listing to Olga Tremi on Mega, or reading your inane comment.

    If I were in Greece now, I'd be outside ERT, protesting too, even though I've never worked for a Greek political party in my life. The EUR 54 I pay for year for ERT is well-spent, even if 25% of it is seized by the government to bail-out a bankrupt RES system.

    If you believe public life in Greece will be better if the news is reported only by Skai, Mega, Star and Antenna, then you have absolutely no clue what you are talking about. But then again, this explains a lot.

  3. I apologise for the aggresive tone of my comment. It is very easy to say undue things when not in person.
    Of course, you can remove it, if you like.
    For an unemployed couple with children, every euro counts.
    I do not watch private TV stations either.