Another reorganisation, 1996–97 — a geological survey in transition
| From: Allen, P M. 2003. A geological survey in transition. British Geological Survey Occasional Publication No. 1. Keyworth:British Geological Survey. |
Chapter 15 Another reorganisation, 1996–1997
Senior managers had expressed dissatisfaction with some aspects of the 1991 reorganisation, privately, from its earliest days, but it was not for anything to do with this that in 1995 the Directorate began to look critically at the management structure. The stimulus for this was the announcement by the Director-General of Research Councils, in March that year, that he was going to initiate a review of the management function of all the Grade 5s in the research councils, with the aim of reducing their number. He had set a target of a 30% reduction in the cost of administering British science. In order to prepare for this, Peter Cook set up a meeting of the Directorate for 27 April 1995 to identify the important strategic elements that ought to be considered in any new management structure that the Survey might have to implement after the review. He insisted that the meeting went ahead even though he was going to be away at the time on a three-month sabbatical and would not take part in it.
The meeting looked at the requirements for a future management structure and, in doing so, tackled some of the complaints that had been raised within the divisions by Group Managers. Among them was inter-group rivalry, which had been viewed in prospect by the Price Waterhouse consultants as being potentially good, adding a new dynamic to the BGS. In reality, it had become an irritant and was viewed by some Group Managers as symptomatic of much deeper failures within the management system.
The conclusions of the meeting were somewhat contradictory. For example, it concluded that the basic operational unit within the BGS should remain the group, but that there was a need to make adjustments to some groups in order to reduce the amount of overlap between them. It was noted that co-operation between groups was best when they were complementary to each other and had no overlapping interests. The Directorate also saw some merit in introducing a matrix approach to the management of certain activities, most notably the commissioned research programme. Action taken along these two lines would have done a lot to reduce the level of inter-group rivalry, but they then agreed that some of the activities carried out in so-called corporate groups might be better devolved to operational groups. This would have strengthened those groups whose recent activities showed that they had begun to opt out of the corporate BGS. By contrast, they did agree that more BGS-wide coordination was needed for marketing and business planning, identifying the sharing of earnings targets between groups as an objective of any new system.
No action immediately followed this meeting and inter-group competition was again raised in the Directorate at its July meeting, when Peter Cook was back from sabbatical leave. Discussion was deferred for a month, when it was planned to hold another strategy meeting for the Directorate, but this time it was to be facilitated by staff of the Centre for Exploitation of Science and Technology (CEST). Held in the Quorn Hotel, Quorn on 30–31 August 1995, this meeting was billed as a self-assessment workshop the purpose of which was to focus on two aspects of strategic thinking, namely future direction and opportunities. This was a good sequel to the April strategy meeting.
Beforehand, the CEST facilitators interviewed individually the Director and all the divisional heads and prepared a briefing pack for the meeting, summarising the issues that were raised at the interviews. There were no surprises among them. One of the realities of the market economy was that price was king and the BGS, having to carry a lot of unavoidable overheads, was struggling to compete. Competitive tendering by Government departments was particularly harsh. It was not at all uncommon for the BGS, having lost at tender because of price, to find itself being invited to carry out a rescue operation near the end of the contract. It had also become evident that high staff costs in the BGS had driven some established customers to stop buying its services, settling for the cheaper option of buying a geological map and doing the interpretation themselves. Sadly, in some such circumstances they would not even pay £75 plus VAT for a 1:10 000 map, but bought a generalised compilation at 1:50 000 for £8.50. While business and sales were being lost this way, there was ample evidence of inadequacies in the processes the Survey was supposed to have developed after Price Waterhouse to enhance business development. There was still a tendency among BGS staff to complete a contract to the highest specification rather than do it fit for purpose. ADs complained about the lack of coordination of marketing effort and that there was no clear definition of marketing roles and responsibilities. There was no system of reward for those groups that were successful and no facility for investment to be focused in areas of greatest opportunity, and the system of setting targets for groups was not working. There were some more basic concerns. The conflict between the long-term objectives of the Core Programme and the prevailing short-termism in the commercial sphere came up, and with it the prospect that the BGS might succeed in neither its commercial nor its non-commercial role if this conflict was not resolved. The conflict of interests in being both the advisor to the geoscience community at large and contractor had in no way been diminished.
The workshop was divided into five modules, covering scenario planning, price-versus-quality considerations, products and services, the role of Technology Foresight, which was beginning to dominate Government thinking on science, and, finally, the way forward. In many ways, this was a five-year review of Price Waterhouse, though it was structured to look forward, not critically backwards. In a sense, that had been done at the April meeting and there was no need to repeat it.
Quite a lot came out of the workshop. Most surprising was the recognition that it was in the Survey’s best interest to develop a closer relationship with the NERC. The NERC had already embarked on its arm’s length policy, which the BGS had welcomed despite finding that many of the new responsibilities being loaded on the Centre/Surveys came without any additional funding. A consequence of this had been that much of the strain in the relationship between the BGS and the NERC had gone. The BGS Directorate, for the first time in the memory of any of its members, found itself in a position where it was relaxed about agreeing to strengthen the relationship between them and NERC HQ.
There were three other crucial conclusions. First among them was the recognition that contingency planning was needed to cover the possibility of the loss of a major contract. The decline in value of contracts from Government departments had continued, so that the only large one remaining was with the Overseas Development Administration — and they had now moved to competitive tendering. Almost as large was the contract with UK Nirex Ltd. It was felt that the BGS was vulnerable on both of them. The loss of very large contracts had occurred in the past and the Survey had recovered, but not without difficulty and some help from the NERC. The absence of a strategy to deal with a repeat occurrence was, in the new ‘arm’s length’ environment, therefore, cause for concern.
The next issue was what was called ‘IT into everything’. This became something of a catch phrase after the meeting. The BGS already had developed its IT/IS (Information Technology and Information Systems) policy based on two lead elements. One was to become ‘first follower’ in all fields of IT and IS development except those that related to digital mapping. This meant that, rather than become involved in software and systems development, the Survey would wait for a commercially developed substitute, not only to come on the market, but to be tested in other organisations first. The second strand to the policy was to move from a centralised computer management system to a distributed one. It was this second one that was thought not to be working as well as it should. Few were prepared to abandon it, because there were undoubted benefits from it. It was thought that the weaknesses, though significant, could be addressed within the framework of the distributed system, given the will. There was no coordination of applications development between groups and divisions; there were no corporate software standards, and there was no centrally defined policy about where investment at any level should be made to improve the Survey’s IT/IS capability. The recognition that IT was into everything did not mean that everything that anyone could think of should be developed, because there were resource limitations that had to be recognised. Targeting of resources was essential. While this was being done within some of the divisions, it was difficult to do for the BGS as a whole because of its distributed, group-centred management system and the insularity of the divisions. The conclusion was that the BGS had to find the half-way point between fully distributed and fully centralised.
Lastly, there was a whole raft of issues that recognised the Survey’s poor record in business development. Marketing effort was not coordinated, and there was no recognition of premium customers, while product development, customer research and across-BGS rationalisation of products was almost non-existent.
Much effort was expended at the workshop in an attempt to understand where the BGS sat in the product chain. Should the Survey concentrate on becoming the provider of basic information to be used by the private sector to generate their own value-added products, or should the BGS go all the way and develop its own value-added products in competition with the private sector? There was, here, a major difficulty in defining the remit of a body that tried to balance its public service role with a commercial one. Inevitably, with the prospect of privatisation still on the horizon, attitudes favoured the commercial option, if for no other reason than it offered better survival prospects.
It was not the objective of the workshop to go beyond problem identification. A set of key actions did emerge from it, but they were an ad hoc collection, not a coherent set that could inform a reorganisation. Rather it was to inform strategic thinking, not yet started. The announcement on the final outcome of the Efficiency Scrutiny was still a month away, and though the Director-General of Research Councils had made known his intention to downsize or de-layer the management of research councils, the Senior Management Review had also not yet been announced.
Matters came to a head at the senior staff meeting that was held at the beginning of November 1995, only two months after the Quorn workshop. Present were Group Managers from both the science and administration divisions, the divisional heads, the Director and the Individual Merit Promotees. This was the first such meeting at which discontent with aspects of the BGS management system was aired openly by Group Managers. Not all of them were in agreement with the critics, though it was the critics who were the most vocal. At first, Peter Cook was reluctant to accept that the structure he had created was failing in any way. The Quorn meeting had not overtly attributed the weaknesses that were identified at it to a failure in the management system, though this was the line taken by some of the critics among the Group Managers. By the end of the meeting, however, he was prepared to accept that there were issues that needed addressing. In a message to all senior managers after the meeting he stated his agreement that there should be adjustments made to the current Divisional/Group structure because of them. Aware of the intent behind the Director-General’s review, he did warn that the adjustments may lead to the reduction in the number of Group Managers and that some of them should be prepared to lose their jobs.
The announcements about the Efficiency Scrutiny and the Senior Management Review had come in September and Peter Cook, therefore, took the precaution of deferring any action on restructuring until the outcome of the latter was known, though he began discussions with the Assistant Directors almost straight away. His problem was to devise a new structure that accommodated both the reduced levels of senior management he was having to contemplate and provided a solution to the problems that had been raised in the April Strategy meeting, at the Quorn in August and by the Group Managers independently.
There were several matters about which managers had complained and attributed to internal competition, which fitted the conclusions of both the April meeting and the Quorn workshop. They all stemmed from one core issue. This was that the management system itself encouraged internal competition. If any one knew the true levels of internal competition it was these managers and at the meeting in November some of them had admitted to practices that could not be described as in the best interest of corporate BGS. Their view was that it was the internal competition that had led to a fragmentation of effort and lack of coordination in areas where it was thought essential to have coordination. Essentially, the critics were looking for a change in the nature of the management system that would re-establish the primacy of the interests of corporate BGS over the interests of the individual groups and divisions. They did not subscribe to the view that the corporate interest was the sum of the interests of the groups and divisions.
In his History of the British Geological Survey 1990–1997, Peter Cook identified four critical issues that needed to be addressed. These were poor coordination of databasing, the tendency for divisions to compete in unhelpful ways, for walls to be built between divisions and groups and a failure of marketing to bring together the complete spectrum of BGS skills rather than just those residing in one group or division. He decided to tackle these by a restructuring within an unchanged management framework, rather than to carry out the more radical review that the most vocal of the critics thought was needed.
The March announcement by the Director-General of Research Councils had provided more than a broad hint that a reduction of about a third in the number of Assistant Directors was in the offing. The Senior Management Review was directed only at Grade 5 managers, but there was continual pressure from NERC to reduce management costs. Taking into account these and the criticisms being made of the current management system the restructuring had to include a re-examination of all levels of management.
When it came, the Senior Management Review recommended that only one Assistant Director should go, but a decision on a second would be made after the outcome of the Prior Options review was known. Ideally, this meant that the new management structure should not even be revealed to staff until after the Prior Options announcement. There were obvious difficulties with this. The optimum time for introducing a new structure was the beginning of the financial year on 1 April 1997. Because several new posts were to be advertised and filled, the new structure had to be ready and announced well before Christmas. When nothing but silence came from Whitehall about Prior Options in the final weeks of 1996, a decision whether or not to anticipate it had to be made. In November, at a meeting of the informal network of directors of Public Sector Research Establishments (PSREs) that had been set up to develop linkages in the light of Prior Options, the view was expressed by some usually well-informed members that it was unlikely that there would be any privatisations other than of ADAS and the Buildings Research Establishment before the general election. Director took the decision to announce the new structure in an Office Notice issued on 1 December 1996 (Figure 9). A target date of 1 April 1997 was set for it to be fully operational.
This was the most drastic restructuring that the Survey had ever undertaken. Two Assistant Director posts were to be lost. There was a reduction in the number of groups, and therefore Group Managers, from 26 to 19. The number of Grade 6 staff, not all of whom were Group Managers, was reduced from 23 to 19.Being forced by the external pressure to downsize the management and having also to address problems that had been recognised in the current management system did not present the difficulties that might have been expected when it came to finding a coherent theme for a new structure. In contrast, however, a recurrent problem that was faced in the months of planning was how to create three programme divisions that were more or less equal in size and whose heads had responsibilities that were equitable and comparable with those of the heads of the two corporate divisions
No division was left untouched. The centralised NERC Computer Services was disbanded at the end of 1996 and the specialist teams that maintained the network and systems were disbursed to the Centre/Surveys. The decision was taken to put the twelve staff who were allocated to the BGS into Facilities Management, which was part of the Administration Division. This was the only change to that division.
International & Marketing Division was merged with the Corporate Coordination and Information Division (CCID) to form the Corporate Services and Business Development Division (CSBD), the second corporate division. The Senior Management Review did not specify which of these two divisions should lose its Assistant Director, but there was little doubt that it was more likely that International would be the victim. In the previous ten years there had been a dramatic change in the nature of work done overseas. Whereas it had once been dominated by big residential contracts overseas, by the mid-1990s Government policy changes had impacted on the BGS such that there were few residential contracts on offer in the fields that the BGS specialised in. Nearly all staff who went overseas did so on short-term contracts. The core of permanent overseas specialists had reduced to a handful and the remit of the division had changed. International marketing and contract management had become dominant over project and programme management, which had once been the mainstay of the division. In recognition of this, the post of head of International was regraded to Grade 6 and the responsibility for UK Marketing and Remote Sensing was removed from it.
Three of the groups within CCID remained unchanged. These were Training, Information Services and Publication Services. The fourth group, Information Systems, was merged with Remote Sensing (from International and Marketing Division) and Data and Digital Systems taken from TMOS Division, to make one large and powerful IT/IS unit called the Geospatial Information Systems Group. The aim of this move was to bring under single management most of the IT staff so that the problems identified in the CEST workshop and the senior staff meeting could be addressed.
The UK Business Development Group was created, under a Grade 6 manager, to coordinate the BGS marketing effort, again a point of criticism raised many times in the past two years. The Press Officer and PR staff moved into this group, which was kept small. The concept of key account managers had being raised at the CEST workshop and had been acted upon. It was agreed that earnings of around £500 000 a year from a single client should define the threshold above which a key account holder was justified for that client. Two were recognised and made responsible to the head of UK Business Development Group, but most of his staff were the sector managers.
The four programmes divisions were reduced to three, by disbanding the Groundwater and Geotechnical Surveys Division and sharing out its groups among the other divisions. The biggest of the new divisions was the Geological and Hydrogeological Surveys Division (GHS). The five Land Survey groups within Thematic Maps and Onshore Surveys Division (TMOS) were reduced to four. Hydrogeology was brought over from the disbanded GGS Division, as was the engineering geology half of the Engineering Geology and Geophysics Group. This was merged with Coastal Geology, taken from Petroleum Geology, Geophysics and Offshore Surveys Division (PGGOS).
Regional Geophysics Group acquired the geophysicists from the Engineering Geology and Geophysics Group, effectively reconstructing the Regional Geophysics Group as it was prior to 1991. The new, enlarged group was moved into PGGOS. Also in this division, Global Seismology and Geomagnetism were merged into one group. The petroleum geologists were taken out of Petroleum Geology and Basin Analysis Group and put with the marine geologists to form Petroleum and Marine Geology. The basin analysis specialists were joined with Biostratigraphy and Sedimentology Group to form Basin Analysis and Stratigraphy Group.
The third division, Minerals, Environment and Geochemical Surveys Division was formed by adding the Fluid Processes Group to the Minerals and Geochemical Surveys Division. Two groups from the old division, Geochemistry and Analytical Geochemistry, were merged to form one in the new. Lastly, the NERC Isotope Geoscience Laboratory was put into this division when it returned to BGS management in July 1997.
What emerged was a more clearly defined market-facing structure at divisional and group level than the one it replaced. But it was also a strongly discipline-based organisation. The three programme divisions very closely reflected the classic distinction between geophysics, geochemistry and geology which had characterised the structure of the Survey under Kingsley Dunham and Malcolm Brown. Most groups were predominantly single discipline, with only three specifically meant to be interdisciplinary groups. These were the Coastal and Engineering Geology, the Fluid Processes and Waste Management, and the Basin Analysis and Stratigraphy groups. The reasoning behind this was that it would increase their commercial capability.
The most important step taken to reduce conflict in one market sector was to move Regional Geophysics into PGGOS. By doing this, all the expertise in oil and gas exploration, which had been the principal source of revenue from that industry, was now concentrated in one division, but so, now, were all the geophysicists, except a small number, who were attached to the Fluid Processes and Waste Management Group. PGGOS was now, effectively, the geophysics division.
The Minerals, Environment and Geochemical Surveys Division, now that Fluid Processes and Waste Management Group and, later, the NERC Isotope Geoscience Laboratories (NIGL) had been moved into it, contained nearly all the expertise in geochemistry and became a geochemistry division. Only those geochemists specialising in water chemistry and attached to Hydrogeology Group remained outside it.
The Geological and Hydrogeological Surveys Division, with the addition of engineering geology and hydrogeology, was now in a better position to deal with land-use issues than ever TMOS was. The merger of coastal with engineering geology recognised the importance of engineering geology issues in the coastal environment.
There were anomalies. Strong arguments in favour of moving the Minerals Group into GHS and, thereby putting the capability to deal with resource issues alongside the others that related to land use, floundered partly as a result of numbers. There were similar reasons for leaving the biostratigraphers and sedimentologists in PGGOS rather than moving them into GHS Division. Despite these, however, areas of overlap had been significantly reduced at both divisional and group management levels. Whether interdivisional co-operation would increase as a result would be seen in due course.
Two other steps were taken to deal with weaknesses in the old structure. One was the creation of three high-level subcommittees of the Directorate. These were the Scientific Programmes Subcommittee, the Business Development Subcommittee and the Management Subcommittee. All three were meant to provide BGS-wide overviews of various important operations, which hitherto had become fragmented. Of the three, the Business Development Subcommittee came into action first because it was tasked to draw up the remit of the new, UK Business Development Group. The other two never met.
An external consultant was drafted in to help the Business Development Subcommittee. The two key issues that were addressed by the subcommittee were the terms of reference for the sector managers and the way that earnings targets should be handled in the new structure. Both issues were hotly argued before a conclusion was reached and it was agreed to stop the arrangement by which individual groups were set earnings targets. In its place, came staff utilisation targets, with each Group Manager being set the target of achieving 100% utilisation for all of his staff. The earnings target for the BGS was to be apportioned among the business or client sectors and the responsibility for meeting it shared by the sector managers and the Group Managers.
The most revolutionary step taken in this reorganisation was to create a matrix of IT/IS staff. The new head of Geospatial Information Systems was to be the head of the matrix. All staff whose main work was in IT/IS, regardless of their original discipline, were to become incorporated into the matrix. They would look to the head of the matrix for their career development. He was responsible for allocating them to groups and coordinating their work, particularly in fields such as database design and development and applications development which had been completely uncoordinated hitherto. Of all the new arrangements that emerged from this reorganisation, this was the most resented.
There were, in 1997, only eight members of the BGS management who had open-ended appointments. That is, their substantive grade was their current management grade. Most of the others were temporary appointments on three or five-year contracts and their substantive grades were one lower than their management grade. One manager was on contract from the outside. When temporary appointment to management grades was introduced in the late 1980s it was meant to give the Director flexibility during times of change, but also the freedom to move managers who had shown that they were not up to the job. Up to 1997 only one repeat contract had been refused. This reorganisation was the first opportunity there had been to take full advantage of the flexibility the arrangement offered. The decision was taken, therefore, with a few exceptions, to make managers compete for the new jobs. In the case of mergers, all the previous heads of groups would be expected to compete with each other for the one post that survived. With regard to the other posts, it was expected that young, ambitious Grade 7 staff would apply and compete against the current incumbents.
The reality was quite different from the theory. This device was well known to have been used in management reorganisations throughout the public service for many years and it was a feature of the private sector. There have been few occasions in recent decades when an action initiated by the Directorate caused so much resentment and bad feeling as this one. The theory patently did not work. In some cases there was no competition for an advertised post because the suitable potential applicants in the group decided, with no coercion, that they would not put themselves forward against their Group Manager. In others, where there was competition from young staff, it was not strong enough to dislodge the incumbent. The worst bad feeling was caused where two or more experienced Group Managers had to compete for merged posts. Though it is difficult to see how else the reduction in the number of posts could have been achieved, this was not an experience that anyone who took part in it wanted to have again.