UNDERSTAND IT EMBRACE IT

Commercialisation, corporatisation, privatisation; forced or voluntary mergers; demergers that separate operational responsibility from regulatory and landlord activities – all of these have been commonplace. Louise Meyrick offers some pointers on how best to manage such events.

Often, the change has been imposed on the port organisation rather than initiated by it. While each situation has presented a unique set of opportunities and challenges for port corporation employees, the experience accumulated over the last two decades provides some valuable lessons that hold true for all of the processes.

MAKE SURE THE DIRECTION AND PURPOSE OF THE CHANGE IS CLEAR Fundamental to any change process is the clarity of direction and purpose. If managers and employees do not properly understand the intention of the change or the role they might play in it, then it is unrealistic to expect them to willingly embrace it. One of the challenges faced by the Australian State Government of Victoria as the architect of the amalgamation of the Victorian Channels Authority and Melbourne Port Corporation, was helping stakeholders understand that what was being established was not merely the reunification of the two organisations nor the takeover of one of the organisations by the other. Rather it was a new corporation with a far broader trade facilitation and customer service role than either of its predecessors. Ultimately, managers, employees and other stakeholders derive their understanding of the direction and purpose of a change programme when words become action: when they can see how the changes will directly or indirectly impact on them or others around them. A practical way of doing this is to translate statements about direction and purpose into measurable, time-based objectives. As soon as the new Port of Melbourne Corporation board was installed it worked with management to do this. This move and its outcome was the turning point in translating the Government’s intentions into terms on which the managers could share agreement and could begin to take action.

LEAD THE PROCESS THROUGH A DEDICATED TRANSITION TEAM WITH ADEQUATE AUTHORITY In the absence of strong top-level leadership, the change agenda can stall, lose direction, or become captured by whoever can assume the most real power. Most ports are still owned by government, and governments need to respond to a number of stakeholders likely to have competing interests. Introducing major structural change is inherently complex and time consuming because of these competing interests and the complicated and sometimes politically sensitive legislative framework within which ports operate.

Even when the direction of the change has been clearly defined, each of the stakeholders is likely to place their own particular slant on the desired outcomes of the change, sometimes slowing down the transition, and making it an expensive, convoluted and demoralising experience for employees.

One way of stewarding the change process is to establish a board and CEO as soon as possible and charge them with the responsibility for planning and implementing the change. As soon as Adsteam/Egis knew that they were the new owners of South Australia’s ports, they installed a board and an interim manager who together implemented a new structure within six weeks. Where it is not possible to install a new board and CEO before the establishment of the new regime, it is still imperative to ensure that whoever is managing the transition has adequate authority and access to the skills and resources required to maintain the momentum of the changes through to their completion.

KEEP THE TRANSITION PERIOD AS SHORT AS POSSIBLE When business remains in a holding pattern over an extended period of transition staff become increasingly uncertain about where they might fit in the new regime. This situation makes it very difficult to manage sliding morale among staff. Memories of these experiences can stay with people for a long time and can make subsequent attempts to introduce changes more difficult.

Although the South Australia Port Corporation went to considerable lengths to look after staff in the run-up to its privatisation, the process took three years. For staff affected by the recent establishment of the Port of Melbourne Corporation, the change process was achieved reasonably quickly – in a little over a year. A transition phase much longer than this would have been unwise, as one of the prevailing fears among staff was that they were in for a repeat of the previous round of reforms that occurred in 1995. In this round the port authority functions were split through the formation of the Victorian Channels Authority and Melbourne Port Corporation. As with the South Australian experience, this process had taken three years, during which time preoccupation with the details of the impending change meant that strategic business decisions about the future of the port were put on hold, and vital trade was lost to competitors. Not surprisingly, staff found this holding pattern distracting and demoralising, and a number of them left before the new corporation was established.

DEVELOP A DETAILED PLAN FOR EMPLOYEES Although it is not always possible to provide employees with safety nets about future employment following from a restructure, it is imperative to develop clear detailed arrangements that allow managers and employees to understand the benefits and risks they face and to determine their best options.

One of the saving graces of the South Australian process was the considerable protections given to employees through a memorandum of understanding (MOU) developed between the covering unions, the AMOU and MUA, and the South Australian Government. The MOU secured employment for workers with the new employer for a short period. Those that the new employer subsequently decided did not fit into the new structure could be re-employed elsewhere within the state public service or could take a redundancy package. This arrangement provided employees with an effective safety net and gave the employer breathing space for deciding who they needed.

Even so, the Government had left the exact nature of the selection process to the new employer, and perceptions about how this ought to be played out caused temporary tension between staff and their new employer.

MAKE APPROPRIATE USE OF CONSULTATION AND PARTICIPATION In the absence of adequate timely information about where they stand, people tend to move into survival mode, which may result in unwanted departures and other actions that undermine the potential benefits of the planned change. Undoubtedly, reliable, empathetic, and timely communication with managers and employees and unions lies at the heart of an effective organisational change process. With this point in mind, relying on a professional communications specialist has almost become a given in the major port sector restructures in Australia.

What is not so obvious, however, is where to draw the line between informing staff about what has or is about to happen, seeking their views about what ought to happen or how it ought to happen, and actively involving them in decisions or actions related to important planks of the change. The prevailing practice has been to involve senior executives and middle managers of the existent regime in various think-tanks about future administrative arrangements on the premise that it is a good idea to keep them engaged and to give them a stake in the future regime. While this makes sense it can be time consuming at a time when it is important to also ensure that the port runs at full operational efficiency. The tactic also risks the change strategy being limited by status quo mindsets or undermined by views that are antipathetic to the intended objectives. One of the ways of mitigating these risks is to ensure that the rules of engagement and the limitations of participation are made clear at the outset. Another is for those with ultimate responsibility for the execution of the change to also be prepared to move quickly in addressing emergent problems.

FIVE KEY PRINCIPLES:

Know what you are doing and why Clearly assign responsibility for getting it done, and the authority to do it Plan carefully, but do it as quickly as possible Understand how what you are doing affects employees, and plan to deal with these effects Consult with and inform employees, but distinguish between consultation and control Louise Meyrick has been a corporate development consultant for 20 years. She has undertaken organisational reviews of Australian ports and has designed and assisted in the implementation of performance management systems for port companies and waterways authorities.

She has assisted bidders for port privatisation prospects with the design of appropriate organisational structures, the estimation of appropriate staffing levels and the development of transition plans. She is a member of the Board of Port Kembla Port Corporation in NSW, Australia. Louise can be reached at louise@meyrick. com. au