Adapting a Public Sector Agency to New Challenges

Solid economic growth in recent years led an Asian government treasury agency to reform its overall role and rethink its organizational set-up and required capabilities for the future. With BCG’s support, the agency is now well on its way to achieving an organizationwide transformation.

The treasury agency, which distributes and monitors public resources, needed to transform itself in order to take on new challenges and play a more strategic role as the country’s economy grew. The country was especially in need of strengthening its fiscal position, while at the same time facing increased complexity due to an evolving market environment and increasingly more demanding stakeholders.

To successfully navigate these changes, the treasury agency needed to strengthen its focus on key functions and on overseeing the management of public sector revenue, budget, investments, and government procurement. This required the treasury agency to establish a set of overarching fiscal management and discipline processes, and to optimize the organization to improve its effectiveness.

BCG was asked to advise and support the treasury agency’s transformation and drive change management efforts to ensure that the effort took hold throughout the organization—in the near term and long term.

The BCG Approach

The team began by streamlining and restructuring the organization to focus on its strategic and advisory role. This involved:

  • Establishing a clear view of key roles within the treasury agency and ensuring there was no duplication of functions across divisions
  • Grouping interdependent and similar skill sets to increase collaboration and teaming
  • Identifying required skills and capabilities going forward
  • Mapping key activities and identifying opportunities to streamline, outsource, or eliminate—especially for activities with extensive external engagement such as in government procurement
  • Reducing resource and time allocation for those activities that add little or no value
  • Enhancing the role of technology to deliver on key activities
  • Enhancing stakeholder relationships by strengthening single-point relationships

The changes created a more efficient organizational structure, but they also caused some upheaval for employees. To ensure that the new processes were accepted and embraced throughout the organization, a strong change management program was essential.

The change management program, developed by BCG, targeted long-lasting results by following four steps:

  • Awareness. Personnel needed to understand and get excited about the transformation and its benefits. Informational materials updated progress and achievements, as did widespread publicity and communication efforts using posters, banners, and desktop pop-ups.
  • Engagement. Staff members were given opportunities to actively participate in the transformation initiative and share their ideas. Activities included an “Aspiration Day,” at which all divisions formally shared their perspectives, a leadership workshop to brainstorm ideas, and a global expert series to provide outside-in views.
  • Enablement. Employees were equipped with the skills and knowledge they needed to do their jobs effectively. Initiatives included on-the-job coaching and mentoring; on-the-ground communication; division-specific workshops; and training on communication, presence, and change management tools. These programs were rated as highly relevant and useful by 97% of participants.
  • Ownership. To ensure the transformation is sustainable over the long term, the treasury agency’s staff are driving efforts and leading their own transformation. Change champions in each division and informal coffee-chat sessions create opportunities for open conversations with agency leadership.

Signs of Success

The transformation of the treasury agency has delivered successful results to date. From the efforts and teamwork with BCG, the treasury agency has realized the following benefits:

  • The organization’s structure is more focused on strategy and policy roles and has significantly fewer overlaps across functions.
  • A fiscal policy office has been formally set up to formulate fiscal strategy and enforce discipline across the government.
  • There is increased process efficiency within specific divisions, including enhanced tax-related processes and streamlined HR activities through delegation of authority.
  • The treasury agency team driving the transformation is now fully familiar with a robust change management program that will ensure a successful long-term transformation.