Rethinking change: Welfare in the City of Milan

Promoting and formalizing medium-to-long-term strategic plans: this is a big part of the job description of public institutions. But when there’s a political change at the top, often strategy changes too. The real problem, though, is how to operationalize the basic principles underpinning strategic orientation: often the big-picture vision clashes with the material challenges of change management and innovation. So when contingencies happen, deliberate strategies developed by decision-makers are supplanted by implicit strategies that are (formally) not intentional; these strategies can end up looking very different than what was initially intended.

In this scenario, an ex-post assessment on the degree of implementation of a given business plan, formalized ex-ante, can provide precious clues on how to minimize major gaps between deliberate strategies and implemented actions. A “reckoning” of this kind can also serve to set a standard of best practices, and to avoid making the same mistakes in the near future. This was the motivation behind the decision in 2016 by the Welfare Department of the City of Milan to task a team of external professional consultants to evaluate the city’s strategic welfare plan, approved in 2012 and implemented from 2012 to 2015.

The 2012 Area Plan was meant to represent a break from the past, following a transfer of political power at the top of the city government that had taken place the year before. The main goal was to guarantee fairer and more inclusive welfare services, with an eye to remedying the fragmentation which had long afflicted the sector (in terms of actors, resources, and services). Intervention needed to take three main vectors, which were broken down into 23 operational actions:

• improving data collection and integrating management of information on the needs expressed by residents;
• achieving greater resource integration between the city, the Third Sector and users;
• community building by creating platforms that can connect formal and informal service providers and caregivers.
  
  

This new plan would go hand in hand with an overhaul of the Welfare Department. With the previous policy, service provision centered on different types of users (seniors, disabled people, minors, disadvantaged adults). Instead, this was replaced by a matrix structured on three intervention platforms, each offering varying degrees of assistance (residential services, home care, emergency services and serious marginalization). Coordination of access and advice was handled by professional social workers who served as case managers. The Department, in adopting this new strategy, would be able to minimize the dispersion of information and the fragmentation of procedures. This in turn would prevent the same user from simultaneously benefitting from several types of services, taking advantage of a lack of service integration.

The assessment of the plan in 2016, conducted after four years, revealed that the new organizational setup had generated favorable feedback from external stakeholders as well as personnel. Furthermore, the introduction of the plan was fairly rapid: the period of uncertainty following the change could be estimated at 8-9 months.

Although the consensus was solid as far as the overall vision, some shortfalls did surface on an operational front. Specifically, there were very few investments in internal training programs, no consistent reengineering of basic working procedures, and no quantitative targets were set. Information services also had a hard time systematically disseminating useful data for planning and control throughout the Department. In addition, selection criteria for middle management within the Welfare Department were not adequately structured, which weakened the role of intermediate-level administrators – the very people who could have acted as liaisons between top management and the operations teams in the field.

In some specific areas, implementation gaps clearly emerged. For example, a critical case was the construction of an innovative housing project for people in need of emergency accommodation, a project described as a “residential model with light social support“ (in other words, temporary public housing). The initial intention of the Welfare Department was to get the major residential service providers on board. But because of the parameters set down in the invitation to tender for the project (i.e. organizational standards and contractual requirements, investment trajectories, extraordinary maintenance), these big players opted out, judging the contractual provisions the City was offering as insufficient. So the only companies that stepped up to bid were the sector’s smaller providers, the exact opposite of what the City intended.

Overall, estimates showed that around 60% of the strategic initiatives proposed in the 2012 plan were formally adopted, while the level of actual implementation perceived by stakeholders was no more than 30%. To sum up, a positive commitment to innovation emerged at a political and managerial level, along with a general consensus in the organization in support of the approach of the new plan. But clearly apparent were some possible causes for gaps generated during the timeframe in question:

• Stakeholders may not be fully aware of the level of interdependency between the initiatives of the department and other public and private players.
  
  
• Not enough resources are invested in growing skills and competencies for change management and innovation.
• Tying in with the previous point, the process of delegating responsibility for actioning change in the organization is not very effective.
• Lastly, a “management by objectives” approach is missing, which would establish concrete, well-defined targets that can align the principles underpinning the plan and the daily work that gets done.
  
  

All these observations are food for thought for the future. The win in the 2016 municipal elections of the same political coalition as before confirmed the mandate of the basic direction mapped out for social policy. So in the second term in office, the city administration has the opportunity to focus on filling the implementation gaps, in light of the new insights gained from the 2016 assessment.

• In any organization, there’s a divergence between the strategies that are initially planned and the ones that are actually implemented. There are a number of reasons for this misalignment: competency gaps, alternative emergent strategies, and a variety external factors that can come into play.

• For public bodies, this is even more true, because myriad pressures come from different players, both inside and outside of the organization. In light of these pressures, it is vital to strike a balance between deliberate strategy, emergent strategy, and consensus (both internal and external) in support of policy-related decision.

• One of the key figures in putting deliberate strategies into practice is the middle manager. These professionals must be aware of the organization’s overall strategic vision and how to action it, while looking beyond the immediate contingencies that might crop up. To this end, promoting internal stakeholder engagement and introducing quantifiable targets and appropriate objectives are essential activities, establishing a planning and control cycle that is appropriately aligned with the attainability of these objectives.

• Methodologies can be built that allow an organization to analyze the actual level of implementation of both deliberate strategy and emergent strategies within the organization. Understanding exactly what triggers the latter is a takeoff point for identifying more effectual measures to upgrade execution and contain the fallout from implementation gaps.

• To ensure effective implementation of the actions that constitute the organization’s strategy, proper coordination and interaction among the various stakeholders involved in the process is critical. The organization, in this context, must also make serious investments in developing competencies for change management, using methods such as promoting ad hoc training activities.