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Ministry of Finance and Planning, Jamaica

Managing Change for Improved Service Delivery InnovativelyBehavioural Insights based Institutional Design: A Ministry of Finance and Planning, Jamaica Perspective

Trudy-Ann JAMES LINTONDirector, Strategic Organisational Development Ministry of Finance and Planning, JamaicaDr Elsie LAURENCE-CHOUNOUNEDeputy Resident RepresentativeUnited Nations Development ProgrammeJamaica, Bahamas, Bermuda, Turks & Caicos and Cayman IslandsThe UNDP Innovation Facility (SHIFT) Ankara, Turkey 23 25 September 2014

11AgendaThe Jamaican Context

The MOFP Context

The Change Partnership: UNDP and MOFP Jamaica

Applying Behavioural Insights based Design Thinking to MOFP Transformation

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Largest English speaking country and 5th Largest Economy in the CaribbeanApproximately 2.7 million peopleUpper middle income statusHuman development index middle of the table of 187 countries (79 in 2011)Regional Per Capita Income: 19th Gross Domestic Product (GDP): US$11.4BAverage Real GDP Growth: 0.9% Abundant ResourcesBauxite, limestone, good quality waternatural beauty (sand, sea and sun), diverse culture, PeopleBob MarleyUsain Bolt

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Vision 2030 JamaicaJamaica the place of choice to live, work, raise families and do business.

Vision 2030 Jamaica

5The focus for the MOFP are National Goals 2 and 35

Our Reality6

Declining Ranking on Doing Business ReportDeclining ranking in Human Development Index 966

The Ministry of Finance and Planning, Jamaica: Where we are nowEconomic Reform Programme (ERP) well underwayStandby Agreement with the IMF in placeEconomic Programme Oversight Committee 7Public Financial Management Reform action planMOFP Strategic ReviewEconomic Reform Programme (ERP), an initiative designed to reduce the national debt burden, promote fiscal discipline, increase revenues, improve efficiency in its operations and the implementation of key reforms namely in the public sector, pensions and taxation.

ERP Key Components include:Tax Reform, Public Sector Transformation, Pension Reform, Debt Management, Central Treasury Management System, and Corporate Governance.

Four-year Extended Fund Facility (EFF) with International Monetary Fund (IMF):Designed to achieve a number of economic reforms aimed at creating conditions for sustained growth through significant improvements in fiscal operations, debt and competitiveness. Imposes serious expenditure restrictions on Jamaica that constrain spending even on social programmes and limit fiscal space. GoJ to accelerate the modernisation and restructuring of the Public Sector to make it leaner, more efficient, flexible, responsive and accountable, which, in turn, demands a radical restructuring of established organisations and systems, including a review of their mandates, introduction of incentives, development of an accountability framework, decentralization of authority and rationalizing the organizational culture.

MOFP Strategic Review concluded in 2013 is part and parcel of a radical restructuring of established Public Sector organisations . Strategic Review identified several challenges:Ministry not organised around creating value 22 direct reports to FSPerceptions of empire building and silo working Fragmentation of policy and research functions

Public Financial Management Plan

EPOC - comprises 11 representatives from the private and public sectors, civil society, and trade unions, who review Government reports on the progress of implementing the Memorandum of Economic and Financial Policies (MEFP)over the life of the IMFs US$958 million four-year ExtendedFund Facility (EFF), which supports the countrys Economic Reform Programme (ERP).

Its role also includes assisting in ensuringthat the agreed targets are achieved, as well as advising the public, through the media, of any concerns or developments.

The Committee monitors the implementation of Jamaicas economic reform measures.Managing Director, Christine Lagarde, called it a display of real innovation by the administration June 27 concept is indicative of multi-sectoral ownership of, and support for the programme.monitoring of the economic reform programme reform by an outside groupis something that I have never heard of, (and) that none of my staff at the IMF had heard of.welcomed the concept, pointing out that when those reforms are conducted you want complete ownership and support to be given (to the Finance Minister).This is clearly amodel, going forward, And it is one that will, from my point of view, be duplicated and encouraged in many other programmes going forward,

7MOFP Transformation Programme

Realigned Organisational StructureCustomer Centric Service OrientationHigh talent workforce in a learning organisationTechnology-enabled Improvement of Critical Business ProcessesA Centre of Excellence, 201788Rethinking Change Management9Insanity is doing the same thing over and over again and expecting different resultsIf you always do what youve always done, you will always be where youve always been

In addition to these internal staffing issues, more general/ industry risks:

challenge to implement comprehensive tax reform within the planned timeframe due to institutional capacity limitations in the MoFP, maintaining fiscal consolidation, public sector restructuring and implementation of new accountability measures over an extended period of time despite strong oppositions from the population, labour unions and public sector workers.

Whats the solution? Radical Change Management.

One Initiative: Partnering with UNDP to reap benefits of BE/BI.9UNDP ADDED VALUE10UNDPs overall mission is about bringing change. Jamaica and UNDP have partnered in these areas and have realised success. Now MOFP will seek to do the same by focusing on technical assistance to develop BE/BI capabilities across its operations and embed in its culture.

Elaborate on the process of Change Management in UNDP for the past 2 years, etc. to lead into applying BE/BI to MOFP Transformation.

UNDP technical assistance will result in the following deliverables:Culture Assessment AnalysisBusiness Process Analysis external and internalExternal focus on relationship between MOFP and citizensInternal focus on employee recruitment, engagement and motivation ( all relating to change and culture management)Design a change management strategy and planDesign a communication strategy and planDesign framework for training of staff in change management replication

End result develop MOFP as Centre of Excellence

10UNDP/MOFP Partnership11GOJ recognises UNDPs Capacity Development niche that can goes beyond training and addresses the organisations absorptive capacity and dynamic capabilities to improve institutional systems, structures and processes to increase performance, stability and adaptability.

MOFP has sought UNDPs support for technical assistance in change and culture management capacity development of the Ministry.

UNDP researched the best technical expertise on change management using BI

Better understanding culture assessments and clear identification of technical and administrative areas of operations that can benefit from behavioural insights to influence change instrument design.

11Value Proposition of UNDP/MOFP Partnership12Value Proposition of UNDP Jamaicas /MOFP PartnershipUNDP Jamaica is planning to provide technical assistance in the design and implementation of a strategic behavioural change management programme based on behavioural insights and design- thinking, to improve service delivery in the Ministry of Finance and Planning.

SIDs Small Island Developing States

It is atypical for UNDP to work in such a close partnership with the Ministry of Finance; it provides opportunities to replicate this model in other countries including through south-south cooperation and in line with UNDPs recent HDR - Sustaining Human Progress: Reducing Vulnerabilities and Building Resilience.It will allow us to walk the talk of HDR recommendations while providing a precedence to change the way UNDP conducts business worldwide.This is critical to advance UNDPs mandate in Jamaica, increase UNDPs ability to deliver and anticipated to enable the implementation and funding of pertinent projects and programmes aligned to its strategic priorities including exploring options for UNDP to directly facilitate delivery of grant funded projects for the Government, where possible. Issues linked to fiscal space constraints continue to impact service delivery at various Ministries and adversely affect delivery of social programmes, including that of UNDP that in turn lead to increased social fragmentation and crime. Partnering the Ministry of Finance in this important endeavour is a significant accomplishment for UNDP, as it will enable us to transform programme delivery while becoming an integral actor in the field thus far dominated by the Banks and IMF. The time is ripe for UNDP to nudge itself at this transformational level that while significantly enhancing its visibility aims to create an excellent value proposition for change implementation for the Government. In addition to reducing operational expenditure of the MoFP, the Transformational Programme will also enhance revenues received by the Government through the application of behavioural insights to tax collection and compliance.

12Change Management Predicting Human BehaviourTRADITIONAL VIEW OF HUMAN BEHAVIOUR However, this Perspective Fails To Explain And Predict A Large Proportion Of Behaviour And Decisions.1313Introducing Behavioural Economics /Behavioural Insights to change management

http://www.youtube.com/watch?v=XH_Bzxp8-dA&sns=em14The hallmarks of the Behavioural Insights Team's methodology:

Applying policy interventions informed by the growing body of behavioural research, together with rigorous testing and trialing based on a rich understanding of the context in which a policy is being delivered.

BIT Team out of the UK Prime Ministers Office.

Draw on insights from behavioural sciences to gain a deeper understanding of how people behave in reality rather than how economists and policy makers think they will Then design and implement interventions to encourage or discourage certain behaviours and empirically test the impact of those interventions usually using Randomised Controlled Trials

Designed a series of trials to decrease absenteeism and increase productivity using behavioural insights and non-monetary incentives.

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What is Behavioural Economics (BE)/Behavioural Insights (BI)?NormsDefaultsSaliencePrimingIncentivesAffectCommitmentsEgoMessengerInfluencing Behaviour The MINDSPACE Way15Influencing Behaviour - The MINDSPACE way

The usual route to behaviour change in economics and psychology has been to attempt to 'change minds' by influencing the way people think through information and incentives. There is however, increasing evidence to suggest that 'changing contexts' by influencing the environments within which people act (in largely automatic ways) can have important effects on behaviour.

The acronym MINDSPACE looks at 9 of the most robust effects that influence our behaviour in mostly automatic (rather than deliberate) ways. In other words, thinking about the effects on our behaviour that result from contextual rather than cognitive influences.M -Messenger: We are heavily influenced by who communicates information to us

I - Incentives: Our responses to incentives are shaped by predictable mental shortcuts such as strongly avoiding lossesN-Norms: We are strongly influenced by what others do

D-Defaults: We 'go with the flow' of pre-set options

S-Salience: Our attention is drawn to what is novel and seems relevant to us

P-Priming: Our acts are often influenced by sub-conscious cues

A-Affect: Our emotional associations can powerfully shape our actions

C-Commitments: We seek to be consistent with our public promises, and reciprocate acts

E-Ego: We act in ways that make us feel better about ourselves

15Applying BE/BI: Practical InsightsTo encourage behaviour change, make it EAST:Easy, Attractive, Social and Timely.

'Change Minds by Changing Contexts' Easy AttractiveSocialTimely16If you want to encourage a behaviour, make it Easy, Attractive, Social and Timely (EAST)

1. MAKE IT EASYHarness the power of defaults Reduce the 'hassle factor' of taking up a service Simplify messages

2. MAKE IT ATTRACTIVEAttract attention Design rewards and sanctions for maximum effect The use of lotteriesFocusing on the scarcity of a product or service. Drawing attention to self-image. 'Gamifying' activities

3. MAKE IT SOCIALShow that most people perform the desired behaviour Use the power of networks Encourage people to make a commitment to others

4. MAKE IT TIMELYPrompt people when they are likely to be most receptive Consider the immediate costs and benefits Help people plan their response to events

Applied BE/BI - KEY POINTS:DEFINE THE OUTCOME - Identify exactly what behaviour is to be influenced. Consider how this can be measured reliably and efficiently. The important thing is to ask constantly: what change are we trying to achieve?

UNDERSTAND THE CONTEXT - Visit the situations and people involved in the behaviour and understand the context from their perspective. Use this opportunity to develop new insights and design sensitive and feasible interventions.

BUILD YOUR INTERVENTION - Use the EAST framework to generate your behavioural insights as well as MINDSPACE which is a summary of a range of behavioural effects. The experience of building the intervention may lead you to reconsider the feasibility of the outcomes defined.

TEST, LEARN, ADAPT Put interventions into practice so its effects can be reliably measured.

By enabling us to demonstrate just how well a policy is working, RCTs can save money in the long term - they are a powerful tool to help policy makers and practitioners decide which of several policies is the most cost-effective, and also which interventions are not as effective as might have been supposed. Doing this is especially important in times of shrinking public sector budgets.

16Applied BE/BI: Practical Insights in Context1717Linking BE/BI to Public Administration

BE/BI: An Invaluable ToolKey insights into the psychology of behaviour motivations

Low cost/ low pain option for curbing or motivating behaviour1818Applied BE/BI and Design Thinking19MoFP regulates and monitors public policy relating to the management of public finance

BE Techniques can be applied to increase success levels in the following areas:Productivity and performance of the MoFPEmployee EngagementTransformation of the MoFP to A Centre of Excellence by 2017Activities associated with increasing compliance with fiscal and financial management rulesTax Compliance Management

Design thinking is a blend of empathy, creativity and rationalization and aims to develop technologically feasible solutions that match peoples needs. It is an approach that allows solving multi-dimensional problems, letting individuals and organizations to improve their problem-solving capacity. Empathy defines comprehension of the user need and/or the context of the problem for which a solution is being sought. Creativity is the basis of potential solutions encouraging stepping outside of the obvious. Rationalization leads the development of a physical response to the problem after analysis of the various solutions.

The Capacity Building component of the Transformation Programme will focus on building capacity of the MOFP for Change and Culture Management with the ultimate vision of becoming a High Performing Organisation and by extension a Centre of Excellence. This will include, but not be limited to, the development of appropriate training programmes targeting MOFP staff at all levels particularly in change management. This Component should lead to an improved understanding of the needs and behaviour of employees transitioning within macro-level organisational change and to promote transformation programme activities across MOFP. It should also lead to the development of an action plan to promote the Centre of Excellence ethos through the provision of training sessions and other interventions on leadership management, values, governance and marketing, and activities (such as networking, and mentoring), as well as stakeholder and client sensitisation sessions.

19Design-thinking model (adapted from Stanford art institute)20) Empathize (for example by undertaking of a Culture Assessment to understand the situation and the experience of the Ministrys staff);2) Define (for example by identifying technical and administrative areas of operations where behavioural insights can be applied);3) Ideate (for example by exploring possible solutions in the development and implementation of the change management plan);4) Prototype (for example by transforming the ideas generated to an actual change management strategy and plan);5) Test (for example by trying out in MoFP change management tools and ICT products that are refined through feedback and observations and replicated to other Ministries).

20Applying design-thinking through be/bi 21EmpathizeDefineIdeatePrototypeTestRefine/replicateIn particular, the following activities will be executed under this project and in line with the design-thinking model (advocated by the Stanford Arts Institute):1.Conduct Culture Assessment;2.Identify and recommend technical and administrative areas of operations where behavioural insights can be quickly applied;3.Develop and implement Change Management Strategy and Plan;a)4.Develop and implement Communication Strategy and Plan;5.Develop a framework that will facilitate the implementation of the Change Management programme to other public bodies;6.Build the capacity of MOFP staff and selected persons to enable them to replicate the programme to other public bodies.

21Applied BE/BI in the MOFP Transformation ProgrammeValue Added to ...22Value to be accrued to our three VIP Publics.22

BE/BI Applied Intervention Success @ MOFPBE/BI Model for Jamaican Public Sector RenewalUNDP Model for similar Public Sector Interventions in SIDS and MICS 23Success @ MOFPBE/BI Model for Public Sector TransformationUNDP Model for similar Public Sector Interventions in SIDS and MICS

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Nonetheless, change is constant, and we must all find a way to transition, cope and reflect if we are to survive as an organisation. To change is difficult; not changing is fatal.

Lewins Unfreeze-Change-Refreeze analogy.

Internal Transitions PROSCI perspective24In closing

When was the last time you did something for the first time?

Author Unknown25Old ways wont open new doors

Author Unknown

EITHER THIS OR THE PREVIOUS SLIDE.

25Dont Worry About a ThingBob MarleyExodus, track 91977Reggae180019.55null233314.55