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Through a transformation program, a housing agency improves both performance and morale

In response to increased demand for its services, a government agency transformed its organization—resulting in better operational performance and higher levels of employee engagement.

Challenge

Following the global financial crisis, a national housing agency experienced a steep increase in demand for its services. The number of in-process applications tripled, cycle times increased considerably, and the agency's employees felt overworked and demoralized.

Agency leaders turned to McKinsey for help in undertaking a transformational-change program. The primary goals of the program were to improve the agency's operational performance and raise employee morale.

Discovery

The McKinsey team helped the client design and launch a transformational-change program, structured according to the "five frames" approach: aspire, assess, architect, act, and advance. Specific activities in each stage of the program included the following:

  1. Aspire: Develop a vision for the transformation that reinforced the agency's mission; create and execute a communications plan, including "change story" that would be disseminated and used at all levels of the organization.
  2. Assess: Conduct a comprehensive diagnostic of the agency's service operations (including, for example, analyses of hand-offs and cycle times); identify opportunities for improvement through data analysis, employee and customer interviews, and visits to three field offices.
  3. Architect: Partner with frontline employees to design, test, and refine solutions to increase efficiency and effectiveness.
  4. Act: Establish an implementation plan for a national rollout of solutions, including sequencing, timing, and resource requirements; develop a playbook to support field offices during implementation.
  5. Advance: Design and implement a performance-management system, including a dashboard and a structured process for performance dialogues; develop the skills of frontline employees, supervisors, and managers through formal training sessions and day-to-day coaching.

Throughout the project, the McKinsey team worked closely with frontline agency employees. In particular, the team made sure to solicit the input of the longest-tenured employees on program design and to incorporate their suggestions. In this way, the team gained employees' trust and support for the effort. The team also organized "visioning" sessions with top leadership—workshops in which agency leaders visualized and planned how the agency would change—to ensure they felt they owned the program and were committed to its success.

Impact

The transformation program quickly brought about a productivity increase of 55 percent, motivating the agency to roll out the program to 48 of its regional offices. But the results go beyond pure numbers. One agency director remarked, "The biggest impact is that this place just feels so different. It feels less stressful. As managers, we are engaging the staff very differently."

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