Change Management
May 13, 2013

Mergers and successful transitions

One important announcement in the federal government’s March 17th budget is the decision to amalgamate the Department of Foreign Affairs and International Trade (DFAIT) with the Canadian International Development Agency (CIDA) as part of Canada’s Economic Action Plan 2013. The reorganization, to be known as the Department of Foreign Affairs, Trade and Development, signals that the new department will continue to provide the same functions as those of the two antecedent organizations: CIDA and DFAIT.

The idea of a merger of DFAIT and CIDA is not a new one. In the early 1990s, Prime Minister Mulroney asked Robert de Cotret to conduct a thorough review of the organization of his government in order to modernize its operations. One of de Cotret’s recommendations was to rationalize the work of the foreign policy and international aid departments by consolidating them. When the Liberals were swept into power in 1993, instead of merging the two departments Jean Chrétien took a different approach by mandating the newly styled Minister of Foreign Affairs to “coordinate” the work of the ministers of trade and of international development.

This current amalgamation builds on the 2006 merger between the departments of foreign affairs and international trade that ultimately created synergies and enhanced policy coherence between these two portfolios. The government now believes there are similar opportunities with the development aid portfolio, especially now that development objectives are becoming more multi-faceted and often include bilateral and multilateral relationships, trade and commercial interests, and engagement with Canadian stakeholders.

According to the budget papers, the merger will:

  • Allow for greater policy coherence on priority issues to magnify the overall impact of Canadian foreign policy;
  • Maximize the effectiveness of resources available to deliver development and humanitarian assistance;
  • Improve the quality of delivering mission-critical services through the combining of knowledge, skills, and expertise;
  • Promote integration and efficiency within the government’s international engagement and development efforts;
  • Increase the government’s responsiveness to address today’s most pressing global challenges beyond the planned foreign aid program;
  • Enshrine in law the important roles and responsibilities of the minister for development and humanitarian assistance; and
  • Streamline costs by eliminating redundant planning efforts, bureaucracies and duplicated processes.

Not surprisingly, the NGO communities that rely heavily on CIDA core funding to maintain their operations have been critical of the blending of aid and foreign policies as they feel that Canada’s longstanding commitment to humanitarian aid will be sacrificed at the altar of crass foreign and trade policy concerns.

Government reorganizations are often messy and gut-wrenching experiences for those involved. In many instances, the exercise loses its way as a result of bureaucratic resistance, the lengthy implementation process, and fuzzy expected outcomes. As a result, the intended efficiencies often never materialize and the work environment becomes unproductive.

However, there is a lot of literature on mergers and reorganizations that suggest there are a number of best practices will increase the probability of success. First, start with an articulation of what the reorganization is expected to achieve in terms of goals, roles, timing, budget, controls and expected results.

Second, set deadlines and a timeframe for completing the work. Third, communicate constantly to employees, stakeholders and interested observers by providing a consistent message about expectations, progress to date and outstanding issues. Fourth, create transformation work teams from both organizations that are empowered to make decisions that are consistent with the overall organizational plan. Finally, senior management must lead by example by demonstrating a strong commitment to the amalgamation.

Unfortunately, the government has already created some confusion by not being explicit about their intentions with regards to the nature of the amalgamation. Is it a merger of two equal organizations or is it the absorption of CIDA by DFAIT? Until the configuration of the new entity is known, there will be much speculation and little accomplished.

It is also important to note that most government reorganizations take much longer to succeed largely because the commitment to the exercise is not sustained and many of the key players abandon the scene long before any concrete changes are made. Hence, the narrative and the rational for the amalgamation soon give way to petty fights over turf and career enhancement.

To succeed, the ministers and the Cabinet must maintain a long-term commitment to making this amalgamation a success in the interest of Canadians and of all those stakeholders who passionately care about the work of these departments.

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