Building a Culture of Trust at the National Audit Office

In: BlogDate: Aug 02, 2021By: Billy Burgess

The National Audit Office exists to inspect public expenditure on behalf of parliament. It does so by auditing accounts and analysing organisational efficiency in order to determine the extent to which the given organisation is getting value for money.

Susan Ronaldson is the NAO's Director for Engagement and Change. She was joined by Steve Mirfin, Head of Skills and Talent, at the 2017 Creating Happy Workplaces in the Public Sector Conference to speak about the measures the NAO has taken to get the best out of its people.

Read the transcript and watch the full talk below.
 

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Building a Culture of Trust at the National Audit Office

Susan: Good morning, and as Henry says, welcome to the NAO. What Stephen and I would like to do over the next half an hour or so is really - and it sounds a bit reality TV - just share a bit of a journey that we’re going on as an organisation. We want to tell you a little bit about where we’ve come from, where we’re heading to, which is summed up in this phrase “culture of trust” and some of the things we’re doing to get us from one place to the other. We’ll stop a few times on the way, so hopefully you can reflect on how our journey might relate to the organisations that you work in. Just to give you a bit of background on the NAO: I think we’re often described as the government spending watchdog but our formal role is to scrutinise public expenditure on behalf of parliament. We do that in a couple of ways: we audit accounts. 348 accounts last year covering £1.6 trillion worth of expenditure - I learnt that especially, I haven’t programmed that! - and we also did 64 other reports looking at what we could call the value for money which is how well policies are implemented, how efficient organisations are and I’m sure many of the organisations here have actually been subject to some of our work. So sorry about that! I know I’ve audited GDS, for example… That’s absolutely it.

Steven: Get that down, someone said nice words about auditors!

Susan: So that’s what we do but what we’re actually aiming to do is really two-fold. Firstly it’s about holding to account, so as it sounds it’s making sure that the accounts are accounted for correctly, but also that the money is being spent in accordance to the way that parliament intended it to be. But we don’t want to stop there. As an organisation, we don’t want to go through all the trauma that our clients go through in going through audit, we want to actually make sure that the process makes a difference so our second aim is very much about helping people to improve public services. I think it’s probably fair to say that it’s that second aim that we’re really focusing more and more on as an organisation and tackling the idea how we add value: how do we add more value? And we keep coming back to the idea that if we’re going to add more value as an organisation, we have to get the best out of our people. And that’s the best out of them as individuals for the best as how we work together as an organisation - not sure. So that’s really a bit about how we are and what we do. 

So if we’re setting up to build a culture of trust, where are we starting from. As most organisations, our culture is a reflection of the kind of work we do. Just to illustrate that, if Steve is working with me and Steve goes out to audit one of our organisations - let’s pick one which we’re about to audit: the BBC - maybe Steve is looking at expenditure on, I don’t know, sequins and glitter balls, we can’t go out to an organisation and assume that because Tess Daly and Claudia Winkleman are really nice people that they’re spending money wisely and doing things properly. Steve has to go out with a sceptical attitude and looking for errors, looking for weaknesses and looking for mistakes and even to the extent that he has to bear in mind the risk that they might be committing fraud. It means that a lot of our people are programmed, as it were, to have a sceptical attitude which makes applying trust to our own culture quite a challenge.

Also he has to go out and follow a set of rules. The 360 accounts that we audited last year has to be compiled to a set of rules and has to be audited to a set of rules. We brought a some of the manuals down: so we take a nice happy carefree guy like Steve and we give him some of these things (Corporate Governance, Financial Reporting!) this is Manual of Accounting and this is the new one, which is the Public Sector Auditing Code.

So I really still feel really happy and carefree! And really free to do my own thing!

Hopefully it illustrates the fact that our people are actually conditioned to follow rules and because there is a risk to us if we don’t follow those rules properly or dont follow auditing standards properly as we are externally inspected, it’s led to an organisation which has quite a low risk appetite with a lot of controls and a lot of processes in place. To summarise: we have an organisation where we’re conditioned to follow rules, very sceptical, very data driven and very control and process driven. What our leadership team realised over the last couple of years that all of that stuff is impacting on our ability to add value, because it’s making our culture quite a fearful one: henry talked about people celebrating mistakes earlier: we’re actually quite fearful of making mistakes and that means that we don’t have confidence in ourselves as individuals and we’re not necessarily confident in other people either, so we tend to try and solve problems and control things by micromanaging.

What we really want to do is move much more towards a trusting organisation. So what we wanted to ask you first of all, if you could think about what does trust mean for you and maybe what trust feels like for you? So if you could spend five minutes on your table: what does trust mean?

Hopefully you had some ideas on your tables but we’re not going to go round the tables because of time but we’ll probably come to you at the end. But just to give you an idea of some of the things that we felt that trust could do for us as an organisation. The first is really about, as I said, tackling that issue about people not really necessarily feeling confident. We recruit some really amazing bright people who join this office with amazing talent and they are the people who go out to the front line who are at the Cabinet Office or at the Home Office and other clients and we really need them to be coming up with ideas and to be listened to. And I think in the past we had a culture where maybe people respected hierarchy too much and people didn’t feel like they could challenge so by making people more self confident, it means that we can build on the best of everyone’s ideas. 

Collaboration is absolutely vital. One of the advantages that we have at the NAO, in fact it’s probably our unique selling point, is that we have a unique place where we can look across the whole of government. We work with something like 400 bodies and we can see the different way they’re doing it so the advantage that we can have is that we can draw best practice in one place and share it with another but that relies on people talking to each other and working together so we need people to collaborate and bring the best that every individual has to every piece of work that we do.

Promoting strengths - steve will talk about it a bit more in a moment in terms of a performance management framework - we have probably had a deficit model in the past  very focussed on what were the weaknesses that we needed to overcome. We believe that it’s now much more important to focus on people’s strengths and building on those strengths and identifying that different individuals can bring different things. And finally, around coaching. We’re moving much more to a coaching style of management, and also a coaching style of organisation so what that means we understand that different people in different roles and different grades can help people to develop and that’s something that we’ll talk more about when we talk about the way we work programme in a second.

So overall we feel that trust is vitally important if we’re going to increase our collaboration and get the best out of everyone and to be a more creative organisation, as we’re talking about celebrating mistakes, we have to let people feel that they have that room to innovate and experiment and that we trust them to do that.

STEVE: so we started slowly; a few years ago we introduced something called Learnfest, which was a week long celebration of learning where this room and four other rooms in our training suite are opened and there are hour long sessions. We invite different people to come along and if you’re in the organisation and you want to talk about something from accounting and Shakespeare to accountability and Tour de France, you can come along and do a session. People are free to come along and consume that learning development as they want to. When we first moved to the idea, directors’ first assumption was that people would go for the whole week and won’t do any work. That’s where we came from. We actually that and it was ...  (8:48) and it’s just gone from strength to strength: after three years, no one questions it now and it is something that people in the organisation look forward to. We invited Henry last year, we’ve had Janet Hughes from GDS, we’ve had some really interesting people who are coming in and doing things differently in government. Of course, as Susan said, we audit government, we need to know what you guys are doing and there aren’t very many things that are new ideas: most of the time, we just nick them! Stocklake and Walkman did that for years, and look at the success they’ve had! So that’s what we’ve tried to do, and that’s one example: we’ve started slowly but we’re getting much bigger.

Anyway, trust is vital, and I just want to share a story with you about Learnfest which shows just how important trust is. 90 events, my team were sorting out 89 of them, and I was left in charge of one, which was Henry, to sort out Henry. I was working with Henry and we had a chat about what we were going to do and got it all sorted out. Anyway on Thursday, this parcel arrived in Learnfest headquarters, and it just said ‘These are the books for today’. I looked and though, oh, I’ve got 120 people coming to see Henry tomorrow. So I’m trying to phone Henry and I’m panicking and then Gemma rung and she goes “Henry is in reception”. And you know those cartoons where you’ve got Roadrunner and Wiley the Coyote, and Roadrunner drops a big weight on his foot and then he starts going red from here to here, and steam starts coming out of his ears: that was me as I went out. I said to Henry, I’ve made a huge mistake. In the middle of reception, this lovely man just gives me a big cuddle and says “mistakes happen”. The point is that he’s trusted me today to stand in front of you and not cock it up again! I think that’s a perfect example actually of trust and that’s where we want to be!

A quick little ‘Here’s the science bit’: why do we want people to be happy and to trust each other? When you’re happy and you trust each other, you get this lovely thing called oxytocin released in the brain. It’s the love chemical: when you’re in love or you’ve got a really close bond with somebody, this is what happens. There’s been a lot of research - a recent article in the Harvard business review, in January’s edition I think, called ‘The Neuroscience of Trust’, and it says that if you get lots of oxytocin released as an organisation, you’re more productive, people have more energy, they will collaborate better naturally, they will have less stress and they’re happier with their lives. And of course, if you’re happy with your life, you’re just happy too. It’s a very similar philosophy to you guys at GDS. they’ve also done research which shows the more autonomy you give people and the more trust, the more oxytocin is released. The more oxytocin you have in your brain, the more oxytocin is released; it’s like a vicious cycle, only not vicious. Un-vicious - is that a word?! It is now! I am owning that: un-vicious is a word.

We wanted to change the culture of the organisation and because we are auditors and Susan has talked about how our brains work naturally - we should have said, we both are auditors, I was with an auditor in Manchester for many years, been in the organisation 26, so a long time - we needed to give people a model and some way of measuring things. What we did was we used a technique called the 4C model, which looks at how an organisation operates in terms of four key things which are up there: Collaborate, Create, Compete and Control. It’s a model based on Quinn and Roeborough and we knew that people would be able to focus on the model because they like it, particularly when you can then measure it because it gives people to talk about. One of the things we did: somebody earlier talked about the fact, how do you convince the leadership team, I can’t remember on what table... well you’ve all moved around anyway, somewhere over there! Anyway, how do you convince the leadership team? One of the first things we did when we got this programme in place and it took about 18 months to get it in place, we went to the leadership team and said, what culture do you want? And we asked the questions and we developed this. You can see now that the whole organisation has an understanding of where the leadership team believe we are and where the leadership team want us to go. Perhaps, because of time we might go back to these questions as we’ve got an overall question at the end which might be more valuable. It means now that when we start running this programme we have a baseline to start measuring progress. Again, auditors, we’re cynical, please can you show me this programme has worked? Yes, we can. Whilst ‘Create’ doesn’t look very big, it’s quite big, but you can see the massive one is a big reduction in ‘Control’, a big reduction in ‘Competition’ and by that, the leadership team were viewing that as competition internally, so whilst you’re supposed to be one organisation, are we really? Or if I’ve got jobs to do and Susan has jobs to do, do my jobs take precedent for me, regardless of whether Susan is auditing something more important, say like the GDS? That type of thing, what comes out.

How have we started to build trust? The first thing we did was we amended our talent management programme. I think it’s fair to say our talent management programme was very based on lots of research which is not a bad thing, but it was very theory based, very model based, and I think it played exactly to an auditor’s strengths. It was very data driven and it was very ‘head’ rather than ‘heart’. The point we decided that as an organisation, we’ve already got a lot of people that think with their heads and not their hearts, so we need to get someone in to do the talent management programme where the heart rules over the head much more. And, Henry, and Happy. They came in and they bid for the work and we made sure we had a leadership team member on that bidding panel. For us as an organisation we made an absolutely conscious effort that we knew that this would put people outside of their comfort zone but we started to roll anything else out and that our future leaders needed to get with the programme. We had some people out in the business that were already going to be speaking the language that we were trying to teach people six months ago onwards. We also changed our performance management framework - you’ve talked a little bit about how it was sort of a deficit model - we did tend to spend five minutes saying, you’re really good at this this and this, but what you really need to focus on and there was that time six months ago when you said blah blah blah and it’ll generally be about data or some sort of audit evidence that hasn’t happened. When we did some research, the feedback was often generally not about the quality of your work, it was more I would have preferred it if you’d done it my way and not the way that somebody like me might not do it; it was very microcontrolling. We have sought to really change that, move away from that, talk  much more about what strengths people were bringing, talk much more about what developments people are bringing and give people equipment to say, okay so you’ve said these are the development ideas, here are some of the things you might practically do. We’ve made it less process-oriented, and also much flexible; previously I think there were a lot more rules, there were a lot more frameworks, and an auditor mindset, when it comes to a framework, you tick all the boxes and that’s what matters, the ticking of the box, not the quality of the conversation. We’re really focusing now on the quality of the conversation.

We put that in place first, but actually in terms of how you use the performance management system, that is all coming into our ‘Way we Work’ programme and we are training people on how to use that, not as a system but as a behaviour set. I’ll talk a little more about that in a moment, but now I am going to pass over to you to talk about that Systems one...

Susan: one of the major change programmes that we’ve had in the organisation is around our back office systems, but it’s central to what we do as an organisation. We’re an organisation of 800 people so if we want to succeed and get those 800 people in the best place to deliver quality work, then as Steve said, we need those people doing work that is going to be challenging for them and developing them. We’re bringing in a new finance and people management system, and there are a couple of things I want to draw on. Firstly the way we did the project: this is blatantly stealing from GDS as our previous executive leader was a big fan of GDS, but being much more user focused. In the past we had implemented IT projects, we’d very much thought of them as IT projects and this one we started to focus much on it as it being a business change project and on it being a back office behaviour change that was needed as well. We went out and instead of imposing it, we went out and talked to people around the business and got them involved in understanding what the problem that we were trying to solve was and what their needs were as users and really trying to design a solution that was really fit for what the business would use. As we did that consultation, helping people on the journey of understanding what it was that was not just going to be solved by systems, but that it would be helped by how they did things differently. The approach to the project was very much different in the first place. As an example of one of the things that we looked at that illustrates the journey that we’re on was around our absence management. In the past if you wanted to take some annual leave, you had to have a conversation with your line manager. If they agreed that it was fine, you’d put it onto the system, a notification would be sent through to the line manager and they’d click a button to say ‘yes, I approved it’. As we were redesigning the system, we thought what a waste of time all that clicking is so as long as you have the conversation about what work you’re doing and when you’re going to deliver it, then it really doesn’t matter if someone comes along and clicks a button on the system to approve it, so we’ll get rid of all of that. It’s fair to say that when we went out to the office, there was horror! The idea that people couldn’t actually tick a box and formally approve, despite the fact we hadn’t got rid of the conversation aspect, it was so scary for our 800 auditors, it was untrue. When we tried to understand the problem, well what happens if people book some leave that they shouldn’t have booked? Well first of all, you’d be trusting them that they’re sensible adults who you send out to audit billions of pounds of expenditure, you’d think they’d know if it was a sensible time to take leave. But secondly, if someone does do something, could you not have a conversation with them and work it out and draw on the bigger points? It was one of the few things that we pushed through quite a bit of resistance; after six months we’ve had absolutely zero problems with it, so it illustrates the fact that a small thing can build a bit of trust into the way that you work and those small changes will add up to lots of bigger changes.

Steven: Now we talk about the big change! So we did it in little increments. I think one of the things that lots of government departments have tended to suffer with in the past is lots of different projects going on, firing all over the shop and not really coordinated. A few years ago we decided this is what we were going to do and we did this in this deliberate effort and in this deliberate order in order to make sure it all fitted together. The final thing we’ve started to do is something we call ‘The Way We Work programme’. Everybody in the organisation is coming on this, absolutely everybody including the leadership team and including all support people as well in this organisation. I’m a people director for our Central Cluster - go Central Cluster non-auditors!

Susan: The leadership team are going on with everyone else, they’re not having their own session.

Steven: Yes, so we mix people up as well. Our corporate services are tending to attend with other people from the business as well whilst making connections there. What we’re trying to do with this is actually help us change the culture. It’s a three year programme and it’s looking at three modules: the first one is around making sure we all understand what our own strengths are. From discussions we’ve had with our staff, it’s really amazing how many people don’t have any idea what they can bring to the party because they’ve been conditioned by this, and that sucks the living daylights out of you! Trust me, as an auditor who hasn’t naturally got preferences for that… for three years, I thought, I’m going to get the qualification and then I’m going because I hate it. Then I met a director who went, you’re different, value that difference, and be you. Don’t pretend to be professional! You know what I mean! I’m really quite good at not being professional at all! I was very lucky, but what we want to do is give everyone, wherever they’re coming from, ability to bring their strengths to the organisation.

The first module is really important because it’s about knowing yourself. We all know that learning to know yourself is the greatest love of all. We use a work style preference tool and everyone in the organisation does it. It’s a Marjorasam McCann STI diagnostic and it basically asks you a lot of questions about your work preferences. It’s very different from MBTI, Mayes Briggs, which is around you as a whole person: this is very much about how you prefer to work as a working style in the workplace. Once you’ve done that diagnostic, you are diagnosed as one of eight types with two secondary preferences. That gives people a common language to start having conversations, and what we’re teaching people is about them and then we’re also teaching people about the contracting conversation you have at the start of a piece of work. It doesn’t have to be a long thing but it might well be. In previous, it might be a conversation I might have with Susan, which might go something along the lines of: “Susan, you’ve got to do thirty payroll samples. The way I would do this payroll sample are like this, I’ve done you the schedule, I’ve told you where to go and what to do, can you do it exactly like that.” And Susan, probably even if her little brain was going, no I don’t work like that, would probably go, OK, off she go. I would also probably say ‘I’m going to check on you at 10, 12, 2, 4, and likewise throughout the rest of the week and I’ll be monitoring your milestones’. If you’re the type of person who works very flexibly and has less structure, and that’s how my brain works, it’s very tiring to work like that, but if the assumption is that she has to because I’m the manager therefore I am right, that makes it very difficult. By having these good contracting conversations, we’ve given everyone in the organisation and we’ve so far out of 830 people in the organisation - and we didn’t make this mandatory - 760 people have done the training. They’re now using this common language. So you might start the conversation, “Susan…”

Susan: Hi Steven.

Steven: Ooh that’s nice, hello! You might start this conversation, “we’re going to work together, I’m an explore-promoter, I know you’re a creator-innovator. I know we might work slightly differently but how might we work together. My natural preference is to do things like this.” And you might say that your natural preference is to do things like this, and then we can have a conversation about meeting in the middle. What we’ve done with people and something we found really powerful is that the model works on four axes. You have the level to which you’re introverted and extroverted; the level to which you’re structured and flexible; the level to which you’re analytically driven or beliefs; and then the way you use data, whether you’re creative or practical. What we do is we get people to come on the course and all to line up, and that’s a really great thing because it already shows the massive diversity we have in the organisation and some of my colleagues have been on this, the line will go - the scale is 25 to 25 - and we will have people 25 on the extrovert scale and (gestures to himself) 24.

Susan: I’m quite high.

Steven: You’re quite high, over there. You’ll also have people absolutely over this side. Very visually we are showing an incredibly diverse organisation - so it’s playing to that wider diversity angle you were talking about. I think that has helped people to then really understand that by doing that we have to meet in the middle and not defaulting to where your manager sits. I can start having the conversations and go, “Yes, I love talking to people, that’s where I get my energy as an extrovert”, but if I’m working with someone who doesn’t do that, I have to make sure I give them the space, and I have to make sure we can have conversations that allow them to vent, or say to me what might really push their buttons. Equally for the introverts, I think the introverts have found it slightly more difficult and they have to understand that actually if we try to put methods in to make it more comfortable for them, it’s part of the deal that they come forward as well: we can’t sit as an organisation say “I’m an introvert, I’m very very quiet, I won’t speak at all”, we will give you ways of doing it. It isn’t also, about that power of introvert and extrovert, that whole look at me and then introverts not being able to speak. We’ve really started people with that preference, unpacking what strengths they have, because interestingly it was a real downer, a lot of people got quite upset understanding that they were introverted because there is a perception I think perhaps in society that an introvert isn’t as valued as extroverts. There are many famous introverts, for example Mark Zuckerberg is very introverted, Christina Aguilera is very introverted as well. Those chaps in that Diiirty video - that is not introverted!

Aside from Christina Aguilera, one of the things I did want to just share is a real success story and this is the one I am most proud of. I was coaching this chap who joined the organisation, and I must admit a little bit of unconscious bias from day one, I got on with him like that because he reminded me of me when I joined and I thought, they are going to swallow you up. This is going to take every little part of what makes you special and turn you into this robot and so I’m going to try and really help you not to be that. He was being micromanaged because he’s very very flexible and the person he’s working with couldn’t have been more structured. He found it very very very difficult and this person got to stage of micro control to say that “any email you send to the client has to come past me”. He was finding it really frustrating and he wanted to leave. Anyway, the lady in question came on the training course, the training course finished at 5 o’clock and at half past 5, this chap had an email in his inbox, and it said, “Dear x, I’ve been on this course and I’m so sorry about the way I’ve been managing you over the last year. I now realise that everything I was trying to do to help get that project pushed all your wrong buttons. I realise that you also tried to tell me and I didn’t listen. So again, I just want to say I’m sorry.” And for me, I am so proud of that. I am so proud of her for having the whatever to take that and do that, I’m very proud of him for sticking at it for years and trying  to have those conversations, and now he’s out in the business and he’s using this, he’s saying this works and he’s really challenging! We really have given people that vocabulary to really have grown up conversations. Just another little tale as well, Vicky here from our facilities team, in Trading Room 3, the wheel has eight colours and there are eight pillars in Trading Room 3 so I very excitedly decide it would be really fun if we painted them the colours of the wheel. And Vicky and her lovely team transformed that room and you’ll be surprised the number of people, their first reaction as they walk into that room is “How did you get permission to do that?” “Hmm I asked!” it’s a simple thing, and again that shows the culture of the organisation. 

I guess we probably need to wrap up really now, I’ve talked a little bit more about that than I should have - I  was going to ask you a question! Henry, have we got time for a group question? OK, what actions do you think you can increase trust in your organisation? If each of you in your teams just fire things off.

Anyway, I guess we’ll stop now. Thank you very much for listening!

The NAO monitors spending to ensure it complies with parliament’s intentions, but they’re also interested in contributing to the improvement of public services. The latter has become a top priority and it all revolves around the question of how to add more value. As Susan says, this means figuring out how to get the best out of their people. 

Internally the NAO wants to cultivate a culture of trust. However, this can be difficult when so much of the work requires professional scrutiny from employees. “It means that a lot of our people are programmed, as it were, to have a sceptical attitude, which makes applying trust to our own culture quite a challenge,” she says.

Given the nature of their duties, NAO employees work in accordance with a lot of controls and formal processes. This has some inadvertent drawbacks, namely engendering a fearful culture – fear of making mistakes and feeling the brunt of micromanagement – which stymies their efforts to add value. 

This is in conflict with their desired culture of trust. To counter this, the NAO has looked at how to give employees more self-confidence, which in turn would allow them to put to advantage everyone’s best ideas. As part of this, they’ve switched from emphasising weaknesses that need rubbing out to identifying individual strengths and working to build upon them. They’re also transitioning away from micromanagement into a coaching style of management.  

Susan knows that trust is paramount in order to boost innovation and get the best out of everyone. Fear-free collaboration is vital, too: “We have to let people feel that they have that room to innovate and experiment.”

What You Will Learn in This Video

  • What the NAO did to embed a culture of trust

  • Why giving staff more self-confidence has enabled the NAO to draw out everyone’s best ideas

  • When the work is challenging and allows for employee development, the quality of the work improves

  • When people are happy and trust each other, the brain releases oxytocin

  • The more autonomy you give and trust you show people, the more oxytocin is released 

  • When oxytocin gets released in a work environment, people will be more productive and have less stress

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About Susan and Steve

Susan Ronaldson has worked at the National Audit Office since 2001. She has worked with a diverse range of clients including the Ministry of Defence, Department for International Development, Parliament and even 10 Downing Street. She became the NAO's Director for Engagement and Change in 2015. 

From 2000-2012, Steve Mirfin managed the audits of a wide variety of public sector clients, such as British Library, Royal Parks and Research Councils UK. In 2012 he moved to the Financial Audit Practice and Quality team and he is now the Head of Skills and Talent.

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