Hansard

In essence, I want to outline the context and the process of change, which is being managed with the sense of urgency that we all agree is necessary.

I will start by giving a quick reminder of the aims of my operational review—an exercise that was undertaken as a matter of some urgency and which was completed within four or five weeks. We wanted to identify the problems and, more importantly, get behind them to discover their causes so that we had the knowledge and understanding that would ensure that when we proposed improvements and changes, they would be based on as much reasoning as could be assembled within the time.

The scope of the exercise was such that we had to look at the organisation as a whole. It was not sufficient to conclude that, because the evidence pointed to a problem with data management, it was an issue merely of process and how we conducted our business. It was clear that there were structural issues to do with the way in which staff and the organisation's other resources were deployed. Most critically, there were—as one would find in any organisation—behavioural and cultural issues that needed to be faced so that changes could be made.

Our clear imperative is the need to deliver successfully next year. Therefore, the key is not simply to improve the processes and think that all will be well. It is clear—to put it bluntly—that new processes will not run on old structures. It is important to consider changes and to manage them across three areas—processes, structures and behaviours—sensitively and effectively.

I will summarise the findings of the review with two slides that indicate the considerable range of issues that the review raised. The list could be construed, as it has been, as a catalogue of horror—a litany of problems—at the centre of which were the failure under pressure of the data management elements of the process and the undue pressure that was placed on the staff within the structure that dealt with data management. However, I prefer to consider the list more constructively—as an agenda for the areas in which there needs to be change.

The SQA is going into this review process openly and honestly. That is why, in my previous evidence to the committee and in the presentations that I have given to staff and to the board, I have been open and have given a complete overview of what I believe the issues to be. We cannot delude ourselves by thinking that in certain areas the situation is not so bad. We have examined the situation in the cold light of day and the list shows the areas where something needs to be done. I will draw members' attention to one or two of them.

Leadership and management failings were manifest throughout, but primarily in the failure to scope effectively the scale of this year's task and to plan, prepare and communicate. Alongside that, an assessment of risk would have indicated what could go wrong. The absence of effective contingency planning meant that, unlike in the year ahead, much of the resolution of problems was attempted on an ad hoc basis.

Checks and balances have been mentioned. There is a need to ensure that everything is all right before moving on to the next stage. That is a lesson that I had hoped the organisation had learned at corporate level, but our experience during the past 24 hours suggests that there is perhaps more evidence in support of the suggestion that it needs to do that.

I have not mentioned the structure, because I intend to go into that in greater detail in a moment.

Slide 3 shows more of the issues that relate to processes, structures and behaviours. It is clear that, in certain crucial areas of the organisation, there was no sharing of knowledge or the sort of investment in training and development that should have been in place. If a member of staff was not available, for whatever reason, to play their part in a process or sequence of events, the process tended to fall into jeopardy. That is not acceptable to our organisation or to the business in which we are involved.

We operate on a split site, about which I shall say more. In my view, the SQA is not yet the organisation that it ought to be, nor has it that potential. In a sense, it is constrained by the heritage of the Scottish Vocational Education Council and the Scottish Examination Board. Some of the cultural issues that emanate from that heritage—which we must deal with—have been reinforced by the fact that the SQA operates over at least two main sites.

However, the biggest issue in relation to changing behaviours—which must be reinforced at every turn—is that the organisation must lose its internal view of itself. It must realise that it has to meet the needs and expectations of others and it must have a truly effective customer focus.

I am being a little absolute in some of my comments and I do not want members to get the impression that everything in the SQA is worthy of such criticism, because that is not the case. There is much good within the organisation on which to build. Despite the problems in the SQA's recent history, it still intends to deliver—to a high standard—much of its work, although it would be wrong to pretend that serious underlying issues could not threaten that.

I believe that the problems that we encountered in our review are serious, but that all can be fixed. Some can be fixed by doing things differently and others by doing altogether different things—we will have to replace parts of the organisation. That is a big challenge, but I believe that significant progress has been made in the two to three months during which I have been at the SQA. However, we have not made enough progress in meeting others' needs or in our performance—I understand that point.

On some of the improvements and changes that are in place, our first priorities were to produce complete and correct results and to accommodate and manage the appeals process. However, we managed to accommodate that process better than we managed to manage it, given that 196 appeals out of 40,800 remain unresolved.

It is important that the committee understands that the SQA's business is wider than its main focus, which is on national qualifications. About two thirds of the business that is measured by flow of candidates is vocational. It is also important that the committee understands the continuing value of lifelong learning and the marriage between vocational and academic learning. The SQA holds that to be a fundamental principle, but there is a risk that that principle has been compromised.

I take this opportunity to thank publicly our candidates and our partners in the vocational side of our business for their patience and tolerance while the situation has unfolded, and while the SQA has focused on solving the main problems.

We have strengthened our management by introducing account management as a demonstration model and, more importantly, as a new way of working. Schools and colleges—our centres—have complained justifiably that the SQA did not listen properly and did not provide the right information on time. Account managers will improve on that situation progressively—they will be the main conduit or point of contact between the SQA and the centres. As a result of that way of working, we are starting to pick up valuable intelligence about exactly what our customers need and expect from us.

I said that we had 18 hours to plan for certification 2001—that was an exaggeration, but it gives a sense of the pace, rather than the haste, at which we have to move. That time is under way.

Improvements and changes will include, wherever possible, rationalisation and simplification of the processes. The SQA has inherited the way in which things work and there is a certain loyalty to many of the processes that have been inherited from SCOTVEC or from the SEB. Some of those processes, because of habit and repute, are still with us. Many of the processes have to be interrogated to examine whether they are the best way of getting from where we are to where we need to be.

Perhaps the best example of that is the critical element of identifying the number of markers that we will require next year and how we will go about recruiting them. An example of how a process can be compounded or confounded by the structure is that five individual units in the SQA's current structure are involved in that task. I see no need for that—we need a much straighter path to achieve what we want to achieve and to meet people's expectations. There are clearly issues that need to be reflected in the way in which we proceed with that task next year, which will be based on the learning experiences from this year.

I will say more about my view that the organisation is not structured according to its core business. I can only conclude—this might seem slightly unjust, but I think that it is a fact—that the organisation's current structure is the product of a compromise between the two organisations that existed previously. I have been sending a strong message around the organisation that the new body is the SQA and the other organisations are no part in it—they no longer exist. That is a wake-up call or a reminder to the staff, which should allow them to move forward. That is an important aspect of the SQA's culture.

It is self-evident that strengthening customer and partner focus is a primary need. We must invest in people—I mean that in the truest sense. That is not to say that the SQA has not considered training and development issues or how people's skills and knowledge are deployed in the organisation. However, we need to involve staff and their knowledge more in how we plan for the future. Certainly we need to invest more in ensuring that we have the right numbers, capacity and capabilities of staff when and where they are needed. That relates clearly to the heavy burden that the operations group faced last year and which it must still face. The group that dealt with data management also deals with the correction of results, appeals and preparation for data collection next year. If the bulk of the work in those critical areas tends to fall on the same people time and again, that suggests that the organisation—which employs 560 people—is not properly disposed for what it needs to do.

It behoves the management of any organisation to consider issues such as having a single site. I emphasise that I am not saying that a conclusion has been reached that a single site is inevitable, but there are obviously communication problems. There are also cost and value-for-money issues that are associated with having a number of separate locations. Efficiency and effectiveness issues must again be addressed bravely, openly and honestly. We must compare the advantages and disadvantages of what we have against any alternative. One alternative would be to locate the organisation in one place.

I turn now to where we are in relation to plans for 2001. This is linked to the issue of obtaining the reference data to ensure, for example, that a centre has approval to offer a particular course in the qualifications portfolio.

More important, we need to get the registration and entry data correct this time. Many problems flowed from the fact that we failed to do that last year. That had a knock-on effect on moderation and the recruitment of markers. Instead of hurrying, we have tried to get it right. I know that there was concern about the fact that guidance went out to centres later this year. In the circumstances, that was perhaps unavoidable. However, it would have been better if we had listened to what people were telling us last year and tried to accommodate as much of that as possible. This year we have tried to ensure that the centres with whom the data originate will have the opportunity to check that the data that we hold on their behalf are complete and accurate. Last year some problems stemmed from the fact that that facility was not available to centres and that they were not aware that there were problems with the information that we held on their behalf. We are trying to simplify the process and to make it possible for centres to check data, so that they can be assured that information is complete and accurate.

The internal assessment target is the subject of consultation—I know that there are a number of views on that. We are trying to find the best way of collecting information on the internally assessed units prior to adding the externally assessed component just before results are processed. This is very much about giving centres the right and responsibility to verify the information that we hold on their behalf. Members will see that a number of the checks and balances that should have been in place last year are now being installed to ensure data confirmation by centres.

There are a variety of views on the examination timetable, which has been the subject of consultation. It appears that it would be counterproductive to move or extend the timetable. In consultation with centres, we have tried to alter the constituent elements of the timetable to take pressure off centres and candidates. We await a final resolution of that issue.

The next point relates to changed ways of working and new behaviours. Instead of continuing with our previous method of appointing markers and moderators, we have nominated one accountable project manager to deal with that. It is his responsibility to ensure that the appointments process is conducted properly and he will account to the senior management team for that. Because of the issues that relate to capacity and capability, it is important to simplify the processes within operations as much as possible. We must ensure that the additional staff and training and development that are required in this area—about which we are acutely sensitive—are put in place very quickly in preparation for next year.

Internal communications are a problem and a challenge for us. I spent yesterday giving this presentation to all the staff at the SQA, because I believed that they had a right to see it even before the committee did. However, it is clear that our external communications are not what they should be, as witnessed by the difficulties in public relations management yesterday. That issue is being examined and improvements are being made progressively.

The next part of my presentation excited most interest from staff. At present, we have a compromise between two previous organisations, which are involved in a merger that is a long way short of complete. Although the structure of 21 units looks devolved, it is in fact disaggregated, as many of those units have their own sovereignty. That is not a criticism, but the structure does not seem the best way of organising the SQA to allow it to carry out its functions.

We will adhere to three important principles. First, the SQA must realign itself to meet the needs and expectations of those whom we serve and to whom we provide qualifications and assessment services.

Secondly, we must adopt a much more corporate approach, an element of which—in terms of behavioural change—is collective responsibility. Although that does not need to be introduced as such, it certainly needs to be consolidated and expanded. However, the corporate approach means that the senior management team collectively with the board must provide the organisation with a clear and consistent strategic direction to allow the board to meet the expectations that are placed on it. Furthermore, it means that there is a difference between developing the organisation's business and running it.

Thirdly, we must introduce greater flexibility. The unit structure is one constraint but, from what I have seen so far, I believe that the organisation contains the necessary skills and knowledge to perform at a much higher level and indeed to fulfil its promise and potential. In many instances, staff are in the wrong place at the wrong time doing the wrong things. Such issues must be resolved, which entails having a much more flexible approach where staff can move more freely according to changes in our market—if I may use that term—which will allow us to respond to those changes effectively and quickly. The current structure is a constraint on that.

Perhaps this is a Freudian slip, but the phrase missing from the next slide is "Senior Management Team". The senior management team will work with the board. The slide shows how the senior management team and the board see the SQA's structure around the turn of the year. The organisation will be realigned to its core business, which is qualifications development and qualifications assessment and awards. We need to identify and focus on what activities contribute to each of those aspects. It is important that the corporate services that run across the organisation can do that effectively. For example, information technology services are locked into a relationship with operations; however, the whole organisation needs effective IT support, which I will speak about later in relation to our need to be better prepared for e-business. An organisation can make such preparations if it has a narrower focus on some of the key facilities, which should be much more corporate.

Although accreditation is an aspect of the organisation's work, in some senses that risks isolation, because a conflict of interest requires to be managed. As the SQA is an accredited organisation, we need some distance. However, there is a price to be paid for that, as I will explain.

As I said, we will be moving to this model by the turn of the year. It is designed to be sufficiently bold to ensure that the necessary process changes work. However, the danger that I have encountered many times before is that we might be more cautious about those process changes that might meet resistance.

We now get back to curing what should really have been prevented. I believe that the set-up of the SQA board and senior management team as shown on slide 8 is what is required. It sends some clear signals and will help to change behaviours for the better. For example, I made it clear to the staff that the fact that we had 21 units was part of the history of the organisation. In the short term, however, a lot of the activities will still be recognisable in terms of the groups of people involved. We cannot risk having too much disruption at a critical stage in the work of the organisation, which will be the next nine months to a year.

At stage 2, the senior management team is retained. If there is a family of activity around how we deliver our services—we could, in a business model, talk about near-market and far-market activities, although I do not think that such phraseology is appropriate for the SQA—and if this is where we deliver, it makes sense for the family of activity to include everything that we do in qualifications.

About this time next year, everything that we do with qualifications, including how we deliver directly to our centres and to our candidates, will come under one senior management responsibility and will be within the one family of activity. Qualifications and assessment development will sit alongside the quality assurance of effective certification.

What we have done on incremental policy developments and on the development of new qualifications and means of assessment will effectively be addressed through a proper approach to strategic planning. That will mean that the organisation has a view on what it needs to do and on how it needs to position itself, perhaps three to five years hence, rather than within the short-term horizons that tend to be set annually. That would engender an effective planning process, benchmarked against best practice wherever it is to be found. The long-term objective is not to make good the damage that has been done or even to come alongside any competitor organisations; it is to move towards and aspire to something that suggests that the SQA delivers its promise—to be the best qualifications organisation.

That will mean that we will have not only to do things differently, but to do different things. Some things that the SQA does will have to be abandoned on a reasoned basis because they are not adding value to meeting our core business, but still taking up a lot of resources. We need to think ahead and develop new types of qualification, perhaps including new means of assessment. It does not take much wit and wisdom to suggest that a lot of the assessment could, not far down the line, be web enabled. Some organisations in the same business world as the SQA are already going down that path. The SQA is not. That reinforces the point that the IT resources need to be more than just the focus of data management. We need to start to think in terms of the bigger picture, as appropriate to the method, rate and scale of the change in our field of activity.

Any organisation in the public sector, particularly in following the principles of the Turnbull report, needs to pay explicit attention to management information and to the identification and assessment of risk, alongside effective internal audit. To me, internal audit means finding out how we do things now so that they can be made better through a greater understanding of strategy and planning. The SQA perhaps needs that more than most similar organisations.

We maintain a distance with accreditation, as is necessary. However, accreditation is also a tremendous source of knowledge about what is required. It is important that accreditation can feed into our strategy and planning focus, which will be more established by this time next year, without any conflict of interest

By this time next year, corporate services will be an awful lot stronger, which will have a cementing effect across the whole organisation. What interested the staff most was the fact that the 21 units and 21 unit managers—part of a rigid hierarchy in an organisation that is still too fond of status, process and procedure for its own good if it wants to become more flexible and responsive—will be replaced by six networked general managers. Earlier, I spoke about a corporate approach. If the board and the senior management team develop the business and provide clear strategic direction using effective best-practice corporate governance, the general managers working with staff, stakeholders, partners and customers will ensure that the organisation runs on the basis of a corporate approach.