Cordia LLP: Service reform in the public sector case study

Please explain the cultural web for Power and Rituals.

CASE STUDY Cordia LLP: service reform in the public sector David Potter and Gerry Johnson Throughout the world governments - central and local - are wrestling with how to manage increasingly pressured budgets, increase efficiency and improve quality of services. Glasgow City Council in Scotland has made structural changes to its services that are amongst the most radical in local government. Cordia is the result of one such change. Previously Cordia was a Council department. In 2009 Direct and Care became a Limited Liability Partnership ILLP) with the remit to develop its services as a business operating at 'arm's length from the Council. But what would be involved in developing and implementing a strategy to deliver the benefits of such a change? Introduction Direct and Care Services (DACS) was a department of Glasgow City Council. It provided school catering, home care services and facilities management to other depart- ments of the council and more prestigious catering services to public and private sector customers through Encore Hospitality Services. The department had been led by Fergus Chambers as Executive Director. Changes were triggered when, in 2008, Glasgow City Council settled an equal pay dispute which resulted in manual pay rates for DACS employees increasing by an average of 20 per cent Fergus explained: Source: Brendan Murphy Card by the Council and we still have politicians on the Board So the Council still controls the strategic direction. The overall beneficiary is, of course, ako the Council. If we generate profits they will either be re-invested or given back to the Council. But as a LLP we can trade as an independent company. We are no longer bound by Council niles and regulations. Our predominantly female workers were graded at the same level as the predominantly male workers in other Council departments. But in many of those departments the male manual stall got bonuses and therefore we were open to pay disputes, we were not equal pay proof. We had to compensate staff over the last 5 years. We ako had to develop a new pay and grading structure for the future. I have to break even over a 3 year rolling period, so the Council decided that if we did not improve upon our competitive position they may have to con- sider other models for some of the services we offered The favoured solution was a limited liability partnership (LLP). That means that as an LLP we would start on day one with a clean bill of health financially and it would give us a chance to improve efficiency over time. It would give us breathing space. We would not have to face an immediate competitive position. So we were established as an LLP. 99.9 per cent of the LLP is owned by the Council: the balance is owned by a company that is also owned In 2009 the department and all 9000 employees were transfered from the Council to Cordia (LLP), Fergus was appointed as Managing Director of the new business. Organisational structure and culture The new business inherited disparate service divisions from its former status as a council department. In 2009 these remained unaltered as Fergus held the view that the classic division of labour by service type was the most efficient way to organise the affairs of the LLP. Also he did not want to fundamentally alter management arrangements This case was prepared by David Potter and Gerry Johnson. It is intended as a basis for class discussion and not as an illustration of good or bad practice. David Potter and Gerry Johnson 2010. Not to be reproduced or quoted without permission. 614 CORDIA LLP Figure 1 Cordia's organisational structure Managing Director Operations Director Director of Finance Head of People Development Head of ICT and Marketing Head of Commercial Strategy Heads of Operations x 2 Head of Finance Facilities Care Man Payroll Accounts at such an early stage. The organisational structure for Cordia LLP) is shown in Figure 1. Under this structure. Cordia (LLP) has three opera- tional service arms: Encore Hospitality Services, Facilities Management and Care Services, each of which has very different cultures. Fergus explained: Encore operates in the visitor attraction catering, university and event catering sectors. The division employs approximately 400 staff. It is regarded as the 'sexier part of the business as we deliver banqueting and public catering services in some of Scotland's most prestigious venues. Encore is very commercially orientated. It has an aggressive business plan that expects it to double itsturnover over the first three years of the LLP: from 12 million (13.27m or $18.08m) per annum to 24 million (26.54m or $36.16m) per annum. If this happens Encore will be the largest operator in its sector in Scotland. To a large extent Encore management and staff identify with Encore as their employer more than they identify with Cordia. In the Facilities Management division the culture is very task orientated and functional. The managers and staff are all long time employees with an average of 22 years' service in this sector. The janitorial sector is largely unionised, unlike Encore which has very low trade union representation. The division employs 2500 staff and operates within 29 secondary schools and 230 primary schools through out Glasgow. It also operates within children's homes. Staff are employed on term time and therefore work only when the pupils are at school. The school meal division is an award winning business model (Fuel Zone') and has been recognised as leading change in school meals throughout the UK. It is facing increasingly difficult trading, however, as pupils are rejecting the menu offering and healthy eating policies are driving large parts of the pupil population in secondary schools towards private sectorcafs and snack shops located around the schools Care Services is the largest business division and the largest home care provider in Scotland. This is the sentimental service with a very powerful sense of community purpose. The managers and staff strongly believe that their primary purpose is to serve their clients who receive their care services. Staff were historically employed by the Council's Department of Social Work in Glasgow and have developed a value system akintotheir former employer. The historical emphasis is on caring for the client - the elderly - not on running the service as a business. Cordia senior management is striving to change this culture towards one that balances care duties with business management. The change goal is to maximise care standards whilst reducing cost. So a key issue for Cordia is how to develop a commer- cial orientation throughout the organisation and given the cultural differences between service divisions this is not a straightforward exercise. Traditionally Cordia as a fomer council department was also built on a cultural assumption that jobs were virtually guaranteed for life. However, as Fergus explained, this was changing: The council has experienced considerable reorganisation over the preceding 10 years. The continuous policy year on year of trawling for early retirement or voluntary redundancies: the development of private public sector partnerships: the development ofa shared service centre and the subsequent centralisation of support services, Exchange rates used in this case are 1 =1.106 and 1 =$1.513. CORDIA LLP 615 the business re-engineering of the Council's ICT systems Cultural change the Cordia way to reduce labour inputs, and finally the emergence of To support the emergence of the desired new culture and Cordia have all shaken to its core the assumption that jobs are guaranteed for life. Management is slowly to cement the Cordin brand senior management in con- sultation with their staff drew up a set of company values accepting the idea that the market will determine job shown in Table 1 security. A key issue, however, is how to develop an It was, however, recognised that the changes needed understanding on the part of all employees, includ- would involve a significant shift in the attitudes and ing management, that it will be Cordia's competitive behaviours of both management and stall. A cultural position and the standard of their work in terms of change programme called "The Cordia Way' was therefore productivity and quality which will determine whether also launched to help develop a commercial culture Cordia retains its contracts or not. throughout the business. This would involve all staff and management interpreting Cordia as the business rather Cordia: a strategic brand that as Direct and Care Services or the department or the Cordia was developed as a brand identity to demarcate the Council. This cultural change programme was designed business from its former entity as a council department and led by David Potter, Head of Commercial Strategy for As Fergus explains: Cordia who explained We have people who have been in the public sector The key issue was how to advance an understanding for 30 or 40 years. Most of them probably still see of the requirement of cultural change throughout the themselves employed by the Council. We needed a new general management team (800 managers). The legacy organisationalidentity that all our staff could relate to in of the former Council department was a collective per a positive way. This new identity we felt was best served ception that the organisation was not a business that by a bespoke brand that symbolically tapped into the it was a Council department which delivered services very essence of what we thought our core competency within budget. In contrast to an independent business was. We are in the relationship management business the council set operating budgets for each department and I have always placed great emphasis on managing once a year. These budgets did not include profit returns relationships between stafl, suppliers, clected Council so, for example, return on capital employed was not a members and clients in a very cordial manner. So the key consideration of management. The objectives of such Idea of branding the new business as "Cordia" which is a council department were to a) maintain service delivery rooted in our culture of good relations amongst all stake standards that did not aggravate stakeholders and b) bo kders made sense to both me and my management operate within budget and c) where possible add value team. The new brand will also provide a visual break to services without exceeding budget. The performance from the past and will legitimise our change agenda;it will provide a banner for all staff to relate to positively. Table 1 Company values In this context Fergusexplained the underlying competitive . We are proud to serve our customers - we provide high position of Cordia's operations: quality and value for money services that are important to people Another purpose behind establishing Cordia was to . We believe in team work when we combine our skills and improve the competitive position of the organisation knowledge we are stronger and to bring in new business to produce profit streams. The industry competition in relation to Encore and to . We respect the opinion of others - our success depends on everyone being able to communicate, listen, share and Facility Management is very strong in Scotland. There make a contribution are mature providers which could compete with both We value relationships - they help define who we are and Encore and for our school meals and cleaning and they secure our future initorin services. This is not the case with regard to We are passionate and confident about achieving our Care Services. In Scotland this is a very immature market goals and aspirations and most home care contracts are managed in-house . We are eager to learn and improve-developing our skills via social work departments. This is starting to change will help us grow In England the situation is the total opposite with . We are open, flexible and embrace change - an mature providers dominating all three sectors that we approachable style helps discover new ways of doing things operate within. So we need to improve our competitive better and faster position with benchmarks as the market leaders in the We encourage Innovation - it inspires us to develop various industry sectors we currently operate within new ideas and motivates us 616 CORDIA LLP of the department was reported to council each month and as long as there were no overspends then perform- ance was deemed satisfactory. This system established organisation-wide routines that bred a perception that we were not in charge of our own destinies. Short tem thinking prevailed and both jobs and services were considered to be safe from external forces such as competition or changing market trends. This produced a potent internal focus towards everything we did as a Council department. The Cordia Way involves six 20 week phases. In each phase there are 13 change leaders who head up teams of 8-10 managers. The teams work on a change project of their own choice, the objective being to improve the efficiency of the organisation as a business. Once this is developed they present it to the Cordia board for consideration to be implemented. Each change leader is democratically selected by the change team. We have successfully completed our pilot stage and 13 projects are currently under way. We have now successfully launched phase two ofthe Cordia Way. more Cordia will be perceived as a company with a management team driving its strategic and operational joumey. . As a set of distinct business divisions that serve the council. If the current organisational structure within Cordia remains intact then, arguably, it will be difficult to dislodge the idea of the historic role of Direct and Care as a former council department: i.e. a loose set of service divisions established to manage the delivery of council services. As a set of distinct business divisions which serve the open market. The only way this perception can be crafted with legitimacy is if Cordia can win consider able new business unrelated to the Council. Fergus continued: The metamorphosis of Cordia By the end of 2009 Fergus faced a dilemma in terms of how he should structure his organisation. He recognised the success that the current structure had brought to the business, but also acknowledged that this might not be the best model for the challenges and changes that lay ahead: "There are different views. Should our organisational structure reflect a more flexible commercial and fluid design? Cordia is changing into something quite differ- ent from Direct and Care. However, what this is to be has yet to be defined. For example it could be considered as any one of the following: Currently 24 million of business can be considered as private work and 130 million Council work. For example through Encore, Equill (our living aids business) Training and Development and ICT programming solutions, Cordia is starting to win contracts outside the Council. This has been aided by the appointment of a Business Development Manager and an assertion that in the case of the training centre, its primary purpose is to build a business not just to deliver training. In the first year of trading Cordia has won circa 14.2 million in new business. But this represents just 1.5 per cent of the business Cordia manages on behalf of the Council This ratio has to change. Fergus believed he needed new business to flow through Cordia. However, he recognised the need not to lose sight of managing and developing existing business and in particular the need to leverage more value out of what had historically been produced from trading activities through out the operation. Managers recognise that the buses of existing revenue have to be contained by continuing existing services and that management effort needs to be on reducing cost and improving the quality of those services. Fergus Chambers summarised the overall situation: . As an extension of the council under the legal identity of an LLP. This entity would be supported by the fact that the LLP is, in an organisational sense, an extension of the Council. It is related to by the Leader and the Chief Executive of the Council as part ofthe Council Family". As a former council department with a brand makeover. If service continues to be delivered in the same ways, terms and conditions remain the same and change is driven by council mandates rather from within the management team, then many will perceive Cordia in such terms. As a company the management of which are responsible for its commercial development. This depends on the discretion and authority allocated to the senior management team through its Board. The more they can influence real change then the If costs don't come down and quality does not steadily improve, the organisation may be allowed to wither on the vine. Elements of Cordia's business could be parcelled out to the private sector. Or some of the services could splinter offinto smaller community-driven am's-length organisations. The undermining of the credibility of the council as a provider or agent of the provision of services to local people through critical media exposure could also influence whether Cordia fails or succeeds. The public sector in Scotland, as ekewhere, is facing financial crisis with aggressive budget cuts being CORDIA LLP 617 demanded as a result Savings will have to come from increased productivity gained through service reforms. The cost of the local authority pension scheme is also now widely recognised as being difficult to sustain in the future. There are also emerging arguments to freeze pay rates for at least four years These perceived threats have to be dealt with as Cordia moves towards a market orientation based on a determined polky to reduce costs, increase produc- tivity, and invest in management and organisational development techniques. That's the challenge. The core strategy for Cordia needs to be fully understood It is one that both contains and protects existing busi- ness whilst reducing cost and improving the quality of services. This strategy includes the pursuit of lucrative new business, the profits of which will be used to reduce the net cost to the main client groups for essential services such as home care. The strategy needs to be articulated and understood by all employed through- out the business. It should guide all organisational activities. Finally, there is an urgent requirement for the underlying culture of Cardia to complement the overarching business strategy. This is the purpose of the Cordia Way. CASE STUDY Cordia LLP: service reform in the public sector David Potter and Gerry Johnson Throughout the world governments - central and local - are wrestling with how to manage increasingly pressured budgets, increase efficiency and improve quality of services. Glasgow City Council in Scotland has made structural changes to its services that are amongst the most radical in local government. Cordia is the result of one such change. Previously Cordia was a Council department. In 2009 Direct and Care became a Limited Liability Partnership ILLP) with the remit to develop its services as a business operating at 'arm's length from the Council. But what would be involved in developing and implementing a strategy to deliver the benefits of such a change? Introduction Direct and Care Services (DACS) was a department of Glasgow City Council. It provided school catering, home care services and facilities management to other depart- ments of the council and more prestigious catering services to public and private sector customers through Encore Hospitality Services. The department had been led by Fergus Chambers as Executive Director. Changes were triggered when, in 2008, Glasgow City Council settled an equal pay dispute which resulted in manual pay rates for DACS employees increasing by an average of 20 per cent Fergus explained: Source: Brendan Murphy Card by the Council and we still have politicians on the Board So the Council still controls the strategic direction. The overall beneficiary is, of course, ako the Council. If we generate profits they will either be re-invested or given back to the Council. But as a LLP we can trade as an independent company. We are no longer bound by Council niles and regulations. Our predominantly female workers were graded at the same level as the predominantly male workers in other Council departments. But in many of those departments the male manual stall got bonuses and therefore we were open to pay disputes, we were not equal pay proof. We had to compensate staff over the last 5 years. We ako had to develop a new pay and grading structure for the future. I have to break even over a 3 year rolling period, so the Council decided that if we did not improve upon our competitive position they may have to con- sider other models for some of the services we offered The favoured solution was a limited liability partnership (LLP). That means that as an LLP we would start on day one with a clean bill of health financially and it would give us a chance to improve efficiency over time. It would give us breathing space. We would not have to face an immediate competitive position. So we were established as an LLP. 99.9 per cent of the LLP is owned by the Council: the balance is owned by a company that is also owned In 2009 the department and all 9000 employees were transfered from the Council to Cordia (LLP), Fergus was appointed as Managing Director of the new business. Organisational structure and culture The new business inherited disparate service divisions from its former status as a council department. In 2009 these remained unaltered as Fergus held the view that the classic division of labour by service type was the most efficient way to organise the affairs of the LLP. Also he did not want to fundamentally alter management arrangements This case was prepared by David Potter and Gerry Johnson. It is intended as a basis for class discussion and not as an illustration of good or bad practice. David Potter and Gerry Johnson 2010. Not to be reproduced or quoted without permission. 614 CORDIA LLP Figure 1 Cordia's organisational structure Managing Director Operations Director Director of Finance Head of People Development Head of ICT and Marketing Head of Commercial Strategy Heads of Operations x 2 Head of Finance Facilities Care Man Payroll Accounts at such an early stage. The organisational structure for Cordia LLP) is shown in Figure 1. Under this structure. Cordia (LLP) has three opera- tional service arms: Encore Hospitality Services, Facilities Management and Care Services, each of which has very different cultures. Fergus explained: Encore operates in the visitor attraction catering, university and event catering sectors. The division employs approximately 400 staff. It is regarded as the 'sexier part of the business as we deliver banqueting and public catering services in some of Scotland's most prestigious venues. Encore is very commercially orientated. It has an aggressive business plan that expects it to double itsturnover over the first three years of the LLP: from 12 million (13.27m or $18.08m) per annum to 24 million (26.54m or $36.16m) per annum. If this happens Encore will be the largest operator in its sector in Scotland. To a large extent Encore management and staff identify with Encore as their employer more than they identify with Cordia. In the Facilities Management division the culture is very task orientated and functional. The managers and staff are all long time employees with an average of 22 years' service in this sector. The janitorial sector is largely unionised, unlike Encore which has very low trade union representation. The division employs 2500 staff and operates within 29 secondary schools and 230 primary schools through out Glasgow. It also operates within children's homes. Staff are employed on term time and therefore work only when the pupils are at school. The school meal division is an award winning business model (Fuel Zone') and has been recognised as leading change in school meals throughout the UK. It is facing increasingly difficult trading, however, as pupils are rejecting the menu offering and healthy eating policies are driving large parts of the pupil population in secondary schools towards private sectorcafs and snack shops located around the schools Care Services is the largest business division and the largest home care provider in Scotland. This is the sentimental service with a very powerful sense of community purpose. The managers and staff strongly believe that their primary purpose is to serve their clients who receive their care services. Staff were historically employed by the Council's Department of Social Work in Glasgow and have developed a value system akintotheir former employer. The historical emphasis is on caring for the client - the elderly - not on running the service as a business. Cordia senior management is striving to change this culture towards one that balances care duties with business management. The change goal is to maximise care standards whilst reducing cost. So a key issue for Cordia is how to develop a commer- cial orientation throughout the organisation and given the cultural differences between service divisions this is not a straightforward exercise. Traditionally Cordia as a fomer council department was also built on a cultural assumption that jobs were virtually guaranteed for life. However, as Fergus explained, this was changing: The council has experienced considerable reorganisation over the preceding 10 years. The continuous policy year on year of trawling for early retirement or voluntary redundancies: the development of private public sector partnerships: the development ofa shared service centre and the subsequent centralisation of support services, Exchange rates used in this case are 1 =1.106 and 1 =$1.513. CORDIA LLP 615 the business re-engineering of the Council's ICT systems Cultural change the Cordia way to reduce labour inputs, and finally the emergence of To support the emergence of the desired new culture and Cordia have all shaken to its core the assumption that jobs are guaranteed for life. Management is slowly to cement the Cordin brand senior management in con- sultation with their staff drew up a set of company values accepting the idea that the market will determine job shown in Table 1 security. A key issue, however, is how to develop an It was, however, recognised that the changes needed understanding on the part of all employees, includ- would involve a significant shift in the attitudes and ing management, that it will be Cordia's competitive behaviours of both management and stall. A cultural position and the standard of their work in terms of change programme called "The Cordia Way' was therefore productivity and quality which will determine whether also launched to help develop a commercial culture Cordia retains its contracts or not. throughout the business. This would involve all staff and management interpreting Cordia as the business rather Cordia: a strategic brand that as Direct and Care Services or the department or the Cordia was developed as a brand identity to demarcate the Council. This cultural change programme was designed business from its former entity as a council department and led by David Potter, Head of Commercial Strategy for As Fergus explains: Cordia who explained We have people who have been in the public sector The key issue was how to advance an understanding for 30 or 40 years. Most of them probably still see of the requirement of cultural change throughout the themselves employed by the Council. We needed a new general management team (800 managers). The legacy organisationalidentity that all our staff could relate to in of the former Council department was a collective per a positive way. This new identity we felt was best served ception that the organisation was not a business that by a bespoke brand that symbolically tapped into the it was a Council department which delivered services very essence of what we thought our core competency within budget. In contrast to an independent business was. We are in the relationship management business the council set operating budgets for each department and I have always placed great emphasis on managing once a year. These budgets did not include profit returns relationships between stafl, suppliers, clected Council so, for example, return on capital employed was not a members and clients in a very cordial manner. So the key consideration of management. The objectives of such Idea of branding the new business as "Cordia" which is a council department were to a) maintain service delivery rooted in our culture of good relations amongst all stake standards that did not aggravate stakeholders and b) bo kders made sense to both me and my management operate within budget and c) where possible add value team. The new brand will also provide a visual break to services without exceeding budget. The performance from the past and will legitimise our change agenda;it will provide a banner for all staff to relate to positively. Table 1 Company values In this context Fergusexplained the underlying competitive . We are proud to serve our customers - we provide high position of Cordia's operations: quality and value for money services that are important to people Another purpose behind establishing Cordia was to . We believe in team work when we combine our skills and improve the competitive position of the organisation knowledge we are stronger and to bring in new business to produce profit streams. The industry competition in relation to Encore and to . We respect the opinion of others - our success depends on everyone being able to communicate, listen, share and Facility Management is very strong in Scotland. There make a contribution are mature providers which could compete with both We value relationships - they help define who we are and Encore and for our school meals and cleaning and they secure our future initorin services. This is not the case with regard to We are passionate and confident about achieving our Care Services. In Scotland this is a very immature market goals and aspirations and most home care contracts are managed in-house . We are eager to learn and improve-developing our skills via social work departments. This is starting to change will help us grow In England the situation is the total opposite with . We are open, flexible and embrace change - an mature providers dominating all three sectors that we approachable style helps discover new ways of doing things operate within. So we need to improve our competitive better and faster position with benchmarks as the market leaders in the We encourage Innovation - it inspires us to develop various industry sectors we currently operate within new ideas and motivates us 616 CORDIA LLP of the department was reported to council each month and as long as there were no overspends then perform- ance was deemed satisfactory. This system established organisation-wide routines that bred a perception that we were not in charge of our own destinies. Short tem thinking prevailed and both jobs and services were considered to be safe from external forces such as competition or changing market trends. This produced a potent internal focus towards everything we did as a Council department. The Cordia Way involves six 20 week phases. In each phase there are 13 change leaders who head up teams of 8-10 managers. The teams work on a change project of their own choice, the objective being to improve the efficiency of the organisation as a business. Once this is developed they present it to the Cordia board for consideration to be implemented. Each change leader is democratically selected by the change team. We have successfully completed our pilot stage and 13 projects are currently under way. We have now successfully launched phase two ofthe Cordia Way. more Cordia will be perceived as a company with a management team driving its strategic and operational joumey. . As a set of distinct business divisions that serve the council. If the current organisational structure within Cordia remains intact then, arguably, it will be difficult to dislodge the idea of the historic role of Direct and Care as a former council department: i.e. a loose set of service divisions established to manage the delivery of council services. As a set of distinct business divisions which serve the open market. The only way this perception can be crafted with legitimacy is if Cordia can win consider able new business unrelated to the Council. Fergus continued: The metamorphosis of Cordia By the end of 2009 Fergus faced a dilemma in terms of how he should structure his organisation. He recognised the success that the current structure had brought to the business, but also acknowledged that this might not be the best model for the challenges and changes that lay ahead: "There are different views. Should our organisational structure reflect a more flexible commercial and fluid design? Cordia is changing into something quite differ- ent from Direct and Care. However, what this is to be has yet to be defined. For example it could be considered as any one of the following: Currently 24 million of business can be considered as private work and 130 million Council work. For example through Encore, Equill (our living aids business) Training and Development and ICT programming solutions, Cordia is starting to win contracts outside the Council. This has been aided by the appointment of a Business Development Manager and an assertion that in the case of the training centre, its primary purpose is to build a business not just to deliver training. In the first year of trading Cordia has won circa 14.2 million in new business. But this represents just 1.5 per cent of the business Cordia manages on behalf of the Council This ratio has to change. Fergus believed he needed new business to flow through Cordia. However, he recognised the need not to lose sight of managing and developing existing business and in particular the need to leverage more value out of what had historically been produced from trading activities through out the operation. Managers recognise that the buses of existing revenue have to be contained by continuing existing services and that management effort needs to be on reducing cost and improving the quality of those services. Fergus Chambers summarised the overall situation: . As an extension of the council under the legal identity of an LLP. This entity would be supported by the fact that the LLP is, in an organisational sense, an extension of the Council. It is related to by the Leader and the Chief Executive of the Council as part ofthe Council Family". As a former council department with a brand makeover. If service continues to be delivered in the same ways, terms and conditions remain the same and change is driven by council mandates rather from within the management team, then many will perceive Cordia in such terms. As a company the management of which are responsible for its commercial development. This depends on the discretion and authority allocated to the senior management team through its Board. The more they can influence real change then the If costs don't come down and quality does not steadily improve, the organisation may be allowed to wither on the vine. Elements of Cordia's business could be parcelled out to the private sector. Or some of the services could splinter offinto smaller community-driven am's-length organisations. The undermining of the credibility of the council as a provider or agent of the provision of services to local people through critical media exposure could also influence whether Cordia fails or succeeds. The public sector in Scotland, as ekewhere, is facing financial crisis with aggressive budget cuts being CORDIA LLP 617 demanded as a result Savings will have to come from increased productivity gained through service reforms. The cost of the local authority pension scheme is also now widely recognised as being difficult to sustain in the future. There are also emerging arguments to freeze pay rates for at least four years These perceived threats have to be dealt with as Cordia moves towards a market orientation based on a determined polky to reduce costs, increase produc- tivity, and invest in management and organisational development techniques. That's the challenge. The core strategy for Cordia needs to be fully understood It is one that both contains and protects existing busi- ness whilst reducing cost and improving the quality of services. This strategy includes the pursuit of lucrative new business, the profits of which will be used to reduce the net cost to the main client groups for essential services such as home care. The strategy needs to be articulated and understood by all employed through- out the business. It should guide all organisational activities. Finally, there is an urgent requirement for the underlying culture of Cardia to complement the overarching business strategy. This is the purpose of the Cordia Way