Trimming the FAT: change at the Ministry of Foreign Affairs and Trade (TEACHING NOTES) 2013-142.2

Foreign Affairs Minister Murray McCully had has his eyes set on an organisational shake-up for some time when he made John Allen the new Chief Executive of its Ministry (MFAT). An “outsider” formerly from New Zealand Post, Allen’s good entrepreneurial skills and charisma made him an immediately popular choice in the media. He arrived, however, less than a year after the National Party (McCully’s party) had come into power, right around the time that the Global Financial Crisis had begun to bite. Public sector reduction was in the government’s sights. McCully publicly outlined dramatic changes to MFAT’s business in 2011, already ruffling diplomatic feathers, which became Allen’s job to manage. Not everyone was sympathetic, especially not when the terms of the shake-up were released, along with a series of unprecedented leaks from within the Ministry. McCully, who had a history of clashes with those reporting to him, decided to state his own concerns in a letter to Allen, which he then subsequently also released to the media. Allen now had to implement organisational changes that were not only complex but which also, it seemed, were everybody’s business.

The teaching objectives for this case are: to examine the relationship between a Minister and a Chief Executive, in the context of a controversial change programme; to illustrate the challenges of leading transformational change in a government agency; to highlight the capacity of recipients of change to resist and undermine the leadership of a government agency.