InternetNZ Organisational Review

Transcription

1 InternetNZ Organisational Review Change Proposal Public Consultation Document (Version 2) June 2017

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3 Foreword Tēnā koutou katoa This paper presents a proposal for discussion among the Internet community about the way in which InternetNZ, and its two subsidiaries, NZRS and DNCL, are organised to deliver on its aims to create a better world through a better Internet. InternetNZ, NZRS and DNCL have played a critical role in the development and implementation of Internet policy, and the well-functioning Internet system New Zealand enjoys today. We have evolved significantly from our foundations in The impact of the Internet on society and the economy is far deeper than in 2002, when our current structure was put in place. Far more people are now affected by what we do. Far more people are affected by the Internet. As people increasingly change the way they connect (mobile devices, apps), new issues are brought into focus for us. Our wider environment will continue to change faster and faster every year and it will change in ways we can t necessarily predict. This makes our group s broader mission more important to more New Zealanders than it has ever been. It also makes our ability to adapt and respond to those changes more critical. As a group, we face increasing competition from the opening up of other top level domains and the choice people are making between different ways of conducting business online (eg through social media, apps). We expect that domain growth will slow - like it has already in many other places around the world. What will not slow down is our need to pursue the objects of the society through the organisation that we have created and crafted over the decades. In light of our matured capability and our changing operating environment, it is timely to consider whether we are still set up optimally to deliver on our Society s objects and realise our strategic objectives. The ideal time to reposition for change is when you can and when it makes sense to do so not when you must and it is too late. This paper presents a proposal, developed by the InternetNZ Council, to respond to these challenges and ensure we remain flexible to respond to new opportunities. We welcome robust feedback from those with an interest in Internet issues including our employees, members, fellows, and stakeholders. The proposal was informed by engagement with employees, members and stakeholders which found that alongside being able to deal with the challenges, there were aspects in the way we are organised that are getting in the way of building on our successes to date. Related to the changes to our structure we considered the size and composition of our Council. We have not made any proposals to change that in order to maintain stability in our overarching governance as we seek to implement the broader structural reforms. However, we intend to review the size and composition of the Council next year, where we will look to reduce our overall size and consider whether to introduce appointed positions. We will be looking to ensure we are the right size and have the right skills on board to support high quality governance of InternetNZ, complemented with and balanced by the need to represent the diverse interests of our members, stakeholders and the wider Internet community. We encourage you to read the proposals carefully and provide feedback for the Council to consider as it makes its decisions. Nga mihi nui Jamie Baddeley President InternetNZ Council i

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5 Contents Foreword i Section 1: Introduction 1 Section 2: Background 2 Section 3: Case for change 4 Section 4: Proposals 9 Section 5: Next steps 12 Appendices Appendix 1 : Working group membership 14 Tables Table 1: Proposed timeline for change process 12 Figures Figure 1: Proposed functional and governance arrangements 9 3

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7 Section 1: Introduction Purpose of this document This document describes proposals to change the way the functions of the InternetNZ group are organised and governed. The document provides the reasons for the proposals so staff understand the proposed changes and the possible implications. It seeks your feedback to inform the proposed changes before any final decisions are made. The audience for this consultation document is all staff across the InternetNZ group. How to navigate this document This consultation document is divided into different sections to help you find the parts most relevant to you. Section 2 outlines the context and approach taken for this review. Section 3 sets out the underlying reasons for the proposed changes. Section 4 gives a description of the proposed changes. Section 5 sets out the expected timeline for this change process and how to provide feedback. How to make a submission on the proposals We welcome your feedback on this proposal, including the case for change, the proposed organisation of functions and governance, and the proposed approach to implementation. Details on how to provide feedback are included in Section 5 on page 12. 1

8 Section 2: Background Context InternetNZ s current organisational approach was developed in to support responsibilities for running the.nz cctld. This saw the membership-based incorporated society setting up two focused centres of expertise and governance: a domain name policy function, to develop and enforce the.nz policy framework, authorise registrars, represent.nz internationally, provide a Dispute Resolution Service and assure the service quality of the.nz offering (now DNCL) a registry function, to develop and operate the Shared Registry System and the DNS infrastructure for.nz (NZRS). This focus separate governance, separate management was required to ensure that there was the appropriate level of focus on the key components of managing a cctld. A review in reviewed this model but didn t propose major changes other than changing DNC from an office of InternetNZ to a subsidiary company. While the current structure was established for very good reasons, the environment within which the InternetNZ group operates, and the InternetNZ group itself, is much changed since The group has matured The evolution of the policy framework for.nz is largely complete, and no major policy issues are foreseen in the near future. DNCL has been considering how to best resource the current work programme which may result in a smaller organisation. The registry and DNS systems are mature and established technology. NZRS has the expertise and capability required, which was built up when the running of the SRS was brought in-house. More recently, NZRS has built capability in response to being given responsibility for the group s product and services development. Internet NZ has grown significantly. In 2002 the work of InternetNZ was largely led by Councillors in a volunteer capacity, with very limited support. The parent, InternetNZ, has grown to 14 staff including a Chief Executive who now develop the strategic direction and operationally deliver on the Objects of the Society. We operate in a rapidly changing environment The growth and development of our group reflects the changing significance of the Internet for New Zealanders. The impact of the Internet on society and economy is far deeper than in 2002 far more people are now affected by what we do. As people increasingly change the way they connect (mobile devices, apps), new issues are brought into focus for us. Our wider environment will continue to change faster and faster every year. This makes our group s broader mission more important to more New Zealanders than it has ever been. 2

9 As a group, we face increasing competition from the opening up of other top level domains and the choice people are making between different ways of conducting business online (eg through social media, apps). We also face changing gtlds and declining growth in cctlds. In light of our matured capability and our changing operating environment, it is timely to consider whether we are still set up optimally to deliver on our Society s objects and realise our strategic objectives. Approach In light of this, the Council took a high-level look at how the group was working at its Strategy Day meeting in September The Council agreed there was a need to develop a more in-depth understanding of the issues and opportunities facing the group, and consider whether the current arrangements remained fit for purpose and aligned with its strategic direction. In December 2016, the Council initiated an organisational review of the group. The aim of the organisational review was to assure Council, members, employees and the public that InternetNZ is organised the right way to most effectively and efficiently achieve its purpose. The Council formed a Working Group to own and lead the review on behalf of the Council. The Working Group comprised five Council members, a representative from each of NZRS and DNCL boards, and an independent person (see Appendix 1 for group membership). The Working Group was supported by external consultants to gather insights and provide management of the review process. The Working Group has followed a robust process that has involved gathering insights from a wide range of people, to ensure the review was informed by a comprehensive understanding of the range of issues and opportunities we face. The Working Group sought input from all staff across our three organisations, including separately from each Chief Executive, external stakeholders (representing a wide range of members and stakeholders across the public and private sector, strategic partners, past Council and Board members and others involved in the establishment and development of the group over time) and the Chairs of the Council and two subsidiary boards. Working Group members spoke with our peers at ICANN to understand how they organise themselves and why, and drew on their own knowledge and experience of the group. The synthesis of these insights formed the basis of the case for change and informed the development of the design objectives and principles that guided the development and analysis of options for the future. The Working Group presented three options for Council to consider one that was more strongly supported, and two that had weaker support from the group. The Council voted unanimously at its meeting on 27 May 2017 for the option that has led to the proposals contained in this consultation document. 3

10 Section 3: Case for change The case for change summarises the issues and opportunities raised in the course of the review. We are doing well, but we can do better. Since the current structure was established in there has been great success for the group as a whole. The dedicated focus on each organisation s core functions is visible and appreciated by stakeholders. The group strategy ( ) and feedback from stakeholders shows that we have come a long way in the last five years towards becoming a more cohesive, professional and effective group. The dedicated focus on building our own expertise and capability in the management of the.nz domain has paid dividends.nz is the preferred domain for New Zealanders. The technology and policy has worked as intended and evolved with the times. It is a credit to the founders of this model and those who have worked within the system that it has largely delivered on the initial vision. We gain our ongoing authority to operate the.nz domain name from the local Internet community, and we take our responsibilities under RFC1591 to serve the community as a first principle. The MOU signed with MBIE last year is confirmation that we are seen as the credible steward of.nz that we hoped to become. We are seen as increasingly professional in our approach and those we work with across the public sector see us as an important source of opinion and advice on Internet issues. Our stakeholders have consistently commented on the high calibre of the people we have working in our organisations. They are largely happy with the direction we are headed, and the role we play in Internet governance in New Zealand. However, what we heard in the course of the review suggests that there are opportunities for us to be more effective, deliver even more to our members and stakeholders, and ensure we are well set up to respond to our changing environment. We need a shared vision and strategy that is well understood by our employees, our members and our other stakeholders. We need to be clearer amongst ourselves, and externally, about our mission and purpose and what we want to focus on these are key factors that actually drive how we think about the way we work and set ourselves up. In our group strategy, we state that we want wide areas of shared and common culture between group business units, enabling collaboration between them to be the norm. Having a shared vision to work towards supports a mandate for employees across all of our functions to work together to achieve the group s goals, and will support the development of a group identity and culture for staff. There is currently no strong sense of group identity and our people are unclear about how to work together and when they should do that. This is exacerbated by a lack of understanding of each other s work programmes and priorities. These issues are likely to increasingly become barriers to achieving outcomes in the future if the nature of what the group does changes. As we increasingly ask staff to work together on our common goals and broader mission, there is a risk that people will not have the right level of influence over resources they need to deliver their work. 4

11 We know that while many of our stakeholders understand at a high level why we exist, they are not as clear on our strategic direction and values. Being clearer about this may lead to new opportunities to work together to further our strategic objectives, and those of our partners. We need to be faster and more agile to keep pace with the changes in our environment. Our governance and management structures are cumbersome and a lack of single point of accountability makes it difficult to progress work across the group. The size of governance groups and management resource is out of proportion to the size of the organisation and the size of the issues it is dealing with. There are 20 governors, three chief executives and around 10 senior executives for the 35 FTE across the three organisations. Decision making is slow and this affects our stakeholders and impacts on the outcomes we are trying to achieve. Reducing complexity arising from the size of our governance, and empowering our people as decision makers would help us align better with the people we want to work with sometimes our timeframes simply don t meet the fast-paced requirements of those we seek to work with. Internally, implementing any change is hard there is no single point of leadership accountability that can drive group-wide initiatives, which impacts on the difference we can make externally. There is an opportunity to introduce processes and structures that allow us to respond quickly to issues and opportunities to prevent us being increasingly out of step in a fast changing world. This would allow us to position ourselves to achieve our strategic goal of becoming the accepted authority on Internet issues in New Zealand and ensure we remain a relevant, valued partner to our key stakeholders. Being faster does not mean being more reactive. We still need to be considered about what we do, but we need to be able to increase the speed of our decision making and how we implement those decisions. Being more agile means making better use of the full range of capabilities across our organisations. We need to get better at working together effectively to deliver on our broader mission, and to allow us to move into new areas as they emerge. Having expertise siloed in different organisations means it is currently harder to share resource, access different capabilities and respond to changing needs in an agile way. We need to be less inward and more outward facing. We are expending a lot of energy making our structure work. A lot of time is taken up at the governance and management level to ensure relationships work across the group and to support the good outcomes that our members and other stakeholders see externally. The effort put in by key individuals on Council, our Boards and employees who have a long history with the group and deep understanding of its parts are one of the key reasons we continue to deliver on our objectives. The need for historical knowledge to make things work well makes succession planning highly problematic, and it takes significant time and effort for governors to come to grips with the way our structure works in order to be effective. The time spent managing relationships limits the group s ability to be effective. The amount of effort put into making the structure work distracts from other opportunities the group could be focusing on, and is not necessarily the most efficient way to deliver on the current outcomes. 5

12 There is no way to know what we are missing when we spend so much of our time making the current structure work, but it is clear from what we heard in the review that there are opportunities to be more effective that we are not realising at the moment. We have a broad mission, and we will miss opportunities to be more effective if we do not carefully consider what we are spending our time and money on. We have some bold goals in our group strategy that we are looking to achieve by 2025, and we need the resources to support these for example, we want to support the Internet community to support the development of the Internet for New Zealand, and aim to increase the community funding we make available to $1 million per year. InternetNZ is in a strong financial position and has a clear role to play but this may not always be as assured. It is widely accepted that the group s primary source of income, through registration of domain names, is not guaranteed. Competition from the opening up of other top level domains and different ways of conducting business online (eg through social media, apps) mean that we face increased competition. We recognise this in our group strategy, and we want $1 million of group income to come from sources other than registrations of.nz domain names from 2020 onwards. However, there are other ways we can increase the resource we have available to support our work. There is a feeling that there is currently a lack of consideration of the cost of work across the group, and that there are no strong levers for the Council to control spending (or at least that the existing mechanisms are not being effectively deployed). There are opportunities for us to be more efficient where we have duplication or overlap across our organisations. Removing duplication and unnecessary cost, and increasing focus on decisions around how money is spent would allow us to do what we do better, and free us up to do more with what we already have. Objects of the Society Throughout this process we have used the objects of the Society as our overarching framework these are the key things we must deliver on, and any consideration of how we are set up needs to align with the objects first and foremost. 2.1 To promote the competitive provision of Internet access, services and facilities in an open and uncaptureable environment. 2.2 To develop, maintain, evolve, and disseminate standards for the Internet and its inter-networking technologies and applications. 2.3 To develop, maintain, evolve and disseminate effective administrative processes for the operation of the Internet in New Zealand. 2.4 To promote and conduct education and research related to the Internet and inter-networking. 2.5 To coordinate activities at a national level pertaining to good management of centralised systems and resources which facilitate the development of the Internet, including but not limited to the Domain Name System. 6

13 2.6 To collect and disseminate information related to the Internet and inter-networking, including histories and archives. 2.7 To develop and maintain formal and informal relationships with the international Internet community, including the Internet Society. 2.8 To represent the common interests of the wider New Zealand Internet community both nationally and internationally. 2.9 To promote widely and generally available access to the Internet To liaise with other organisations, New Zealand Government authorities, and the general public for coordination, collaboration, and education in effecting the above objects. Design objectives and principles With the constitutional objectives and the case for change outlined above in mind, proposals in this document have been further guided by the following objectives and principles that were developed specifically for this process to ensure we address the current issues and opportunities we face. Design objectives The design objectives are the key things we want to achieve through change and reflect the shifts we think we need to make across the group. The design needs to: increase the InternetNZ Group s ability to respond in an agile way to opportunities (and issues) as they present themselves including flexibility to adjust to changing functions and directions over time ensure our delivery and management of critical infrastructure is uncompromised support the development and implementation of a consistent vision and strategy across all of the key functions and services provided support more effective collaboration and sharing across all parts of the InternetNZ Group enabling people to work together easily, harmoniously, efficiently, and effectively to deliver on our vision have an appropriately scaled approach to governance and management encourage the development of an effective shared culture provide clarity of responsibility for key roles and functions be resilient capable of operating successfully without relying on specific individuals or groups to make it work. Design principles These design principles are considerations that are specific to our context and are important to take into account in coming up with and assessing design options, as well as generic good practice design considerations. 7

14 Specific principles Maintain the good reputations and relationships of InternetNZ and.nz. Continue to deliver the current functions to the high quality they are now. Ensure the.nz root zone is uncompromised by any next steps. Protect our ability to recruit and retain talent, including at the governance and management levels. Ensure the independence of.nz policy and the management of registrars. Retain the ability to engage professional directors to provide independent, specialist perspectives to the governance of the group. Be cost efficient and financially sustainable. General principles Fit for purpose Ensure the delivery of our Objects and Mission, while retaining flexibility to respond to potential changes in these over time. Stakeholder focus Align with the needs and expectations of our members and other stakeholders. Provide a clear point of contact for those we work with and minimise multiple points of contact. Managing the work Manageable spans of control (number of direct reports) for all managers. Manageable scope of functions within teams. Clear roles and accountabilities, avoiding overlap or duplication. Clear lines of reporting and accountability. Sufficient influence over resources by teams and individuals required to deliver on their accountabilities. Avoid unnecessary management hierarchy. 8

15 Section 4: Proposals Overview This proposal would place all current functions and responsibilities of the InternetNZ group in one organisation, InternetNZ. All staff would report to a single Chief Executive, and the Council would be the single governance group. Once fully implemented, the two subsidiary companies and their Boards would no longer exist. We would retain a strong focus on the high quality delivery of the technology and policy that supports our stewardship of the.nz domain, and our work developing new products. An expert advisory group would be put in place to ensure the ability of this function to draw on expertise and knowledge and give a degree of independence to the.nz policy function. Position(s) would be put in place reporting to the Chief Executive but with independence in the execution of regulatory powers. The figure below is intended to represent the functions of InternetNZ only, it does not imply a detailed structure or positions outside of the single Chief Executive. The following section describes the process we propose we would follow to arrive at a detailed design for a single organisation (more detail regarding implementation and structure is in the following sections). Figure 1: Proposed functional and governance arrangements Why one organisation? The proposal to create a single organisation is intended to protect and build upon the good work we do already, and position us to be even more effective in the future. Bringing the group s functions together into one organisation would greatly reduce the complexity of our governance and management arrangements, with a single point of accountability at each level. It would support our desire for a consistent vision and strategy, reinforcing the way we work internally 9

16 and providing clarity about our goals and values for our stakeholders. It would streamline and improve both the ongoing development of strategy and the communication and implementation of the agreed strategic objectives throughout the organisation. Having all our functions in one organisation would mean we can easily align our resources with our strategic goals, including changing the mix as we refine our direction. Internet issues are changing rapidly. Less complex governance and management would improve our ability to respond in an agile way, make timely decisions and allow us to apply our resources flexibly in response to changing issues and to capitalise on opportunities as they present themselves. We would be better able to plan and prepare, both strategically and financially, across all our functions in a way that makes us more resilient. Having a single face for our organisation would provide clarity and consistency for our members, stakeholders and the wider public, with less likelihood of mixed messages from across the group or confusion around who is responsible for what. It would make it easier for members to communicate with us about activities across the group, and would be easier for stakeholders who currently may need to communicate with all three of our organisations separately. A single view within our organisation of what we are hearing from our members and stakeholders would also allow us to be more responsive to their needs. A single organisation would support our staff to work together on our common goals and broader mission. It would remove the current pain points when we try to work together and reduce duplication of functions and effort. Alignment of our policies, practices and systems in one organisation would remove some of the day-to-day barriers faced by our staff when we try to work together. We have expertise across our three organisations that should be leveraged, and having a single view on our capability will allow us to identify where that should happen. Being more efficient in the way we work, and reducing our significant governance overheads, means we will be able to do more with what we already have. This would complement our efforts to increase revenue from sources other than domain name registrations to support our work supporting the Internet community. We are conscious of the value placed on the independence that the current structure provides for.nz policy and regulation. Introducing an expert advisory group with independent members over the.nz policy function not only provides some independence of the function, but ensures we can appoint people with the right expertise and experience to advise Council on the development of policy. The proposal would also provide for independence of the execution of regulatory powers. What would this mean? If the proposed changes to our organising model are adopted, it is proposed to implement these changes in two key phases. The first phase would be to establish a new Chief Executive position for the proposed consolidated organisation, employed by InternetNZ and appointed by the Council with responsibility for all the current functions across the group, with an appropriately scoped role setting expectations regarding the delivery of key accountabilities. Because this role would be substantively different from the current Chief Executive position at InternetNZ, and because the position would take responsibility for the functions currently led by the Chief Executives of NZRS and DNCL, this would involve the disestablishment of the three existing Chief Executive roles across the InternetNZ group. 10

17 In the second phase, the person appointed to the proposed new Chief Executive position would be tasked with reviewing and proposing a structure for the organisation in line with the strategic direction of the organisation and any parameters established through decisions from this review and consultation process (including how the expert advisory group would operate and the arrangements necessary to ensure the independent execution of regulatory powers). Employees would be given the opportunity to input to the new design and consulted on any proposed changes. The group would continue to function largely as usual up until this point, with little change below the Chief Executive level. In this interim period, the current senior managers in InternetNZ, DNCL and NZRS would move to report to the new Chief Executive, with a small number of other minor changes to reporting lines in order to ensure the number of direct reports to the proposed new Chief Executive is manageable. The entity structure would remain in place in this interim period, but with the two subsidiary boards reduced significantly and acting largely to support and advise the new Chief Executive through the design process. The boards would comprise the existing board Chair, the Chair of the Council and the new Chief Executive. We have proposed this phased approach for a number of reasons: Delivery of functions would be assured as the current (non-chief Executive) senior management positions are not affected at this time. The person appointed to the proposed new Chief Executive position would be engaged and motivated to ensure the organisation is optimised to deliver (with the direct link to the expectations set for the Chief Executive). There will be a dedicated focus on completing the redesign. The person appointed to the proposed new Chief Executive position would take ownership in appointments to key roles. Leadership of the change for all employees would be much clearer, with the closer relationship between employees and the Chief Executive, and employees would have an opportunity to input to the new design and feedback on any proposed changes. 11

18 Section 5: Next steps Timeline The proposed timeline for the change process is set out in the table below. The closing date for submissions on the proposed changes is 5.00 pm on 30 June The dates set out below are indicative and while we will endeavour to work within this timeline, timing of some steps may vary. We will continue to update you should any significant changes occur. Table 1: Proposed timeline for change process Stage Date Consultation document released 8 June 2017 Closure date for receipt of submissions 30 June 2017 Submissions considered Decision document released Implementation of decisions - phase 1 Appointment processes commence (if required) New structure takes effect July August Upon release of decisions Upon completion of appointment processes (if required) Process for providing feedback Overview Your feedback on these proposals is welcomed. You are encouraged to provide feedback on as many or few aspects of the proposals as you would like to comment on. You can make either an individual submission or a group submission, or both. Please note whether your feedback is from you as an individual or a group submission, listing the members of that group. Your submission will be analysed and a summary of submission themes will be provided in the decisions document. Names of submitters will not be attached to any analysis material that is distributed. Submissions must clearly identify the name of the submitter. The submissions will be received directly by the consulting firm assisting us with this process, MartinJenkins. Submissions close at 5.00 pm, 30 June How to make your submission Please read this consultation document thoroughly before you make your submission. 12

19 An online feedback form has been set up to gather your feedback on the proposed changes and process. You can access a link to the feedback form from the InternetNZ website at The feedback form has a save and continue later option, which you can select if you would like to take a break and come back to it. You do not have to answer every question. If you have any questions please Jamie Baddeley or Joy Liddicoat. Jamie Baddeley Joy Liddicoat President@internetnz.net.nz VicePresident@internetnz.net.nz 13

20 APPENDIX 1: Working group membership The Working Group comprised: five Council members - Kelly Buehler (Working Group Chair) - Keith Davidson - Rochelle Furneaux - Richard Hulse - Dave Moskovitz one representative from the Board of DNCL - Adam Hunt one representative from the Board of NZRS - Richard Currey one independent member - Murray Bain. The Working Group was supported by staff and external consultants in its work. 14