Vardon responded to the perceived leadership vacuum by introducing team-based management with new working groups and non-APS titles. Vardon flattened the SES structure, imported new SES staff and, significantly, introduced the concept of the guiding coalition.

These changes in power arrangements created consternation and resentment among some senior staff, particularly within the IT groups, who were used to controlling the means of delivering entitlements and were confronted by the seeming lack of recognition of their contribution and importance. The later introduction of an outsider, Jane Treadwell, a former colleague of Vardon’s in South Australia, as the new chief information officer added to their discomfort.

Kotter’s (1995) management change process—an eight-stage framework for creating and implementing change in organisations—was very significant in Vardon’s thinking about change (Vardon 1998c, 2001, 2003b).^[2] The first stage in Kotter’s process is to establish a sense of urgency after examining the external environment and to then identify possible crises or major opportunities. Next, the leader needs to create a ‘guiding coalition’, a powerful group working closely as a team to lead and provoke change. The third phase is to develop a vision to encompass and direct change efforts and devise strategies to accomplish that vision. Communication is the key element here and Kotter argues that managers should use every possible means to market the new vision and strategies; the guiding coalition is meant to provide the role model for the expected behaviour of staff.

As part of the process, there is a need to empower what Kotter deems broad-based action, meaning to overcome obstacles, to change systems or structures that undermine the vision of change and to encourage risk taking and non-traditional ideas, activities and actions. Importantly, change is dependent on generating quick success or short-term wins. Kotter recommends planning, creating and recognising obvious improvements in performance. Consolidation and generation of further change is a necessary part of the process to embed new, compatible systems, structures and policies that support the new vision. This can mean injecting new staff and introducing new projects into the organisation.

Finally, successful change is achieved by anchoring new approaches in the culture—that is, creating better performance by concentrating on customers and productivity, improving and expanding leadership and management, spelling out the links between new behaviour and successes, developing leaders and ensuring succession.

Vardon chose this model for the Centrelink transition on the basis of its comprehensiveness and applicability.^[3] The model was almost tailor made for the Centrelink transition and beyond, and Vardon used it to great effect. It contained highly relevant guidelines for a CEO faced with the external and internal environments of a public service agency in transition. At the same time, Vardon was also influenced by ‘emotional intelligence’ (Goleman 1996; Higgs and Dulewicz 1999) as a contributory model of personal leadership, building on her social-work background and her previous experience in senior public sector positions. This model encourages participants to become willing leaders or agents of change and employs exhortations for self-awareness, emotional resilience, self-regulation, motivation, empathy, influence and intuitiveness.

Vardon’s corporate philosophy also distinguished clearly between management and leadership, accepting the prevailing wisdom that managers—particularly in large organisations—were required to cope with complexity through judicious planning, budgeting, organising, staffing, controlling and problem solving to ensure organisational maintenance and survival. On the other hand, leaders deal with change by direction setting, aligning people to the vision, motivating and inspiring to ensure not only longer-term survival but effective competition and growth (Harvard Business Review 1990). These concepts and intellectual frameworks were critical in shaping Vardon’s approach to management change and developing a new organisation.