1. Foundations for a Successful Competition Authority Bernard J. Phillips Head, Competition Division New Delhi 23 November 2009

2. Competition Authority Capability Assessment At the OECD we have tried to provide a tool based on analysis of successful Competition Authorities –A tool that uses Capability Assessment as part of Institution Building…to complement the legislative framework embodied in Competition Law

3. The fundamentally special nature of Competition Authorities Competition Authorities are distinct… An approach in terms of Institution Building is helpful Institutions are both sound organisationally and have become embedded in society because they are valued! The values of Competition underpin the CA The values are shown and re-enforced through the results – impact of the CA activities

4. Competition Authority Assessment We have had two goals: Where a CA exists, to provide them with a consistent model of success (tuned into an enquiry method) against which they can assess themselves and identify areas where the CA itself would want to improve Where a government is thinking about creating a CA, to provide a blueprint, with some of the essential ingredients in terms of organisation and process, that are required to create a successful Competition Authority

5. Foundations of our model and enquiry tool Understanding, from the experience of Competition Authorities, the key capability characteristics of a successful CA Consultation with ‘experts’ on Competition Authorities Synthesis of their experiences – evaluations into a model of capabilities that underpin the successful CA

6. A Capability Model for a successful CA 8 Dimensions that have a critical impact – are critical capabilities – for success. Strategic Direction Leadership Organisation Operating Processes and Management Processes Human Resource Utilisation – People Management Relations with Government Institutions Relations with relevant ‘publics’ outside of the CA Performance Standards and Performance Review

7. Strategic Direction Legislative and Government Regulatory Environment – new, reviewed, public awareness Strategic Direction of the CA – specific directions for the CA CA Approach to Strategic Direction – up-to-date, people engaged with… CA Application of its’ Strategic Direction – strategic direction applied to structure and process of the CA

8. Leadership The Leadership Role(s) – well-defined…includes passion, mission and values The Internal Leadership functions – wide or narrow group of leaders The external Leadership functions – an active ‘external’ role

9. Organisation The Organisation Structure – transparent? The relationship between Structure and Strategic Direction The impact of Structure on Output – a ‘barrier’ or clearly aligned

10. Operating Processes Operating Processes – How work is done! Process Effectiveness – measures for the work process. Quality Control – standards for cases, interventions, analyses… Management Processes – are there processes for managing the people and resources of the CA Alignment of Processes and Strategic Direction

11. Human Resource Utilisation Policies and Practices for effectively managing people, recruitment, selection, training, etc. HR in Operation – engagement of people, nurturing the values of competition

12. Relations with Government ‘ Horizontal Relations’ – with regulators, government ministries and departments Vertical Relations – with politicians, ‘electors’ and courts

13. Relations with the Wider Public Relationship to special interest groups – business community, academic institutions, legal profession Relating to the General Public – active in public debate about competition

14. Performance Culture: Standards and Review What are the Performance Standards of the CA – publicly available? Impact of Performance Standards on daily work – e.g. any evidence of falling down on Legal standards / poor economic analysis Policy – does Performance Review exist in principle

15. Performance Culture: Standards and Review (2) Practice – are there habits of reviewing performance at all levels, cases, interventions, decisions, projects CA Impact – is there a review of the impact of the work of the CA? Does the CA examine whether it achieves it’s goals?

16. How do we apply this model? Dialogue – Interviews between ‘examiners’ and the Competition Authority Dialogue with members of the CA, focusing upon how the CA works in respect of the model dimensions Dialogue with those external to the CA who have experience of the authority and how it ‘performs’ its work

17. Interviews Interviews with people who have solid experience of the CA and how it works… Each Interview 1.5 hours on average No real preparation required by the interviewees – we will explain the enquiry and start the questioning Responses should be ‘fresh’ thoughts and not pre- formulated Draft communication to send to interviewees available

18. Agreement on interviewees Typical Internal Interviews– aiming for approx 25 Chairman/President and VPs (3) Section Heads (6) Competition Council/Commissioners/Members (3) Secretary-General, Chief Economist, Competition Policy Section (3) Communications – Press Office (2) HRM (1) Young Case Handlers in ‘focus groups’ (4-6)

19. Agreement on Interviewees Typical External Interviews– aiming for approx 20 interviews – people who have experience with the CA Business Associations (2) Consumer Associations (2) Judges (2) and Private Lawyers (3) Government Ministries – e.g. Economy, Finance, Communications and Prime Minister’s Office (3) Sector Regulators (2) and the National Consumer Prot. Office (2) Financial Journalists – Media (3) Academics (2)

20. Synthesis of the data The examiners prepare the ‘data’ gathered during dialogues The CA ‘scored’ against the model A CA Management Seminar – the process and the outcomes should be: Exposure to the all the data collected by the staff and managers of the CA Decisions on the areas of focus for improvement made by the CA An agreed Improvement Plan ‘owned’ by the CA

21. Findings so far: areas of strength Studies123 Strategic DirectionMLM LeadershipHHM OrganisationMHM Operating and Management ProcessLLL HR - People ManagementHML Relations with GovernmentMHH Relations with Public(s)HMH Performance Standards and Performance ReviewLLL L = Area of low capability – thus key area for improvement M = Area of medium capability H = Area of higher capability

22. Findings so far: areas for improvement Studies123 Strategic DirectionMLM LeadershipHHM OrganisationMHM Operating and Management ProcessLLL HR - People ManagementHML Relations with GovernmentMHH Relations with Public(s)HMH Performance Standards and Performance ReviewLLL L = Area of low capability – thus key area for improvement M = Area of medium capability H = Area of higher capability

23. Conclusions (1) Competition Authorities reviewed so far have needed to focus upon and have stronger capabilities in: Performance Standards and Performance Review Operating and Management Processes Strategic Direction These authorities have tended to have more natural capability in terms of: Leadership Relations with Government / Relations with Publics HR – People Management

24. Conclusions (2) Strong capabilities impact other dimensions Performance Culture delivers continuous assessment of processes and people…ensures early elimination of errors…increases probability of success…a foundation for impact analysis…strong communication with people and market Good operational processes deliver consistency, transparency and results…give confidence to staff, especially new recruits…makes training simpler…reduces uncertainty…make best use of all resources

25. Conclusions (3) Building capability is an ongoing process for the CA An improvement plan designed and “owned” by the CA has the most chance for a successful outcome – reports by consultants sit on shelves! Focus on your capabilities and be engaged in increasing them.