Date: 2024-11-24 Page is: DBtxt003.php L0913-TVM-MMW-000010
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TrueValueMetrics ... Peter Burgess Manuscript
Making Management Work for Relief and Development |
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Chapter 10
Evolutionary Solutions |
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Practical Framework For Success ... A Pragmatic Approach
Small steps and a different mindset Efforts to make major structural reform in the relief and development sector have not worked. Reform has been “on the agenda” for as long as I can remember, at least 30 years, and nothing much has happened. There are too many competing interests, and major reform is potentially problematic. But evolutionary and incremental change, small steps, with a focus on performance ... results, that is, what is accomplished rather than how it is done ... might, just might, be the answer. Sustained success in socio-economic development is going to be achieved when there is a different mindset and: (1) people in the “south” are seen as a resource and not a liability; (2) resources are used to achieve goals that are of value to people in the south and the communities they live in; (3) there is a publicly accessible flow of information about costs and activities and results of relief and development interventions; and (4) there is similar reporting about all economic interventions that impact communities. None of this is particularly difficult in the abstract, but translating this from idea to practice is a challenge. It can be done, and I am encouraged by the experience of the dot.com entrepreneurs who took apparently outlandish ideas and made them commercial and valuable in a matter of a few years, sometimes just months. The basic process that needs to be in place is one where there is an iterative cycle of:
In relief and development the process needs to be moving forward and progressing over time, and different elements need to get added into the plan from time to time as needed, and all the other stages as everything progresses ... and results need to be continuously measured and efficiency assessed. This process is not the old project cycle created 30 or more years ago by the World Bank and now widely used almost everywhere in the relief and development sector. The old project cycle is static, or worse, retrogressive, while the process needed for success is dynamic and continuous. I like to think of the process which has measurement and decision making and operations tightly linked as being not much different from skiing. The process dynamic that is needed has to have some of the characteristics of water skiing ... or skiing moguls. During these activities (implementation) there is rapid assessment of the situation (measurement) and almost instantaneous feedback and adjustment to stay stable and moving forward. Before setting out, some planning and getting organized. With a static project cycle like process, the skier would wipe out pretty quickly, just the way, it appears, that many World Bank projects have. I have not been a surfer, but I think that the same dynamic applies. Success is all about knowing what is going on, and reacting in real time to everything that is happening! In other words, the process needs to be information based, be iterative and with fast response. There is no one best way Where there are hundreds of things to do, and all sorts of people and organizations engaged in doing things, there is chaos. I do not pretend to understand chaos theory, but have some appreciation of the problems of organizing for good results in complex and chaotic conditions. Understanding chaos theory might well the a good way to understand socio-economic progress. I was a participant in an Organization and Management Conference in the early 1990s. One of the sessions was about managing in chaos. I forget exactly how the game was played, but I think we all had numbers, and a number of balls circulating in the group. If a ball was sent to a person number 10, the ball then had to be sent to number 11 ... but where was number 11? When the game started it was absolute chaos, and balls were all over the place. In a few minutes people figured out where to stand so that they were next to the person with a number different by 1 from ones own. And then the rules were changed ... for example 10 had to send to 20, 11 to 21 and so on ... another period of chaos, but fairly quickly everyone figured out where best to stand. There is a powerful capacity for human beings to problem solve. In complex chaotic conditions many small decisions can get a workable answer far more quickly than the academic planners , no matter how big their computers. Avoid impossible goals The problem has to be approached in a very different way. The problem needs to be approached in ways that can work. The constraints that have been stopping progress have to be avoided. When Nazi Germany attacked France at the beginning of the Second World War, it attacked round the Maginot Line, rather than through the Maginot Line. The Maginot Line was heavily fortified, and difficult to penetrate. Instead, Germany chose a strategy that made the Maginot Line irrelevant. Improving performance in the relief and development sector needs to be done with a similar mindset. Success can be achieved by going round the obstacles, rather than going at them head on and wasting all the resources accomplishing very little. Not an easy fix In the relief and development sector there are huge opportunities. The key is to take advantage of the opportunities. It is not easy. If it was easy it would have been done a long time ago. In fact some things are east to accomplish, but they have to be approached in ways that will work, rather than using purely theoretical constructs. An Easy Fix I used to argue that it was easier to fix something that was seriously broken and get it working than the improve something from 95% efficiency to 99% efficiency. If this is a valid premise, then improving performance in the relief and development sector ought to be easy. Since relief and development performance has not been significantly improved over a period of many years ... it is surely time to try something else Most people who have spent time working in the relief and development sector in the field know that there are possibilities, but there is no structure to do the most valuable things. There are a huge number of good people ... but progress is not being made. There is a catastrophic failure of the system. But the potential to do a lot is still very much present. Elements of Strategy What is the potential for performance improvement? Before progress can be made in unlocking latent potential for community improvement, it must be identified. Community level performance can be improved enormously simply by good people having a look at what is going on and arranging support for critical improvements. Removing constraints can make it possible to get a lot more performance out of existing initiatives and projects and programs. A modest input of practical experience can go a long way to improving performance. Many key resources have potential to utilized more effectively including:
The failure in relief and development has largely occurred because too much of disbursed funds have never touched the “south”. Better performance will be achieved when there is a maximum of funds used in support activities that reach people. Improvement in relief and development performance starts when improvement takes place anywhere and everywhere. Many resources have potential to be used in ways that generate value for the “south” ... sustainable value that all the people and families and communities can get benefit from. However, there must be value analysis to ensure that there is value adding reaching people in the “south” and their communities. Existing organizations and their initiatives There is a lot of “know-how” and capacity in existing organizations and initiatives. There is a lot of knowledge in the traditional society of the “south” that is not much recognized. What might work well within 50 miles of Wall Street may not work at all in the very different environment to be found in areas hundreds of miles from modern infrastructure. What works in these areas is of critical value in making a success of development. People with experience can help, and especially local people. Maximizing results by supporting existing initiatives is possible. Everyone seems to want to start a new initiative, but instead of starting a new initiative, people should find something that is going in the same direction and join forces. This is easier said than done ... but the scale of most new initiatives dooms them to failure. A lot of the initiatives started do not have the management sophistication needed to enable them to move beyond being a very small scale operation. Do the most with what is available Better results are going to be achieved when the available resources are used to the maximum to get the best possible results. This is a new mindset for planners in the relief and development sector. What is available? What is the best use that can be made of these things? Often, something of considerable value can be created when available assets are used in the most creative way. Children do it all the time. They find things, and create games around what they find. Adults need to do the same, but in the serious matter of living life. But in the relief and development sector absolutely everything that is done should be looked at with the “cost value” question in mind ... that is:
When I go to the cupboard or refrigerator to find something to cook, I blank out unless there are some simple things like eggs and sausages. When my wife goes into the same raw food collection, she finds all sorts of things to cook, and a five-star meal results. I am not a good cook. My wife is. There is a similar situation with relief and development planning. To get the best results, there need to be people that understand haw to combine the various resources available to get some good results. Just doing something, especially big projects, has proved to be expensive and unproductive, in other words, value destroying. We need to be doing things that generate value that exceeds the cost, and especially any external cost. The value does not to be MY version of value, but something that is valuable in the context of the community in the “south”. Every community has things that need to be done. Many of these things have a very high return in terms of value to the community. Arrangements need to be made so that things that are priority get done ... not just in a few communities, but in practically all communities. Getting rid of constraints There are plenty of constraints. Constraints on good performance are everywhere. Some of the big constraints are:
Some of the constraints need big investments, but a lot of improvement can be made with modest initiatives, local and international. So many things in developing countries do not work because some critical thing is missing. Identify what the critical things are that are constraining progress and put effort into getting them fixed. Most people prefer to be working than waiting, but most operational systems have people waiting a lot more than is needed. Henry Ford and his production line attempted to solve this problem and did it pretty well. Most factories cannot have production lines of that sort, but even so, there should not be excessive wait time. I have already mentioned my work as VP Manufacturing at Southern States Inc. in Georgia. We reduced wait time in final assembly by changing around how we handled our inventory and picked components. With no more waiting for parts, production almost doubled. Theoretically it should have improved more than this, but other constraints emerged and then they had to be addressed. But it was progress. If there are systemic efforts to get constraints removed, then there will be rapid progress. Risk Reduction There is a perception of high risk associated with working in most countries in the “south”. But risk goes way beyond the simple perception. For people with limited experience of the “south” there are a lot of unknowns ... it is a different culture, a different history, a different framework for social and economic activities. Therefore risk reduction, and risk management is a very critical element for success. Knowledge is one of the best tools to reduce risk. If people know what they are doing, the risk is tremendously reduced. Strategic design The design of organizations and the design of activities can go a long way to ensuring success. What I refer to as strategic design takes into account a variety of issues including:
Know more of local and indigenous knowledge The experts have ignored the value of indigenous knowledge. While much of this knowledge might be of the most interest to anthropologists and people interested in cultural aspects of society, indigenous knowledge also has a big value in helping to plan and support activities that are priority in a community. Local people know what is going on in their communities and what is most valuable in their society. Local people know best what would help the community. This indigenous knowledge is substantial and not much used by international relief and development experts. There is value in people knowing more. This is not just about educating people in the “south” which is a widely accepted “north” priority, but also about getting people in the “north” to be better educated about the “south” and to do things that have a value for the “south”. This is very much about making all the actors in the relief and development sector know a lot more ... it is about data, information and knowledge. Practically everything that is worthwhile in the “south” could do more with more money. More money is a top priority. But why is money not being allocated to good things. Why are worthwhile things not getting much financial help? The limited amount of financial help is not reaching the most worthwhile ... just getting used in some activity that satisfies some arbitrary relief and development criteria developed in the “north”. This needs to be fixed. A part of fixing this is to have the required information. Nobody seems to really know who and what organizations are doing good worthwhile activities. Who can trust a little organization on the other side of the world? Nobody. Why should anyone trust them. This is a key issue that needs to be urgently addressed. Up to now the relief and development sector, the governments. The multilaterals, the NGOs and everyone else have a zero track record of credible and verifiable reporting of their activities. There are lots of reports ... there is some general accounting ... but little or nothing credible about performance. Why would I want to give money to any NGO when the information they can provide me about their work and their accomplishments is minimum and unverifiable? International knowledge International knowledge can be very helpful. It can come from the “north” or it can be relevant experience and solutions from other parts of the “south”. Technology is very powerful and can be used to do all sorts of good things, but in the poor “south” there is very little evidence that technology is powerful and good, but that it is powerful and bad. There is too much of gun and greed and not so much of grain and good. A lot is possible because of very high performance science and technology, but the results do not show it. This has to be changed. Get the scale right Getting the scale right is important. Some things need to be done small and some things are better at a larger size. Almost any economic activity has a point of “least cost”. For a factory it is probably at about 95% of capacity. By the time production reaches 110% of capacity, costs are usually soaring and out of control. ➢ For a bridge it is when it is big enough to carry all the traffic easily, with some margin for future growth, but not massively larger. ➢ For fisheries it depends on the resource. ➢ For a cargo vessel, mostly bigger is better. When there is wrong scale, there is economic distortion, and almost invariably with economic distortion there is economic waste. Economic distortion Avoiding economic distortion is a way to get better performance from limited resources. A huge project in a small community marginalizes local people and makes for a lot of unproductive tension. Donor driven development has usually resulted in big projects out of scale with their social and economic surroundings. Big fund flows have devastating Keynesian repercussions. A large amount of external money flowing into a small economy does damage to local economic activity that is not associated with the big project. Prices go up. Infrastructure is overused. The gap between the haves and the have-nots increases. Worse, when a big project goes away, all the Keynesian benefits reverse and there are negative multiplier effects.The lesson is that appropriate scale should be carefully considered, and programs structured so that there are community interventions that are of practical tangible value to the community. Do the most with the least If there are limited resources it is irresponsible to do anything other than to work at doing things the very best possible way, and in the most efficient manner. A relief and development sector culture that spends the minimum and gets the most value for money is going to get more socio-economic progress than one that spends without regard to the results being achieved. The relief and development sector should be put under pressure to have easily accessible data about how much things cost. The corporate world knows what things cost, and does not expect to be paying more than it should. The same level of information needs to be accessible and used in the relief and development sector so that the most is done with the least. A study in New York City in the early 1990s showed that when corporate standards were applied to the cost of activities carried out by the City Administration, city costs were often 10 times what they should have been. The study showed that most of this high cost was caused by petty procedural constraints and lack of attention to cost issues rather than being blatant corruption. A lack of accounting and effective reporting was a part of the problem, as well as a system where knowing someone was more important than being able to do the job well. A lot has changed in the last few years, and New York City has become a lot more cost effective than it was in the past. Ownership The idea of ownership is very powerful, and is one of the underlying drivers of the capitalist enterprise economy. But there are many different “things” that need to have ownership including not only physical goods and real property, but also intellectual property and on to ownership in common property, ownership in government, ownership of society and ownership of the environment. The last types of “ownership” are being increasingly recognized, but the understanding is incomplete, and the practice somewhat incoherent. Nevertheless the idea has importance, because it helps to design an organizational framework that can be sustainable. As we have noted elsewhere (see page ) successful sustainable socio-economic progress requires both a public and private sector that is stable and capable together of socio-economic value creation. Less planning, more organization Getting the best results in a chaotic world is not something that is practical for academic planners to do. The record shows that formal academic planning almost always fails. The “gosplan” type economy of the Soviet Union is one example, and I will argue that the “project” planning of the World Bank is another example. Physics was my favorite subject at school, and it natural led me to doing engineering at college. Subsequently it has helped me to understand various complex systems in the real world. ➢ A small force does not make much of an impression on a big object. How does this play out in the relief and development sector? In the relief and development sector, the well known organizations like the World Bank, the bilateral donors and the UN are all “big objects”. By contrast the groups seeking to be agents of change are very small forces. Ergo ... nothing is going to change. The advocacy movement (a small force) has no hope of getting the World Bank and the relief and development establishment (big objects) to move. It is a waste of time and energy to try merely by frontal assault. The relief and development process has to move from failed centralized planning where a bureaucratic planning team defines how resources are to be be used to some process that better reflects local priorities and the capacity of local entities to take advantage of opportunities. The mindset of money being the dominant constraint needs to get changed to one where all available resources are used to maximum potential. The focus is on people and community and getting rid of organizational and process restrictions. Focus on community People make decisions, and the best decisions are usually those that are made with the best information, and as near the action as possible ... in other words, people from the community. It is essential that people are reasonably informed in order for them to be able to participate in priority setting and decision making. Local knowledge is a missing element from most of the relief and development effort of the past 40 years. The local community needs to be the center of development. When the local community is made the center of development and activities are integrated with the routines of the community, then development can be successful and sustainable. Reform of big institutions The reform of big institutions is not easy. The principles of physics apply just as much in the field of organizational theory just as they do in the natural sciences. There needs to be reform in the big institutions of the relief and development sector in order to have higher performance, but this is unlikely unless there are changes in the internal systems that make performance a critical component in their management information. This ought to happen, but it probably will not happen because most of the incentives constrain effective change. |
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