Solution 1 A: building or restoring organisational hygiene.

The problems in your organisation may be caused by insufficient organisational clarity.

Even if other, more dynamic reasons, account for the problems in your organisation, it can help to introduce clear structures and procedures for decision making. They can be considered the basic hygiene of the organisation.

If introduction of clear structures and defining authority levels wont make the problem disappear, you should look elsewhere to find deeper reasons for malfunctioning.

Maybe you have to look at the problems or symptoms again or start a discussion in the organisation about the question: what is bothering us most?

We discuss the following topics:

1.1. External organisational goals.
1.2. Internal organisational goals.
1.3. Division of labour and coordination mechanisms.
1.4. Decision making structures.
1.5. Responsibility, authority, accountability.
1.6. Management: giving direction, creating support, caring for stakeholders.
1.7. Output and measurement of achievement.
1.8. Financial management.
1.9. Organisational culture.

1.1. External organisational goals.

An organisation that starts its life in troubled times will not spend time on defining goals. But when the situation becomes more stable, definition of aims becomes a necessity to set priorities, to measure success and to adapt strategy.

Goals should be formulated:
concrete, measurable, feasible and inspiring.

Goals function as a leverage for the organisation, they indicate the gap between the actual situation and the desired one. The way in which they do that should be clear and motivating.

• The goals should be defined in concrete terms in order to avoid confusion what is meant.
• They should be operationalised and made measurable, in order to be able to establish success, or to adapt a strategy.
• They should be feasible. Unrealistic unreachable goals will create frustration. Success is the most powerful source of  intrinsic motivation. Success can only be reached of goals are feasible.
• They should be inspiring. Although feasible goals should also be inspiring. They should invite and motivate.

Goals are based on a vision of the organisation on the society and on the (genesis of the) problem at stake. The vision is indicative for the own identity of the organisation, expressing something of the own ideology

NGO's should consider to contribute in one way or another to the development of civil society.

Both topics: societal analysis of the problem from an ideological point of view and the role of the NGO in civil society, need a broad discussion amongst the members of the organisation.

Beware of the pitfall of endless vison discussions. Don’t strive for complete agreeing on anything by anybody. The question should be: do we agree sufficiently to start the actual work? Remember that the result of a discussion on vision is always temporarily. A vision should grow. Goals and vision should not be static but dynamic.

Goals need some maintenance from time to time. If the external situation changes over time, the goals probably will undergo some modification. The process of close re-examination of goals is called strategic positioning.

If you want to know more about methods to establish goals, read the appendix: strategic positioning.

If you want to learn more about the role of NGO's in civil society, read the appendices related to civil society.

1.2. Internal organisational goals.

We make a distinction between two types of internal goals:

• internal goals which meet the needs of those people who want to join the organisation
• internal goals directed towards the quality of the organisation.

Internal goals based on the needs of the target group.

Organisations founded to fight societal oppression of minority groups are sometimes very attractive to join for members of those minority groups themselves. They hope to meet fellow minority group members, for reasons of socialising or mutual assistance. Members of oppressed groups, for instance homosexuals, hope to be helped to fight for acceptance in their own environment (coming out) and some hope to find friends and an atmosphere of understanding and support. The organisation may become a haven of safety.

It is OK if the organisation wants to satisfy these needs of the target group. But sometimes the motivation of people joining the group does not go further than the satisfaction of their own needs. If it is only a phase, it is no problem. Some organisations need a phase in which the members of the target group join, share and become strong together, before going into action. But if the organisation sticks to no more than this internal goals it becomes very internally oriented. If organisations concentrate on internal goals, without combining them with a political sting, societal action or external projects, the NGO can not be considered as a co-builder of civil society.

Internal goals directed to the quality of the organisation.

Other internal goals are those which provide conditions for realisation of the external goals. For instance: goals in the area of personnel (concerning recruitment, training, education, career planning etc.), finances (concerning sources of income, cash flow, financial systems, accountability and control), information and communication (concerning internal and external communication, important topics and means of communication), automation (what will be computerised and how), organisation (size, geography, cooperation, etc.) organisational culture (establishing, maintenance and change of organisational culture) and so on. These goals are sometimes called the PICOF goals, the acronym for personnel, information (including automation), communication, organisation (including culture) and finances.

The essence of internal goals should have a connection with the external goals, and no elements contradicting the external goals. (For example: No racial prejudices in the personnel department of an organisation fighting discrimination.)

1.3. Division of labour and coordination mechanisms.

The organisation needs people to do the job. In the beginning a small band of  people do all that is needed more or less together. As the organisation is growing the question will arise how to distribute the work and how to guarantee that the work is done as meant. In other words: division of labour and coordination.

The structure of an organisation can be described as the sum of the ways in which the different tasks are divided and the way  in which these tasks are coordinated. The organisation consists of several groups needed to realize the goals.

Conform Mintzberg, a well known author on organisational structures, we discern the following groups:

1. The operating core. Those who do the job for which the organisation was founded. In the beginning an organisation needs no more than just the people who together are the operational core.
2. The strategic top: the leaders or manager. As the organisation grows and the division of labour amongst the operators becomes more complex, a manager is needed. The top is responsible for the functioning of the organisation as a whole and is charged with the supervision over the satisfaction of the needs of important other stakeholders of the organisation.
3.   The middle managers. As the organisation grows, not only the operating core needs a manager, but also the managers need a manager. A middle management is created, a line of authority between the strategic top and the operating core. The middle managers are controlling the work of the units beneath them and feed the strategic top with feedback.
4. The techno structure or staff. The still growing organisation will use standardisation to coordinate the work. The responsibility for this standardisation is with people who are outside the 'line', the hierarchical line from the top to the operating core. This techno structure gives advice to those members of the organisation who have power of decision: the middle managers and the strategic top. The techno structure consists for instance of the personnel department, the department of planning and control, the quality control, the financial department. 
5. The support staff. People who  give general services to the rest of the organisation: administrative, a canteen, the cleaners, a department of PR and so on.

Mintzberg discerns also five types of coordination:

• coordination by mutual adjustment: agreements in a informal consultation;
• direct supervision: a person who gets the responsibility over the work of others, instructing them and controlling their activities;
• standardisation of working processes: for instance instructions how to assemble a car;
• standardisation of output: the result is fixed, not the way how to attain that result;
• standardisation of skills: a description what should be the necessary training for the job (nursing). The skills are often acquired outside the organisation, via a formal education or training.

One can often see a sequence of these five mechanisms of coordination with the grow of the organisation. As the complexity is increasing and the degree of difficulty of the work is growing, mutual adjustment as the main coordination mechanism will turn on again.

Mintzberg describes six basic organisational structures (called: configurations), each of them characterised by the importance of one main coordination mechanism:

• Simple structure: based on direct supervision, the strategic apex has the key position. Vertical and horizontal centralisation..
• Machine bureaucracy: based on standardisation of working processes. Techno-structure has the key position. Limited horizontal decentralisation.
• Professional organisation: based on standardisation of skills. Operating core has key position. Vertical and horizontal decentralisation.
• Division organisation: based on standardisation of output. Key role for the middle line. Limited vertical decentralisation.
• Ad-hocracy: based on mutual adjustment. Key role for the support structure, sometimes together with operating core. Selective decentralisation.

Later on Mintzberg added a sixth configuration:

• The idealistic organization: based on standardization of norms and values.

In the beginning the NGO probably has the configuration of the simple structure. Later on the most probable development is towards a professional organisation or a adhocracy.

Some remarks on the different structures.

• simple structure.
  Advantages:
  • The centralisation has the advantage that the strategy gets feedback by intensive knowledge of the work of the operating core.
  • It functions very flexible and informal.
  • Commitment is one of its main characteristics. .
  • People can easily identify with the organisation.
  Disadvantages:
  • Everything depends on the sanity and caprices of one person.
  • Low level of internal democracy.
  
  
• machine bureaucracy
  Advantages:
  • Only efficient structure apt for situation in which people have to perform an integrated serial of simple and recurrent tasks in a precise and consistent way.
  Disadvantages:
  • Risk that people will be treated as means of production, with serious consequences for individual work satisfaction.
  • Problems tend to be transported upwards (because of the coordination mechanism of direct supervision).
  • Problems in adapting or changing strategy.
  
  
• Professional organisation. 
  Advantages:
  • Structure gives room for internal democracy and a high level of autonomy for the operating core.
  • Provides opportunities for the professionals to enhance and perfect their skills.
  Disadvantages:
  • Main point of reference for professionals is outside the organisation (because of the coordination mechanism of standardisation of skills, vocational training). F.i. their ethics are professional ethics, not so much based on the values of the organisation. Professionals tend to neglect the needs of the organisation.
  • Difficult to correct professionals who are incompetent or neglectful.
  Sometimes organisations react on this problem of these elusive workers by intensifying control and direct supervision (belonging to the machine bureaucracy). But such an intervention is never effective. Authority moves from the operating professionals to the managers. But measures of control remove also their responsibility. As an effect the professionals will become passive
  
  
• Division structure
  Advantages:
  • Economic profit.
  Disadvantages:
  • The head quarter tends to assume too much control, thereby harming the autonomy of the divisions.
  
  
• Adhocracy
  Advantages:
  • Adhocracy is the only configuration which combines internal democracy with a minimum of bureaucracy
  • Ideal for unique projects
  • The structure provides room for creativity
  Disadvantages:
  • Unfit for normal, routine work
  • Many aspects of the organisation are and stay unclear: who is the boss, low group loyalty because of rapid changing task forces, undefined functions, unplanned personal development, internal competition for means, recognition and appreciation.
  • Risk: politicised configuration ('un panier de crabes'),
  • Communication is essential (because of the main coordination mechanism of mutual adjustment) but time consuming and can lead to conflicts.
  If the most striking characteristics of a NGO are those of the machine bureaucracy, one should reconsider the configuration.

If you want to know more of structures and their functioning read one of the books of Mintzberg.

For instance:
Mintzberg on management. The Free Press, NY, 1989
Or read organisations 1: structure of organisations.
Or read organisations 2: some basic organisational requirements.

1.4. Decision making structures.

When talking about decision-making we should make clear what kind of decisions have to be taken.

• Strategic decisions relate to the position of the organisation in the outside world, the relationships of the organisation with outside groups etc. The main issue is the choice of external goals in relation to the needs of the society. Strategic decisions relate to the organisation as a whole and should be taken centrally (central decision-making body with the highest authority like the general assembly, the plenary council, the board or the management).
  Sometimes the legislation, the chosen legal form of the NGO, decides which body is the highest in authority (like the general assembly in an union), but sometimes the organisation has to make internal agreements on which body has the highest authority. 
• Organisational or tactical decisions relate to the intermediate space between the central or high levels of the organisation and the operating ones. It could concern for instance a modification of structure on behalf of the realisation of a new policy. The question who should make these kinds of decisions depends on the specific matter at stake.
• Operational decisions relate directly to the operation of concrete tasks, like establishing operating norms, planning of work processes etc. They have to be made as close as possible to the place where they are raised, especially by the operating core.

NGO's usually have rather democratic opinions about the influence of people on the decisions that touch them. They regularly want to involve externally target groups in decisions concerning the realisation of policies and internally the members of the organisation. Ownership, efficiency and accountability are the key-words in deciding who have to be involved in what kinds of decisions.

Fowles: (In: Striking a balance, a guide to enhancing the effectiveness of NGO's in international development. Earthscan, 2000, London)

.....Decisions often relate to plans about activities and budgetary resources, therefor the planning and budgeting system must support a participatory approach.

NGO's decision-making must be consultative enough for shared ownership of the outcomes and directive enough to be timely, while ensuring accountability. The reason for opting for a consultative process (internally and externally) is that people more willingly modify their behaviour when they participate in problem analysis. The task for managers is to treat their role in decision-making as one of facilitating a group process with the right people and then discharging their final authority in a transparent way...

Tips (borrowed from Fowles):
effective decision making requires

• only involving those who directly control a situation and those affected.
• mediation and guiding the process rather than directing it.
• a culture of openness and self-criticism.
• clear allocation and mutual understanding of who is responsible for what.

1.5. Responsibility, authority, accountability

The responsibility for a task should always be accompanied by the authority needed to execute that task and the obligation to report about it (accountability).

If a certain task is delegated, the authority and the obligation to report should be delegated as well, while the end responsibility stays with the one who delegates.

The people who have to perform certain tasks on behalf of a team should also have the disposal of the authorities that belong to the task. The way in which accountability is arranged should be clearly defined.

People, especially professionals, cannot work in a situation in which they have to perform certain tasks, without the power to make decisions in the realm of their operating duty. Taking away their authority, f.i. by making central decisions concerning their tasks, means taking away their responsibility.

1.6. Management: giving direction, creating support, caring for stakeholders*

A lot is written about management and management tasks. Look at the background materials and the list of readings. At this point we want to cite only Fowles who lists the critical tasks of NGO managers:

• to provide a consistent image and moral ethos
• to retain and promote sensitivity to deprivation and injustice experienced by the poor
• to build a culture of association within the organisation which encourages sharing and promotes reflection for learning
• to bring coherence between members' interests and organisational objectives
• to act as a 'holder' for the psychological needs and frustrations of staff and volunteers
• to reconcile individuals' values and contributions with collective needs
• to put the process of personal relations into sustainable development
• to enable followers to become leaders themselves

In Fowles' description leadership and management are very close. Recent studies indicate that the main distinction between leaders and managers is their adherence to moral principles. This is especially important for leaders of NGO's, which are more than average value driven organisations.

In line with the summing up of Fowles we want to emphasize three aspects of management: giving direction, creating support and caring for stakeholders.

giving direction

Giving direction means a strategic responsibility (look at: strategic positioning) combined with a coaching style of management. The manager/leader should be constantly aware of the organisation's mission, in order to be able to encourage the members of the organisation to direct their efforts in pursuing those goals. This goes for the formal external goals, but also for the internal goals. (Look at: goals). This awareness and this orientation towards the desired behaviour should be in strict concordance with the values and norms of the organisation itself.

The art of leadership is to let the goals inspire and connect individual drives of  members of the organisation with the goals of the organisation.

creating support

Creating support is meant as an external as well as an internal activity.

The most important group to support is the staff of the organisation, being themselves the only tool of the organisation in attaining its goals. People have to put their utmost (talent, time, energy) for the sake of the organisation. They only will continue to do that is they feel recognised, appreciated and supported. People want to take responsibilities and they want to grow. The management should take care for conditions in which they can do so by creating a consulting and coaching style, offering influence on major decisions, putting responsibilities and the accompanying authorities deep in the organisation and looking for possibilities for empowerment and growth.

Systematic support can be provided by regular evaluating the work of each member of the organisation, f.i. by appraisal interviews. That is why a systematic evaluation has to be introduced, in which each one's performance is judged by objective standards and by earlier records. Such evaluations have to be followed by consequences directed to improvement: instruction, training, education and so on. In this the worker and the organisation bear both a part of the responsibility; the organisation for providing opportunities for improvement, the worker for realising the agreed targets of improvement. If a sequence of such judgements and the accompanying investments do not lead to progress, than a decision should be made: either placing the person in question elsewhere in the organisation, on a position more fitting the persons competences, or dismissal and help in finding another job.

Who want to know more on directive resp. supportive management:

Hersey and Blanchard: Management of organisational behaviour. Prentice Hall, NJ, 8^th ed.2002

taking care of stakeholders

An endeavour for managers should be to take care of stakeholders, transforming them to different endorsing and supporting groups by attuning their different interests. The most important group of stakeholders consists of the people who legitimise the existence of the NGO: the constituencies, the clients, the grassroots. Other formal stakeholders are the staff (see above), the board, the funders, the collaborating government, other NGO's and other comparable organisations and institutions.

A NGO performs well if it succeeds to satisfy the rights and interests of the (primary) stakeholders in keeping with its mission, while at the same time recognising and taking into account the rights and interests of the other stakeholders. To realise that the manager or leader has to keep in touch with all the different stakeholders, striking an optimum balance between their multiple perspectives, opinions, rights and interests.

One way to keep the stakeholders involved is to inform the stakeholders and to listen to them and to make the organisation accountable to them. A manager should thus realise a threefold accountability: primarily towards the primary stakeholders, secondly towards funders and thirdly towards peers and other interested parties.

1.7. Output, measurement of achievement and learning capacity.

The main task of the manager is to realise the goals of the organisation. Core question in this challenge is: does the NGO reach its goals. Even if it is hard to answer this question, all efforts should be directed to provide information for the answer. The NGO should not be satisfied by vague indications, by guessing, assuming or hypothesizing the results. Only if clear results are measured and presented the NGO can adapt its strategy, can measure its effectivity and efficiency, can appraise its working methods and the effectivity of the work of the staff. Moreover: only measurement of achievement makes the NGO legitimate towards the constituencies and accountable towards donors.

Input, output, outcome, impact.

One of the problems is that NGO's tend to measure their results by measuring input, or in the best case by measuring output. For instance: an input measurement is: we developed three different training programmes for different target groups. An output measurement, in essence measuring the effort, could be: we have trained 50 persons of regular institutions. But what really matters is the question if that training led to the intended results, the effectivity of the efforts: how much better did the trained people perform after the training. In other words: outcome is more important than output which in turn is more important than input. Even more important than the outcome is the solution of the original problem. Leads the training to the desired change: the impact of the work of the NGO.

In order to be able to measure the results of the work, the start should be to assess the original problem. Making the results operationally can be very difficult, because much of the results have to do with attitudes and behaviour of people (outcome). What is needed are indicators of the matter that will be measured.

Who wants to know more about measurement of achievements: most big donor organisations can provide monitoring and evaluation systems and -if needed- training in assessment procedures.

learning capacity

The best way a NGO may improve its impact, its quality of aid, quality of management, quality of systems, methods or processes, its organisational quality and its quality of contributing to civil society is to build in ways of systematic reflection. One of the methods could be a self assessment.

For those who want to know more about self assessment:

• Read: Fowler: Striking a balance. especially the chapter on Growing Organisational Capacity.
• Contact CYSD, a NGO in India. CYSD developed an organisational self audit for NGO's (OSANGO) in English, based on South Asian input. cysdbbsr@sancharnet.in

Or contact Espiral, a Mexican NGO for the Spanish version of the OSANGO, based on Latin American input. Espiral: espiral@planeta.apc.org

1.8. Financial management

Financial management in NGO's coincides for a big deal with looking for funding and reporting to donor organisations. However important the accountability, the donor often causes an administrative burden, at the costs of management attention to more directly goal related activities.

One of the problems related to funding is the preference of many a donor for project funding, which leaves hardly any room for the NGO organisation to finance its own plans and budgets. Programme funding provides more possibilities for flexibility and own decision making of the NGO's themselves. But donor organisations are not always receptive to the arguments in favour of  programme funding.

For the solidity of the organisation, a NGO should have a planning and budget system. Budgeting in essence is planning translated in money. It describes what should be performed by whom, with which resources, in which quantities. In this way, budgeting is an important tool of management. Its enables the management to manage the processes in the organisation, to define the results and thereby offering the possibility for control, feedback and readjustment.

But this plain description not always fits with the feelings of the workers in a NGO. A strong identification of the workers with the goals of the organisation or with the interests of the clients will lead to a lower sense of costs. Limitations of financial resources will be felt as a loss of quality. That is why financial control, coming from the management, the donor or the government, soon will be experienced as hindering. Especially by the professionals in the organisation. Just another reason why financial management in NGO's is not always the most grateful job to do. But when the management succeeds in making the professionals co-responsible for managing budgets, the resistance may disappear.

A planning and budget system includes:

• performance agreements in terms of outcome
• allocation of budgets to responsible departments, units or teams in the organisation
• budgets are allocated at the same level as the authority level for approving expenditure
• agreements on moments of critical reflection, evaluation and learning
• transparency at all levels of the organisation
• clear ways of accountability

In terms of financial management the organisation should prevent to be fixed too much on time-expenditure relationships, instead of measures of change in terms of output or outcome.

Budgets should be structured in such a way that they enable teamwork rather than supporting top-down management control.

Who wants to know more about financial management of NGO's:

Read: Fowler: Striking a balance. A guide to enhancing the effectiveness of non-governmental organisations in international development. Earthscan, 2000, London.

1.9. Organisational culture.

Whatever structure a NGO may have, the organisational culture will be at least as decisive for its success.

Managers have a special responsibility in feeding and maintaining the strong aspects of the organisational culture. The personal model set by the manager or leader may strongly affect the dominating culture. Fowler (Striking a balance) gives the example how arguments defending a certain system of remuneration unveil organisational culture. Measure the differences between the level of remuneration professional staff receive and that what they could gain if working in the commercial sector. Arguments that remuneration should be determined by comparably sized commercial 'caring' organisations refer to business as benchmark, where organisational culture and incentives will be shaped accordingly. Where leaders who use norms of responsible behaviour towards the poor will tailor their remuneration and life style accordingly, a different signal is sent and staff respond accordingly.

Donor organisations often have a different organisational culture, partly because of the influence of national culture on organisational culture. Dealing with donors demands resisting the tendency to copy the donor's culture.

Managers should care for the organisational culture, ensuring that it reflects the central values. Ongoing sharing of values is crucial. Common energy has to be put in assuring that the organisation, its working methods, approach, systems, structure and treatment of personnel reflect these values.

Who wants to know more about organisational culture:
Read: Schein: Organisational culture and leadership.
Jossey-Bass, San Francisco, 1987
And read solution 8: changing the organisational culture.

Who wants to know more about national cultures:
Read: Hofstede: Cultural Consequences.
Beverly Hills, Calif, Sage, 1980

^*  Stakeholders are all the people who hold an interest (=stake) in the organisation such as clients, supporting groups, donors. See further explanation at Taking care of stakeholders.