No more restructuring! Please.

No more restructuring! Please.

How non-profit organisations can keep up with change without change projects

by Christian Meyer zu Natrup, October 2018

The need to change an organisation is constant. Non-profit organisations should beat the permanent catch up play and disruptive, expensive restructuring projects. But how? At MzN International, I explore how we can keep up with the changing environment without having to constantly go through reorganisation projects.

The world is constantly changing and so is the environment in which NGOs, UN and government agencies operate. The expectations and demands from beneficiaries, governments, donors and other external partners change faster than ever, especially when it comes to the pressures to improve programmatic and financial transparency. Technology is paving the way for organisations to have more data and be more evidence driven than ever before. But it also requires new ways of organising management (read more about this aspect here) to use the data and turn insight into action.

Yet, non-profit organisations are failing to keep their operating models up to date and adapting to the changing environment. Organisations struggle to deliver the impact in the world that they set up do to due to operational inefficiencies, outdated financing models and non-agile structures.

One reason is that even though the need to change is ever increasing, the way we are changing is not.  I have observed many non-profits which find themselves playing constant catch up – trying to launch one restructuring project or strategy after another. By the time the restructuring is done, the demands and environment has changed once more, and we will need to restructure again, and again.

This is not the most effective way to keep up with the hyper-competitive environment, fast-paced context changes and amazing technological opportunities. I think that there is a cheaper and better alternative available.

Evolution vs. restructure

Restructuring projects take months to complete. They are accompanied by anxiety and stress in the organisation, with the hope that it will ensure that the organisation is fit for purpose afterwards.

Sector leaders around the world have noticed this too. Presidents and CEOs of large and mid-sized organisations to Directors at regional levels have expressed their fatigue, saying it’s a game of permanent catch up. “I get why we need to do this, but I am tired, and this change will certainly not be the last” – this is a line I hear a lot.

It is therefore perplexing that many leaders in our sector opt for (frequent) large scale restructuring projects.

Not only is this often a waste of time – precious time in the rapidly changing world – and resources, but also results in a lot of stress, anxiety and fast decision-making, which would be better made over several weeks.

Put simply, launching one restructuring project after another to adapt to the subtle and incremental changes is not the way forward.

Let’s change we change

Rather than periodic large scale change projects, non-profit organisations should be constantly checking their operating systems and the way they work. Using a set of external and internal parameters and factors that steer the organisations’ evolution and learning, does not only make the operational change more evidence driven, it finally ends the endless reorganisations.  Internally at MzN International, we refer to this as incremental organisational development.

Organisational change should be as constant as the change happening around us is . For NGOs to succeed in the long term, we need to install the ability to identify and respond to internal inefficiencies and adapt needs as a matter of routine practice. This constant evolutionary capacity will keep the organisation nimble, self-critical and evolving. It is a much less stressful and cheaper way to change, compared to the endless restructuring projects.

One-off restructuring may be necessary from time to time to deliver drastic change, for example when reacting to large context changes or quickly correct major inefficiencies. But it is not the right solution to adapting to change. Simply drastically restructuring an organisation will not necessarily create the capacity to deal with the emerging technology, new funding models or beneficiary demands, nor will it ensure that the organisation adapts in the long term. So, why spend time doing it if there’s a simpler way?

The key is to build an organisation that is always evolving. This can be done by introducing mechanisms that take a good and hard look at the structure, processes, performances and systems within the organisation. And do this on a regular basis. Think of it like an internal Monitoring & Evaluation function, but for an organisation.

Most organisations may not have the mechanisms in-house to drive change and meet the expectations of the external players.  My colleagues and I have created a low-intensity, periodic Operational Capacity Assessment Tools (known as the “MzN OCAT”), which delivers a real-world view of the agency’s true capacities in reference to its strategy ambition, both at a board and ground-level view.

In recent years, our clients have found the comparative assessment to be particularly helpful, which compares the organisation to its peers.   The key advantage is that the organisation can demonstrate – and verify – its evolution and ability to adapt. Remaining responsive and flexible means that staff, beneficiaries and donors can expect – rather than hope – for the organisation to be ready to change with the new realities and pro-actively act upon opportunities to create more impact.

The periodic OCAT compliments the change instruments available to management:

Another key advantage are the vastly lower costs. The monitoring and evaluation work can be done at around 20% of what organisations usually cash out for the average restructure or change process. MzN International monitors the operational performance of several non-profit organisations. We do not bill more than this amount – which is a significant saving.

Waiting for the organisation to be in a situation where it is so far behind in the catch-up game that it has no other option than to restructure is just not cost-effective. Instead, we need to be monitoring and evaluating what is in place and adapt as we go along. We can help monitor the processes and practices, according to our indicators, and come to a conclusion about how well an organisation is responding to change.

Think about it like this: you don’t just go to the dentist when your teeth are falling out – you go every six months to keep everything in check and the dentist may tell you a cavity is appearing. You then get it fixed before it gets out of  hand and the tooth has to get pulled out. You monitored and observed the process and ensured you were taking all the precaution you could to avoid the major event, the tooth needing to be pulled out .

Similarly, you don’t just have an operation once your health is so bad that it’s your last option, you try to stay healthy and may have small surgeries to ensure you can go on living your life to the fullest.

NGOs and other non-profit agencies should do the same. Don’t just restructure and keep playing catch up with the constant change. Get ahead of it and start monitoring and evaluating your organisations performance to ensure that you can evolve with the change instead.