Creating an Organization Design to Deal with Global Complexity

Speaker A Good afternoon, everyone. And I want to talk a little bit about a global not for profit and the application of Ro principles and methodology to a global organization. And I'm very fortunate today is that if you have any tough questions, I have my former project director with me so he can answer them. I guess two opening comments I would make is that it does work for a global not for profit organization, but it also has, as Sulutha said, it has some limitations. And it really is like swimming in the mud because everything is very, very public. And some of the things we did landed up in the press, in the Geneva press, and we had a media crisis for a week while we were dealing with the change. So everything you did was public. And while we applied it at an international organization, I can also say that I can apply for a national organization, national, not for profits, because I'm currently the CEO of the Canadian Dental Association. And when I came back to Canada in February 2000, we also applied it to a national professional membership organization. So it does also work at a national level also too. So those are just two differences. When I was dealing at the international level, unlike some other private sector changes where they were maybe delayering, we had a problem with management depth and we had to add a layer. So we added a stratum. So this has a little different story that we're going to add a stratum as I walk through the story. So there are four aspects I'd like to deal with and highlight some of the salient points. I'm going to spend a little extra time on context so that you can understand the variables that we had to deal with secondly, and then what and how we did it. I'm going to talk a little bit about results and like Ruth, I'd like to talk a little bit about some of our learning points and the points that if I had to redo it again in the international level, what I would have done a little better, so to say. So taking on to the first slide, let's talk to you about what the organization, the context. The International Federation Red Cross. Red Crown Society is the largest humanitarian network in the world. And these are some of the statistics from 1994 because that's when we started the process. I took over in December of 92, but it was 1994. The overall organization assisted 233,000,000 people using 105,000,000 volunteers, just under 300,000 permanent staff, annual expenditures, collectively $24 billion. And we operate it nearly in some element in every country in the world. There's approximately over 190 nation states, and there was some element of the Red Cross or Red Crescent, which are the equivalents in every nation state in the world today. The engine of the organization was really the secretariat with people in Geneva and in our field operations around the world. We had 16 regional offices in key areas around the world covering groupings of countries and national societies, a New York office, permanent liaison with the UN and 50 plus country offices. And country offices were set up in countries that had been affected by major disasters and they would change. We'd go anywhere from 50 to 70 depending upon the month and the number of disasters that were occurring at any one time. 5000 plus Secretary of Employees we had 92 different nationalities working for us and we operated in four languages english, French, Spanish and Arabic, adding complicating. So you had to translate and get things translated or interpreted. So it wasn't always so clear. Always. Although English was one of the main working languages, you still had to take care of those other sensitivities. Out of the 5000 plus staff there were about 300 at headquarters of which 10% were on loan from national society. So he didn't really own them, borrowed them for a period of time. So their allegiances and loyalties were different at times. You had 400 field people that were 80% on loan from national societies and 20 20% were people that specialists that we had to find from other parts of the world that didn't belong to a Red Cross or Red Cross society and 4300 that were local hire. So our staffing situation was constantly fluid, constantly changing like that. And people working for us for a couple of weeks taking out an expert on war surgery out of a downtown hospital in Stockholm to go to Monrovia to deal with war surgery for a couple of weeks to people on loan to us for a couple of years. So it varied. So those were kind of the stage, the context in terms of pressing for review. It was clear at that time that a minimalist approach was not going to work, that it was going to have to be something a little bit more radical to be able to prepare the organization to deal with what we could see down coming down the horizon. So we had a little bit of an interesting process. We started pulling the manage anybody who managed anybody off to half day sessions trying to probe and we set up effective leadership leadership workshops and we introduced 360 feedback systems at a time which was a real shock to 92 different nationalities. It was real shocking, for all I can tell you that it was mainly the western Europeans that were more resistant than some of the developing European people that were there. They were willing to learn but the western Europeans were a little more resistant to somebody coming in from Canada showing them some of this stuff. So it was interesting. But anyways, that led to setting up a formal task force. All these different workshops that we had led to a formal task force setting up. They did some data gathering, then they put together a report on the operating systems in order to link back to the strategic work plan, how are we going to get it going? And they came up with twelve critical areas with 103 recommendations that needed to improve the effectiveness of the organization to be able to meet the challenges now going forward. And that out of the review of the operating systems. That led to two studies. So in the first year we're able to create a climate ready for change, for major change to take place to the organization. And so that led to two further studies. One was dealing with the review of the organization design because there were a number of multiple recommendations that all really led to that. And a second group that was going to work on the federation priorities and working methods linked back to the strategic work plan to do the review of organization design. Dwight was on staff and both of us had worked with Stafford Beer back in the Canadian Red Cross. So we knew something about systems and that wasn't really totally satisfying in the 80s when we did some other reorganization and Dwight had identified Ron Capell who was using Ro. And so we hired Ron to come over and to help us in working with a task force led by a project director and a project team. Then we started to take a look about putting together a new organizational design and doing using methodology related to RO and federation priorities and working methods led also to some other recommendations. And when looking at the results in terms of an organizational design, working down to the federation. Working as a federation was a concept that in order to be able to deal with the challenges in the future, we had to realize that we couldn't do it all ourselves and that we had to use more of our national societies to be more an architect of cooperation as opposed to the doers. And that was what meant working as a federation. Moving on just to the organizational design and the organizational review. We took a traditional approach back in 94 with Ron;s literature review, the interviews with all the employees and field people. Geneva and the field did task analysis and task analysis. What happened is we set up a nomenclature of 137 tasks and all the employees both in Geneva and the field allocated 5% of their time. So then we costed out based on the salary. So we knew what percentage people were working on core and what percentage were working on support. We found that we had only people working only 30% core and 70% support. So we had to do something about that. That was kind of how we're going to deal with that. Workflow process analysis we took mapped. Ron helped us map a number of key processes to try to take work out of the system. How are we going to do that? How are we going to deal with the greater volume of business coming along. So we had to try to take work out of the system. And of course, related to the organizational design, we did time span analysis, key findings. It was clear that we needed greater management depth and restructuring was required when the time span analysis showed that of all our managers, only 45% were aligned properly, 55% were not aligned properly, 36. We had 36% of the 55 that were compressed and a 19% gap. So we clearly had to do something with the structure and the different levels. Clearly we had to improve the systems and procedures. If we had 70% people were working on 70% support areas as opposed to core big issue in terms of improving our effectiveness and our performance was to get the field geneva relations needed clarification and strengthening who were the boss of the field people. And there was some very, very gray get to that in a moment. A better balance between relief, raising money for relief and dealing with relief. And that's a different type of personality. People that are gun hole ready to break all the barriers to get the relief to the people, versus people who work on development and capacity building. Trying to build additional capacity takes time and adding capacity people so that they cope locally better than having international intervention. And of course our planning systems need refinement because everybody, every manager was doing their own thing in terms of their own formatting, in terms of results. As a consequence of the new organizational design, we felt that we should implement a Stratum Six organization to take care of the compression. And I can tell you what we did is that we had everybody resign, all staff resign and we rehired everybody, some within an hour or so and others a little longer. But there were about 45% of the managers that were floating out. And that's of course when the press got on it in Geneva that how could this it was unheard of that an international organization had fired all its staff and it caused kind of a diplomatic growl. And I was the talk of the diplomatic community in Geneva for about a couple of weeks. So some interest in horror, how could you do that? And others saying hey, show us how it can be done. So it's very interesting, increased management depth. We moved up to have our undersecretary generals, which is one level below the Secretary General to Stratum Five. So we only had two. And we had management depth, they had two additional ones because there was a missing layer of work in the larger regional departments. We had regional departments under our operations group and regional departments were heads of regional departments who had desk officers who managed our country and regional delegations. And the heads of the regional departments in Geneva would be traveling six to seven months of the year. So there was never a boss in Geneva taking care of the desk officers. So they became running the field whereas the heads of the field operations country and regional delegations really reported to the head of the regional department but they were never around. And so the desk officers with their certain personalities started acting as the boss and that kind of caused a lot of conflict that had to be fixed. And so we created deputy director positions in the larger regional departments, neva support departments like the finance people. While they'd have line accountability to the head of the country delegation or regional delegation, they'd have a cross-functional accountability to the finance department or health or whatever in Geneva. And business planning was enhanced to reinforce these vertical and cross-functional. We changed the performance review and compensation systems to achieve that kind of behavior. Results well, I gave you the 193 and 99. Six years later we had increased our appeal or mobilization of resources on 54%. That's both for relief and development and a higher percentage for development. We had doubled the amount of beneficiaries we were able to assist and we had an 18% increase in the number of national societies that we'd helped reach the threshold then to be admitted as members. And I can tell you that the staff stayed steady or was reduced. So there was a level of productivity and we were able to handle a greater volume of business. And the surveys on staff when it got going and three, four years later by 97, 98 and it took that long, the staff were feeling good about the changes. And the donors, the customers that had also provided us with funds were feeling much better in terms of our effectiveness and efficiency change process. So we had these two parallel process worked together. When the software dealing with the people and the hardware we had to balance that off in terms of how much effort in both areas. But you had to spend a lot of time dealing with the people issues. We involved everybody, all staff, including the switchboard operators and the chauffeurs and everybody, everybody was involved and consulted the whole staff community. Extensive communication throughout, weekly bulletins, emails, meetings of smaller groups, larger groups, people moving around the field, visiting and talking this up over a period of time. And Creeping is having a full time project director to keep the project on track. Extensive use of task force and implementation and the senior management team along with me were totally committed to making this work. Some lessons learned and some of this is a little bit ABCs. It was clear we couldn't have done this with only our internal team. Only it was important to have an external Ron Cappell and his people help us with the methodology and pushing us, pushing the internal group and pushing the senior management to go as far as you could with the change. The second point is particularly an international level with 92 different nationalities. It takes much longer to change an operating culture. And five to eight years is not unreasonable to change an operating culture when you're dealing with so many different culture groups. And I can say that maybe a couple of the couple of the medical doctors, the really well qualified medical doctors who had spent 15 years in getting there, where there were surgeons and heads of departments, I don't think we ever convinced them about the time span. And we had to use other methods to get them to comply. And that was very difficult with particularly well qualified professionals and neatly to constantly re energize the process. It would start to wane because you're dealing with emergencies all the time and other things, you constantly have to re energize the process. And so Ron came back two years after and two years after again to help us re energize the process. Anorequisite organization can be used in a global not for profit while fighting fires. And I say that my analogy at the time. To the staff, it's like painting a destroyer at full battle stations in the middle of a hurricane. That's what was trying to do. That kind of change with an emergency gain was the importance of man Stratum three for us in terms of the regional country delegation to Geneva, that was a critical point between the headquarters and dealing with the field operations and one filling key positions as soon as possible. I think if I look back at it, I took three or four months too long to fill one critical position. That could have made a difference. We could have probably optimized the organization a little bit more. That's my story. Thank you.