3) Role of OD
The means to build organizational capacities and manage change.
Definition
Organizational development (OD) is a term most commonly used when referring to building capacities of an organization. The International Federation defines organizational development as:
an ongoing systematic approach of continuous learning to improve the ability and the capacity of Red Cross and Red Crescent Societies to make the most effective and efficient use of their available human and financial resources to achieve the humanitarian purposes of the Movement in a sustainable way.
Managing change
OD is about managing change in a systematic and planned way. The purpose of change for an organization is to evolve and to increase its positive impact on the lives of vulnerable people. The goal of changing is to become more effective, viable, autonomous and legitimate. In an organizational change process, it is important for a National Society to understand its current model, create a vision of a future image and identify the steps to realise that vision.
National Societies are voluntary organizations (non-profit or member-based societies) that should not be turned into bureaucracies. They mobilise people and resources to deal with humanitarian needs in society. They grow in capacity by doing this work, by practising their mandate and by solving problems encountered along the way. They draw their resources mainly from the communities. A systematic sociological and economic evaluation of the country provides a National Society with the necessary information to adjust its capacities to meet changing needs of vulnerable people effectively.
Understanding and managing organizational culture is an important aspect of managing change. Culture is ultimately linked to values and beliefs. To identify a National Society’s existing culture, the unwritten rules need to be exposed:
· What behaviour is allowed or not allowed?
· What is rewarded or punished and by whom?
· What is sanctioned or not sanctioned?
· What is praised or not praised?
Based on organizational traditions described in section 2, as well as learning from National Society change processes from around the world, there are four key points for consideration in organizational development:
a)Focus on making a difference in the lives of vulnerable people
Organizational change should be driven by the needs and capacities of vulnerable people. This requires an analysis and a (re)design of services and programmes the National Society should be providing as well as the local organizational delivery structures.
b)People make all the difference
A National Society needs to be transparent and inclusive in its change process, with volunteers, members and employed staff actively involved in participating in the process at different levels. There needs to be a clear definition and design for the role of volunteers, members and employed staff in running programmes and services, including their involvement in governance and management. Supporting and training staff, volunteers and active members are essential to a successful change process.
c)People’s trust and the organization’s credibility
In order to obtain resources from its environment and accessing vulnerable populations and ensuring that its services are relevant and fully utilised, a National Society must have the trust of its community and have credibility. Trust and credibility are achieved through transparent management practices and provision of relevant services to communities. A simple way to practise transparency for a National Society is to engage its key stakeholders and ensure that it continuously builds effective external partnerships.
d)Integrate capacity building measures into coherent change management
There are many entry points for building capacities, such as working on improved programmes and services, or on improving systems and structures. Capacity building measures in one part of the organization trigger needs for capacity building in other parts. For example, while working on improving financial management, weaknesses in governance and management practices are exposed and will need to be addressed.
Change management phases
For the purpose of better understanding the scope of activities related to organizational development, four main phases of an OD process are identified and analysed below. These four phases are:
· organizational analysis;
· strategic planning;
· implementation; and
· evaluation and learning
Each of these four phases can yield success only if they are carried out by the National Society itself. Even if external support is needed, the National Society must exercise its lead role and assume full responsibility for the change and its results.
Phase 1: Organizational analysis
OD work should be guided by the needs of vulnerable people. Development and expansion of programmes and services must demonstrate a direct link to improving the lives of vulnerable people. Assessment of the needs and risks of vulnerable people and the related organizational analysis is perhaps the most important step in an OD process. Subsequent actions are based on the results of assessments. Consequently, the success of the entire process depends on how well this first step is carried out.
Organizational analysis during a change process is based on a broad external assessment that includes identifying vulnerable people, the risks they face and their humanitarian needs. This information must then be integrated into a specific analysis of the National Society itself which includes the organization’s service-delivery capacities and performance in relation to identified risks and needs of the vulnerable people.
The overall success rate of a change process is dramatically increased when a National Society’s critical internal and external stakeholders are invited to participate in the assessment process and in all subsequent steps.
There are many available tools but a framework cannot dictate which one to use. Practitioners can choose the tools most appropriate to their respective situation (Tools).
In 2000, the International Federation’s board launched the National Society Self-Assessment process. Based on the Characteristics of a Well-Functioning Society a questionnaire was designed and tested. By the end of 2001, over 40 National Societies provided feedback and subsequent assessment reports were written up. The main objectives of this self-assessment process are to provide:
· information to the International Federation's governing bodies on the quality of its membership;
· updated baseline information on National Societies for planning and knowledge sharing;
· analytical input to National Society OD processes on areas that require improvement; and
· input for cooperation and coordination processes.
As a tool, the National Society self-assessment provides useful complementary information for National Society organizational development.
Phase 2: Strategic planning
During this phase, a National Society will often design or revisit its strategic plan. Effective strategic planning is about making choices for the future and positioning the organization accordingly. Based on the information gathered in the first, organizational analysis phase, a National Society defines or restates its mission and its vision, as well as the goals it considers a priority. Apart from the findings of its self-assessment, a National Society's strategic plan should demonstrate a direct link to the International Federation’s Strategy 2010, the Movement Strategy and other relevant policies and statements such as regional declarations.
The overall strategy is then translated into simple operational plans for programmes and services as well as into specific organizational change activities. During this phase, the National Society should determine what human, financial and material resources (type, quality and quantity) are needed to implement the selected programmes and organizational change activities. It then compares what is needed with its existing resources and plans initiatives to close all resource gaps.
New initiatives should be planned as additional activities. These activities should be properly reflected in the National Society's plan. Such initiatives can include (but are not limited to) the following: revenue generation; fund-raising; marketing; public relations; specialised training; and recruitment. As part of planning, the National Society must define how the results of stated objectives and planned activities will be measured.
Phase 3: Implementation
Key activities during the implementation phase include:
· communicating the vision to critical stakeholders such as the National Society's leadership, members, volunteers and staff, as well as vulnerable communities, donors, NGOs, government and local authorities, and Movement partners;
· designing and improving volunteer-based programmes and services; and
· developing and engaging volunteers and staff.
Complementary or secondary tasks emerge during the implementation phase and pursuing them are important to yielding success. During a change process a National Society may have to adjust key elements of its organizational foundation and its resources.
Organizational foundation
§ Structure
Effective structures and systems need to be developed in particular at local branch levels as well as at the national level. A National Society is closer to reality and better prepared to respond to needs if it has a countrywide network of branches. The purpose of Red Cross Red Crescent branches is to enable a National Society to support local volunteer-based groups effectively in implementing programmes and delivering services to communities.
Experience shows that it is wise not to change everything at once, and not always to start the change at the top. It is important to start changes systematically at the local level in a few places. As the diagram below shows, many effective branches will eventually create a better functioning Red Cross or Red Crescent at the national level.
During implementation, it is important to look for and learn from unexpected success. An example of this is a small HIV/AIDS project in western Kenya. When the external donor cut its support, the local communities decided to accommodate and feed the external project coordinator for several months. A lot can be learnt from this experience in terms of the importance of community ownership, local support structures and sustainability. Another example is the Golfo de Fonseca in Central America. The detailed report shows a number of important issues to be considered in building local support structures.
§ Financial management
Development of financial management capacity is one of the key complementary activities in organizational development. Since each National Society is different, it is impossible to develop a comprehensive standard financial management package (including software and accounting system) that can be used globally. Therefore, a tailor-made solution has to be designed for each case according to the specific circumstances. To accomplish this, there are four main steps in the development of a National Society’s financial management capacity: (1) analysis of the current situation; (2) development of a strategy for change and design of concrete activities; (3) implementation; and (4) readjustment of the approach through monitoring and evaluation.
§ Legal base
A National Society's legal base and its statutes contribute to its functioning in line with the ten conditions for recognition. The legal base consists of the National Society’s statutes and the national law or decrees under which it is recognised by its government.
Financial resources
All National Societies need to review and improve their fund-raising and revenue-generation activities regularly. A healthy organization generates the necessary resources for its services from a diversified financial base. National Societies can safeguard their independence and enjoy stability when they develop a coherent strategic plan for resource development, and practise marketing and public relations.
§ Fund-raising
In most countries, resources provided by Red Cross Red Crescent members and the community are not sufficient to sustain humanitarian programmes and services in the long run. Therefore, a central complementary element of organizational development is to ensure that there is an internal support system for fund-raising activities. Fund-raising is a skill that can be developed through training, knowledge of the organization and experience.
Everyone has the opportunity to participate in implementing or supporting fund-raising activities. First and foremost, a sound financial development strategy uses available resources to generate more resources. For instance, the members of a National Society’s governing board and existing corps of volunteers can participate and drive the organization’s fund-raising goals. Key to successful fund-raising is the ability to develop and maintain excellent relations with partners and governments alike. Therefore, National Society staff can play a crucial role in this area through their external working relations and consistent professional performance.
Fund-raising is a necessity in the non-profit humanitarian sector and the most important characteristic of successful fund-raising is trust.
§ Revenue generation
Revenue generation goes beyond fund-raising and means selling services and/or goods or persuading people to pay for something they want. In the best revenue-generating projects run by National Societies, the product or service is not only profitable and of real social value, but it also supports the organization's mission. It flows naturally out of the work of the organization, supports the organization's image and increases its capacity to assist vulnerable people in a specific way.
Revenue-generation activities include selling or leasing goods, services or property. They range from renting out space in buildings to providing training services for a fee, from cause-related marketing with corporate partners to running businesses. They all require a business mentality to ensure that they make a profit and to know how to restructure them, cut their costs or cancel them altogether if they do not.
The capacity to run a business needs to be developed or acquired. Innovation, risk-taking, marketing talent and other business skills are essential for success. Neither the external environment nor the existing capacities of the National Society are always conducive to running a business. Engaging qualified advisors to undertake detailed environmental analyses and to establish appropriate structures for implementation are essential ingredients for success. A National Society getting involved in business must ensure that it does not shift its focus from humanitarian services and programmes to enterprise. A good example of a revenue-generation activity is the sale of first-aid kits and tailoring first-aid training services for corporations, businesses and government agencies.
Revenue generation is about covering costs for services and ensuring that any and all profit is reinvested into improving programmes and services.
Other considerations
The role of change agents and facilitators is a key consideration when managing the implementation phase of a change process, in addition to identifying and addressing resistance to change.
§ Change agents
Change agents are the key implementers, the “doers” or “champions” inside an organization. They are the ones who provoke and lead change. They also advocate for change with key stakeholders.
§ Facilitators
Facilitators are often external (e.g., consultants or delegates) and thus may be more "distant" and "neutral”. They are involved in processing and "mirroring". One of their important functions is to provide feedback for learning and to accompany and/or coach the National Society in the change process.
§ Resistance to change
In an organization, change is about retaining people, who have individual needs, fears and aspirations. It is important that the National Society is aware of and understands strategies to help individuals to cope with change and that it is able to manage resistance to change in an appropriate manner. The focus of OD should be on preparing and engaging people for change rather than just the mere mechanics of capacity building. Participation and empowerment are integral elements of successful change management.
Phase 4: Evaluation and learning
OD work must include a high degree of accountability for results. Processes, results, successes and failures should be measured and documented. Progress of implementation as reflected in data associated with indicators should be monitored and adjustments should be made as needed. To this end, National Societies need to establish solid monitoring and performance evaluation systems.
§ Measuring the impact
One of the most difficult challenges in organizational development work is how to measure its impact. OD should result in improved capacities for delivering services and programmes. In line with this focus, the National Society should set specific indicators for success of OD interventions relative to their context. Additionally, they need to develop their own mechanisms to measure their development. Although it is difficult to attribute OD success, these processes can help draw the link between OD and capacity building interventions and improved service delivery.
§ The learning organization
Capturing positive and negative experiences constructively and in an easily assessable way creates the main learning opportunities for systematic organizational process. Leaders and senior managers have to ensure that people are free to try new ideas, take the initiative and allow for failure as long as they learn from their failures. An organization that creates a system for sharing failures and successes with people doing similar jobs is an organization that institutionalises learning from experience.
A learning National Society not only copes by adapting and responding to change, but thrives and contributes to the overall progress by enhancing its ability to create, innovate and transform. A learning National Society monitors internal and external changes systematically. It does so by conducting ongoing dialogue with different groups and individuals to ensure continued relevance of its humanitarian services to a changing environment.
Key lessons
· Build on existing strengths and resources.
· Communicate clearly the vision and the process including milestones and indicators of progress.
· Change is a balance between control and consent.
· Commitment and public support of leaders including senior management is essential.
· Leaders need to provide the space for participation and empowerment.
Organizational development (OD) is a term most commonly used when referring to building capacities of an organization. The International Federation defines organizational development as:
an ongoing systematic approach of continuous learning to improve the ability and the capacity of Red Cross and Red Crescent Societies to make the most effective and efficient use of their available human and financial resources to achieve the humanitarian purposes of the Movement in a sustainable way.
Managing change
OD is about managing change in a systematic and planned way. The purpose of change for an organization is to evolve and to increase its positive impact on the lives of vulnerable people. The goal of changing is to become more effective, viable, autonomous and legitimate. In an organizational change process, it is important for a National Society to understand its current model, create a vision of a future image and identify the steps to realise that vision.
National Societies are voluntary organizations (non-profit or member-based societies) that should not be turned into bureaucracies. They mobilise people and resources to deal with humanitarian needs in society. They grow in capacity by doing this work, by practising their mandate and by solving problems encountered along the way. They draw their resources mainly from the communities. A systematic sociological and economic evaluation of the country provides a National Society with the necessary information to adjust its capacities to meet changing needs of vulnerable people effectively.
Understanding and managing organizational culture is an important aspect of managing change. Culture is ultimately linked to values and beliefs. To identify a National Society’s existing culture, the unwritten rules need to be exposed:
· What behaviour is allowed or not allowed?
· What is rewarded or punished and by whom?
· What is sanctioned or not sanctioned?
· What is praised or not praised?
Based on organizational traditions described in section 2, as well as learning from National Society change processes from around the world, there are four key points for consideration in organizational development:
a)Focus on making a difference in the lives of vulnerable people
Organizational change should be driven by the needs and capacities of vulnerable people. This requires an analysis and a (re)design of services and programmes the National Society should be providing as well as the local organizational delivery structures.
b)People make all the difference
A National Society needs to be transparent and inclusive in its change process, with volunteers, members and employed staff actively involved in participating in the process at different levels. There needs to be a clear definition and design for the role of volunteers, members and employed staff in running programmes and services, including their involvement in governance and management. Supporting and training staff, volunteers and active members are essential to a successful change process.
c)People’s trust and the organization’s credibility
In order to obtain resources from its environment and accessing vulnerable populations and ensuring that its services are relevant and fully utilised, a National Society must have the trust of its community and have credibility. Trust and credibility are achieved through transparent management practices and provision of relevant services to communities. A simple way to practise transparency for a National Society is to engage its key stakeholders and ensure that it continuously builds effective external partnerships.
d)Integrate capacity building measures into coherent change management
There are many entry points for building capacities, such as working on improved programmes and services, or on improving systems and structures. Capacity building measures in one part of the organization trigger needs for capacity building in other parts. For example, while working on improving financial management, weaknesses in governance and management practices are exposed and will need to be addressed.
Change management phases
For the purpose of better understanding the scope of activities related to organizational development, four main phases of an OD process are identified and analysed below. These four phases are:
· organizational analysis;
· strategic planning;
· implementation; and
· evaluation and learning
Each of these four phases can yield success only if they are carried out by the National Society itself. Even if external support is needed, the National Society must exercise its lead role and assume full responsibility for the change and its results.
Phase 1: Organizational analysis
OD work should be guided by the needs of vulnerable people. Development and expansion of programmes and services must demonstrate a direct link to improving the lives of vulnerable people. Assessment of the needs and risks of vulnerable people and the related organizational analysis is perhaps the most important step in an OD process. Subsequent actions are based on the results of assessments. Consequently, the success of the entire process depends on how well this first step is carried out.
Organizational analysis during a change process is based on a broad external assessment that includes identifying vulnerable people, the risks they face and their humanitarian needs. This information must then be integrated into a specific analysis of the National Society itself which includes the organization’s service-delivery capacities and performance in relation to identified risks and needs of the vulnerable people.
The overall success rate of a change process is dramatically increased when a National Society’s critical internal and external stakeholders are invited to participate in the assessment process and in all subsequent steps.
There are many available tools but a framework cannot dictate which one to use. Practitioners can choose the tools most appropriate to their respective situation (Tools).
In 2000, the International Federation’s board launched the National Society Self-Assessment process. Based on the Characteristics of a Well-Functioning Society a questionnaire was designed and tested. By the end of 2001, over 40 National Societies provided feedback and subsequent assessment reports were written up. The main objectives of this self-assessment process are to provide:
· information to the International Federation's governing bodies on the quality of its membership;
· updated baseline information on National Societies for planning and knowledge sharing;
· analytical input to National Society OD processes on areas that require improvement; and
· input for cooperation and coordination processes.
As a tool, the National Society self-assessment provides useful complementary information for National Society organizational development.
Phase 2: Strategic planning
During this phase, a National Society will often design or revisit its strategic plan. Effective strategic planning is about making choices for the future and positioning the organization accordingly. Based on the information gathered in the first, organizational analysis phase, a National Society defines or restates its mission and its vision, as well as the goals it considers a priority. Apart from the findings of its self-assessment, a National Society's strategic plan should demonstrate a direct link to the International Federation’s Strategy 2010, the Movement Strategy and other relevant policies and statements such as regional declarations.
The overall strategy is then translated into simple operational plans for programmes and services as well as into specific organizational change activities. During this phase, the National Society should determine what human, financial and material resources (type, quality and quantity) are needed to implement the selected programmes and organizational change activities. It then compares what is needed with its existing resources and plans initiatives to close all resource gaps.
New initiatives should be planned as additional activities. These activities should be properly reflected in the National Society's plan. Such initiatives can include (but are not limited to) the following: revenue generation; fund-raising; marketing; public relations; specialised training; and recruitment. As part of planning, the National Society must define how the results of stated objectives and planned activities will be measured.
Phase 3: Implementation
Key activities during the implementation phase include:
· communicating the vision to critical stakeholders such as the National Society's leadership, members, volunteers and staff, as well as vulnerable communities, donors, NGOs, government and local authorities, and Movement partners;
· designing and improving volunteer-based programmes and services; and
· developing and engaging volunteers and staff.
Complementary or secondary tasks emerge during the implementation phase and pursuing them are important to yielding success. During a change process a National Society may have to adjust key elements of its organizational foundation and its resources.
Organizational foundation
§ Structure
Effective structures and systems need to be developed in particular at local branch levels as well as at the national level. A National Society is closer to reality and better prepared to respond to needs if it has a countrywide network of branches. The purpose of Red Cross Red Crescent branches is to enable a National Society to support local volunteer-based groups effectively in implementing programmes and delivering services to communities.
Experience shows that it is wise not to change everything at once, and not always to start the change at the top. It is important to start changes systematically at the local level in a few places. As the diagram below shows, many effective branches will eventually create a better functioning Red Cross or Red Crescent at the national level.
During implementation, it is important to look for and learn from unexpected success. An example of this is a small HIV/AIDS project in western Kenya. When the external donor cut its support, the local communities decided to accommodate and feed the external project coordinator for several months. A lot can be learnt from this experience in terms of the importance of community ownership, local support structures and sustainability. Another example is the Golfo de Fonseca in Central America. The detailed report shows a number of important issues to be considered in building local support structures.
§ Financial management
Development of financial management capacity is one of the key complementary activities in organizational development. Since each National Society is different, it is impossible to develop a comprehensive standard financial management package (including software and accounting system) that can be used globally. Therefore, a tailor-made solution has to be designed for each case according to the specific circumstances. To accomplish this, there are four main steps in the development of a National Society’s financial management capacity: (1) analysis of the current situation; (2) development of a strategy for change and design of concrete activities; (3) implementation; and (4) readjustment of the approach through monitoring and evaluation.
§ Legal base
A National Society's legal base and its statutes contribute to its functioning in line with the ten conditions for recognition. The legal base consists of the National Society’s statutes and the national law or decrees under which it is recognised by its government.
Financial resources
All National Societies need to review and improve their fund-raising and revenue-generation activities regularly. A healthy organization generates the necessary resources for its services from a diversified financial base. National Societies can safeguard their independence and enjoy stability when they develop a coherent strategic plan for resource development, and practise marketing and public relations.
§ Fund-raising
In most countries, resources provided by Red Cross Red Crescent members and the community are not sufficient to sustain humanitarian programmes and services in the long run. Therefore, a central complementary element of organizational development is to ensure that there is an internal support system for fund-raising activities. Fund-raising is a skill that can be developed through training, knowledge of the organization and experience.
Everyone has the opportunity to participate in implementing or supporting fund-raising activities. First and foremost, a sound financial development strategy uses available resources to generate more resources. For instance, the members of a National Society’s governing board and existing corps of volunteers can participate and drive the organization’s fund-raising goals. Key to successful fund-raising is the ability to develop and maintain excellent relations with partners and governments alike. Therefore, National Society staff can play a crucial role in this area through their external working relations and consistent professional performance.
Fund-raising is a necessity in the non-profit humanitarian sector and the most important characteristic of successful fund-raising is trust.
§ Revenue generation
Revenue generation goes beyond fund-raising and means selling services and/or goods or persuading people to pay for something they want. In the best revenue-generating projects run by National Societies, the product or service is not only profitable and of real social value, but it also supports the organization's mission. It flows naturally out of the work of the organization, supports the organization's image and increases its capacity to assist vulnerable people in a specific way.
Revenue-generation activities include selling or leasing goods, services or property. They range from renting out space in buildings to providing training services for a fee, from cause-related marketing with corporate partners to running businesses. They all require a business mentality to ensure that they make a profit and to know how to restructure them, cut their costs or cancel them altogether if they do not.
The capacity to run a business needs to be developed or acquired. Innovation, risk-taking, marketing talent and other business skills are essential for success. Neither the external environment nor the existing capacities of the National Society are always conducive to running a business. Engaging qualified advisors to undertake detailed environmental analyses and to establish appropriate structures for implementation are essential ingredients for success. A National Society getting involved in business must ensure that it does not shift its focus from humanitarian services and programmes to enterprise. A good example of a revenue-generation activity is the sale of first-aid kits and tailoring first-aid training services for corporations, businesses and government agencies.
Revenue generation is about covering costs for services and ensuring that any and all profit is reinvested into improving programmes and services.
Other considerations
The role of change agents and facilitators is a key consideration when managing the implementation phase of a change process, in addition to identifying and addressing resistance to change.
§ Change agents
Change agents are the key implementers, the “doers” or “champions” inside an organization. They are the ones who provoke and lead change. They also advocate for change with key stakeholders.
§ Facilitators
Facilitators are often external (e.g., consultants or delegates) and thus may be more "distant" and "neutral”. They are involved in processing and "mirroring". One of their important functions is to provide feedback for learning and to accompany and/or coach the National Society in the change process.
§ Resistance to change
In an organization, change is about retaining people, who have individual needs, fears and aspirations. It is important that the National Society is aware of and understands strategies to help individuals to cope with change and that it is able to manage resistance to change in an appropriate manner. The focus of OD should be on preparing and engaging people for change rather than just the mere mechanics of capacity building. Participation and empowerment are integral elements of successful change management.
Phase 4: Evaluation and learning
OD work must include a high degree of accountability for results. Processes, results, successes and failures should be measured and documented. Progress of implementation as reflected in data associated with indicators should be monitored and adjustments should be made as needed. To this end, National Societies need to establish solid monitoring and performance evaluation systems.
§ Measuring the impact
One of the most difficult challenges in organizational development work is how to measure its impact. OD should result in improved capacities for delivering services and programmes. In line with this focus, the National Society should set specific indicators for success of OD interventions relative to their context. Additionally, they need to develop their own mechanisms to measure their development. Although it is difficult to attribute OD success, these processes can help draw the link between OD and capacity building interventions and improved service delivery.
§ The learning organization
Capturing positive and negative experiences constructively and in an easily assessable way creates the main learning opportunities for systematic organizational process. Leaders and senior managers have to ensure that people are free to try new ideas, take the initiative and allow for failure as long as they learn from their failures. An organization that creates a system for sharing failures and successes with people doing similar jobs is an organization that institutionalises learning from experience.
A learning National Society not only copes by adapting and responding to change, but thrives and contributes to the overall progress by enhancing its ability to create, innovate and transform. A learning National Society monitors internal and external changes systematically. It does so by conducting ongoing dialogue with different groups and individuals to ensure continued relevance of its humanitarian services to a changing environment.
Key lessons
· Build on existing strengths and resources.
· Communicate clearly the vision and the process including milestones and indicators of progress.
· Change is a balance between control and consent.
· Commitment and public support of leaders including senior management is essential.
· Leaders need to provide the space for participation and empowerment.
Personas
Contactos externos
Linda Micciche