Assessing Organizational Capacity: A Diagnostic Tool for NGO Development, Study notes of Business

Download Assessing Organizational Capacity: A Diagnostic Tool for NGO Development and more Study notes Business in PDF only on Docsity! 29 OA Tool 6 : Burke Litwin Model The “Burke-Litwin model” has been developed to examine organisational change and performance. It provides a link between an assessment of the wider institutional context and the nature and process of change within an organisation. It makes the following key points: • The external environment is the most powerful driver for organisational change • Changes in the external environment lead to significant changes within an organisation – its mission and strategy, its organisational culture and its leadership. • Changes in these key factors lead to other changes within an organisation – changes to structure, systems and management practices. These are more operational factors and changes in them may or may not have an organisation-wide impact • Together these changes affect motivation, which in turn impacts on individual and organisational performance • The model describes 12 organisational variables (incorporating the 7 variables of the 7-S model) and the relationships between them. Each of the variables interact and a change in any one of them can eventually impact on the others. This is useful in explaining not only how organisations perform, but also how they can be changed. How do I use it? • Gather data on relevant boxes based on desk research and interviews with key stakeholders throughout the organisation • Summarise findings in a report for senior staff. This report can then be used as a basis for identifying which boxes relate to which executives and managers, and can be useful in helping them understand the complex performance and change issues they are trying to manage • Key questions to include are summarised in the table below. Dimensions of Model Key Questions 1. External Environment What are the key external drivers? How are these likely to impact on the organisation? Does the organisation recognise these? 2. Mission and Strategy What do top management see as the organisation’s mission and strategy? Is there a clear vision and mission statement? What are employees’ perceptions of these? 3. Leadership Who provides overall direction for the organisation? Who are the role models? What is the style of leadership? What are the perspectives of employees? 4. Organisational Culture What are the overt and covert rules, values, customs and principles that guide organisational behaviour? 5. Structure How are functions and people arranged in specific areas and levels of responsibility? What are the key decision-making, communication and control relationships? 6. Systems What are the organisation’s policies and procedures, including systems for reward and performance appraisal, management information, HR and resource planning, etc? 30 7. Management Practices How do managers use human and material resources to carry out the organisation’s strategy? What is their style of management and how do they relate to subordinates? 8. Work Unit Climate What are the collective impressions, expectations and feelings of staff? What is the nature of relationship with work unit colleagues and those in other work units? 9. Task and Individual Skills What are the task requirements and individual skills/abilities/knowledge needed for task effectiveness? How appropriate is the organisation’s “job-person” match? 10. Individual Needs and Values What do staff value in their work? What are the psychological factors that would enrich their jobs and increase job satisfaction? 11. Motivation Do staff feel motivated to take the action necessary to achieve the organisation’s strategy? Of factors 1-10, which seem to be impacting most on motivation? 12. Individual and Organisational Performance What is the level of performance in terms of productivity, customer satisfaction, quality, etc? Which factors are critical for motivation and therefore performance? 33 Organisational Self Analysis Chart Starting with Leadership, read all the statements and choose and circle the number you feel best reflects the situation within your organisation. Multiply the number you have chosen by the factor shown and enter your score in the Total box. Repeat the exercise for the other eight criteria and total your scores to produce a grand total. Score Leadership Policy and strategy People management 1 Management act as individuals in taking and communicating decisions. They promote the need to develop and improve the organisation and to set targets Partial business plans exist – only concentrating on financial targets. Plans are not widely communicated or visibly championed by top team Training is seen as a cost and people are employed to do a job 2 3 Management act as a team, ensure two-way open communication, become involved in improvement groups. They agree plans and set priorities. Business plans encompass competition data e.g. customer satisfaction measures. Key points are communicated; individuals understand and accept responsibility The management team recognises that success comes from employees. Skills training is encouraged and training plans are agreed and aligned to company goals, 4 5 Managers develop and support improvement teams and make time available for them to work. They check progress and recognise involvement; they say “thank you”. Strategic direction – vision, mission objectives etc. are communicated to all stakeholders. A new culture is being developed. Resources made available for continuous improvement Delegation of responsibility to people at appropriate levels takes place. Appraisal schemes match the aspirations of the people and organisation. 6 7 Managers are willing to “let go” and empower people to become involved in improvement teams between department and with customers and suppliers Strategic direction understood by all stakeholders. Visibility championed by top team. Key success indicators (e.g. meeting customer needs) are reviewed at all levels in the organisation Employees are allowed to implement improvement activity without reference to management. A climate conducive to personal development and continuous improvements exists. 8 9 All managers are active inside and outside the organisation in promoting improvement activity. Continuous improvement is the culture and business philosophy Strategic direction visibility achieved. People’s success recognised by leaders at all levels. Innovation and continuous improvement is the culture throughout the organisation. Staff morale is high and exceeds the competitive benchmark. The full potential of all people is being realised to achieve the strategic direction. 10 Are you REALLY this good? FACTOR FACTOR FACTOR TOTAL TOTAL TOTAL X 10 = X 8 = X 9 = 34 Score Resources Processes Customer satisfaction 1 Resource management tends to be directed solely at financial areas. Decisions on stock and materials are taken using hunches and ‘gut’ feelings. Information is ‘kept in people’s heads’. Few procedures exist apart from financial controls. Everyone does their best and firefighting is the norm. Changes are made to fix problems as and when appropriate. Customer satisfaction only considered in terms of external complaints. Complaints are dealt with when they arise with little attempt to find or correct the cause. 2 3 Information available – often talked about or over-analysed but rarely used to improve. Cash and working capital are seen by all to be important. Stock controls in place Procedures have been written and imposed. A bureaucratic system exists with little chance for improvement. Non conformances are seen as “bad”. Systems purpose not clear to operators Customer satisfaction measures are available for surveys. This data is used to set performance standards and staff hav been trained in customer service. 4 5 Decisions are made on the basis of information. Stock is related to customer requirements. Process improvements and evaluation of new technology takes place. Planning systems are in use Critical process are owned and there is support to monitor and improve them. Ownership is assigned to management who review corrective action etc. The need to meet agreed customer needs is reflected within the core strategic plans. A customer care policy exists and is widely published. 6 7 All areas of waste are measured and form part of the improvement plan. Data is gathered to form an accurate view of competitors and used in business planning. Financial plans meet stakeholders needs Meeting customer needs is seen as the purpose of the system. Procedure and operating standards are owned by the operators, managers and suppliers. Processes are being controlled. Continuous research exists to identify and meet individual customer needs. This research is fully integrated into business planning, improvement and innovation processes. 8 9 All the companies’ resources are deployed to meet agreed policies and strategies. Benchmarking against the ‘best in class’ is a key resource improvement driver. System ensures all stakeholders’ needs are met by existing and new products and services. Customers find it easy to do business. Continuous feedback causes improvement and innovation. Customer commitment is being delivered by all processes and relationships. Improvement and innovation exceed customers’ expectations and the competitive edge is being increased. 10 Are you REALLY this good? FACTOR FACTOR FACTOR TOTAL TOTAL TOTAL X 9 = X 14 = X 20 = 35 Score People satisfaction Impact on policy Business results 1 Disputes and grievances are resolved as and when they arise. Absenteeism and/or staff turnover are high. Morale at times is poor and management tend of concentrate on themselves. Environmental and social obligations seen as costly and a threat to competitiveness. Damage limitation exercises are used to counter ‘problems’. Community work limited to individuals. The financial results are available and some non- financial indicators published. They are seen as management data by the majority of staff. 2 3 People’s views are sought through surveys. Staff are consulted on improvement but grievances are dealt with by “personnel”. Health and safety are treated seriously. Environmental and social requirements are dealt with to conform fully with legal requirements. Policy documents and internal standards have been written. Systems exist to monitor and display financial and non-financial indicators. They are communicated to staff and improvement targets indicated. 4 5 Two way internal discussions take place and some form of appraisal process is used for joint improvement targets. Communication and feedback on a broad range of issues happens – morale is good. Strategic quality planning incorporates environmental and social obligations. Responsibility is allocated to senior managers. Environmental audits take place. Keen practitioners are encourages. Indicators are used to measure process and output and available for improvement teams. Trends are monitored and used to set targets. Supplier quality is measured and shared. 6 7 Business changes that may adversely affect staff are jointly worked on. Data available to show that all employees feel responsible for both their jobs and improving the organisation’s capability. Data shows the organisation “betters” legal requirements. Encouragement is given for employees to become involved in supporting local community activities. Public aware of environmental strategy. Benchmarking is used to compare results with industry and “best in class” trends. Differences between targets and results are always published and available on request. 8 9 Benchmarking against other organisations shows employee satisfaction is high and has an improving trend. Two way appraisal is taken as “the norm”. Data is gathered and views sought from local society and employees, and is used in business planning. The organisation has received formal recognition of environmental performance. The organisation performance exceeds external benchmarks and stakeholders are proud to be associated with us. A commitment by all to improve our business continually is our culture. 10 Are you REALLY this good? FACTOR TOTAL FACTOR TOTAL FACTOR TOTAL GRANT TOTAL X 9 = X 6 = X 15 = 38 OA Tool 9 : Organisation Effectiveness Questionnaire These questions can be used to identify appropriate areas of investigation or gaps in information so far acquired. They represent an elaboration of the Capacity Assessment Guide included in this Manual. PURPOSE AND STRATEGY 1. Does the organisation have a clearly-defined purpose to which staff and Board are committed? 2. Does it have a well developed and realistic strategy to achieve its purpose? Has it, for example, taken into account: the organisation's capacity to deliver the programmes; the availability of the necessary resources; the needs and wishes of the target groups; and various "environmental" factors (government policy, the political and economic situation, climate, and so on)? Does the organisation engage in strategic planning - who is involved? ORGANISATIONAL CULTURE 3. Do the Board and staff have the same values concerning both the purpose and the way that the organisation operates? How are these values expressed? CONTROL AND ACCOUNTABILITY 4. Does the Board really control the organisation? What power does the Executive Director, the staff, target groups, or donors have over the decision-making process? Is this power appropriate in the long term? 5. Are there good relations between the Board and the staff? Does the Board receive adequate information to be able to take realistic decisions? 6. Is the organisation accountable to its various interest groups; target groups, local communities, government, donors and staff? Does it have a clear policy on accountability? Is this policy implemented? PRODUCTS, PROGRAMMES AND SERVICES 7. Do the target groups participate in the planning, management and evaluation of the programmes? 8. Are the programmes effective and appropriate? Do they meet the priority needs of the target groups? Are they sustainable in the long term? Do the programmes have a long- term impact on the local community and/or country? 9. Does the organisation have the ability to adapt the programmes (and the strategy) to changing situations and needs? 10. Does the organisation have the ability to develop and/or expand the programmes without over-extending itself? 39 11. Does it have the staff with the relevant skills and experience for each programme (sectoral skills, facilitation skills, experience with target groups, etc.)? A LEARNING ORGANISATION 12. Does the organisation have the ability to think critically about itself? Does it have the ability to learn from its successes and failures? What evidence is there of this? GROWTH AND CHANGE 13. Has the organisation grown significantly in recent years? What is the attitude of the staff to change? How has it coped with the change? 14. Has the organisation diversified recently? Did it over-extend itself? Did the staff have the relevant capacity before diversification? Was the diversification planned or was it forced on the organisation? RESOURCES IN GENERAL 15. Does the organisation have adequate resources to carry out its activities? If not, does it have a realistic plan for obtaining the resources? 16. Is there a plan for distributing the resources? Are they, in fact, distributed efficiently and fairly? Is there a system for resolving conflict over resources? FINANCIAL RESOURCES 17. Does the organisation have several sources of funding? If it is dependent on grants, does it have plans to generate income in alternative ways? 18. Does the organisation have to spend an unreasonable proportion of its time on obtaining financial resources (and on satisfying donor reporting demands)? Do donors unduly influence the organisation's strategy and programmes? 19. Is there a difference between what the organisation says it does and what it actually does? Is there adequate communication between the fund-raising and the operational departments? 20. If the organisation does not have sufficient funding, how does it cope with inadequate funding? 21. If the organisation is offered more funding than it immediately needs, is it pressurised into expanding or diversifying without planning or possibly without having the necessary capacity? HUMAN RESOURCES 22. Is there an adequate number of staff with the required skills to carry out the programmes and to run the organisation? 23. Is there an adequate system for recruiting and firing staff? Do political, family or personal ties unduly influence this process? 40 24. Does the organisation have the ability to resolve conflict among the staff, or between outside groups and the organisation? 25. Is there a formal or informal training programme for the staff? Are different individual needs acknowledged in this programme? 26. Is there a high turnover of staff? Does the organisation have the appropriate incentives for motivating and retaining staff? 27. Is there an adequate personnel system for administering staff, ensuring equitable treatment, resolving grievances, and so on? COMMUNICATION 28. Does the organisation have an effective system for circulating information to all concerned? Are there aspects of the organisation's activities that are kept unnecessarily secret? 29. Is there a spirit of open communication within the organisation? Do people work as a team or as individuals? Are office doors kept closed as much as possible? Does the staff get together over coffee and/or lunch? Are there social occasions? 30. Is conflict managed or ignored? How is conflict resolved between: Board and staff; volunteers and professionals; headquarters and field staff? 31 Is communication two-way? In other words are staff acknowledged as important sources of operational AND strategic information LEADERSHIP 32. Is the leadership style(s) used by the directors and/or senior staff appropriate to the organisation, its purpose and values? Do staff resent the way that they are managed? 33. Are responsibilities delegated to the appropriate staff? Does the delegation work? 34. Is the organisation dominated by the original Founder? If so, does s/he control (or try to control) every aspect of the organisation and to resist change? 35. Are there any possible successors to the current director? 36. Does the staff feel that they can speak openly? PROBLEM-SOLVING AND DECISION-MAKING 37. Does the organisation have a system (and do the staff have the skills) for identifying problems, analysing options and then taking the relevant decisions? 38. Is the staff involved in the decision-making process? Are they consulted about issues before the decisions are taken? Do they feel that their opinions are considered? PLANNING, MONITORING AND EVALUATION 43 Discussion Oriented Organisational Self-Assessment (DOSA) Date of self-assessment: Facilitator: Other self-assessment team members: I. Human Resource Management Discussion: a) What and when was our most recent staff training? Who participated? b) How often over the last 12 months have we held joint staff training events? We provide adequate joint staff training for successful implementation of our programme Strongly Disagree Disagree Neutral Agree Strongly Agree 1 1 2 3 4 5 Discussion: a) For our three most recent staff training events, what evidence is there that they strengthened staff capacity and performance? b) To what extent were the areas of improved staff capacity relevant to our human resource needs? 44 c) To what degree did these training events prepare staff to respond to our strategic objectives? Our staff training directly contributes to the achievement of our organisation's objectives Strongly Disagree Disagree Neutral Agree Strongly Agree 2 1 2 3 4 5 Discussion: a) What are three primary, activities that we undertake to achieve our mission? b) To what extent does staff, as a group, have the necessary skills to carry out these functions? c) How many staff are in our organisation? To what extent is the number of employees carrying out these functions appropriate with work demands? Strongly Disagree Disagree Neutral Agree Strongly Agree 3 We have the appropriate staff skills to achieve our mission 1 2 3 4 5 4 We have the appropriate staff numbers to achieve our mission 1 2 3 4 5 45 Discussion: a) Over the last 12 months, to what degree have the personnel and management practices noted below influenced the performance of new recruits and old employees? b) Give examples of instances in which the practices listed below either contributed to or detracted from employee performance. The following systems or practices contribute to good performance by our employees: Strongly Disagree Disagree Neutral Agree Strongly Agree 5 Recruitment 1 2 3 4 5 6 Compensation (Salary and benefits) 1 2 3 4 5 7 Personnel evaluation 1 2 3 4 5 8 Promotion (Professional advancement) 1 2 3 4 5 9 Grievance and conflict resolution policy 1 2 3 4 5 10 Work place environment 1 2 3 4 5 11 Lines of authority and responsibility 1 2 3 4 5 12 Job description 1 2 3 4 5 13 Leadership practices 1 2 3 4 5 48 II. Finance Resource Management Discussion: a) What are our practices and procedures/systems for account keeping b) What are the difficulties we encounter? Strongly Disagree Disagree Neutral Agree Strongly Agree 17 We have appropriate accounting systems in place which provide adequate financial control 1 2 3 4 5 18 Our financial transaction provides adequate transparency and accountability 1 2 3 4 5 19 Internal and external financial reviews provide confidence among staff and other stakeholders including donors 1 2 3 4 5 49 Discussion: a) What are our organisational objectives this financial year and to what extent are these reflected in our current budget? b) What specific features of this year's budgeting process facilitated consideration of mission and programme priorities? The budgeting process leads us to allocate funds in a way that closely reflects our organisational priorities Strongly Disagree Disagree Neutral Agree Strongly Agree 20 1 2 3 4 5 Discussion: a) How accurate were last year's financial projections? b) How timely is the distribution of financial reports? 50 c) Do we have contingency measures currently in place if projected revenue fails to materialise? Strongly Disagree Disagree Neutral Agree Strongly Agree 21 Our financial management practices lead to accurate financial projections 1 2 3 4 5 22 We regularly modify our programme expenditures based on findings presented in our internal financial reports 1 2 3 4 5 Discussion: a) List three recent procurements (goods or services) b) Did procurement follow written procedures? c) What was the impact of these procedures on costs? Strongly Disagree Disagree Neutral Agree Strongly Agree 23 Our procurement practices contribute to the effective use of recourses 1 2 3 4 5 Discussion: a) Over the past year, what problems, if any, have we had regarding delayed transfer of funds to the field or our partner organisations if any? 53 III. Service Delivery Discussion: a) List three representative projects in our current programme portfolio together with key stakeholders in these projects? Who are our stakeholders? b) For the three projects identified, what are some concrete examples of stakeholder involvement in each of the processes listed below? Stakeholder in our programmes are engaged in: Never Seldom Occasionally Frequently Always 26 Assessing needs 1 2 3 4 5 27 Designing projects 1 2 3 4 5 54 28 Implementing projects 1 2 3 4 5 29 Monitoring projects 1 2 3 4 5 30 Assessing their impact 1 2 3 4 5 Discussion: a) For the three projects identified in the preceding question, to what degree are traditionally under represented stakeholders (e.g. rural poor, women, ethnic minorities) engaged in the tasks listed below? Traditionally under- represented stakeholders are engaged in: Never Seldom Occasionally Frequently Always 31 Assessing needs 1 2 3 4 5 32 Designing projects 1 2 3 4 5 33 Implementing projects 1 2 3 4 5 34 Monitoring projects 1 2 3 4 5 35 Assessing their impact 1 2 3 4 5 Discussion: a) For the same three representative projects, what impact indicators are we using to track progress towards meeting project objectives? b) To what extent does the evidence that we have in hand suggest that we are achieving intended impact? 55 c) To what extent does the evidence that we have in hand suggest that we are enhancing the capacity of local organisations? Our projects: Never Seldom Occasionally Frequently Always 36 Routinely use result-based indicators to monitor progress in achieving objectives 1 2 3 4 5 37 Are routinely monitored through internal evaluations 1 2 3 4 5 38 Achieve intended impact as captured through internal and external evaluation 1 2 3 4 5 39 Enhance local/village organisational capacity as captured through evaluation 1 2 3 4 5 Discussion: a) For the same three representative projects, to what degree have we addressed each of the sustainability issues listed below? b) To which kinds of sustainability (environmental, economic, political, social, cultural) do we pay most attention? 58 IV. External Relations Discussion: a) Over the last 12 months, what kinds of information about our work have we shared with our members (if any), users and the general public? b) In the context of all the information we present to our members, users and the general public, what relative priority have we assigned to information about our impact? c) How effectively do we demonstrate the impact of our work to group members and the general public? We routinely share information on our progress in achieving our mission through our communications with: Strongly Disagree Disagree Neutral Agree Strongly Agree 48 Constituency/Membership 1 2 3 4 5 49 Users/Beneficiaries 1 2 3 4 5 50 General public 1 2 3 4 5 59 Discussion: a) Over the last 12 months, to what kinds of donors (e.g. bilateral, major foundations, corporations) have we submitted narrative and financial reports? b) To what degree have these reports increased donor confidence in our work? Strongly Disagree Disagree Neutral Agree Strongly Agree 51 Timely financial reports contribute to donor confidence in our programmes 1 2 3 4 5 52 Timely narrative reports contribute to donor confidence in our programmes 1 2 3 4 5 Discussion: a) Over the past 12 months, what has been the frequency and nature of our organisational contacts with policy makers? b) To what degree are these contacts part of an ongoing communication strategy? Strongly Disagree Disagree Neutral Agree Strongly Agree 53 We regularly engage relevant policy makers and institutions in dialogue related to our mission 1 2 3 4 5 60 Discussion: a) Over the past 12 months, what specific linkages have we established or maintained with the private business sector? b) During the same period, to what degree have we offered companies the opportunity to assume a role other than that of donor? Strongly Disagree Disagree Neutral Agree Strongly Agree 54 We forge innovative linkages with the private business sector 1 2 3 4 5 Discussion: a) What concrete measures have we taken over the last 12 months to diversify our funding? 63 b) What are some concrete examples of changes we have made on the basis of this feedback? Strongly Disagree Disagree Neutral Agree Strongly Agree 63 We routinely use feedback to improve performance 1 2 3 4 5 64 V. Organisational Learning Discussion: a) What information has flowed between senior management at Headquarters and non- supervisory staff (including field staff) over the past month? Typically, who initiated these communications? b) Is the prevailing flow of information top-down or bottom-up? Is information exchanged horizontally, e.g. between field offices? c) Typically, to what degree did recipients perceive this information to be useful? Information flows freely: Never Seldom Occasionally Frequently Always 64 Across Headquarters units and functions 1 2 3 4 5 65 To and from field offices 1 2 3 4 5 Discussion: a) Over the last 12 months, what have been our organisational priorities? What information was available to us as we worked through these issues? 65 b) To what degree was the information useful in achieving our organisational objectives? c) How typical are these examples of informational resources within our organisation in terms of content and timeliness? Never Seldom Occasionally Frequently Always 66 Available information is accurate 1 2 3 4 5 67 Available information is relevant 1 2 3 4 5 68 Available information is timely 1 2 3 4 5 Discussion: a) Over the last 12 months, what data (qualitative and quantitative) have we routinely analysed and reviewed: b) List some examples of how this data analysis has influenced our practice c) To what extent does data analysis and review contribute to our organisational learning? 68 Our staff meetings directly contribute to organisational learning and mission achievement Never Seldom Occasionally Frequently Always 74 1 2 3 4 5 69 VI. Strategic Management Discussion: a) Over the last 12 months, in what strategic planning activities has our organisation engaged? b) What conclusions about our external environment did we draw as a result of these activities? c) What changes did we make in our operations to reflect and enhance understanding of the environment in which we operate? Never Seldom Occasionally Frequently Always 75 We use strategic planning to examine ourselves in relation to our external environment 1 2 3 4 5 76 We modify our strategic objectives based on findings generated through strategic planning exercise 1 2 3 4 5 70 Discussion: a) List three important activities, programme and non-programme, that we have initiated over the last 12 months b) To what extent do these activities reflect our strategic and operating plans? Never Seldom Occasionally Frequently Always 77 Our activities are developed and implemented in ways that are in line with our strategic and operation plans 1 2 3 4 5 78 We routinely track progress in achieving our strategic objectives 1 2 3 4 5 Discussion: a) With respect to each of the areas listed below, what are some representative actions that our board has taken in the last 12 months?