The world is constantly changing and so is the environment in which NGOs, the United Nations, and government agencies operate. The expectations and demands from beneficiaries, governments, donors, and other external partners can alter faster than ever, especially when it comes to the pressures of improving programmatic impact, operational performance, and financial transparency.
Many organizations struggle with the ever-increasing rate of change and mounting pressures. Operational inefficiencies, lacking capacity, outdated funding models, and nonagile organizational structures, all add to the pressure to change in order to become better at the business of doing good.
Justified as these pressures may be, the downside, however, is that they can result in one reorganization project after another; this is inefficient, costly, and tiresome. Instead, the best nonprofit organization we can hope for is one that is able to continuously evolve and change to become better at what it does.
Here are a few things to know as organizations work toward this vision:
1. You don’t have to launch a restructure project to achieve results
Large-scale change projects are by far, not the only change method. Rather, nonprofit leaders should aim to install processes and a culture of continuous improvements.
There are a number of external and internal parameters and factors that can steer an organization's evolution, and learning is much more effective. We developed a dashboard that measures and visualizes these indicators in an effort to gauge the agencies operational performance. This allows for change management to become more evidence-driven, as opposed to perceptions and anecdote dominated.
The dashboard looks at three types of indicators that all give a one page overview of how well the organization and its projects are doing: Operational effectiveness indicators, such as time spent in routine operations to hire new staff, write a proposal or prepare a donor report, or hire a new staff member; financial performance and situation indicators, such as reserves versus project spend to indicate sustainability, or project spend per project milestone to show the financial health of any given project; and compliance and ethical indicators, such as compliance with sexual conduct, anti-money laundering, gender and equality policies, and other compliance standards.
Critically, the dashboard shows best practice and sector average indicators, showing management how the organization is performing compared to the standard and compared to others.
Evaluating these indicators regularly and monitoring the agencies performance against self-imposed standards allows management to visualize what does not work — or could work better — and act upon it.
In the medium term, this can finally put an end to ceaseless reorganizations, as it installs the ability to identify and respond to internal inefficiencies and make adaptations routinely. This capacity will keep the organization nimble, self-critical, and evolving. It is a much less stressful and a much cheaper way to change, compared to the endless restructuring projects.
2. Incremental changes are better for an organization’s long-term success
The key is to build an organization 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 organization. And to do this on a regular basis. Think of it as an internal monitoring and evaluation function, but for an organization.
Most organizations do not have the mechanisms in-house to drive change and meet the expectations of the external stakeholders. The above-mentioned dashboard delivers a real-world view of the organization’s true capacities in reference to its strategy ambition, both at a board and ground-level view.
The dahboard is effectively a mechanism that is a tool for nonprofit leaders to regularly measure and report on the operational performance of key workflow processes and compares them to the set standard. It also compares the status quo to other nonprofits, which many find very helpful.
More on data in development with our Data Guardians series:
3. Continuous data collection leads to continuous improvement
The key advantage of this approach is that the organization can demonstrate — and verify — its operational evolution and ability to adapt. It takes a more data-driven, less intuitive, and anecdotal based approach to make sure your agency is good at what counts.
Operational improvements and structural changes become data-driven, reviewed routinely and incremental expected by all, reducing resistance to change. Remaining responsive and flexible also means that staff, beneficiaries, and donors can expect — rather than hope — for the organization to be ready to adapt to new realities. It is a lot more cost effective the large restructure projects too.
It may finally put an end to the endless restructuring projects.