Tuesday, 29 March 2011

The business of charity and how it affects us.

I am in awe of the British public. I heard Lenny Henry say that Comic Relief and Red Nose Day had raised a record £82M for charity this year. Anyone watching the videos could not help but be moved by the plight and fortitude of those featured, young or old, in both the UK and Africa. They need our care and support.

Sceptics will argue that much of this money may be wasted on administration or fall into the wrong hands. My answer is simple, only comment when you have first hand experience.

For a short period in 2009, I was involved in a project advising on the restructure of a $35M charity in Asia. I visited refugee camps in the jungle. I saw how people live on a diet of rice and herbs and in “temporary” bamboo huts. I spoke to some elderly people who had escaped across the border 3 miles away, often scarred mentally and physically by their experiences; still worried that marauding militia will come and take their young away. Meeting these people and seeing their resilience affected me deeply.

Because we were looking at the financial, budgetary and organisational aspects of the charity, we gained significant insight and access to the charity’s operations at all levels. We saw how a group of only 79 personnel could acquire and distribute food and shelter to over 160,000 people year in, year out. How they had set up camps and trained refugees to manage their own affairs locally. How they co-ordinated their work with 18 other charities to ensure the efficient delivery of all aspect of education, health and many other disciplines necessary to ensure the smooth running of the camps. These individuals do this within a framework tolerated and closely scrutinized by the local government. Life for them can be difficult, politically sensitive and sometimes dangerous. While we were there, we sat in on a meeting to discuss what to do with an extra 5,000 souls who had just arrived. UNHCR will not recognise this new influx of refugees for several years, but they still need shelter and food even thought they officially do not exist on any international records.

When people in the western world worry about where the money goes, I would simply point them to the high standard of financial reporting and waste-free budgeting operated by this charity. I would invite them to chat to the dedicated personnel who achieve so much with so little. I am delighted that we helped them develop their budgeting, SORP accounting, re-structure their organisation, distribution and develop succession processes for key personnel. The Pyramid ODI team, in addition to my contribution, included an in-country financial expert and a specialist with years of experience in international rescue.

Our efforts may be small in comparison to the size of their task, but here is a final thought for you. Many of these refugee camps have been in existence for more than 20 years. Residents do not have the right to leave or to seek work to improve their circumstances. In many cases, parents of the newborn were also born in the camp.

Here in the UK, our local authorities could learn a great deal on how to budget and prioritise – this charity is “Big Society” in operation. When I think of our challenges, our circumstances, the recession, I think how lucky we are to live in a democracy. Yes, the quality and cost of our social services and education systems may be open to criticism – people should have the right to march peacefully and make their views known. Anarchists, however, have no right to destroy other people’s property, as they did in central London last weekend. They seem to have no idea how lucky they are. Those wonderful people who have given £82M to Comic Relief do.

Wednesday, 23 March 2011

Implementing your business plan (continued): a real-life example

To illustrate, an automotive client had to increase production dramatically. They faced significant management inertia and a legal barrier limiting the solution.

The resulting success of this six month Pyramid ODI assignment triggered legislative change, increased revenue by $20m and added $4m to the bottom line.

Success came from attributes “stolen” from the business planners’ manual:

- detailed market analysis principles were used by three shop-floor facilitated groups to find solutions from way beyond their current business sector;
- risk mitigation principles were used to identify “new entrants” and “substitution” that were not impacting the current business but could influence the future;
- segmentation was used to identify the unique needs of all those currently influenced and those identified in risk mitigation - leading to multiple action and communication strategies.

In seven weeks, the teams picked up ideas, modified them and designed their preferred solution, within a framework that included a “no increase in operating costs” framework set by management.

Management were initially sceptical and then amazed. Supervision attended a weekly breakfast briefing. Initially negative, they soon embraced the changes.

These teams had no previous involvement in influencing change; for many, this represented their first visit to another company and their first presentation to anyone above their immediate supervisor.

Key to their success was the identification and inclusion of “new entrants” who played a significant part in influencing a successful outcome. Left unattended, they could have blocked the change. The early inclusion of authority figures from the local community, the country’s Prime Minister and the Group Board were crucial.

We engaged with the workforce in a fundamentally different way. Their solution grabbed the imagination of supervision, management, executives and government.

Views on shop-floor capability changed forever, as self-confidence grew and the capacity for change increased. HQ invested in new capital projects. The future, for a generation at least, seems secure.

The shop-floor even found their own elegant solution to avoid conflict with their trade union at national level.

In conclusion, “Getting to Plan B” works equally well in implementing the resulting change. True culture change can occur rapidly with really effective segmentation and due diligence.

Postscript: The quote from their Finance Director, which he delivered in between pinning me to the wall and then giving me a large bear hug, will stay with me forever, “I have worked here for 35 years. I never realised the potential of our own workers. We have wasted so much in that time!” He was shaking with emotion.

Monday, 21 March 2011

Implementing your Business Plan; Pass it on.

John Mullins and Randy Komisar’s excellent book “Getting to Plan B” invites us to import ideas from other sectors to enhance our business planning. They explain how this can drive iterations of a business plan to reduce the risk of failure.

Planners deploy an effective “spirit” for creativity, systematic segmentation, risk assessment and due diligence before gaining board approval. They consult widely in and beyond the organisation. The organisation structure, its processes, skills, channels to market and suppliers will have been reassessed. If the plan is radical, then the level of change will be also.

Activation of the plan is passed from the planners, to the builders and then to the implementers, like a baton in a relay race. For successful implementation of the plan, the baton must retain the planners’ “spirit”.

Two separate competencies are required and need to be practiced: the hand-over and the ability to move quicker than your opponent. The baton can be dropped, if you or others:
- Fail to invest in detailed due diligence;
- Assume that everyone involved is “addressable” in the same way;
- Neglect the impact of “new entrants” who may radically affect the outcome of the race.

With the right level of detailed analysis, planning, and action, leaders can accelerate successful cultural change in a limited timescale; it is a myth that successful change needs to take years. If your segmentation strengthens communication, individual relationships and personal motivation then results are fast and stable.

Sometimes you do not need to look outside your organisation for best practice; it just needs to be passed around.

My point is simple. If “Getting to Plan B” helps you generate a new plan, don’t throw it away. As a leader, make sure that the “spirit” generated by the planning is the same “spirit” deployed in its implementation.

To be continued, with a real life example…