The Refugee Rethink Part 5: A New Way
How to Build a 21st Century Organization
“I say the goal is not to be good — it’s to be great. The idea is to have the audience leave, and say, “You’ve got to see this.” You have to work backwards from that result.” — Steve Martin
To those of you from the humanitarian assistance community, let me begin this post by asking you few questions:
— Do you drink the water you provide in villages?
— Would you let your children attend your clinics?
— Would you recommend your livelihood programs as a career path for your graduating teenager?
In the 20th century, our industry focused on scale: achieving the minimum standards of services to huge numbers of people in great need, in hard places. We had a formula: start with reachable and moderate standards, add in controls, throw in technocrats and money, and then multiply and replicate throughout the world.
But this hasn’t worked, and it doesn’t have to be this way.
In the 21st century, we should pursue a new goal: substance (I’d use the word quality, but we have killed that word through misuse). Our new formula could be: take the spirit of our founders, then add in collaboration and proximity, all enabled by real innovation.
Back to the Steve Martin quote for inspiration; what if our goal was to be great? “Scale” isn’t great; scale is just another word for mass. But what if our greatness was defined by our ability to deliver real substance — services worthy of singular human beings? What if our goal was to provide services good enough for our own children to use? To do that, what would we need to change?
I. Replace Largeness with Closeness.
20th Century: You glorify “largeness.” Those who push “scale” as our ultimate goal often argue that the size of the problem requires us to be “large.” They assume that large organizations are best equipped to deal with large problems. This way of thinking isn’t limited to our industry; I’d argue that it is the single most emblematic assumption of the 20th century: large requires large. But, with the exception of armies, profits, and egos has this ever been true?
People look down on the proliferation of non-profit organizations and seem to hunger for a day of mass consolidation. But what if the rich diversity of our sector represented an opportunity not a challenge? Rather than having one large organization serve one million people, why not have ten passionate, driven, and customer-obsessed organizations serve 100,000 each? Would this work? Yes, and frankly we all know that it would. Instead we say its “inefficient.” Really? It’s a dirty little secret in our industry that the largest organizations have some of the largest indirect cost rates (think of these are administration percentages, for the uninitiated). After 20 years in this sector, I’ve seen beyond all doubt that size has absolutely no effect on base efficiency. So, who benefits from consolidation? The large official donor. It is certainly easier for the donor contracting officer whether in London, Brussels or Washington to manage one contract than ten. But is this where we need “efficiency”? And at what cost?
21st Century: We must lionize proximity to the customer. In this context, the opposite of large is not small. It’s close. When I started in this work in 1995, it was all about “participation” and empowering the beneficiary through engagement. Concepts like immersion and closeness to the poor were considered badges of honor; you had to live in villages, walk the same steps to collect water, and sit by the campfire at night.
Today large organizations are oriented to control and are aligned upwards to the needs of those in power. At each stage of growth, we add layers — field, country, regional, headquarters, and federations — and to manage these monoliths we hire political and corporate leaders. The end result: uncrossable bureaucratic distance between leadership and customer.
If we are to truly engage with human beings in a way that encompasses the spectrum of satisfaction, connection and meaning, then we are going to have to get close to them…maybe even learn their names. We need to realign; to reorient— against our instincts and perhaps self-interests — our organizations downward. We must minimize layers and bring leadership closer to those we are helping. The point of our spear must not be the charismatic name-brand CEO, but the empathetic local clinic worker — because you simply can’t put beneficiaries first if you don’t put support to the frontline service providers first.
II. Replace Control with Collaboration
20th Century: You emphasize control with a focus on compliance. The reduction (what was hailed as “efficiency”) in bureaucratic oversight that came from our focus on consolidation and “largeness” pushed the rigors of compliance down to the contracting delivery organization. We are encumbered with layers of control (HQ-region-country-field) and a web of policies and procedures, reviewed by a constant line of auditors. I understand this. Our sector has eagerly pursued ever larger grants from public funds. These grants need to be compliant, and, fortunately, we — the larger U.S. or European entities can handle the burden.
But here’s the second dirty little secret: not everyone can. Our community has been planning to increase funding and responsibility to local partners and governments for years now, following the 2005 Paris Aid Effectiveness reforms. But it’s not happening because these local groups simply can’t meet the compliance and auditing requirements. An ARC team member recently met over dinner with an outside auditor for a Big Four firm that does the due diligence on local organizations (those based in regions like Africa, Asia, and Middle East) for a large bilateral agency. She has been performing due diligence on these organizations for two years. We asked her how many had passed. Zero.
Compliance is important. But when it comes directly at the expense of proximity — being able to leverage our partners on the ground — there is a problem.
21st Century: We must decentralize through collaboration. The opposite of centralized “control” is not an unconstrained freedom; it’s networked collaboration.
One of the distinctive features of the non-profit sector has been its rich diversity and size. With organizations that are strong in purpose, founded by a group of passionate individuals, with distinct missions, and located close to their customers yet small and struggling to deliver impact at the size they so eagerly desire. Instead of ruthlessly consolidating these (in a bad swap of passion, clarity, ownership, closeness, diversity for mere compliance, without even reaping efficiency gains), can’t we create networks of organizations, both tightly and loosely collaborating? Tight around systems, process and governance allowing for the needs of compliance, while loose enough to maintain brand identity, customer focus, and product design?
The goal is akin to an “ambition accelerator.” Impact could be achieved through the combined influence of the partnering organizations locally, regionally, and internationally. The goal would not be to do-it-yourself, but rather to co-create and collaborate. Growth will be about the amplification of connection and community.
III. Replace Models with Empathetic Design.
20th Century: We overly rely on “minimum standards and models.” Think Taleb from my last piece: there is a reason why corporations sell junk drinks, and artisans sell you cheese and wine. Larger entities are just better at wide and shallow, and smaller organizations do “niche” better than big ones. The same is true in our industry: smaller organizations are generally more focused, more grounded in local context, and just know their customers better. This combination typically makes them better at providing the tailored services that refugees actually want.
Today, refugees are fleeing our services and camps en masse. The industry calls these people “urban” refugees; I prefer “people-who-don’t-want-to-live-in-a-camp-for-17-years-with-no-real-livelihood-and-no-proper-education-for-their-children-eating-the-same-food-everyday-with-the-walls-closing-around-them-and-no-where-to-go” refugees. It’s clear that big organizations are not providing quality services; it’s time to stop providing the “junk drinks” version of refugee assistance and start holding ourselves to higher standards. So, let’s look to smaller, more focused organizations to do this.
21st Century: We must design products for real people. The opposite of standards is not best effort, its dedicated design and continuous learning. Real program impact is not driven by highly defined processes (“best practices”) and standardized models, but rather by clever, dedicated, and resourceful people who have the support of an organization (and broader collaborative network) clearly aligned around them. The nature of our program work is in highly changeable environments, within communities with very differing values and desires. Therefore it must be fundamentally grounded in local context and time. It is judgment-based work (where art and science meet) that requires entrepreneurship, innovation and the application of multiple schools of thought. Program design cannot be left to the donor, and implementation outsourced to our “partners.” Rather, design and implementation are an organization’s canvas for creativity, authenticity and intelligence. It forms the organization’s intellectual property. It’s how we create tangible value on a daily basis.
IV. Put the Passion Back in Our Profession
20th Century: You put the fate of refugees in the hands of technocrats. It’s a generalization, but I’ve found it to be true: technocrats prefer to hew to “best-practices” and tend to laud distance, objectivity, regional compacts, and systems-wide approaches. Too many of them have interpreted cynicism, objectivity, and hypocrisy as the surest positive sign of professionalization (meaning, they think these are good traits.)
Technocrats aren’t hired for their passions or blue-sky mindsets; they’re hired to crunch numbers, bring technical soundness, guard compliance, and approach problems “linearly.” And in some situations, to a degree, this is important. Technocrats can be a useful (if grating) voice in the room — but too often, they are the ones controlling the actual levers of funding, project design, and partner selection. And through the skillful application of these levers they shape (and limit) an organization’s vision and strategy.
21st Century: We must be invigorated by the spirit of “founders.” The opposite of the technocrat is not local staff and organizations it’s the spirit of our founders. It’s about having an owner’s mindset: a bias to action, not advising. It’s about taking responsibility. It’s always personal and focused on achieving the result rather than completing the “process”.
Embracing this owner’s mindset can be as simple as starting to behave normally in the countries we are in. We aid workers often behave as Frankenstein-like creatures when working on the ground. Cloaked in the veil of do-no-harm we have morphed into people with all the ego and self-importance of the most arrogant of doctors, the gruffness of TSA Agents, the indifference of a bureaucrat, with the fashion sense of backpackers (or trout fishermen if over 35). This combination acts to underscore the temporary nature of our presence, it perpetuates our “otherness”, and is a constant reminder of the overall artificiality of almost everything we are doing (e.g. tents for houses, lines for rations, and cash-for-work).
V. Emphasize Vision, Not Money
20th Century: We emphasize money. When reaching scale is the problem we are solving — how to take this big thing and spread it wide — the answer comes down to money. The more widgets you want to produce the more money you need.
21st Century: We must commit to real innovation. The opposite of more money isn’t more efficiency, it’s innovation. Few will admit it, but our industry has an imagination problem, not a money problem. The truth is that “scale” is a solved problem: there are people in the world who know how to deliver large amounts of stuff, to massive amounts of people, in incredibly diverse locations.
What we don’t know is how to do the opposite of scaling up: scaling deep. How do we re-engineer organizations to the point where they can deliver a tangible difference in a human life…many times. Lives that are singular, rich, and wonderfully dynamic. (Just think Mohamed from my last post.)
For organizations like ours to truly matter in human terms, we must go beyond the homogenous, to the singular. We must come up with a way to deliver to many singular human beings in many different contexts. As a sector, we haven’t cracked this, and that’s why we need real innovation. We at ARC are currently working on our own secret weapon, but there must be many more.
The Big vs Small Idea
I am not advocating for a “small is beautiful” approach. Small is just insufficient in terms of the size and scope of crisis we are all working on. I do believe that the 21st century will bring a new paradigm to the big vs. small idea. If the 20th century was all about large requiring large, then the 21st century has already demonstrated that this is not necessarily true. Speaking of Space X, Jon Stewart joked “four entities have launched rockets into space: the U.S., China, the Soviet Union, and Elon Musk.”
We need bigness of vision. Scale is not that. Human being are truly wondrous; each one a universe unto themselves. We must act and deliver in a way that is worthy of this. To do this we will need to rely on all the abundance that the world offers. We will need to throw open the doors of our organizations and let people in. And as we do this I believe something new will emerge. Umair Haque states it well:
“Bigness of purpose is what separates 20th century and 21st century organizations: yesterday we built huge corporations to do tiny, incremental things — tomorrow, we must build small organizations that can do tremendously massive things.”