Limitation of Organization Capacity Assessment Tools

[Roshanga Wickremesinghe]

Most of the organization capacity assessment (OCA) tools that are used for this purpose can be traced back to a few general tools which were made famous in the latter part of the twentieth century. Increasingly, the need to further customize these tools in a way that they become more relevant to the current context is a key feature of modern OCAs. This customization has been happening in the past and continues at a faster rate at present.

The single biggest reason that is attributed for this need is that; today we live in a technological age which has some peculiar characteristics. The characteristics are that we need to innovate and improve not only our products but also how we do things inside the organization at a faster rate. This is nothing new; most of the thought leaders of our time have made big bucks selling this message repackaged with additional jargon. These characteristics currently affect most of the knowledge based industries. However as time goes by their affect on every organization be it government, private or development sector will grow exponentially.

As mentioned above since we have to improve the way we do things inside an organization we run into the human dimension of things. We are also aware of the “change management” that needs to happen inside the organization to facilitate the “keeping up” with the changes that drive our organizations toward bigger and better things. However we don not consider that some of the changes required may be limited by the knowledge / intellectual capacity of the staff (here staff include owner directors, CEOs, CFOs, CIOs, and CKOs). In some organizations we may have staff that has reached the limit of their intellectual prowess.

This does not mean that they stop being experts in their field/discipline; however this means that they are unable to keep pace with or get ahead of the sophistication curve prevalent in the current context. For example consider a banking transaction. Before you would go to a bank teller and do all the transactions that you may require; then came the automated teller machine (ATM); then came internet banking and now we have mobile banking.

Now let’s consider 2 people working in a government department (e.g. 2 finance officers). Before they could go to the bank, converse in the local vernacular and do all the transactions at the bank. With the advent of the ATM they have to be able to read in English (those who’s first language is not English) and operate a screen driven terminal. Consider the learning needs of an adult who can’t read English and have a machine phobia. This means that a straight forward transaction has got sophisticated due to the change in medium of transaction. Then we progress to internet banking where the government employees now have to learn simple things about the operating system of the computer, plus how to get on line and the simple browsing skills to be able to get the same service. We come across another layer of sophistication again. And finally to the mobile where the sophistication has further increased.

Now you come across people who are capable of keeping up with this sophistication (through formal training or by aptitude) while others still queue at the only teller to get the services as before (as they are not able/willing to change despite formal training). When considering the 2 people working as finance officers in a government department one may be able to keep up with the sophistication level while the other may not. However both can still do their finance job well. As time goes by the person who can keep up or get ahead of the sophistication curve is likely to get promoted or will leave for a better position in another more progressive department where his abilities are appreciated and rewarded. The other will remain still doing his job well as a finance officer. After several cycles of such technical innovations (say over 20 to 30 years) you will have a collection of people working at the same department/organization where they all queue at the only teller at the bank.

Finally when it is time for the government department to change or improve its work processes (say to an automated system), the staff who are left at the department are the ones who stayed back because they are unable to keep up with the sophistication level. These organizations have some special characteristics or markers as I like to call them.

The point is that we as consultants regularly come across organizations, where the majority of the employees are in effect still lining up at the teller. When an organization reaches this level it is said to have arrived at the door step of “mediocracy”

The current tools that most of our contemporary consultants use for organizational diagnosis will not help identify this issue of “mediocracy”. However there are some characteristics that are peculiar to these organizations where they have reached the glass ceiling of intellectual limitation / mediocracy.

These markers were identified by me during consultancy assignments over a period of 8 years across Afghanistan, Bahrain, Bangladesh, India, Jordan, The Netherlands, Nepal, Pakistan, Sri Lanka, Thailand, United Arab Emirates, United Kingdom & Viet Nam. Another critical observation is that this phenomenon runs across the private sector, government sector as well as the not for profit sector; and have been observed in over a 100 organizations where I have done work as a consultant in the past.

The markers that I identified were:

1. The organization starts adding parallel value chains to the existing organization structure to overcome loss of revenue.

2. Organization does not move forward or backwards in the value chain

3. The organization does not spawn new businesses that are “stars” / neither are they known for any innovation (other than the innovation of some of the principles / 3^rd party brands that they may represent)

4. History of young star performers leaving the organization on a continuing basis

5. Boasting of people (the young starts) who have left the organization and gone to achieve great things as been trained at this organization.

6. Long serving staff in a particular discipline / technology / expertise

7. Some staff that leave the organization after a few years (not the stars) re-joins the organization again as a manager or a senior in the same field of expertise

8. Staff talk of the same obstacles that they face every year (one years experience repeated over many years) as opposed to innovating / re-engineering / work-a-rounds to overcome obstacles

9. Large number of managers based on technical areas as opposed to value addition

10. Staff does not take up higher education or professional development

11. Average age of staff moves parallel to the age of the organization

Let take a few examples and explore this further.

The 1^st example is that of an ICT company started over 25 years ago. The organization has been fairly successful in keeping up with the changes in the ICT technology; and has been making above industry average, earnings per share. However in the early 21^st century there was a need to re-strategize to keep up with the faster pace of change in the ICT environment. I was invited to develop a new strategic plan for this organization. During my first meetings with the senior management of the organization; I was able to identify / confirm that this organization had all of the above 11 markers in varying intensities. This was indeed the first instance that I was able to observe all 11 markers in a single organization.

I suggested to the Managing Director who invited me to the organization to do a Strategic plan that; the organization not only needed a new strategic plan but it also needed a corporate renewal plan and a voluntary retirement scheme (VRS). This suggestion was not looked at favorably and I was asked only to develop a strategic plan.

The above 11 markers as identified by me is a clear indication that over the years the organization has become a repository of people who were unable to keep up or get ahead of the sophistication curve; even though they are a technical/knowledge based organization. Therefore the organization has in all intense and purposes become mediocre and the incumbent staff was not able to get the organization out of the hole that it has dug for itself. They need fresh blood and a new playing field to continue being profitable. In its current state it will just survive but never reach its former glory / heyday it enjoyed in the beginning of its existence.

The 2^nd example that I would like to take is a research organization set up to do applied economic research. This organization too has been in existence for over 30 years and had enjoyed considerable success in the early part of its existence. This organization too displayed the following common markers as identified by me earlier.

They were:

1. Long serving staff in a particular discipline / technology / expertise
2. History of young star performers leave the organization on a continuing basis
3. Boasting of people (the young starts) who have left the organization and gone to achieve great things as been trained at this organization.
4. Some staff that leave the organization after a few year (not the stars) join the organization again as a manager or a senior in the same field of expertise
5. Staff talk of the same obstacles that they face every year (one years experience repeated over many years) as opposed to innovating / re-engineering / work-a-rounds to overcome obstacles
6. Large number of managers based on technical areas as opposed to value addition
7. Average age of staff moves parallel to the age of the organization

In addition they displayed the following:

8. Doing (research) work in traditional / theoretical / safe areas as opposed to doing applied / non traditional / contentious issues based research (Not competing in your space as mentioned in the mission but trying to compete in the space that you perceive to be good at / running back to mama so to speak; relying on your academic training as apposed to innovation)
9. Contempt / arrogance towards younger organizations (doing applied research) and relying on the age of the organization and past performance as a mark of value (of research) as apposed to quality, (rigor), and relevance to current context.
10. Employees who are not able to perform get salary increments based on years of service and most employees qualify for this increment.

When an organization displays some or all of these characters it must be restructured. No amount of retraining or pumping money for investment will revive the organization it will after a brief period of increased activity settle in to the old routine. In essence such an organization needs the following:

1. A new set of leaders.
2. Funds to offer a VRS
3. Funds to restructure the organization starting from the revalidation of vision and mission based on the current context.
4. Funding to develop a new strategic plan and operational budget.

Anything short of this will only waste funds and time, as well as deprive the investor of a reasonable return on investment be it private or not for profit funds.