Monthly Archives: February 2015

Strengthen M&E to gain from efficiency and impact of Government projects

Across the world, governments are the major sponsors of multi-year multi-million projects. Most government projects, whether infrastructure like hospitals or roads or developmental like vaccination or HIV intervention program often do have well defined project development objectives (PDO) and well supported investments from lending agencies such as World Bank or Asian Development Bank.  Many of these projects expect to gain from improved processes and capacity building at various governmental units.  In several cases the lending organizations tie the loan component to specific areas of improvement termed tied loans. In cases where the institutional arrangements are satisfactory, lending organizations allow block grants that may be used at the discretion of the users and the government agencies. The assumption in block grants is that consumption units can prioritize their areas of improvement, plan and allocate funds in line with their prioritization.  Despite noble intentions, many lending organizations realize the funds are misused. In China World bank funds were diverted to speculative investments. Uganda and Zambia governments reported misuse of debt-relief funds to non-scheme areas. Scams in construction, animal welfare, healthcare and other schemes in India and the subcontinent are clear indication to the misuse of development loan funds.  Administrative reforms projects, including judiciary have seen large scale misuse of funds from Philippines, Russia, Sri Lanka, Ukraine and Greece.

What is the weak link in the execution of government sponsored projects. Our analysis of several World bank lent projects reveal absence of a tight leash on the PDO, activities and outcomes is the real culprit. While World Bank and other lending organizations insist on describing in detail the project context, developmental objectives, design, key indicators , safeguards and implementations, many a slip happens between the project  fund allocation and implementations. It is not uncommon to see many department heads putting their heads together in stitching a formidable Implementation completion report (ICR) to the lending agencies for their approval or extensions. While World Bank and other lending organizations insist on using result based management framework to capture YoY outputs, Outcomes and Impact, many a gaps exist in the government organization and limited knowledge of junior consultants sent by lending organizations. No formal analysis and alignment of outcomes and secondary effects are planned ahead by the implementation agency. The result, many assets and works get completed without significant long-term effect.  Lending organizations must insist on a strong M&E organization within the government departments. Formal and up-to-date data analysis must be conducted before release of YoY grants. Half yearly reports detailing the nature of assets being created or programs planned is a good indicator of what would be the expected outcomes and impact of the investments. World Bank consultants must seek an intermediate completion report with sufficient use of latest ICT technologies including images, and videos.  New age institutional lending requires lending organizations deploying more investments in M&E to reduce fiduciary compliance.

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A structured approach to professionalizing a family business

Family businesses are a significant constituent of many economies. Family business have certain traits like high emotional involvement, unilateral decision making and optimization focus that offer unique advantages, more so in tough times. However, these very traits prove to be their Achilles heel once they start to grow and expand.  Family businesses realize a need for formalization of processes and bring in professionals at senior levels to drive focus on results and efficiency. Family businesses attempt professionalization to build newer fences and wedges at some managerial levels to drive the emphasis on outcome rather than relationships.

Professionalization of a family business is a process that folds over couple of quarters. Smart family businesses have traversed the distance pace the change in terms of short term outputs and long term intended results. Results based management is a strategic management tool that can be effectively used by family business embarking upon professionalization program. RBM has various dimensions. Results are realistic, risks are identified and managed and appropriate indicators are used to monitor the progress of the expected results. These indicators help the organization in assessing whether or not the activities are yielding the desired results. RBM helps to bring clarity on the purpose of the programme/activity/change and the desired results from the very beginning. RBM captures the process of change in short, medium and long term. Professionalization results  (in terms of formalization of process, reporting mechanisms, performance systems, outcomes management, etc) are commonly linked together in a result chain. The results are captured at three levels:

  • Short term or output
  • Medium term or outcome
  • Long term or impact

The result at each level aggregate or contributes to the goal or desired impact that needs to be achieved.  RBM integrates people, process, resources and measurements to administer the programmes and improve transparency and accountability. RBM clearly defines the activities to be performed at each stage to achieve the desired results. These activities are further segregated into allocation to different groups. Each group is reviewed based on the activities and the outcomes and outputs are consolidated at the programme level to report the impact or the final result in comparison to the objective set.

While adopting RBM for professionalization program, family businesses must use PCC-DIO framework to identify activities and the outcomes. The PCC DIO involves

  • Purpose
  • Comprehensiveness
  • Consistency
  • Delivery
  • Impact
  • Outcome

Purpose:  Each activity must meet the objective of formalizing, integrating process, functions and roles so that actions drive performance.

Comprehensiveness:  Each activity and tasks are aligned with complete consideration of the the roles, responsibilities, and different levels of learning. The focus is to ensure the tools, and methodologies are rich enough to make informed decisions.

Consistency:  Systems and activities must be repetitive and consistent in terms of data, duration and procedures for the complete professionalization program and show no deviation from the desired architecture.

Delivery: The timeliness and quality of delivery by each activity should meet the professionalization goals and be delivered within the defined time.

Impact: The impact analysis of every process on the concerned stakeholders must be done after delivery.

Outcome: On completion of each process, outcomes must be evaluated to assess what was desired and what has emerged.

While the above frameworks can offer a defined approach to professionalization program, certain critical human elements are key to the success of professionalization program. First, is the change management champion from the family who can anchor the program, imbibe the tantrums and shocks that emerge in the early days of transformation and buffer the professionalization program. Second, a trusted experienced non-family person who can work with new professionals brought into change the desired areas. Thirdly, planning and showcasing some quickly demonstrable outputs like formal employee policy manual, incentive models or documentation of knowledge management processes to convey the seriousness and commitment of family business on professionalization program.   Fourthly, preparing the business to bear the shock of untimely exit of relatives or other executives who find adopting to the program a little difficult.  Finally, family learning to clearly devise approaches to successfully manage the conflicts between family business and business of the family.

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Hopping on to Dad’s throne: successful immersion strategies of Daughter’s into the family owned businesses

In the past, gender has been a particularly thorny issue when it comes to ascent of throne or board room. Catherine the great, or Elizabeth I and many princess had to manage male chauvinism and persecution to survive and manage their kingdoms. Fortunately, business owners across the world are recognizing that gender is a non-issue and are seeking a family champion for continuity.  Are you a business owner blessed with a daughter interested and capable of running your business and take to next stage.  How should your business plan and execute successful in immersion of daughter into family owned business.

Insights from successful entry and immersion of daughters into family business show there are some common principles that can be easily adopted.  First, the immersion is well planned ahead. For a large automotive seat manufacturer, the immersion started when the daughter was just 12 years old. She was encouraged to spend summer holidays in the plant, know the employees and their families and develop personal bonds with long standing respected non-family members. By the time she graduated from engineering she had helped design two innovative products.  The second principle is to bring them at appropriate level, preferably closer to market. A large construction company based out of Mumbai that has diversified into food parks, hospitality and related areas, asked the daughter to start with interning for an operational excellence team that had a charter to improve customer engagement. Working with the excellence team helped her understand the gaps from 10,000 sq.feet,  get a large picture view across various functions and what to change to make things happen in the company. A great advantage was she could tag along with the excellence team to all departments without being prying. Third principle is identify respected non-family mentors who would take the new ward under their umbrage and fill in “implicit knowledge”.   A manufacturing company in Ahmedabad placed the daughter who was going to take the overall mantle of the firm shortly from the founder under the guidance of sales and marketing chief stationed at Mumbai. The ward had an advantage of learning the ropes of business from an experienced hand, but away from the distraction of royal court. Fourth, but the most important one followed by most successful companies is to help the heir position as a winner by setting them to win, especially by focusing on related non-core business. An equipment manufacturer that has been in business for over two decades, after announcing the entry of the heir apparent in a normal way, asked her to work on areas of improvement with no investment but significant revenue upside. What the young heir went on to do for the first two quarters is to build successful aftermarket revenue of their existing business. A large construction house brought in the daughter as an marketing assistant,  pushed her to go through the grinds of sales and marketing. After an year the company asked her to come with ideas for related business areas that can be pursued. The heir came up with School and Interior decoration unit  that complemented the integrated real-estate development. The two business units now support 18% of the overall group revenue and with the successful running of the two enterprises, the daughter has gained the appreciation of all stakeholders.

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