Government agencies tend to be complex, having multiple objectives and facing increasing demands to deliver more services at a lower cost. Traditional accounting-based approaches emphasize moving the organizational boxes around on the organizational chart. These efforts work no better than they did 2,000 years ago:
We trained hard . . . but it seemed that every time we were beginning to form into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency, and demoralization of our subordinates. –Petronious Arbiter, Grecian Navy, 210 B.C.
Typical approaches to organizational design don’t work because they assume that structure contributes directly to capacity. It doesn’t. Performance comes from your processes or systems. Organizational design only impacts performance by interfering with the flow of work through a process. If performance is the objective, then effective organizational design has but one aim–minimizing the organizational impact on the workflow.
Our approach to conducting Comprehensive Organizational Reviews relies on the framework outlined and defined by the World Bank. It is comprised of three components:
A Functional Review, what the institution and its operations are intended to accomplish. These are largely related to the outputs and outcomes of the logic model and link to effectiveness measures including outcomes.
An Operational Review, the existing programs, processes, projects and services, representing the way in which the organization performs its functions. This includes elements of the supply chain and links to efficiency measures including the fundamental measures determining capacity.
An Organizational Review, an assessment of the current organizational structure and its ability to effectively and efficiently support existing functions and operations as well as respond to change (flexibility).
The data gathering component of each, is comprised of a mix of one-on-one interviews, focus groups and workshops as well as background documentation research.
A functional review entails an examination of the various operational functions of the focus area and how these match to the specific expectations, needs and demands of each area’s stakeholder groups in terms of their results effectiveness. This is key to developing a strong customer-driven and results based organization.
Key questions to be answered within the scope of the functional review include:
- What functions, activities or programs are currently being undertaken by each department? What do they cost and how many staff are they using?
- What is their rationale? How do they relate to any strategic objectives or priorities stated for these departments, if such objectives and priorities exist?
- To what extent have adequate medium term strategies been established to guide this process? What strengthening of policy is required in the department?
- What are the apparent outcomes (effectiveness and service delivery quality) of these activities or programs? If activities or programs are ineffective or provide poor service delivery, what response or changes are required?
- Are there apparent duplication’s or overlaps between different activities or programs – either within or between departments – which could lead to rationalization and savings?
- Do existing operations provide for adequate decision making and accountability for performance and achievement of objectives? What changes might be needed to achieve these ends?
Operational (Programs, Processes and Projects) Review
The Operational Review is a detailed analysis of the activities driving results. This includes business and service processes, programs and projects. The focus is the organization of the work and measures of efficiency. Among the questions that need to be answered are:
- Do budgeted funds actually reach the point of service delivery? To what degree? What changes would increase or improve the flow through of budgets to service delivery allocations?
- To what degree are desirable activities or programs aligned with funding and staffing levels and where are possible efficiency gains? What is the extent of such possible efficiency gains?
- What is the basic business model that defines the cost recovery strategy of programs and services?
- For revenue generating programs and services, is there potential to increase revenues by improved administration or targeting? Is improved targeting consistent with basic objectives?
- Is the level of program resourcing adequate given program objectives and organizational constraints?
- Are there activities or programs for which new or additional user charges would be appropriate – or where charges should be reduced or eliminated?
- What is the relative cost of the processes for recovering charges for services and the amount of revenues themselves?
- Are desirable activities or programs adequately funded to achieve their required results? If not, what additional funding is necessary?
- Are the various programs and services sustainable? Is the basic cost recovery model in use appropriate to maintaining longer term program and service viability?
- What is the appropriate role of the focus area? Are there activities or programs that do not appear to be a proper activity and which therefore could be eliminated or transferred to other sectors?
- Are there activities or programs for which new service delivery arrangements – such as contracting out, partnerships with the private and non-government sectors – would improve outcomes and efficiency?
- Are there activities, programs and/or processes that appear to serve no useful purpose and could be abolished?
- What is the flow of work? Is this flow rational? Are the underlying assumptions logical, following an if/then structure?
- What is the overall productivity of the programs? Are the results and output levels consistent with factor inputs?
- The outcome here is a comprehensive assessment for improving operational efficiency and productivity.
The purpose of Organizational Review is to determine how best to organize resources to optimize operations in meeting the functions of the organization. This deals with roles and responsibilities, as well as system conditions such as technology, policies, financial constraints and infrastructure. Some basic questions that need to be addressed and answered in the Organizational Review include:
- What is the basic organizational structure of the organization? Does this align with the mandate and mission?
- What is the basic economic rationale for the organization structure? Is it designed to take advantage of economies of scale, economies of specialization, economies of scope or economies of integration?
- Is the organization structured along best principles? Is a Lean management and operational approach incorporated into the design? If not, what is the supporting rationale?
- Are the roles and functional allocations to various organizational units appropriate? Are these consistent with underlying business and operational processes?
- Have we got the right number of people doing the right number of things in the right positions? Are reporting relationships and operational roles appropriate?
- What are the appropriate competencies, knowledge, skill and qualification levels for the roles in the organization?
- Are lines of accountability clear? Where is the responsibility for critical processes and assets located? Who owns these assets and processes?
- What are the major barriers in the central systems of budgeting and financial management, personnel management, and procurement to achieving better outcomes and efficiency?
Some Of Our Work
Converge conducted a major organizational and function review for The City of Red Deer Parks, Recreation and Culture Department. The review recommended significant organizational changes and improved accountability by aligning organizational components to significant asset types. Recommendations were accepted by City Council and implementation is largely completed.