Managing disruptive change in an uncertain world: learning for DFID from Southern NGO leaders

Managing disruptive change

November 2015Author nameDateNovember 2015

Learning for DFID from Southern NGO leaders

Managing disruptive change in an uncertain world


November 2015The backdrop• Many drivers of disruption will affect how SDGs are

implementeddemographic and geopolitical shifts, climate change, urbanisation, resource scarcity, technological transformation

• Internal development disruptors also change development practicedisintermediation, new donor nations, blurring of ‘civil society’ and ‘private sector’ ways of working, online giving, changing regulatory space for civil society, rise of social enterprise

• DFID and others are preparing for disrupted futures

• Southern NGOs are key implementers for the SDGs, but little is known about how they view or manage disruptive change


November 2015The project

Collating and sharing learning from Southern NGO leaders about how to manage disruptive changeMay Jun Jul Aug Sep Oct Nov Dec

Literature review

Workshop with IIED donors and partners

23 interviews across Africa, Asia, Latin America

written outputs, DFID and INGO engagement, learning exchange

Agreement to focus on Southern NGOs


November 2015The project

Why focus on Southern NGOs?

• the SDG commitment to ‘leave no one behind’ demands effective organisational capacities to adapt and innovate

• Local and national NGOs are invaluable in building agency and achieving lasting change

• Southern NGOs are closer to the places where development disruption bites

• Southern NGOs already manage disruption in the here-and-now


November 2015What is disruptive change?Interviewees suggest disruption means many things:

•Disruption is life!... At moments of ‘stuck-ness’, disruption brings the energy to move again.•Our organisation has grown from something very small to something very large, all in the context of wars, conflicts, earthquakes, and changing donor priorities, government policies and spaces for civil society. This is an incredibly turbulent environment.

•Our reality is one of ‘consistently trying to overcome uncertainty’. The reality of the change process has been to learn to manage uncertainty on an ongoing basis.

Turbulence, uncertainty, a fact of life

•The idea of a shock assumes a steady state earlier, and that after a shock there is a return to the initial condition. [Conversely] the layman’s definition of disruptive change is ‘life will not be the same again’.

“Life will never be the same again”

•The first thing you think is always negative, but there are pluses and minuses.• ‘Disruptive change’ has a negative connotation. [But] …disruption might not be bad because [your organisation] can thrive on other peoples’ sorrow or misery. And there is also a positive dimension when disruption benefits everyone.

Positive as well as negative

•There is a risk that external priorities are somehow submerging the internal. There are stronger, if not bigger, issues … that create more disruption. The relationship with government is the major disruption which we manage: particularly with change towards ‘loved’ and ‘unloved’ NGOs.

Externally or internally driven

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November 2015How to respond?Interviewees say responses to disruptive change can be:

Adaptive, reactive Proactive, innovativeor

Adaptation is dancing to somebody else’s music. Innovation is composing and playing your own music — and having the others dance to it.“Some organisations … are successful because they can survive through the adaptive capacity of capturing the mood: climate change is a good example. Any new fashion will force us to adapt: for some in a positive way; for others in a way that is too opportunistic for our mandates or missions to survive.

The typical kind of change in developing countries is reactive, and it happens when some event occurs in the environment and the system or NGO reacts… But it’s essential to think of innovation which comes from within. And innovation can also be disruptive.

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November 2015So what?The many meanings of disruption matter because, in Southern NGO contexts:

‘Mega disruptors’ like climate change are often obscured by disruption as a daily ‘fact of life’.

Addressing disruption-readiness here and now is a

vital stepping stone to ‘future-fitness’.

How disruption is framed internally can affect how it is addressed at an organisational level (Harvard Business Review, 2002).

so

If DFID takes a ‘disruption’ theme further, it should consider how to

frame it to enable alignment with the

adaptive and innovative outcomes needed.

so

Reactive NGOs can effectively deliver changing donor, INGO, and government priorities. They can appear very resourceful. But they may lack capacity to develop organisational systems and innovation to chart their own futures in a disrupted world.

DFID could reflect further on what blends of policy,

partnership and financial support are most likely to deliver adaptation that is

‘disruption-ready’ and rich in innovation potential.

so


November 2015So what for DFID?DFID may not be able to tackle systemic drivers of disruptive change. But it can consciously aim to anticipate disruption in ways that:

• lead the way among bilateral donors• with potential positive spillovers for development-conscious businesses, NGOs, and

wider ODA practice

• stimulate learning on organisational responses • both within DFID and in other development organisations

• invest in ‘disruption entrepreneurs’ • in civil society and the private sector: people and organisations with scalable ideas

that embrace disruption and could accelerate implementation of the SDGs


November 2015Learnings for DFIDOur work reveals four kinds of learning for DFID as:

A positive development

disruptor

An enabler of effective disruptive

change management

A development actor facing

disruption itself

A disruptor of Southern NGOs

Supporting others

Direct agency

Embracing disruption

Adapting to disruption


November 2015DFID as a positive development disruptor

Where DFID disrupts the status quo in ways that advance implementation of the SDGs.

Many Southern NGOs also see themselves as disruptive innovators. DFID can strengthen Southern NGO-led disruptive innovation, and take inspiration from existing practice.



Insights from our interviewees:

We wanted to embrace a new movement of start-ups creating technology for the poor, and to create a connection to areas that need them. The fact that unusual suspects are joining this area is really disruptive.“

”I feel that there is a vast field of innovators; people with courage and capacities who are showing the way and can help us move forward, and use disruption not as something to fight against, but as a stepping stone for the transformation that is needed.

If you want to be disruptive, you need not to take the world as it is, but leave more windows open to the world as it should be. What that means at an organisational level is that you need to be very open to breaking stereotypes.

Most innovation is at the grassroots, in smaller NGOs. They can deliver, but they are not aware of… opportunities [to work with the private sector].

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Implications for DFID:

A focus on disruptive innovation shifts ODA geographies.

Supporting disruptive innovation may demand new delivery models, a shift in risk appetite, and an ability to spot ‘disruption innovators’.

We want international cooperation agencies to be open to innovative organisations that bring something different… looking at us based on usefulness, not geopolitics.

Donors seem to want innovative solutions, but they won’t finance things until you have proof of concept. There must be greater coherence here. It becomes very hard to have innovation in how you deliver services because the system tends to take you to proven and traditional ways of doing things.

Grassroots disruptive innovators may need DFID’s support to broker the connections between their innovation capacities to development outcomes.

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November 2015DFID as an enabler of change management

Where DFID enables Southern NGOs to manage disruptive change effectively.

Southern NGOs with experience of disruptive change management have lots of insights into what makes for effective disruptive change management.



Four broad categories of insights from our interviewees:

Skills and capabilities• getting beyond survival, building skills

Leadership and governance• ‘distributed leadership’, engaging the board

Culture and learning• working on cultural alignment, continual commitment to learning

Funding and coalitions• securing resources for organisational development, applying coalitions to

disruptive change management



Skills and capabilities

NGOs with strong innovation capabilities may deliver better development outcomes than those in ‘reactive’ mode.

DFID’s civil society support could lead the way in building understanding and a Southern NGO community of practice on ‘disruption-ready’ innovation.

I don’t think reactive disruption management can lead to innovation.… It’s the survival mode in which NGOs and many organisations live in the developing world... [S]urvival is different to development.

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”Effective organisational change processes support and diversify internal skills to deliver desired outcomes.

‘Disruption-ready’ decision making on internal skills and competences demands strategic reflection and organisational learning, with implications for donor support.

If you let people pursue their passions and interests, they will always leave something.

Our management approach is different from the one you see in business school literature. We focus on people with the skills and traits of leaders, who can take decisions on their own in the field at any time.

“We’re writing a new strategic plan; and part of my thinking is that we need to re-think the kinds of skills and people you bring into your governance model.

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Leadership and governance

Leadership behaviours and styles have great impact on how organisations experience disruptive change management.

Do ‘distributed leadership’ models deliver more effective disruption management? If so, there are implications for DFID itself, as well as for how DFID supports Southern NGOs.

Our leadership style is ‘distributed’: everything is based on personal responsibility; each one of us is a leader one way or another.. We had a funding shortfall twice where we stayed more than fifteen months without resources. And still people came to work.

With new leadership, we are very decentralised. Most operational decisions are taken in the field, which builds confidence and ownership in local managers.

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”Boards can be invaluable in supporting effective disruptive change management.

How much does DFID know about how boards work in the NGOs it supports? Is there a case for supporting boards’ enhanced ‘effective change governance’ capacity, through grants or information resources?

To confront changes in the external environment, many NGOs are.. changing the composition of their boards.

By the time we got the subcontract, we were told it could not be used to cover the cost of salaries for the previous six months…The board said they would make personal contributions to cover the shortfall.

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Culture and learning

Organisational culture can predispose NGOs to positive or negative outcomes from disruptive change.

If ‘disruption-readiness’ is important, DFID could look at links between organisational culture and development outcomes, and pilot support for strengthening ‘disruption-ready’ or ‘disruption-embracing’ culture.

It’s the culture of busy-ness that’s the problem. You never stop to reflect, and there’s a tendency to think that the bigger we are, the more successful we’ll be…

One thing we really wanted to embed is a culture of always identifying opportunities and areas for improvement. Also a culture of ‘action’ rather than talk. We [have] an online culture page [www.kopernik.ngo/page/our-culture]… We still discuss it every quarter... We go through the culture [statement], and assess whether we’re living up to it.

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”Learning is a key resource. At first blush, there appears to be a strong correlation between effective disruptive change management, internal mechanisms for learning, and rapid feedback from mistakes.

Many NGOs struggle with short-termism in their operations. Supporting organisational learning is vital, and DFID can step up its role in this. But many learning models are already in use, and these offer a resource for donors and other NGOs?

Every year, boards should have a meeting for horizon scanning, or for a consultant to come in and talk about patterns in the external environment.

In our organisation, for 22 years, we dedicated a week of each month to learning. This was our ‘home week’.

At every staff meeting we have an agenda item on ‘what we have learnt’ which creates space for all levels of learning-- we keep track of this in a learning journal.

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Funding and coalitions

Effective organisational development and change management must be funded.

Effective organisational development (OD) approaches minimise the disruptive impacts of change, positive or negative. Could DFID better integrate funding for it into project-based support as well as strategic funding? Flexible OD funding is in short supply, and can be hard to access.

Projects, in many ways, kill organisations. They make us lose our strategic focus.

You just can’t fund organisational jumps through project funding. MacArthur is one of our key donors, and gave us a grant to strengthen our organisation, to do a new website and produce a strategic plan. Without this support, we wouldn’t have a coherent strategy.

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”International networks and coalitions could play an enhanced role in enabling peer support and learning for management of disruptive change.

The international network or alliance can enable each [member] to handle [potentially disruptive issues] more effectively in their national setting.

There is no way you can deal with [climate change] only in the South if you are not connected to the same approach in the North.

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DFID could consider supporting a peer-to-peer support network on managing disruptive change. Or it could integrate a ‘change management learning’ component within grants to existing relevant networks.


November 2015DFID as an organisation facing change itself

Where DFID acts to manage the disruption change it faces itself.

DFID can potentially take inspiration from things that Southern NGOs are doing well.



Insights from our interviewees:

Southern NGOs are diversifying their skills in response to disruption in the operating environment (but gaps remain, e.g. in natural and physical science for climate mitigation and adaptation).

In a typical screening in development agencies, you look at the number of years of experience, and you weigh them and so on. To us that’s not really the point. The person should be really driven and motivated to make a difference. It’s hard to judge that by looking at CVs. So our policy is to ask for a one-minute video first, about why [the candidate is] the best for the job. We get a sense for what kind of person they are; what kind of drive [they have]. That’s the first thing. Without that, it’s hard to run an organisation at the forefront of disruptive change.

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”Distributed leadership models in some Southern NGOs appear to deliver strong staff commitment, experimentation, and resilience in the face of disruption.

We try to be as open as possible so that people don’t have fear. Fear is a real block for creating change and learning.“

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Implications for DFID

As a development actor preparing for disruption, DFID can learn from inspirational examples of organisational practices in Southern NGOs.

What would it take for DFID to integrate learning from Southern NGO change management and disruptive innovation into its processes?


November 2015DFID as disruptor of Southern NGOs

Where DFID causes negative disruptive change for Southern NGOs.

Southern NGOs have practical insights into how donors can minimise and avoid negative disruption out of their own operating practices.



Two broad categories of insights from our interviewees:

Policy change• changes in funding policies and priorities

Tendering and consortiums• terms of reference and proposal evaluation criteria



Policy changeSouthern NGOs respect donors’ need to change policies. But sudden change can destroy the social and institutional capital on which effective development interventions are built, and hamper efforts to chart a consistent strategic course. A change in donor policy is understandable... but

changing the geographic focus is really hard for national NGOs to adjust to.

Impacts can be particularly hard on ‘locally embedded’ NGOs with the strongest community links.

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To what extent could grant agreements and terms of reference for contracts be ‘disruption-mitigated’ through provisions on advance notification, simple impact assessment tools, or use of ‘sunset and sunrise clause’ approaches to donor changes of direction?

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Tendering and consortiumsConsortia can lead to compromises that undermine long-term strategies.

In a consortium, you need a common understanding. That means that some part of the consortium may have to compromise. The compromise might be somewhere in the middle – or it might be dictated by the bigger agencies (because it can be easier to change the 30% than the 70%). But if we compromise on our approach, we also compromise on our long-term strategy.

Criteria can be exclusionary, to the detriment of marginalised groups.

“ ”Could DFID carry out a Southern NGO-centred ‘disruption impact assessment’ of tendering and consortia requirements, with a view to making adjustments in terms of reference and proposal evaluation criteria?

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Mandating consortia.. gives an unfair disadvantage to local NGOs. For example, one requirement in a recent situation was to have a UK regulated bank account. That limits who can submit proposals to like-minded agencies. If it’s always the same ones getting the grants, it doesn’t open the way to innovation ”They wanted to make it more sophisticated so they introduced a literacy requirement, which nearly completely excluded women.

Terms of reference can favour ‘the same’ groups and stifle innovation.

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November 2015Learnings for DFIDAcross all areas, our interviewees felt that:

• Donors often focus too much on governments

• DFID should more visibly support and advocate for the role of civil society in international development

• Funding is not the only answer: advocacy and who DFID engages with are also important


November 2015Learnings for DFIDWhat can individual DFID teams do to support the agency play a leading role among donors in crafting best practice ‘disruption-readiness’?

Civil societyInnovation and

adaptive programming

Learning

Interviewees suggested pathways for more effective grant-making and funding through support for ‘disruption-readiness’ (including via intermediaries such as INGOs); and stressed the importance of policy engagement on the operating space for civil society

Many Southern NGOs already see innovation as a means to greater local ownership of regional or national development pathways. Our interviewees gave many insights into the organisational and cultural accelerators and blockers of adaptive programming and innovation, such as empowered staff, or fear

Continual learning processes emerged as a key resource for effective management of disruption, with implications for DFID itself as well as support to Southern NGOs


November 2015Learnings for DFIDWhat can individual DFID teams do to support the agency play a leading role among donors in crafting best practice ‘disruption-readiness’?

Evaluation‘Mega-disruptors’

climate change, urbanisation, migration, demographic change

Business models and operations

Interviewees hinted at routes to more effective evaluation of development outcomes by focusing on ‘disruption-readiness’. Adaptive programming with more frequent quick-fire monitoring, learning and evaluation can give insights for anticipatory disruptive change management

Interviewees gave specific insights into Southern NGO engagement with donor climate change agendas, and ways to build trust and capacity for effective action. As a whole, they offer multiple insights into leveraging ‘disruption-readiness’ here and now as a way of effectively managing change driven by ‘mega-disruptors’

Interviewees suggested how to use tendering, consortia, and terms of references (for grants) to improve local ownership of development outcomes. They also pointed to the implications of risk and innovation appetite for effective disruptive change management

Managing disruptive change in an uncertain world: learning for DFID from Southern NGO leaders

Environment

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