What Does an OD Project Look Like at a NPO?
The Community Services (CS) department at a youth organization provides shelters, transitional and long-term housing, medical and counseling support, and programming for street-involved or homeless young women and men. With a budget of $4.6 million and approximately 70 staff, CS operates two downtown shelters, a drop in center, and three long-term housing apartments.
Over the last five years, CS saw tremendous growth in the demand for their services. There was a growing concern that the existing organizational structure no longer supported operational requirements. Line programs and service delivery had always been resourced appropriately, but administrative, managerial and supervisory capacity had not kept pace with the growth.
The Program Managers had seen the scope of their job expanded and were experiencing serious challenges meeting workload pressures. Their role had been re-designed over the years to include a variety of administrative and facility duties, which they argued detracted from their client-facing responsibilities and core youth worker skill set.
At the same time, facing their own pressures, the Finance department reduced its level of control and support and made the Managers more accountable for budgets. Finance provided training on ‘how to read financial statements’ and prepare budgets, but the Managers found the new financial aspects of their roles overwhelming, creating a ‘disconnect’ with the clinical aspects of their programs.
In response, two new positions were created, Assistant Director and an administrative assistant, but their roles and place in the organization were unclear. The reorganization needed to address the workload pressures in a fixed budget environment and respect the existing set of programs.
A comprehensive analysis of opportunities and challenges was conducted. Several optional Detailed Design Models were prepared for consideration by management. The advantages and disadvantages of each option were assessed from both short and long term perspectives. The new model created a Program Administrator job. This position was designed to provide administrative coordination.
The Assistant Director was tasked with operations management. The Program Manager was re-focused back to front line aspects: providing youth worker expertise, management of staff performance and training, ensuring the quality of clinical assessments and the proper handling of high risk cases. A final new structure and revised set of roles and responsibilities were recommended to senior management and a plan was created to communicate the changes to staff. This has since been successfully implemented by CS.
Tips and Best Practices for Successful Re-organization
- Problem Statement: Define your program needs, internal and external challenges and strategic objectives. What exactly are you trying to fix? What is your ‘desired state’?
- Conceptual Business Model: Look in the mirror. Outline your strategy, resources, inputs, major functions and outputs (programs and services) in a clear and concise model.
- Design Principles: Create a set of design principles. These are attributes that you must have. Examples include Board relations, service excellence, process efficiency, and accountability.
- Workflow: Map out the major activities and steps in key program and administrative processes. Identify and link the key roles (jobs / positions) that perform each step.
- Organizational model options: Create several potential ‘to be’ states divided into three groups; A. minor change, B. practical and realistic change, and C. radical ‘outside the box’ change. Quite often the ideas generated in Group C will prove to be effective in a Group B option. Select a winner.
- People: Assess the “people impact” of changes. Prepare a People Plan and address potential retraining, re-assignment, replacement and recruiting needs. Be open to the need to design a function around the skills of the incumbents – as opposed to what looks best on paper.
- Systems and processes: Focus as much on how the new structural model will work as on what it looks like. Ensure that systems and processes are fully integrated with the re-design.
- Culture: Be aware of your organizational culture (unwritten norms and behaviors) and how it impacts your new structure.
- Change management: Expect resistance to change and plan accordingly. Appoint a senior executive as project champion. Develop a clear communications plan and adhere to it. Explain the reason for the changes and the benefits it will provide.
- Implementation: Pay attention to how the re-design will actually happen. Prepare a detailed implementation plan and hold people accountable. Address risks and bottlenecks. Define, measure and report on metrics. Quick decisive action is often more successful than an evolutionary process.
- Beware of entropy (see below).
Entropy is the silent killer of organizational performance. It is the measure of the disorder of a system. Entropy is a natural process of degeneration. It is an unavoidable trend toward disorder. The alignment of functions, positions, skills, processes, human talent and performance to our strategic priorities deteriorates over time and we don’t see it.
The cure for entropy in your NPO is ongoing configuration; achieving and maintaining full alignment between your corporate strategy and your structure and processes – in other words – organization design.
Tim McConnell is the Managing Partner of McConnell Consulting Inc. in New York. More information on Organization Design for NPO’s can be found at www.McConnellConsulting-NY.com.