Author: MzN International
Clearly, these are challenging times. The COVID-19 pandemic poses a threat to many NGOs worldwide. An October 2020 Bond survey found that nearly half of the network’s 400 UK non-profit members will go bankrupt by 2023; small and medium-sized organizations are most at risk.
Simply because an organisation is still active does not mean it isn’t facing financial challenges. Approximately 65% of UK NGOs expect significant funding reductions in the next two years, resulting in cost-cutting measures and staff reductions. Organisations that are still operating are experiencing disruptions due to health-related absences and lockdowns, which lead to fluctuating workloads, inefficient processes, and inept strategies.
Crises expose weaknesses, bringing to light organisational structures that need to be addressed. Yet we find it noteworthy that some of our NGO partners continue to flourish in spite of adversity. Interpeace, for instance, managed to increase its funding base in 2020, partly due to the changes that MzN and Interpeace implemented together in 2018.
So what makes a non-profit successful against the odds? Several key characteristics of resilient organisations are evident: They are accustomed to change, have diversified income streams, have a more digital infrastructure, and establish new partnerships quickly. Simply stated, these organisations are agile.
What exactly is ‘agile’?
In the last decade, agility has evolved from an idea to a way of working. Most NGOs will have to become agile to some extent if they want to survive and thrive. But what exactly is agility and how can organisations become more agile?
Agile organisations rely less on hierarchy and more on local decision-making and information sharing. It involves a shift from an old-fashioned, traditional, hierarchical structure to one that is more organic, flexible, and responsive. Thus, agile organisations are able to quickly change course when necessary – and thus are better suited to respond to challenges.
A traditional management structure is unnecessary in an agile setting. But this does not mean there is no structure. The operational core of an agile organisation handles routine matters such as legal, financial, and HR matters, allowing the other members of the team to work flexibly and autonomously, using their creative skills to make decisions. The tasks that generate value through creativity benefit the most from agility.
Five characteristics of an agile non-profit
Having agility enables effective business development, establishing partnerships quickly and flexibly, generating revenue from multiple streams, and generally generating impact in new ways. It is clear from our experience that the more agile an NGO is, the better it is able to cope – and even thrive – in times of crisis.
We have observed five key characteristics of an agile NGO:
- The strategy sets goals, but it does not describe in detail how to achieve them
- An ‘obsession’ with data and performance metrics
- Digital platform-based work
- Collaborative relationships based on trust
- Having diverse sources of income
We will take a look at them here in more detail:
Targets are set by strategy, achieved by people
An agile organisation establishes an agreed-upon target and the measures for determining whether it is being met. Nothing more, nothing less. An agile NGO is founded on the trust that each employee has for each other and the abilities they bring to the table, allowing them to achieve a set-and-agreed-upon goal in many ways. Therefore, the strategy does not prescribe how to achieve these targets, it is up to the individuals.
Organisations following this method of strategic planning are different from traditional ones who rely on the board or top management to set the direction. A management role in an agile NGO is to provide the resources and tools necessary to achieve the goals and remove any obstacles to their achievement. Management in an agile organisation is not separate from the organisation but is in service to it.
In terms of localisation, the same strategic approach applies: Global organisations may set specific targets, but the local offices ultimately decide how to make them a reality.
The key to impact is data
The key to generating foresight is measuring, verifying, reporting and learning from the lessons acquired through data acquisition. Data collection and analysis are at the heart of every agile and efficient NGO. By transforming hindsight into insight, data can provide foresight.
The goal is not to control but to learn what works. A data-centric approach is key to establishing credibility with potential donors and creating a circle of innovation. MzN’s partner War Child, for example, placed data analysis at the core of its initiatives in 2020. In doing so, War Child has already gained substantial donor support, and, even more importantly, it has learned what works best to make a significant impact.
Agile organisations are platform-based. Having a digital platform offers a lot of benefits. For instance, it allows organisations to easily form partnerships and projects. It also allows routine tasks to be completed more efficiently. Whether it’s payments, approvals, bid submission, HR or hiring, anything that can be done digitally should be done. By automating processes, people can focus more of their time on complex, creative tasks. Digital platforms also facilitate flexible working. By allowing people to work when it suits them, asynchronous work arrangements can result in more motivated and efficient employees.
Trust is essential
In a virtual world, how can trust be built? By earning it! The members of an agile team should have access to as much information as legally possible and the analysis of team goals, programme performance, and even individual goals should be transparent. This creates a shared reality that builds trust.
Management must not only be able to trust its employees, and for employees to be able to rely on each other, but management must also inspire trust in its employees. The key to cultivating trust is data transparency, both within the organization as well as externally, to attract potential partners and donors. A digital platform makes data, such as individual performance targets and indicators, accessible to all – employees, employers, and donors alike. An organisation that inspires trust is able to develop beneficial partnerships and find diverse financing sources – the building blocks of an agile NGO.
Diversification of funding
Although it is tempting to rely on grant funding, the COVID-19 crisis has shown that this is not a sustainable source of income. Funding from the government can help launch or scale up a programme; however, it is not a viable path to sustainable impact. From our experience, successful organisations do not rely solely on one source of funding but instead diversify their streams of income.
MzN client Interpeace, which supports local peacebuilding initiatives, is a prime example of an NGO that has been able to weather the storm of the current crisis thanks to the diversification of its funding. By taking a critical look at operations and the organisation together with MzN in 2018, Interpeace was able to reduce its traditional hierarchy, allowing skilled people to act more independently and make decisions more efficiently. New digital processes were established, as well as local partnerships. Most importantly, Interpeace broadened its funding strategy, which resulted in a diverse portfolio.
Change is a choice – and an opportunity
The NGO sector is suffering, and many non-profits are struggling to survive in the current economic climate. But changemakers do have options and strategies they can employ to navigate these uncertain times. Ultimately, change is a choice: either be passive and forced to adapt or take an empowered position and drive it yourself.
To drive your change, prioritise what you can control, such as creating an agile data-, digital-, trust-based organisation, which can quickly and efficiently develop new partnerships and diversify its funding. Taking these steps will allow your organisation to be better prepared to face future crises, enabling you to continue striving toward achieving the SDGs in the limited time left.
Contact us for more information on agile change management.