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Part 1 - Murari Thayi, Part 2 - M S Ashok, Cirrus Management Services Pvt. Ltd.

22 November 2014

CSR With Verifiable Impact:

Designing & Managing Projects: New Ways

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Part 1

Presented by Murari Thayi, PgMP, PMP

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Preview of PresentationPart 1 - Problem, Challenge, Opportunity

• Fact: Numbers of poor increasing despite massive spending.

• Question: Why so little impact?

• Challenge: Impact with evidence; how?

• Opportunity: New CSR regulations, few constraints.

Part 2 - Action, New Ways

• Experiments and lessons.

• New ways to design and manage projects.

• Implications, ways forward, working with you.

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Fact: Poverty in Developing Countries

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Fact: Poor in South Asia – UNDP, HDI 2014 Report

0

10

20

30

40

50

60

70

80

90

India Bangladesh Pakistan

% o

f p

op

ula

tio

n

VulnerableIn Poverty

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Fact: Poor in India – Numbers Vs %

100M

200M

300M

1950 2014

70%

28%

Numbers of poor

% of poor

Source: UNDP, HDI 2014 Report Claims of reducing poverty are misplaced

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The Question: Why so little impact?

• Donor agenda drives projects, not socio-economic

imperatives, unfortunately.

• Loud on spending, giving & volunteering, but

• Silent on impact with evidence

• While numbers of poor increase each day.

• Embedded institutional resistance to innovation;

everywhere: governments, NGOs, international donors,

even corporates.

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The Challenge: How?

• Conventional approaches not working, but “how to

solve the problem” is not clear.

• But corporates haven’t done much better.

• Can they? They do seem to have better potential.

• So government asks corporates to solve the problem.

• The costs of failure are small for corporates; the

rewards great: public image, and leverage with

government. Will corporates take the opportunity or

fritter it away?

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The Opportunity. Take it, create new ones

• New CSR Law effective 01 Apr 2014.

• 2% of corporate profits, companies with net worth

>500 Cr or revenue >1000 Cr or net profit >5 Cr.

• Freedom, no constraints. Education, health, fighting

hunger, poverty, malnutrition, promote sanitation,

safe drinking water, gender equality, environment,

heritage, relief, infrastructure, livelihoods, skills.

• We offer new, practical ways forward.

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Opportunity: Spend in 2014 – 15 (in Rs Cr)

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5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

09-10 10-11 11-12 12-13 13-14 14-15

Education

Health and familywelfare

CSR

Donors

Other govt. programs * 80000 (2014 -15)

Source: Accountability Initiative, Centre for Policy Research

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Part 2

Presented by M. S. Ashok

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About Us

• Professionals, socio-economic change, private company.

• Our constituency.

• Policies, programs, projects.Changing praxis at the cutting edge, leaving behind

what does not work, overcoming minimalism.Overcoming institutional pathologies. New standards, benchmarks, impact audit.

• Goal: A seamless micro to macro approach for projects,

programs and policies; tracking each input-rupee, each

beneficiary, “kaizen” - an ERP.

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Opportunity, Challenges, New Ways: Case Study

• An opportunity came after ten years; a livelihood project

(microfinance). Combined with other assignments across

domains, the opportunity was magnified.

• The main challenge: Microfinance with livelihood

improvement as the primary objective. Profit vs viability.

• Chronic microfinance challenges: last mile logistics, high

service delivery costs, fidelity, customer defaults.

• Other challenges; stakeholder priorities at odds, skepticism.

• Seven years of experiments, learning and unlearning.

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Experimental Outcomes

• Direct Outcomes: service quality (accessible, friendly,

customer transaction costs/ time near zero), low default

rate (<0.5%), service delivery costs halved (<5-6%),

interest rates to customers dropped (<20%), customer

incomes on upward trajectory, a robust objective function

and an emerging ERP for microfinance.

• More importantly, strategic outcomes:A big bag of new perspectives, ideas, tools.A prototype of a new kind of service delivery vehicle.An embryonic architecture for a generic ERP.

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A Generic Architecture: Five Facets

1. Mandate: stakeholders, resources, direction, momentum

2. Processes: inputs, activities, outcomes, quality

3. Structure: trans-organizational people, teams, links

4. Intelligence: brains, hardware, software, decisions

5. Evolution: scale, innovation, integration, transformation• These five form an ever-changing jigsaw puzzle, full of

circular loops, causes and effects, micro to macro.• Complexity demands sophistication. Unknowns, grey

zones are identified, marked out, targeted, and kept under attack. Unceasing improvement, “Kaizen”.

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• The architecture enablesdesign + management, projects, programs, policies; Analysis, improvement; projects, programs, policies; Identification of winners, of losers designed to fail.

• It enhances established practices, is a force multiplier, a

lens to focus resources and effort on the goal, cutting

wastage, leakage. It prioritizes problems and issues. It

does not displace any existing good practices.

• It enables you to develop your own ERP for continuing

improvement.

• Next, an overview of the five facets.

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Mandate: a quick overviewWho?

Externals

Ifs, buts

What?

Delivery Costs?

When?

Evidence, audit?

What if?

Caveats

Price charged?

Who pays, how?

Resources, reserves

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Mandate: key elements

Strategic direction, objective continuum, based on:Stakeholder synergies, conflicts, asymmetries,

entrenchment, domination; (customers, teams, donors..).Realities, risks, uncertainties, externalities.Grey zones, black boxes, knowledge/ information gaps.Moral, statutory, donor and other imperatives.

Deliverables, impact, accountability, evidence, unit costs.

Resources; generating, deploying, balancing, reserves.

Direction; maintaining, modifying course: multiple

exploratory attacks, learning, reinforcing success.

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Mandate: key elements (…continued)

Strategic Accountability; responsibility, price for failure,

credits.

Dissonance; nominal, actual, implied, obsolescent, deviant

mandates.

• The mandate is a living entity, with real time links to a set of

databases, analytical reports and a feedback mechanism,

reviewed and revised as things change.

• It is the cockpit, control tower and schedule rolled into one.

• It is not a document sitting on a shelf.

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Mandate: Common Problems

• Most are vague, disjointed. Common weak points:

? Direction: Where to go, from where, how, costs.

? Who is to go, who will get them there, doing what.

? How sure is everyone, what do they know, not know, should know.

? Crosswinds, headwinds, tailwinds, drifting off course.

? When.

• Frameworks like “logframes” struggle with these

questions, but usually fail to address them. They are top-

down, and weakest, blind at the grass roots. Needed: a

cutting edge framework, systems; an ERP.

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• Objective Function: Maximise value for money.

• Examples of considerations/ inputs:Loan, grant, recurrent subsidy? How much? Can the loan-grant-subsidy mix be changed? Through

what changes in operations, teams and structure?Competing claims on available funds?Potential impacts of competing claims. Doubling impact is

as good as doubling funds.

Review points, consequences of mid-project cut-off.

• Module Output: Short-list of decision options.

Example of a Module: Project Funding Decision

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Processes: a quick overview

Input Process OutcomeProbabilityDecisions

Process Networks

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Processes: key elements

Building blocks: input-process-outcome chains,

attributable, probabilistic outcomes.

Flexible process networks, intervention/ decision nodes

with resources.

Automation, routinization of simple processes,

maximizing parallel activities.

Surveillance, anticipation, contingencies, redeployment.

Detachable, repairable, “re-engineerable” segments.

Hygiene and progress monitoring.

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Processes: Common Problems

• Usual weak points:

? Weak integration of processes, weak links between inputs, processes, outcomes, impact.

? Poor recognition of uncertainties, probabilities.

? Firefighting approach to key decision nodes and allocation of resources.

? Compartmentalization.

? Weak attributability, non-recognition of externalities.

? Silence, denial of weaknesses.

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Structure: a quick overview

Teams Communications, Data Links

Decision, Control Nodes

Logistical Links

Homeostasis

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Structure: key elements Trans-organisational, people, teams, links.

Homeostasis: Dynamic, recombinant task-teams.

Integration: Communication & logistics.

Stakeholder inclusion, management, motivation, de-

personalised factual feedback and assessment;

customising tasks to skills, workload balancing.

Momentum: Coordination & troubleshooting nodes;

detachable, independently “re-engineerable” units.

Fiduciary safeguards, contracts, cascading legal action.

Distributed power, strategic redundancy, control nodes.

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Structure: Common Problems

• Static, hierarchical; little or no flexibility.

• Little or no participation for many stakeholders.

• External locus of control.

• Asymmetries.

• Fiduciary inefficiency, few preventive measures or none.

• Predominance of the individual over the institution; locus

of knowledge, memory mostly with individuals.

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Intelligence: a quick overview

Analytics, Feedback

Data

Fiduciary Oversight

Resources, reserves, impact, efficiency real-time monitoring, decision support

Integrating the five facets

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Intelligence: key elements Monitoring

Internals, externals, pathologies, opportunities.Stakeholders.Risks, uncertainties, externalities.Fiduciary oversight.Grey zones, black boxes, knowledge/ info gaps. Integrity and dissonance.

Dynamic systems, protocols; databases, analytics with

real-time feedback & learning; micro- to macro-loops.

Security, access management, disclosures, misuse.

Performance support, “mandate at risk”.

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Intelligence: Common Problems

• Often absent at institutional level.

• Poor integration of mandate, processes, structure.

• Secrecy, even where transparency is obviously needed.

• High costs, overinvestment.

• Poor response to needs at the cutting edge, excessive

focus on concerns of higher management, lack of

flexibility.

• Few warnings if any of disaster, none timely.

• Big gaps in institutional knowledge, memory.

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Evolution: a quick overview

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Evolution: key elements

Iterative, cyclical reviews, project concept to closure.

Learning, change, re-design, micro to macro loops.

Scaling up, reinforcing success, economies of scale.

Continuous validation and review of the mandate.

Higher level synergies; integration across domains.

Realistic, constantly improving standards and

benchmarks, esp. for mandate and processes.

Organic evolution, adaptation, like open-source codes

in software; go beyond funding to resource generation.

Conceptual leaps. CSR, governance reform, tax reform.

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Evolution: Common Problems

• Stakeholder time horizons, stakes usually very short.

• Superficial, very little conscious thought to evolution.

• Learning, improvement, correction rare during project.

• Post-mortem evaluations fail to inform new projects.

• Evaluations tend to be politically correct, laudatory and

careful not to damage reputations.

• Radical changes extremely rare.

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Conclusion

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• That was a brief outline: the architecture, five facets.

• Some of it may look familiar. The way they come

together, interact… and the detail… that is different.

• The detail: too much for a single session; best

understood in the context of your specific situation.

• Much of what we say is so different from accepted

practices that some big mental leaps will be needed.

• This also has wider implications: for business projects,

organisational design, operations and public policy.

• This is for everyone: corporates, NGOs, international

agencies, governments, private donors….

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• Take a leap in time, fast forward, five years.

• Visualize your own CSR program, primary education.

• A center of excellence with a proven ERPevolving, scaling up, powerful impact.a beacon, new standards and benchmarks.supporting, networking, incubating other projects, big,

small, corporate, government, international, NGO.Networking, developing synergies, globally.

• Visualize other corporates like you, each specialized in a

domain, education, health, livelihoods. Massive scale

and impact…..super synergy, mega ERP.

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We can make it happen, together.Stay in touch

Cirrus Management Services Pvt. Ltd.

Consultancy…Action…Research…Capacity building

www.cirrusworld.org

cirrusworld@gmail.com

M. S. Ashok

Ph: +91 99000 98594

Murari Thayi

Ph: +91 96115 88893

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Thank You

We’ll take as many questions as time permits.We’re also available here today after this session,

and later on telephone, or email.