Operational Excellence Is Trending

Blog

February 06, 2018

Operational Excellence Is Trending

By Tom Dente

President and CEO Humentum

To serve our members and learners more effectively in this time of sector change, Humentum has been reviewing and refreshing our strategy. As part of this process, we surveyed our community at the end of 2017 to ask which trends will have the most meaningful impact on their organizations. Participants highlighted the factors they believe will have the most potential for significant and fundamental change for their organizations as they look ahead. In many ways, these trends reinforce the importance and need for enhanced operational capabilities and operational excellence.

In assessing the changing context in our sector, many of those surveyed highlighted ongoing structural changes including new funding models and partners, greater funder scrutiny, and the move toward localization. Observations included:

  • “New and non-traditional funding mechanisms will push us to get better at measurement and accountability and at building mutually beneficial partnerships with the private sector.”
  • “Probably the greater funder scrutiny (and with that, desire for different operational models). If donors decide that the traditional NGOs no longer represent best value or support their vision for development, we will become irrelevant.”
  • “Localization will change the whole system, but I think is poorly understood by international actors.”

While these three trends will continue to develop at different rates, and perhaps unevenly in terms of their impact, the intersection of new funding, demonstrating overall value, and localization will together require effective operations. Operational excellence—especially in areas of financial management and compliance, while also ensuring that overall operational capabilities make it easier to engage with private sector as well as local partners—will be essential.

In addition, while many who responded to our strategy survey highlighted factors that reflect this period of uncertainty, they also noted the great potential for innovation that this period of change presents. Participants commented that:

  • “The move to digital will ultimately impact every project, every program and every back-office function. We are still in the early stages as a sector, but the changes will be profound.”
  • “Diversity in every sense—new strategy, new operating models, new geographies, staff profile, partners, CSR needs. Switching from a service org to a flexible, adaptable learning org that reflects disparate and sometimes competing needs.”
  •  “The need to be adaptable because many of the other trends are contingent on having highly trained staff that can perform multiple tasks or have the skill set to learn new skills as the organization changes.”

Becoming more digital, embracing new operating models, and improving adaptability and learning have been hallmarks of our community. But with these trends on the horizon, operational capabilities will need to continue to evolve to enable success. Fully leveraging digital technologies, developing the operational experts for the future, and creating adaptable functions will continue to change the nature of future operational teams and the capabilities required for operational excellence.

Finally, operational excellence plays another more important role in this time of change. In many ways, our shared commitment to operational excellence helps create and sustain the trust required to engage with partners and funders and to deliver the impact for the communities we serve. Recent studies reveal that enhancing trust is needed even more in our current environment. The 2018 Edelman Trust Barometer Global Report unfortunately placed NGOs in the US and UK in the ‘distrust’ category. While many factors likely influence this assessment, it is reminder of the importance of our work together to define and demonstrate NGO operational excellence. As we demonstrate operational excellence in our organizations and as a Humentum community, we create the capabilities and conditions that enable and demonstrate trust. In our work as a community, we are not only leaders and experts making differences day-to-day, but also trust-makers who build sector resiliency in more volatile times.

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