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It has been a while since we published our last blog and reflection. In that reflection, we discussed some confusions that exist regarding organisation culture. Organisation culture is complex and multi-faceted and it becomes quite difficult to discuss some of the more complex aspects in our reflections. This is specifically relevant given our self-imposed standard that reflections must be four pages of informative yet “relatively” easy reading.

To help with future reflections on culture, we decided that as background and before the next reflection, Jan should first explain his journey into working with culture. We can reveal that the journey started with a basic question about the relationship between three generally accepted statements. The content does not classify to become one of our reflections so you can read about it here.

We are also glad to announce that after almost 25 years, many frustrations, successes and explorations, a related journey is about to begin. Jan is letting his brain-child leave the nest and has decided to make the questionnaire he developed and tested available internationally for use by OD and HR practitioners. Feel free to contact him if you wish to know more but as the saying goes, watch this space.

Culture: Analyse Detail or Look for Patterns?

In the latest reflection, we refer to an octopus as the poster child of culture. An octopus can worm itself into very small spaces and stick its tentacles into almost anything. Each tentacle also has its own brain. Like an octopus, culture is a multi-tentacle concept that seems to be present everywhere. Culture is also similar to an octopus in that, if a tentacle is lost, it can regrow a new one.

Attempting to understand culture by studying its details or tentacles usually only succeeds in highlighting truly convoluted causes and effects. Usually, it becomes almost impossible to identify these causes and their effects.

When studying culture one cannot adopt a reductive thinking – focussing more on detail - process. One needs to take a step back and objectively review it through inductive – holistic - reasoning. One needs to look for patterns and relationships, such as seeing that an octopus has nine tentacles but then considering the similarities and differences between them. The research needs to consider what drives octopus tentacles and even how they work independently, yet collectively. One must consider the total octopus and attempt to understand what makes an octopus an octopus.

In this reflection, we discuss two concepts namely processes and systems. To understand culture it is imperative to adopt a systems – inductive – perspective and not a process – reductive – perspective.

A Harmful Text on Love?

I am very involved with the international "Thursdays in Black" campaign. In February 2019, Valentine's Day was on a Thursday, and the World Council of Churches invited #ThursdaysinBlack reflections on a well-known scripture on Love. This reflection was published on the blog of the Pilgrimage of Justice and Peace on the 11th of February 2019:

Love is patient; love is kind; love is not envious or boastful or arrogant or rude. It does not insist on its own way; it is not irritable or resentful; it does not rejoice in wrong doing, but rejoices in the truth. It bears all things, believes all things, hopes all things, endures all things. 1 Corinthians 13:4-8 (NRSV)

This is possibly the text most often used in wedding celebrations and familiar to all of us.

It is often held forth as a romantic ideal and it seems as if this should indeed be our dream – to be patient and kind, not to be envious, boastful, arrogant or rude, not to want your own way, not to be irritable or resentful, to celebrate the truth.

I am sure that marriage preparation classes and counsellors would be happy to promote these thoughts!

But could it be that this text is actually harmful?

It is to the last part of the well-known verse that I would like to turn our focus:

“It bears all things, believes all things, hopes all things, endures all things.” (NRSV)

Too many times I have heard women (and their pastors!) quote this text in ways that are harmful and life-limiting:

“Yes, he abuses me, but you know, the Bible says I must bear all things”

“There are many signs that he is cheating and exposing me to HIV, but he says that he is faithful and I should believe all thing in love.”

“Things are very bad, he hurts me badly, but I hope and pray for something to change.”

“The pastor says that as a woman of Faith I have a responsibility to stay with him, even though he abuses me and the children.”

And even:

“My father/pastor/teacher rapes me, but my family says that I should just endure it and not bring disgrace on our family/church/school.”

This can never be the message that Paul wanted to send to the Corinthians or to those of us who read this today!

The very first book of the Bible establishes the position of human beings as ‘created in the image of God’ (Gen1:27) and particularly emphasises that both male and female were created in God’s image. How can we expect that the image of God should remain in a situation of abuse and destruction?

No! There are as many texts that reminds us that this is not what God dreams for us. The Gospel of John tells us that Jesus said: “I came that they may have life, and have it abundantly.” John 10:10 (NRSV)

An abundant life cannot be to sentence people to a life lived in abuse and pain. As people of faith - individuals, churches, faith communities and faith-based organisations - we can not just say that people in abusive relationships should “bear all things, hope all things, endure all things”.

We have a different responsibility: A responsibility to guide and support people who are victims of abuse to become survivors and victors, to live their lives abundantly - physically, emotionally and spirituality! A responsibility to speak out against abuse. A responsibility to challenge unhealthy use of Sacred Texts.

A small part of this responsibility is also to create an awareness of abuse. So, on Valentine’s Day, like every other Thursday, I will wear black as part of the international #ThursdaysinBlack Campaign, towards a world without rape and violence. Because I believe a different reality is possible.

Extrapolating from what is seen

Since the 1980s, the terms culture and organisation culture have become possibly two of the most used, but also misused, terms in organisations and in organisation development.

There is general agreement that there is some unifying concept, force or mindset that affects all aspects of human-related functioning both in societies and in business. There is also a large degree of agreement regarding the influence this “force” has on organisational functioning. The difficulty is in defining, describing and understanding this invisible yet powerful concept. There seem to be almost as many descriptors and definitions as there are articles on the topic. This is not a negative reflection on the researches and authors; it is a reflection on the complexity of the concept. The reality is that describing culture is very similar to the difficulties faced in describing personality. With that said, consider the number of personality theories that exist each with its own followers.

An analogy heard many years ago, helps clarify why there are so many different views definitions and opinions on culture – and for that matter personality.

“Imagine a big building with only very small windows in a dark forest and no lights on. Next, imagine people on the outside looking through one of the small windows and trying to describe what is going on inside. People can only describe what they see through their small window.”

Today we start with the first in a series of reflections on what has been more than 25 years of trying to see through many “darkened windows” and trying to understand the intricacies and complexities of organisation culture.

Structure and Equitable Remuneration

Last week we did some 'probing' of executive remuneration and how it is influenced by economic factors. We touched on aspects such as equity, the need for perceived fairness and employee motivation. 

Every so often, we hear people saying that, given their physical work in production, they should earn more than for example a person working in stores or in an office. Other people talk about their friend, with a similar job title, who works at a competitor but earns more than them. It would be amiss if we did not also mention dissatisfaction about a colleague that spends their time drinking coffee with clients, but has a company car and earns a bigger salary.

One also often hears of an entrepreneurial organisation, or small NPO, that grows and expands to a point where their informal hierarchy needs more structure. Management and the board starts qustioning if their salaries are on par with other similar organisations.

When we answer these questions, it is important that comparisons are credible and done correctly. Attempting to compare by title alone is not feasible. Just consider the title 'consultant', which has many interpretations and scopes of work. Also, consider the title 'store manager' where the size of the store and the value of stock and number of employees could differ radically. It is critical to compare apples with apples.

Today we publish a somewhat technical reflection about job grading, salary surveys and organisational remuneration. Starting with how the organisational strategy determines the staffing needs, we explain how differnt aspects work together to obtain internal and external equity.

Expectations built on examples

In the preface of "The Requisite Organisation" (1989) Elliot Jaques wrote: "To get the best of this book: ... you must be willing to undertake a substantial long-term program of organisational and human resources development in which you and your senior colleagues sustain a personal interest and commitment". What makes it so powerful for me is that it sums up what we are working on through our blogs, reflections, and probes. We are busy building a resource of thoughts and ideas that we hope will not only help people practically, but also be food for thought and discussions.

We read and hear in various books and articles - including the Bible -  that we should not "follow their example. For they don't practice what they teach" (Living translation Matthew 23:3). Given human nature, we know this is easier said than done. We also know that telling someone that they should not do something while you are doing it, often has the opposite effect (specially with children).

In our recent document "Probing Executive Remuneration" (see below) we discuss a few ideas around capitalism and how some changes resulted in high remuneration of executives. One aspect we did not touch on is the concept of how the system sets examples and creates expectations. Irrespective of the reasons or what is being said, people considered as "successful" - whatever that means - become examples of what can, or should be done and expected.

The expectation of higher income - as per shareholder capitalism - has become so ingrained that one often hears people among the top 5% of income earners in the world complaining about how poor they are and how little they are earning. Executives cannot expect a large salary and expect people to remain committed when they they must work for 350 days to earn what the executive earns in a day. That is not deemed as equitable. 

"Probing Executive Remuneration

Linear Change and Retrenchment

The last week highlighted some effects of retrenchment - as part of a turnaround strategy, on organisation development and organisation performance. We emphasised that the dominant paradigm during turnaround strategies is predominantly financial, with the focus on affordability and short term ROI’s. This paradigm often leads to retrenchments.

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Just yesterday, a quote on LinkedIn (see image) noted that the standard approach to change is as a linear process. However, even project management teaches that projects include progressive elaboration – details emerge as the project progresses. I will respond to the quote by saying that linear organisational change can only be done when working with inanimate aspects of business such as IT or Finances.

The minute "free thinking" people become part of the process, a systems- or process-methodology is required. Such approaches include frequent stops and starts and many iterations. This perceived “uncontrollability” frightens many managers into searching for fixed solutions and accepted “routes” from point A to point B.

Perhaps the question one should ask when discussing “turnaround strategies” is not “what can be saved by retrenching staff” but “what will be lost when retrenching staff”. It is then that issues such as breakdown of organisational learning, loss of experience, future cost of re-training, damage to organisational core competence, loss of top performers (they get jobs first) and loss of credibility in future recruitment drives come to the fore. In this week a large accounting firm lamented the damage to their image and resultant inability to attract top students from universities. To my mind this is a direct result of their recent retrenchment process

The few effects mentioned are just the tip of the iceberg, as we have not even touched on aspects such as survivor syndrome/ survivor guilt or drop in productivity. The human impact of retrenchments – on organisation functioning and organisational image – lasts much longer than any planned turnaround strategy.

These effects can be compared to attempting to push-start a vehicle while the handbrake is on.

Thoughts on Retrenchments

Turnaround strategies and retrenchments seem to go together like ...., no, let’s not start with corny clichés.

It seems that whenever an organisation experiences some form of financial problems, the first solution mentioned is retrenchment. 

From a purely financial perspective, retrenchments usually make a lot of sense. From a people perspective, it must however be asked if people are commodities - like raw materials - that can be increased or reduced as budgets allow. Many years ago, the futurologist Alvin Toffler identified what he called a pulsing organisation. These organisations, such as the electoral commission, employ people when needed but when the objective is achieved, the employment is terminated. These terminations are not official retrenchments but rather end of contract terminations.

Numerous organisations employ "full-time" employees on contract basis thereby allowing the company to reduce employment costs. These contracts are sometimes routinely renewed when the contractual time-period ends. Financially this again makes sense, as benefits are often not included in the contracts. From a people perspective, the law stipulates that this is not a long-term option. When terminating contracts that have been routinely renewed is seen in the same light as retrenchments.

Retrenchment is a complex issue and not always linked to management as some want to believe. Various aspects can affect an organisation resulting in unavoidable staff reductions.

When done correctly retrenchment is a complex process that, if not done correctly, could result in long-term repercussions. The effects often manifest indirectly resulting in hidden costs.

This week (download below) we briefly look at the role of Organisation Development and retrenchments.

NGO Types And Registrations

Last week we discussed different organisational forms.  This week we will spend more time specifically on NGOs. 

There are many different definitions of and viewpoints on NGOs.  To start with, let's look at three definitions;

“A NGO is a non-profit, citizen-based group that functions independently of government. NGOs, sometimes called civil societies, are organized on community, national and international levels to serve specific social or political purposes, and are cooperative, rather than commercial, in nature.” 1

“… a not-for-profit organization that is independent from states and international governmental organizations. They are usually funded by donations but some avoid formal funding altogether and are run primarily by volunteers.”2

“… any non-profit, voluntary citizens' group which is organized on a local, national or international level.”3

In South Africa, the term NPO is the formal term used when referring to organisations that have a not-for-profit motive. One of the reasons for using NPO is that the South African Government created a number of organisations that function as “NGOs” but with government support. Internationally and in general discussions however, the abbreviation NGO (non-government-organisation) is used when referring to such organisations. The South African use of the term NPO does create some confusion, as there is also a formal South African NPO registration.

As the purpose of NGOs is usually described as “doing good”, “addressing a community need” or “not doing things for the money”, it is commonly thought that NGOs do not have to adhere to the same rules, regulations, standards and modes of functioning that a for-profit company should. This is incorrect! You are

In South Africa, there are three acts governing the functioning of organisations that operate with a not for profit objective. These acts are;

§  The Companies Act (Act No. 61 of 1973 as amended) regulates an organisation referred to as a Not for Profit Company (NPC).

§  Trust Property Control Act (ActNo. 57 of 1988) regulates the functioning of trusts. 

§  The Non-profit organisations Act (Act No. 71 of 1997)which further regulates not for profit trusts and voluntary organisations.

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Registration with Department of Social Development
If certain conditions are met, any form of NGO, whether it a Trust, Voluntary Association or NPC, may register as a NPO (Not for Profit organisation) with the Department of Social Development.Registration under the Not for Profit organisations Act 71 of 1997 is not mandatory, nor is it a precondition for the legal existence of any organisation. However, there are certain benefits to registering as an NPO. including:

§ Any NGO applying for government funding must be registered in terms of the NPO Act.

§  Only registered NGOs are eligible to become grant recipients of the National Lotteries Commission, the National Development Agency (NDA), the Independent Development Trust (IDT), local and provincial authorities, and various other public and private fundingagencies.

§ Registration as an NPO improves the credibility and funding opportunities of the NPO.

§  It is easier for a registered organisation to open a bank account and comply to FICA (Financial Intelligence Centre Act(38 of 2001) criteria.

§ Registering as NPO allows the organisation to apply for, and possibly obtain, tax incentives.

The Certificate of Registration serves as proof of the legal existence of theorganisation.

Next week we will discuss registration as apublic benefit organisation (PBO) with the South AfricanRevenue Services (SARS) in terms of section 30(1) of the Income Tax, No 58 of 1962 and the implications of Sec 18A.

  1. http://www.investopedia.com
  2. https://en.wikipedia.org
  3. www.ngo.org
  4. FHI360 and USAID (2017) CDS Capacity Strengthening For Organisational Development Curriculum. Governance - Participant Workbook

What is in a Name?

There seems to be a common perception that the type of business a person starts or manages is really not that critical. 

During our training on Governance and Fundamentals of Business we often meet board members that apparently do not know the registration structures and implications of different organisational forms. 

We have also met a number of unhappy people! People that took their provident fund payments to start a small “business” such as a day care centre.  For a period of time they then receive payment for their services, buy equipment and perhaps even solicit donations to help people that cannot afford it.  The problem comes when they feel they are ready to retire and try and sell the “business”. That is when they find out they did not register the business correctly, or even worse, registered it as the wrong form of organisation.

The news in South Africa is increasingly filled with reports about state owned enterprises and their performance (or lack thereof). ESCOM, SABC, SAA, Denel and others fill our minds. Interestingly the enterprises we hear about most often is only one form of the six different classifications of state-owned enterprises. It is important to note that while there are similarities, there are some legal differences between a state-owned enterprise and other businesses. 

The levels of corruption and inequality in for-profit entities also reach the news. Steinhoff, VBS … the list continues.

When we evaluate all of this, it is important that we understand what type of organisation it is, how it is registered, and which laws govern its management and function. 

Governancecomprises systems and processes to ensure the overall direction, effectiveness, supervision and accountability of all people in an organisation. Governance is also typically the responsibility of the board of directors – although not exclusively so. Board authority and management systems comes from and are influenced by the organization’s registration under a country’s relevant laws. It is these laws that sets out the duties and responsibilities of boards and leaders and determines how a business may or may not operate.

This week in the reflection (download below) we take a look at different forms or organisations, and highlight some key factors of organisations commonly known as Non-Governmental organisations (NGO’s) or as they are referred to in laws, Not-for-Profit organisations (NPO’s).

In future discussions we will look at some of the factors in greater detail.

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