Manage for impact

Re-orient management choices towards development impact.

What’s the idea?

To make a series of shifts in institutional practices that refocuses development program management towards development impact and releases some of the pressure to micromanage risk. This will deliver more capacity to the organisation by freeing up staff time to think and manage strategically, while empowering and trusting those working closest to the coalface of program implementation to make decisions.

What problem does it solve?

DFAT staff are so busy managing the detail they can’t always manage for impact. With more to do, less time, and demand to demonstrate quantifiable results, something must shift. According to the Development Policy Centre’s analysis of DFAT performance data, the average effectiveness and efficiency of completed Australian development assistance investments is declining. Implementing partners have observed DFAT’s focus on short-term results, driven by accountability and public diplomacy objectives, rather than a desire to learn and build evidence about what works. And departmental staff report that DFAT’s culture encourages them to respond first to urgent or more visible diplomatic, political and organisational priorities, leaving limited time to focus on longer-term issues of development effectiveness. Both managing contractors and DFAT staff agree that they don’t have the time or capacity to use monitoring information to improve program performance.

Practically, this can mean DFAT officers working on development are sometimes busier copy-editing contractor reports, briefing seniors and micromanaging activities to control risk than they are working with partners to achieve development and foreign policy impact. Most DFAT staff managing development assistance investments are highly capable and want to do a good job. But when you put them in a situation where there’s a low tolerance for failure, and strategic uncertainty about whether development or diplomatic objectives are paramount, staff feel more pressure to mitigate risk than to produce development impact.

Why now?

The system is already stretched – and now has to do more. Commentators have long observed Australia’s diplomatic deficit – countless reviews and analyses have shown that DFAT has been under-funded and under-resourced. A third of DFAT staff report feeling burned out, and two-thirds say their workload is over their capacity. Even though there’s finally some momentum to redress this, more people and training won’t solve the problem unless DFAT also changes how it focuses its bureaucratic energy.

Business as usual is not an option in a polycrisis. And now there’s a new development policy to implement, with a long list of commitments to deliver. Staff are once again being asked to do more – in the most challenging strategic circumstances in generations – without a clear sense of what can be de-prioritised. The Government expects the Department to engage with uncertainty and reduce transaction costs. But just demanding more efficiency doesn’t guarantee it – staff must feel empowered and authorised to seek those efficiencies, even if it means giving up control – and making the odd mistake.

The development policy won’t deliver impact without changes in how programs are managed. Building effective and accountable states has long been a major focus of the Australian development program, and was re-emphasised in the new policy. Evidence suggests this type of governance programming – such as supporting institutional reform or strengthening government systems – is less likely to be effective if managed in a top-down, highly controlled way. And Australia’s development assistance will continue to be concentrated in the Pacific, a region where many donors struggle to implement programs effectively. Chasing development impact in unpredictable or hard-to-understand environments requires a commitment to adaptation, agility, and learning.

Pressure on bureaucratic performance is mounting across the Commonwealth. This Government has made public sector reform one of its priorities, with an agenda that covers everything from integrity to capability and effectiveness. The new Australian Centre for Evaluation will have the ability to conduct randomised control trials in collaboration with any APS agency, and the National Anti-Corruption Commission has a sweeping mandate. Senior officials may be facing civil and criminal prosecutions and other disciplinary actions as a result of their mismanagement of the Robodebt scheme. While DFAT has one of the stronger investment-level monitoring systems in the Commonwealth, evidence suggests program effectiveness is waning. DFAT leaders may find that fostering a culture that incentivises micromanagement, and doesn’t take underperformance seriously, will now invite more scrutiny and consequences.

How would we implement this?

First steps would be …

Helping staff understand what they should be managing for. While there’s plenty of training available for DFAT staff on other parts of the policy cycle (design, monitoring and evaluation), there’s less available on how to be a good program manager and development leader. Many first-time managers end up doing what their predecessor did – which is a recipe for entrenching the status quo in a situation where Ministers are demanding the Department refocus on development. A ‘Managing for Impact’ course as part of the International Development Faculty of DFAT’s Diplomatic Academy could include advice on how to build effective relationships with local organisations and implementing partners, use monitoring reports to drive performance, and effectively allocate decision-making authority. It could be a practical accompaniment to DFAT’s Good Practice Note on Political Economy Analysis and Adaptive Management, and draw on existing toolkits.

Signalling that managing for impact is important. Institute a staff award for management practice, as a companion to the existing DFAT International Development Design Award. This would recognise that good program design is only part of what determines program success. Based on USAID’s Collaborating, Learning and Adapting Case Competition, the award could highlight examples where program managers changed or adapted their management practice or learned to improve the way their program was managed.

Thinking about what drives micromanagement and supporting program managers to lift their gaze. Building on existing approaches, DFAT could continue to provide more ongoing technical support to program managers – through robust program support units, access to external expertise and advisers, or through communities of practice and peer learning or mentoring opportunities.

Bigger steps would be …

Quantifying the true cost of micromanagement. Trial a voluntary time tracking/auditing process in development-focused areas of the Department (either Canberra-based program managers or at selected posts) to understand how resources are being allocated to tasks and functions. This could give managers the evidence and data to inform structural and workforce planning choices, including the opportunity costs of prioritising briefing and policy coordination tasks over strategic management. In 2013 AusAID’s Business Model Review performed a similar function for the agency as a whole and provided the impetus for internal reforms. With the Office of the Pacific approaching the five-year mark, and the Office of Southeast Asia newly established within DFAT, the time is right to re-examine these structures and set them up for success.

Building trust with implementing partners. The vast bulk of the development program is delivered on the Government’s behalf through arrangements with local, Australian and international organisations. Many have indicated they’d welcome more collaborative management approaches that draw on their skills and expertise, not just their implementing muscle. And DFAT has signalled its intention to work more strategically with these partners, and engage in ‘intelligent’ contract management. A mutual and continuous exchange of ideas, insights and knowledge – for example through policy dialogue or co-ideation processes – between DFAT program managers and their implementing partners would help to build shared trust and understanding on priorities. Going further, DFAT could consider embedding more of its staff in program implementation units. If implementing partners’ lack of security-cleared staff is holding the Department back from high-impact partnerships, then it’s time to find a fix.

Refocusing key governance institutions on outcomes. DFAT should consider how its governance and leadership mechanisms can graduate from a risk management approach that is driven by mitigation and compliance at all costs, to a more sophisticated approach to engaging with and accepting higher levels of risk in pursuit of development effectiveness. The Development Program Committee’s mandate could be expanded beyond governance and oversight of the program to actively driving and enabling performance, including by providing the necessary senior coverage to programs working in high-risk, high-reward settings.

This could be coupled with an effort to normalise adaptative management and learning from failure. In addition to the first step of a management award, resources should be allocated to capturing surprising successes and examples of positive deviance: programs or approaches that succeed in the face of common barriers or challenges. And across the board, embedding a culture of contestability at all stages of the program cycle – not just at the design and evaluation stages – would ensure that staff feel safe to test ideas and approaches.

A comprehensive response would be …

Proactively piloting innovative management approaches. Build on the pockets of existing innovative practice – whether it be adaptive management, problem-driven iterative adaption, ‘navigation by judgement’ etc. – by looking for more contexts or programs where this management approach would be relevant, and then encourage and support program managers to pilot adaptive management approaches. In practice, this would look like DFAT defining its intended outcomes – across both development and strategic domains – then delegating more authority, control, judgement and accountability to those working closest to the ground, especially locally engaged staff.

DFAT’s Ministers creating the authorising environment to manage for impact. Political authorising environments – and whether development agencies feel secure enough in their existence and funding to risk failure – shape management choices. Ministers must send unequivocal messages about the importance of development impact; their tolerance for learning from failure; and their trust in downstream partners’ judgement. They must be willing to accept that while fraud carries the higher political risk, program ineffectiveness ultimately costs the taxpayer more.

What is the policymaker’s take on this?

Yeah but that’s development assistance … this is foreign policy. Policymakers under pressure might be saying “sure, this kind of hands-off management approach might make sense when you’re managing for development impact – but that’s not the only objective here.” They’d be pointing out that when you’re managing programs to achieve national interest objectives, only an Australian government official can be trusted to understand what those actually are. With diplomatic, as well as development objectives, in frame, and partner government sensitivities abounding, the risk of letting an external party call the shots is too high. They may also observe that it’s easy for political authorisers to talk a big game on risk appetite – until risk leads to failure on the front page of the newspaper. Who’d want to go first?

There are a couple of reasons why you would try this approach anyway. We’d agree that this kind of management choice wouldn’t be appropriate for every part of the development program portfolio. But there are investments and scenarios where development impact is the main game, and a strong and growing evidence base that where DFAT lets go a little, great things happen. A managing for impact approach could be piloted in those circumstances, with plenty of management attention and care, to see what kind of impact it produces. That’s certainly what Ministers expect – trying new options, learning on the go, innovation and a greater tolerance for risk are all commitments in the new policy. Moreover, Ministers expect a world-class development program. Arguably, the current management approach is not delivering one.

What inspired this idea?

Research and analysis team

Heather Murphy with support from Richard Moore, Bridi Rice, Madeleine Flint and Izzy Coleman. The Pitch is produced by Lab staff, based on analysis and interpretation of open source material, and represents the views of Lab staff only.

Make a series of shifts in institutional practices that refocuses development program management towards development impact.

DFAT’s culture encourages staff to respond first to urgent or more visible diplomatic, political and organisational priorities, leaving limited time to focus on longer-term issues of development effectiveness.

Staff are once again being asked to do more – in the most challenging strategic circumstances in generations – without a clear sense of what can be de-prioritised.