Anchoring Community
by John Hanley, Editorial Contributor
Important Note: The views expressed in this article are those of John Hanley personally and do not express the opinion or position of the Millennium Challenge Corporation or the US government.
"We all live under the same sky, but we don’t all have the same horizon." —Konrad Adenauer
Many organizations operate in close partnerships while maintaining some degree of independence. Inter-organizational dependence can take many forms. A corporate takeover that leaves a new subsidiary intact, for instance. Or a financing organization and a local implementing partner.
Regardless of the circumstances or industry, such relationships carry the potential for organizational values to come into conflict. Managing this challenge falls to today’s modern human resources leaders, who craft the concrete workforce policies that drive daily work. Their success in doing so is dependent on the ability to diagnose and embrace different values and their impact on operations.
With such complexity at play, it is important to have a simple and consistent framework for analyzing each policy issue. That framework entails three steps in which a policy objective is aligned to shared values, given specific policy spaces for differentiated values to flourish, and then consciously reviewed with an eye towards improvements.
Context
An example of how this framework has been used effectively can be drawn from a small US economic development agency—the Millennium Challenge Corporation (MCC). For over 20 years, MCC has partnered with well-governed countries to fund transformative investments and reduce poverty through economic growth.
At MCC, the work was guided by several sound principles of the agency’s founders. Three of the most important were
- Value country ownership in project design and implementation.
- Instill urgency by strictly limiting project duration.
- Demand accountability for results and value for money.
These three critical principles include the seeds of contradiction. In relationships between a funding organization (MCC) and the separate entities (“MCAs”) that implement projects on behalf of their governments, there is a risk that remaining faithful to any two principles can undermine the equally important third.
Overemphasis on results in a short timeframe, for instance, can undermine an individual MCA's efforts to develop unique organizational values. Similarly, allowing those organizational values sufficient time and space to flourish could risk project completion.
The successful balancing act implied here required a conscious three-step policy framework that focused on organizational values.
Step 1: Identify organizational values shared between MCC and MCA partners. Design common human resources policies to operationalize those values across all MCAs.
Step 2: Identify organizational values that are likely distinct between MCC and individual MCAs. Empower MCAs to develop policies that reflect their individual values.
Step 3: Continually assess whether you’ve balanced correctly. If not, make policy changes decisively.
Integrating Values to Drive Results
All of this may make sense, but how is it actually done? Let’s review two examples, starting with performance management.
Performance management is difficult for many organizations and is made more so by the dependencies in the MCC model. But by providing a standardized system supportive of the shared values of MCC and MCAs, while introducing flexibility where consensus softens, adoption of the system was successful.
Initial adoption, however, was not enough. MCAs are established for the implementation of each grant, and inevitably, organizational values can evolve. This is what makes Step 3 so critical. Willingness to assess each experience and make substantive changes to rebalance between the guiding principles enhances credibility and allows for innovation. To this end, MCC’s revised guidance introduced the possibility for systems entirely designed by individual MCAs to be introduced.
This same framework was utilized to develop compensation standards. Many years ago, compensation design was largely decentralized to each MCA as part of each grant. A bespoke methodology and market position were developed for each MCA formation. While this tracked with each MCA’s separate legal status, the practice undermined accountability and rapid start-up. It also reduced oversight to ensure compensation was broadly market-based.
With intensive support from the Birches Group, MCC used the same three-step framework to significantly standardize the methodology while creating policy space for country ownership.
Here again, carefully balancing values was critical. As the organization providing financing for the salaries in question, MCC needed a defensible way of developing pay ranges. These ranges needed to be broad enough for flexibility, but once set, needed to be defended strongly against efforts to pay above (or below) on the basis of individual circumstances.
In an assessment over time, MCC and MCA partners determined that greater dynamism was needed. To be competitive for talent, it was necessary to ensure a regular process around the comparators used to establish salary ranges. With this in mind and consistent with Step 3, initial guidance suggesting that pay movement would be infrequent was updated to create a system that responded to market movement.
Conclusion
These are just two examples of workforce policy development employing a simple methodology for balancing the shared and distinct values of organizations dependent on each other. In the context described, the framework was successful and necessary to ensure that the potentially competing principles were all achieved.
Approaching it this way is not without its costs. To work, both the team at MCC and the human resources experts within each MCA needed to be sufficiently resourced and empowered. Without this investment, it was very difficult to achieve the critical “Step 3” that allowed for refining and rebalancing.
With this caution in mind, however, the framework is a practical and effective way to anchor values in the shared work of separate organizations. That extra effort is worth it. Making space for the distinctive values of partner organizations in workforce policies is an investment that will drive innovation in the long run.
John Hanley is the founder of Mosaic Consulting, LLC, based in the San Francisco Bay Area. Mosaic is committed to serving the needs of organizations focused on operational excellence in financial management, internal control, organizational design, and talent acquisition.
John’s prior service with the federal government spanned over two decades, working to build small organizations around the world capable of achieving transformative results.
With expertise in both public financial management and human resources management, he led teams overseeing the investment of billions of dollars in economic development and infrastructure projects through grants between the Millennium Challenge Corporation (http://www.mcc.gov) and MCC’s country partners around the world.
For more information, see Mosaic Consulting’s website: https://www.mosaic-consulting-llc.com/
This interview is part of the inaugural edition of Community Magazine, Birches Group's publication on workforce management. Subscribe to receive the full issue and future updates.