International Outreach Foundation: an international charity

International Outreach Foundation: an international
Gary Bolt had enjoyed a good day. He had just been appointed as the Director
of International Outreach Foundation (IOF), a charity based in London which
operated primarily as a third world overseas aid agency. The selection
process for the job had been tough. The organisation had recently
reorganised its structure and a major part of the new Director’s job was to
implement the new structure and make it work effectively. At his interview,
Gary had expressed sympathy with the ways in which the reorganisation had
been described to him. Coming from the Council of Churches, Gary had been
used to a rather centralised and bureaucratic organisation structure. The
Council was rule-bound, career progress was slow, everything seemed based
upon ‘serving your time’ in the organisation and things had hardly changed in
20 years. Gary’s new job with IOF seemed very different. IOF had also been a
centralised, bureaucratic organisation based largely around functional
departments, but today, far from being a centralised bureaucracy, IOF had
just become a decentralised matrix of activities based largely around project
teams, each dealing with a different geographical area of the world. Each team
consisted of specialists (e.g. in nutrition, irrigation, language) and these were
coordinated at the centre (London HQ) by a slim administrative and executive
IOF was an established charity. Until recently, it had always been functionally
organised. Founded in 1921, IOF had originally been an extension of churchbased organisations, although it had grown rapidly and consistently up to the
1990s. Employing 500 people (of whom 150 were full-time and the
remainder were part-time and voluntary) the organisation was a major
provider for Third World overseas aid. It had grown to become one of the top
charities in the UK and was readily recognised across the world.
The structural change in IOF had been the final result of a combination of
factors, all of which had happened over the last 20 years or so. During this
time, the Third World overseas charities (like most areas of charitable
activity) had increasingly recognised that they were in competition with one
another. Although income to the Third World ‘sector’ was increasing (by
about 10 per cent per annum) competition for this money was fierce. There
were new overseas aid charities entering the field. Other concerns (such as
Greenpeace or charities dedicated to saving species such as dolphins and
whales, or the environment) began to compete for the attention and the
purses of givers (both individual and corporate).
Gary Bolt’s predecessor (Asha Jones) had tried to direct IOF along a particular
strategic path. She argued that the long-term survival of charities depended
upon long-term public support. Givers would continue to donate funds to
established charities which had a good track record of achievement and
which were somehow distinctive from other providers of similar services. IOF
had the distinct advantage of being both church-based and non-political. IOF
was also not operational overseas. Instead, it worked in partnership with
other church-based charities locally. IOF provided funds and some expertise if
this were necessary. Local agencies carried out operational activities on the
This made IOF quite different from most of the large Third World charities.
Certainly, it had precluded the debates, which had centred on other major
charities that they were becoming too political (by attempting to remedy the
causes rather than the symptoms of poverty). Oxfam, for example, had been
subject to intense scrutiny by both the press and the Charity Commissioners
for such alleged activities. Jones viewed such publicity as inevitably damaging
and argued that IOF should stay well away from such areas of activity.
Declining income, however, meant that Jones could not rely on being a niche
player in the Third World sector, nor on a growing (or even steady) supply of
voluntary donations. Although in the big league of income receivers, IOF had
been losing around 2 per cent per annum of funds to other Third World
charities. Asha’s solution was to hire a Deputy Director (Matt Cleaver) who
came with seemingly impeccable credentials. He had an MBA from a top US
Business School. He had been a Director of Corporate Planning in the
commercial sector and had on the Boards of
several UK companies. Cleaver had particular skills in corporate planning and
finance. He brought these to bear on IOF’s management team.
His first job was to create a strategic planning team (SPT) that comprised all
functional heads. Cleaver acted as Chairman of this team. The plan was to use
this team to make the organisation more efficient and effective, whilst Asha
Jones handled the interface with the outside world (and thus, hopefully,
bringing in increased funding).
At first, things went well. Functional heads spoke freely and suggestions to
improve operational aspects of internal organisation (budgets, improved
accounting procedures, etc.) were numerous. Many heads said that this was
the first time they had talked to their counterparts for many years. In general,
however, each function head left his or her staff (many of whom were
voluntary) to operate freely within general guidelines agreed in the SPT.
After 2 years, IOF had suffered its first actual decline in income. Jones and
Cleaver met. ‘The trouble is,’ said Cleaver, ‘We’re acting like a bunch of
amateurs. Any other organisation would have got the operational procedures
in place and then started to plan strategically. We never did this, we just
bumbled on in the same old way. The only thing that changed was that our
new accounting system uncovered the loss of income earlier than would have
happened previously.’
Cleaver poured himself another glass of mineral water and turned
aggressively to Jones. ‘Any mediocre MBA would tell you that IOF cannot
compete in the market for funds unless it radically alters its structure. It
needs to be flexible, responsive, decentralised and ready to go with the
market. Haven’t you read Paul Lawrence or Tom Peters?’ Asha shook her
head. She had heard of neither, although she had a sneaking suspicion that
Tom Peters had starred in some recent fiction program on television. He was
quite handsome, she thought to herself. Unlike Cleaver, she observed, who
had a cold, aloof quality topped off with a sneer rather than a smile.
Yet Jones had respect for Cleaver. He had rationalised the organisation and
things were working more smoothly. Perhaps the financial setback was
temporary. ‘It isn’t’ assured Cleaver. ‘The market has changed, we’ve got to
compete to survive. If we don’t change radically we’ll go under. Look what
Oxfam are doing.’ Asha knew that Oxfam had adopted a new structure and it
did appear to be working better for them. She listened intently to Cleaver. ‘I
suggest we bring in a management consultant to advise and help me in
creating a new plan for IOF,’ said Cleaver. ‘It so happens that I have a contact
from my MBA days with a consultant who also has an interest in charities. His
name is Nick Bright.’
Jones agreed. Bright was not cheap but he had a great deal of empathy with
charities and had an outstanding reputation as a management thinker and
consultant. Over the next few weeks, Cleaver and Bright prepared a blueprint
for success. It involved structural reorganisation into a decentralised, projectbased set of teams, each of which would be responsible for particular areas in
the world. Cleaver was pleased that Bright had reinforced his earlier beliefs.
When Gary Bolt walked in to his first executive meeting (the SPT had been
retained although it now represented teams rather than functions) the new
structure had been in place for just under 1 year. The agenda for the meeting
was full. It ranged from a discussion of for some
offices to the consideration of moving premises for HQ. It was going to be a
long afternoon. As discussions progressed, Gary Bolt began to realise that
Cleaver was constantly trying to act as Chairman. Often, Cleaver would
intervene and cut short some of the discussion. After the meeting, Smith
remarked on this to Cleaver in a friendly way. Cleaver, however, responded
that the previous Director had always been happy to let him chair the
Bolt argued that since his brief had been to make the new structure work
effectively then he would be Chairman at least for the foreseeable future.
Cleaver returned to his office.
The next meeting came as a shock to Bolt. Cleaver had produced figures to
show that IOF was still losing out on income to other Third World charities.
He argued that the real source of this loss was twofold. First, IOF did not
discriminate amongst those agencies to which it gave money. Second, the line
management of staff had been neglected for years, he argued. In Cleaver’s
view, each member of staff needed clear and formalised job descriptions so
that the inter-disciplinary teams could more effectively work together. Both
suggestions were the first time anyone had voiced such issues. Bolt looked
around the table and detected a number of angry and concerned faces.
Two of the project teams argued that specifying to whom money was given
implied that a rank ordering of perceived need would have to be drawn up
and agreed. ‘Who was going to do this and on what criteria?’ demanded the
team leader. Cleaver told the leader that was ‘her problem’. That’s what she
was paid for. A further incident worried Bolt at the meeting. One of his key
staff said that if her job was to be demarcated by job descriptions, she would
be unable to work in the flexible way to which she had become accustomed.
The description would limit her role and require others to do the jobs she was
willingly doing at the moment. The meeting ended angrily.
Two days later, Bolt was faced with a deputation from team staff. They
wanted to know which projects were going to be cut under the new plan and
what was the logic for not funding certain aid programs whilst supporting
others. In addition, the Trade Union representative informed Bolt that there
would be problems implementing the job description plan and that staff
intended to resist it. Bolt related these issues to Cleaver some hours later.
Cleaver was unsympathetic. ‘Let them try’ he said, ‘they don’t know when
they’re well off, they’re living in the dark ages of amateurism.’
An emergency meeting of SPT was called. The atmosphere was tense and
irritable. Cleaver put his case firmly and quickly. Bolt argued that perhaps
some rationalisation was necessary in order to make the new structure a
success. The meeting erupted. One of the team leaders offered her resignation
on the spot and two others stormed out of the meeting.
The situation developed rapidly over the following days. Bolt called on Asha
Jones (now in retirement) and asked her advice. She was unable to be much
help. She thought it was terrible to discriminate amongst aid projects, but
thought that this was just hotheadedness and that after things had cooled
down, everything would go back to normal. She was wrong. Two further
resignations later, Bolt was left with virtually no team to cover the Asia and
South Pacific regions. Quickly he moved two individuals from another team to
fill the gap. Two days later there was a virtual riot in the team. According to
established team members, the new members had little idea how this region
worked and what were its key demands. ‘They want to rationalise our aid
program but have no knowledge. They are disruptive and unhelpful’ argued
one of the team to Bolt. ‘We want them out.’
Cleaver overheard the conversation as it spilled down the corridor. He
became angry. ‘You are all the bloody same’ he shouted down the corridor.
‘You’ll end up caring and sharing and the organisation will go out of business.
It’ll cease to exist and your jobs will go too! You’re all too frightened to face
up to reality and make hard decisions.’
Bolt’s next meeting with the Trustees (the governing body of IOF) proved
difficult. He informed the Trustees of some of the problems they were
encountering, although he missed out Cleaver’s outburst in the corridor. The
Trustees recommended sticking to the structure recommended by Bright, but
asked Smith if he would consider appointing another Director to concentrate
upon advertising and corporate image. The Trustees felt that this was the
area in which IOF was weak. If more funds could be obtained, then this would
preclude difficult decisions having to be made over the selective funding of
An advertisement was duly placed and Jack Maggs was selected from
numerous candidates who applied. Jack had come from the commercial sector
where he had been in consumer goods advertising. He soon began talking
about distinctive competence and premium branding. Many SPT members
seemed to nod their assent to his deliberations, although many privately had
no idea what Maggs was going on about. They were soon to find out. Jack
embarked upon a new advertising campaign aimed jointly at individual givers
and the commercial sector. Organisations such as Marks and Spencer, BP and
British Telecom were targeted for corporate gifts and/or pay-roll deduction
schemes for their employees. The major problem arose when IOF’s staff
discovered that the advertising Maggs was promoting made claims for the
organisation that, at the very least, stretched the truth (about financial
efficiency, target client groups, services provided). The adverts also
deliberately made disparaging remarks about other charities in the Third
World overseas aid sector.
The conflict came to a head at the next SPT meeting. Figures were produced
by Cleaver to show that there had been a slight increase in funding over the
last 2 months and thanks were extended to Jack Maggs. Jack then took the
floor and argued the case for a stepped up effort in advertising to maximise
impact and returns. Two of the teams said that they would have no part in
such a scheme. Making only half-true claims and presenting a ‘false’ image to
the public and to corporations was unethical, they argued. They thought that
Maggs had already damaged IOF’s image amongst its current givers and was
likely to do more harm than good. A heated row followed during which the
team members stormed out of the meeting, saying that if nothing changed
they would look for jobs elsewhere. Cleaver and Maggs turned on Gary Bolt
and asked him to exercise his Director’s authority. He should require the
teams to get on with their jobs and leave the rest to the professional
Bolt was in a dilemma. If the team members left, he knew he would have
difficulty in recruiting replacements. On the other hand, the Trustees seemed
to support the actions of Cleaver and Maggs. He was going to have to act
quickly before things got completely out of hand.

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