Reengineering Best Practices No. 3

 March 1996

 Reengineering at USAID/Bolivia:
 Why We Did What We Did

 by

 Olivier Carduner
 Reengineering Coordinator
 Agency for International Development

 A joint initiative of PPC/CDIE and M/ROR

PN-ABY-272
 FOREWORD

 USAID/Bolivia is pleased to offer the following case study of a Mission going through
the Reengineering Transition. Thanks to careful planning, our experience has been more positive
and much less chaotic than we had originally anticipated. Different Missions have taken
different approaches to the transition process, and we look forward to hearing from them. For us,
the major practical change brought so far by reengineering is the teamwork concept. We decided
to do everything we could to give teamwork a chance to work. This included giving our new
Strategic Objective Teams full responsibility for the entire portfolio, delegating as much
authority as possible to them, and avoiding higher level micro-management. Secondly, to
improve customer service we applied reengineering methodologies to some of our internal
Mission level processes such as travel approval, document clearances, and others. Improvements
affecting a broad range of employees have already been implemented. While not considered part
of the formal Washington transition agenda, we found these internal efforts extremely useful in
developing credibility and enthusiasm for reengineering.

 The third and most important part of the USAID/Bolivia approach was a conscious effort
to minimize the time investment needed to complete the transition. Our primary objective in
Bolivia is to make development happen. With a downsizing plan now being implemented, our
entire staff is more than fully occupied with that essential task. We could not in good conscience
allow reengineering to displace development work and become our prime occupation. We
wanted to make reengineering work for us without spending endless hours in Mission-wide,
soul-searching meetings. This paper describes how we did this.

 So far our experience with reengineering has been quite positive. However, it is still too
early to confirm whether or not reengineering will fulfill its promise of improving our ability to
achieve development results. At least another year or two will be needed to make that
assessment. We hope that this paper can be useful to Missions and Offices who are working to
manage the transition. We also hope that readers will provide us with feedback on what we may
have missed and what we should focus on next.

 Lewis Lucke
 Director a.i.
 USAID/Bolivia

 March 22, 1996
 Table of Contents

I. Introduction. . . . . . . . . . . . . . . . . . . . . . . . 1

II. Pre-transition Fears and Crises . . . . . . . . . . . . . 1

III. Planning the Transition: Challenges and Tactics . . . . . 2
 A. The Challenge. . . . . . . . . . . . . . . . . . . . . 2
 B. Tactics. . . . . . . . . . . . . . . . . . . . . . . . 3

IV. The Road Map . . . . . . . . . . . . . . . . . . . . . . . 5
 A. Creating New Management Structures . . . . . . . . . . 5
 B. First Transition Tasks . . . . . . . . . . . . . . . . 7

V. The Training Plan
 A. Introductory Overview Briefing . . . . . . . . . . . 9
 B. Reengineering Reading Series . . . . . . . . . . . . 9
 C. Core Values Course . . . . . . . . . . . . . . . . . 9
 D. Directives Course. . . . . . . . . . . . . . . . . . 10
 E. GSO Course . . . . . . . . . . . . . . . . . . . . . 10
 F. Expanded Team Briefings. . . . . . . . . . . . . . . 10

VI. Achievements and Up-coming Challenges. . . . . . . . . . . 10
 A. Achievements . . . . . . . . . . . . . . . . . . . . . 10
 B. On-going Challenges. . . . . . . . . . . . . . . . . . 11
 1. Managing the NMS phase-in . . . . . . . . . . . 11
 2. Managing a continuing downsizing process. . . . 11
 3. Improving Teamwork. . . . . . . . . . . . . . . 12

VII. The Need for Reengineering Alignment. . . . . . . . . . . 15

VIII. Conclusion . . . . . . . . . . . . . . . . . . . . . . . 17

Footnotes

Annex I -- Core Values Course Exercises

I. Introduction

 The reengineering transition at
USAID/Bolivia has proceeded with
unexpected ease since last August when the
first reengineering training course was
provided to Mission Staff. In discussing
transition progress with other Missions, we
noted that there was as much interest in why
we took certain steps as what the actual
steps were. This paper is for those interested
in the "why" as well as the "what". It
describes the background, strategies and
tactics we developed to take control of the
reengineering process and make it work for
us.1

II. Pre-transition Fears and Crises

 USAID/Bolivia declined an
invitation to be a Country Experimental Lab
(CEL). We therefore did not go through an
early experimental stage, but instead
plunged directly into implementation of the
new operations systems that went into effect
on October 1, 1995. Mission management
chose not to take on the role of a CEL
primarily because we did not feel, given
demands of our development program and
recent staffing reductions, that we had the
time to experiment.

 There was also some skepticism as to
whether the Washington reengineering
frenzy that was observable at the time would
ever go beyond politics and jargon into
something concrete and implementable. As
a result, very few Mission employees had
prior exposure to reengineering concepts
when our first reengineering retreat was held
in May 1995. At this retreat we watched
Administrator Brian Atwood and others
speak to us via videotape on what it all
meant. In our ensuing report to the
Administrator, we carefully noted thoughts
and concerns expressed by Mission
employees in both written feedback and
discussion.2 Feelings after that initial
introduction were a mix of the following:

 Positive anticipation: There was a
 definite sense among many that
 finally, we would really have a
 chance to break down and tame this
 crazy bureaucracy.

 High degree of skepticism: The
 changes being talked about seemed
 so radical and complex, that many
 were skeptical that it could be pulled
 off.

 High Apprehension over loss of
 control: Apprehension was the
 bureaucratically correct term for the
 fear that many felt with respect to
 future changes. This fear boiled
 down to three different issues all
 related to loss of control:

  Loss of control over timing of
 implementation -- "Get on board the
 train or get run over" was the word,
 but no one knew where to get the
 tickets, or how to get on board.

  Loss of control over day to day
 management and decision processes
 -- It was clear that old systems would
 be eliminated, but totally unclear
 what the new ones would be.

  Lack of Washington follow-through -- The fear that for a variety
 of reasons reforms would only be
 partially implemented with the result
 that we would in the end be stuck
 with an incompatible and
 disastrous mix of old and
 new systems.

 With these thoughts in mind, we
patiently waited for the first Reengineering
Training of Trainers courses. We expected
that the answers to our pressing questions
would all be provided there. Accordingly,
we decided to seek the earliest possible
course -- a pilot course held in the last week
of July 1995. We sent four Mission staff
members including the Acting Mission
Director. About two days into the one week
course, we had a sinking feeling that disaster
had struck. The heralded new Directives
were nowhere to be seen. The NMS
computer software was so full of bugs that
we were only given xerox copies of what
some of the screens would look like. The
contract trainers had few answers to our
detailed questions. Although a few "subject
matter experts" (real live reengineering
people) eventually surfaced, our confidence
never reached the levels we had hoped. One
thing that was made clear however, is that
whatever our level of readiness, there was
little choice but to go "full speed ahead".

 Back at the Mission, employee
morale had been under extraordinarily
severe pressure for several weeks from what
was then known as "the four crises". These
were:

 Decertification: Imminent threat that
 the USAID program would be forced
 to close if Bolivia failed to meet
 USG counter-narcotics certification
 requirements.3

 Downsizing: Announcement and
 implementation of a downsizing plan
 aimed at cutting Mission staff by
 25%. This plan meant that many of
 our FSN colleagues would be laid off
 and certain USDH positions
 eliminated.

 Merger: A merger with State
 Department was being actively
 pushed in Congress; some of our
 Embassy colleagues were already
 considering it as a fait accompli and
 beginning to eye our motor pool and
 other support services.

 Drastic Budget Cuts: Our total FY 95
 budget was cut 33% from $99.6
 million to $66.6 million.4 While
 warned that cuts would be likely, we
 did not know their ultimate size until
 the last quarter of the fiscal year.
 This put enormous pressure on
 project implementors to make last
 minute budget adjustments and
 change obligation plans.

 Some of us remarked that we had
never experienced such prolonged and deep
instability in our entire USAID career. The
last thing we wanted to do is add
"reengineering" to the list of crises.

III. Planning the Transition: Challenges
and Tactics

A. The Challenge

 Given the situation, we quickly
decided that our major challenge in
introducing reengineering was to minimize
chaos. Doing so would require the
following:
 Neutralizing skepticism quickly and
 preventing it from growing into
 cynicism, which would be much
 more difficult to deal with.

 Providing staff with a sense of
 control over the transition process to
 reduce the fears mentioned above.

 Building and maintaining credibility
 of the training team. Achieving this
 was not at all obvious given the
 paucity of information initially
 available.

 Getting people excited enough about
 reengineering to willingly put in the
 many additional hours needed to
 make it work.

B. Tactics

 In the course of several
brainstorming sessions in early August, our
training team quickly came to the conclusion
that a major re-design of the reengineering
training program was needed. The course
prepared in Washington assumed that
material would be presented to groups of 40
to 50 employees during four-day training
sessions. The idea was to have everyone
trained by, or quickly after, the official
October 1 transition start date. This could
have worked if the necessary information
was available. With much of the material
still vague, we realized that pulling staff
away from their work for four days and
subjecting them to the same uncertain
answers that we were given would only
increase cynicism and complicate the
transition process. We proceeded to rethink
the entire training program around three
basic parameters:

 Address the "legitimacy" issue
 upfront.

 Minimize total time needed for
 training.

 Don't train until ready to implement.

 We felt that the first step in
combating skepticism was to convince
everyone from the start that reengineering
was a legitimate cause, worthy of the effort
it demanded. In our Washington course, this
"legitimacy" issue was addressed only
indirectly by between-the-lines messages
which essentially said: "you will implement
the reengineered systems because a small
handful of senior bureaucrats have decided it
is a good idea, and besides, (in case you are
still not convinced), doing it is a political
requirement for survival of the Agency."5
Getting our colleagues on board, we
decided, would require a more effective
approach, one that would appeal to people's
intellect and tap into the passion that many
in USAID have of finding solutions to real
problems.

 We went back to the original
reengineering literature, buying what we
could find in Washington bookstores and
ordering the rest by mail.6 We studied these
books to understand why corporations and
public sector entities would want to take on
such chaotic change. We also looked
carefully at the track record of prior
experience to see what results were actually
achieved by others. Finally, we compared
the approaches to reengineering described in
the literature with that being taken by
USAID. We then condensed this
information and presented our findings to all
Mission staff as part of the first overview
briefing. Providing this information was
extremely effective in neutralizing
skepticism and promoting a positive "let's
try it" attitude. Resistance was significantly
lowered although we still had few specifics
on the new reengineered systems.

 We had heard stories of Country
Experimental Lab (CEL) Missions spending
entire days each week huddling in Mission
wide retreats to sort out what reengineering
meant and how to do it. This approach
seemed impossible to us because of the
difficulties described earlier combined with
a strong concern with carrying out our
development agenda. A widely shared
value that our primary purpose in Bolivia is
to "do" development, was a critical unifying
factor in the Mission. It enabled us to work
through and survive the four crises described
above with relatively good morale.

 We could see reengineering as
possibly helping us do development better,
but not as something that should take
precedence over our primary purpose. We
decided that spending long days discussing
reengineering would not support this shared
value or serve us well. We made it a goal to
minimize the time investment needed, not
just for training, but for the entire transition
process as well.

 The final point was actually taught to
us in the Washington trainers course during
a presentation on computer training. We
were advised that efforts to train staff on
new software was wasted unless trainees
could use the software within two weeks of
the training. It was clear that our
Washington trainers had been put in a
professionally difficult position of having to
train people to implement systems that had
not yet been fully designed and approved.
The politically driven push for rapid
implementation may well have been the
right thing to do at the time.

 We realized however, that the
credibility of our training team, and
reengineering in general, hinged on not
repeating this situation. We decided to
break up the training material and repackage
it into small digestible pieces that would be
given "just in time," not more than two
weeks before staff would be required to
implement what was taught. This had the
additional advantage of allowing us to wait
until additional information was provided
from Washington to make training
meaningful. For example, we did not
conduct, or even design, training on the new
operations system until after we had actually
received the first portions of the new
Directives in mid-October.

 The three principles outlined above
required us to think beyond a training
program alone to the actual steps necessary
for transition to the new systems. Doing the
first without a clear vision of the second
would mean working in a vacuum. We set
about developing a six month transition plan
outlining specific steps that would be taken,
including transfers of authorities and
responsibilities. This exercise permitted us
to deal directly with the fears related to lack
of control described earlier. The draft plan
was made available to all staff for comments
and suggestions, and was ultimately
finalized and agreed upon at the first
meeting of a new Mission Reengineering
Steering Committee in early October. This
broad consensus approach combined with
clarity on transition steps, greatly helped
dispel the fears of loss of control. This plan
became known as our transition "Road
Map."7 With a road map in hand, we were
then able to customize our training to fit
specific and concrete implementation steps.

IV. The Road Map

A. Creating New Management Structures

 As part of the Road Map, several
new management structures were
established. A Reengineering Steering
Committee (RSC) chaired by the Mission
Director was organized to make decisions
and provide guidance on all transition
issues. A Training Team was formed to
design and deliver necessary courses, and a
Transition Monitoring Team (TMT) put in
place with the sole task of monitoring the
transition process, identifying problem
areas, and making appropriate
recommendations to the Reengineering
Steering Committee. New Strategic
Objective "core" teams were formed during
the month of October, with "expanded" team
members added during January.

 With the Steering Committee and
Transition Monitoring Team, we sought to
take as broad and participatory an approach
as possible, consistent with the tasks
assigned to each group. We opted for a
large Steering Committee with a total of 15
members. In addition to all Office Directors
and SO Team Chairmen, this committee
includes the Chair of the Transition
Monitoring Team and senior FSNs. The
Transition Monitoring Team was created in
large part as a mechanism to more directly
involve mid and lower level staff and to help
ensure that issues and concerns were
brought to the attention of the Steering
Committee. It is chaired by a senior FSN
and consists of twelve members ranging
from secretaries to a Deputy Office Director.
Two are USDHs while others are FSNs or
USPSCs.

 Although organized to identify
problem areas and make recommendations
to the Steering Committee, this group also
ended up playing a very proactive role by
helping ensure that the many Road Map
actions were completed as planned, and
disseminating related information and
promotional material.

 The Training Team included three
members who had participated in the
Washington trainers course plus one USPSC
with extensive training experience, and one
FSN from the computer center who made
computerized "Power Point" software
presentations possible. The Regional Legal
Advisor was also recruited for a lecture on
delegations of authority.

 With a total staff of around 200 and
four Strategic Objectives, we quickly
concluded that it would not be feasible to
make everyone a Strategic Objective team
member. It initially appeared that
elimination of some Offices would be
inevitable as a result of the new SO team
structure. After a couple months of
experience with the new structure, we
concluded however that SO teams could
actually retain more agility in modifying
membership to suit changing needs, if
members all have a "home" office to return
to. Retaining traditional offices also reduces
the need for large SO teams thereby
simplifying decision making and permitting
more energy to be directed at involving
external "expanded" SO team members.
This conclusion is not necessarily definitive
and we may opt to disband or consolidate
some Offices in the future.

 In creating the SO teams, the
Reengineering Steering Committee limited
itself to appointing the team leaders. These
were all technical staff with recognized
development expertise. All but one were
also Directors of technical offices. The
Chairmen were instructed to select their
team members (core and expanded) based
strictly on considerations of value added to
the team. This approach was taken to
undermine any presumption that teams
would be a continuation of the old project
committee system where each functional
Office designates its own representative.

 While asked to submit their final list
of members to the RSC for approval, there
was no change of membership due to RSC
input. Some adjustments were made as a
result of some individuals being
overrequested, but these adjustments were
handled by the SO team chairmen and the
individual Offices involved. This "hands-off" philosophy was part of a conscious
senior Mission management decision, fully
supported by all RSC members, to give the
SO team concept a chance to work. The
Directives states that teams should be self-managed. We saw self-selection as the
starting point to self-management.

The RSC was so sensitive to the need for
operational autonomy on the part of SO
Teams that it decided, as one of its first acts,
to abolish itself within three months unless
proven a useful supporter, rather than micro-manager, of SO Teams. We basically
sought to avoid creation of a new layer of
management control. The RSC passed the
test in late December, and it continues as a
body for information sharing and general
decision making on reengineering matters.

 A total of 53 Mission employees are
now members of SO core teams. Since
January they were joined by 48 expanded
team members from outside of USAID. Our
four SO teams average 13 USAID and 12
non-USAID members, or 25 individuals per
team. In selecting expanded team member,
care was taken to identify exceptionally
qualified and creative individuals from a
range of institutions including: the GOB,
other donors, USPVOs, local PVOs, USAID
contractors and local private sector firms, as
well as "virtual" team members from
USAID Washington. Our team members
range from the local World Bank resident
representative to the Chief of the native
Izozeo-Guarani tribe, one of our newest
customers.

 Full implementation responsibility
for all projects were formally transferred
from six traditional Offices to the four SO
core teams on November 1. This shift
caused the Program and Project
Development Offices to lose direct control
of projects they had managed for years.
While staff continue to maintain their office
affiliation, no major implementation
decision could be taken after November 1
without specific approval of the SO Team
Chairman. The decision to avoid structural
changes such as dissolving offices or
transferring staff to new units was made for
three reasons: 1) to avoid extremes such as
an arbitrarily imposed top-down structure on
one hand, and endless meetings to achieve
an uninformed consensus on the other; 2) to
give us a chance to understand through
experience the needs of SO team based
management as it grew and evolved; 3) to
reduce transition chaos and excessive
diversion of time from on-going
development work. As mentioned above,
we are not wedded to old structures, and
may decide to make more drastic structural
changes in coming months if this can clearly
improve the operational effectiveness and
functional autonomy of SO Teams.

B. First Transition Tasks

 Initial tasks of the SO core teams
were to conduct internal portfolio reviews,
identify expanded team members and
prepare new results frameworks with
expanded team inputs for the spring R-4
document submission. As of this writing,
new results frameworks have been
completed and SO teams are turning their
attention to creating new results packages
from the existing portfolio of projects. We
anticipate that several results package teams
will be created, which will include staff who
are not members of core SO teams.

 To begin work on a customer service
plan, each functional support office
(Program, Project Development, Economics,
Contracts, Legal Advisor, Controller and
Executive Management) was charged with
identifying its key services, and conducting
a customer survey to identify areas of
improvement. Most of these offices'
customers are internal to the Mission. We
started here because we felt that the
customer service concept would not be
adequately understood or taken seriously,
unless people could see that it applied
directly to themselves (as customers or
service providers), when dealing with
colleagues in the Mission.

 Each Office presented the results of
their survey to the Reengineering Steering
Committee and Transition Monitoring Team
along with steps planned to address issues
identified by customers. SO teams are now
beginning to plan surveys of external
customers as part of the process of creating
new results packages from the existing
portfolio of projects. We will seek to
combine the results of internal and external
customer surveys into an overall Mission
customer service plan. This plan will
probably not be completed until July-August
1996.

 We decided to move more slowly
with external customer surveys because we
were unimpressed with available examples
of customer service plans, and preferred
investing initial efforts in areas that would
yield quick progress. Some would say that
completing results frameworks before
undertaking external customer surveys is a
major mistake. While correct from a
theoretical point of view, the practical reality
is that we started with an existing portfolio
of projects with the majority of funding
already committed to a wide variety of
grantees, contractors and suppliers. We felt
that focusing first on sorting out existing
project purposes, objectives, goals and
results, according to the new results
framework rules of the game made better
management sense.

 With results frameworks in hand, we
can better decide which of our innumerable
customers we should focus on and how.
Now that our SO teams are focusing on
reconfiguring projects into results packages
and forming results package teams, several
have opted to carry out external customer
surveys at the results package level. These
will be used to create customer service plans
at the SO level. We expect that customer
surveys may well call for changes in the
results frameworks and will address this
possibility during preparation of our next
multi-year strategic plan next year.

 A specific part of the Road Map was
devoted to improving internal Mission
operations in areas not directly affected by
Washington designed reengineered systems.
Aside from improving Mission level
efficiency, this step was very important in
increasing the credibility of reengineering as
a whole and maintaining the enthusiasm for
change created during our training courses.
During October the Transition Monitoring
Team undertook an employee survey to
determine which internal Mission process to
target. Out of approximately 38 processes
identified as potential candidates for
reengineering, the Reengineering Steering
Committee thus far has selected seven.
Others will be added as work on the initial
processes is completed. The seven are:

1. Document processing in the
 controller's office (reducing time
 required for voucher processing and
 document clearances)

2. Completion of FSN appraisal reports
 (ensuring timely completion and
 avoiding delay in granting of salary
 step increases)

3. Travel approval process (reducing
 time and clearance requirements for
 field travel)

4. Internal delegations of authority and
 document clearance requirements
 (reduce clearances wherever
 possible, shift authorities to SO
 teams, and consolidate various
 delegations into one customer
 friendly document)

5. Local salary approval process
 (simplify process for ensuring
 reasonableness of local currency and
 dollar financed salaries, and reduce
 potential legal liabilities created by
 the old system)

6. Long distance call logging and
 billing system (simplify to reduce
 workload and improve accuracy)

7. Reduction of document duplication
 (reduce unnecessary costs)

 A reengineering team was created for
each of these processes. Each team applied
appropriate process reengineering tools to
analyze and redesign their process. The four
core values were used as guiding principles
in redesign efforts. Each team presented its
redesign proposals to the Reengineering
Steering Committee for review and final
approval.

 Redesign of the first five processes
listed above has now been essentially
completed, and the new systems are being
tested and implemented. Except for creation
of new SO teams, this effort of improving
internal processes has probably had more
impact on a broader range of Mission
employees than anything done under
reengineering to date. We plan to continue
with additional internal process innovations
over coming months.

V. The Training Plan 
 The training program consisted of
the following six interventions, all scheduled
to support specific steps in the road map
plan.8 As explained earlier, no training was
given until required for implementing
specific steps in the Road Map. So far no
training has been given on the NMS except
for a very brief introduction during the
introductory overview course. We will be
spending considerable time on NMS training
in the next five months following the
regional training of trainers courses.

A. Introductory Overview Briefing
 (August - two hours)

 In late August, an introductory
overview briefing was presented to all
mission staff. The major objective of that
briefing was to transform existing
skepticism and cynicism into positive,
hopeful attitudes, essentially setting a
receptive stage for the deluge of change and
information to follow. This was
accomplished by presenting key information
on the history of reengineering concepts, and
comparing USAID's approach with that
prescribed in the literature. At the same
time, the broad outlines of the "Road Map"
transition plan was introduced. This gave
everyone a sense of what the transition
process would look like and made it clear
that all would have a say in shaping and
controlling it. The plan was subsequently
elaborated and refined with broad
participation of Mission staff. Employee
surveys and feedback indicated that our
initial objective of reducing skepticism and
resistance was resoundingly achieved.
Addressing the "legitimacy" and "control"
issues directly were key to this success.

B. Reengineering Reading Series
(September -- five parts)

 Following the overview briefing, a
series of selected readings from
reengineering literature was distributed to
those who asked to be put on the distribution
list. The team felt that such background
information would be a useful complement
to training sessions and allow staff to absorb
more information on their own time. The
material selected focused on new concepts
such as teamwork, and provided a historical
perspective on reengineering principles as
developed in the private sector.

C. Core Values Course (October -- one
day off-site)

 The heart of the training program
consisted of a one-day, off-site course for
groups of 50 people, focused on introducing
core values, and preparing staff to
implement the SO team and customer
service concepts. This course targeted 150
professional, secretarial and clerical staff. It
was completed by the second week of
October with all but one targeted staff
member attending. Three small group
exercises were developed to get across the
concepts of teamwork, partners,
stakeholders and customer focus. These
exercises are summarized in Annex I.
Concerned with how staff would react to the
material, the Training Team asked all
trainees to fill out written course
evaluations. These evaluations showed the
course succeeded beyond our expectations.
To this day, it is remembered as a high
watermark in terms of generating
widespread enthusiasm for reengineering
and a desire to move ahead quickly. By
mid-October, resistance and skepticism were
no longer issues. Moving quickly with
implementation became the main focus of
attention. Indeed, in subsequent months the
Steering Committee was repeatedly asked to
address concerns from lower and middle
level staff -- passed on through the
Transition Monitoring Team -- that we were
not moving fast enough with the transition.

D. Directives Course (November -- two
hours)

 A course focusing on the Automated
Directives System (ADS) was given in the
first week of November covering the
specific changes introduced in the ADS.
Related transition cables were also covered
at this time, including, in particular,
delegations of authority, results frameworks,
and conversion of existing projects to the
new system in other words, all the nuts
and bolts necessary to implement the new
systems. We designed this course after
receipt of the final ADS documentation in
mid-October.

E. GSO Course (December -- one hour)

 In December a reengineering
overview was given in Spanish to our GSO
service and maintenance personnel and
drivers at their request. This covered the 64
staff members who were not targeted in
other training. The course focused on core
values and how they could be applied by
service personnel in various service areas.
The importance of contributing value added
and focusing on the customer was stressed.

F. Expanded Team Briefings (January -- 45 minutes)

 In January and February, the
Training Team provided short courses to the
new expanded SO team members from
outside USAID, to explain reengineering
and the role of expanded SO Teams. The
course included a summary of the history of
reengineering, core values and the shift to
results framework and results packages as a
management tool. The importance of
demonstrating results as a means to maintain
funding levels, and the new concept of
"management contracts" with Washington
was highlighted.

VI. Achievements and Up-coming
Challenges

A. Achievements

 During the past five and a half
months since beginning the reengineering
transition on October 1, 1995, the following
has been accomplished:

 200+ Mission staff plus 48 expanded
 SO team members were provided
 with reengineering training necessary
 to implement the new operations
 system.

 Four entirely new strategic objective
 teams were formed including core
 and expanded team members.
 Significant effort was made to
 provide these teams with maximum
 possible autonomy and operational
 effectiveness.

 Results Frameworks were completed
 for all strategic objectives with
 inputs from expanded teams. SO
 teams are now focusing on creation
 of results packages and results
 package teams.
 Seven Mission level internal
 processes, affecting a wide range of
 employees, were targeted for
 reengineering. Five have been
 essentially completed.

 As part of the above, a "state of the
 art" comprehensive and customer
 friendly Mission delegations of
 authority document has been drafted
 which will greatly support staff
 empowerment and effectiveness.

 All functional support Offices have
 completed internal customer surveys
 and are implementing improvements
 to address weaknesses identified by
 their customers. Planning is
 underway to conduct external
 customer surveys as part of results
 package development.

 The customer focus concept has
 taken hold. Through direct
 experience in completing internal
 customer surveys and reinventing
 key internal processes, employees
 have gained a practical
 understanding of what it means to
 "put the customer in the driver's
 seat". Most functional offices have
 and are making adjustments in their
 mode of operation in response to
 feedback from internal Mission
 customers.

 A psychological shift has started
 from personal bureaucratic identity
 based on project "turf," to a team
 identity based on achieving common
 results. This can be seen in project
 managers who are now increasingly
 looking for, and finding ways to
 increase synergism between
 previously separate activities.

 Our goal of maintaining momentum
 on development efforts through
 minimizing transition chaos and time
 investment for reengineering was
 significantly achieved.

B. On-going Challenges

 Over the next six months, we see
three major challenges related to
reengineering. We would particularly
appreciate feedback and ideas from others
who may be facing similar issues.

1. Managing the NMS phase-in

 We are fortunately well equipped for
the NMS system, with all the necessary
hardware in place. Nine employees are
attending the regional AWACS, NMS and
A&A trainers courses, and we are planning a
joint transition and training program based
on the same fundamental approach used in
other reengineering training (i.e. don't train
until ready to implement, and minimize total
time investment needed). We will first
concentrate on fully training a core group
representing the absolute minimum number
of staff needed to fill the formal NMS
"roles" needed by our Mission. We estimate
that around 12 people will be needed for this
core group. This will position us to
effectively use the NMS software when it
goes "live" for real transactions.

 When the system is "live", we will
gradually train and "NMS certify" other
Mission staff over a three to four month
period. While our core group will need to
practice with training data to maintain skills
until the system is operational, others will be
able to go directly from training courses to
operating the system for their given role.
This approach will minimize potential
wasted effort as skills are lost due to
excessive time gaps between training and
actual use of the system. It will also allow
initial systems adjustments (hardware
configuration and software) to take place in
the initial weeks of operation without
affecting more staff than necessary.

2. Managing a continuing downsizing
process

 Fortunately our two year downsizing
plan was developed and announced just
prior to the reengineering transition. This
eliminated a major potential source of
resistance to reengineering -- fear of job
loss. Unfortunately greater than anticipated
OE budget pressures are forcing us to
complete implementation of downsizing
before our reengineered systems, in
particular the NMS, are fully in place. This
means that the changes in work
requirements resulting from the new systems
may come too late to be adequately taken
into account in adjustments to the
downsizing plan. We may find ourselves
with downsizing targets met, but hampered
in achieving development results because of
a suboptimal post-reengineering staffing
mix. We will have to cope with this
situation as best we can.

3. Improving Teamwork

 While our SO teams are generally off
to good starts, we see five critical needs for
developing and sustaining their
effectiveness.

	 Leadership: Chairing an SO team
 with core and expanded members is
 very different from heading an
 office. Non-USAID expanded team
 members have to be engaged and
 involved. USAID staff who are core
 team members may also be serving
 on other SO teams and may report to
 a "main" supervisor who is in charge
 of writing their annual evaluation but
 who is not a member of the SO team.

 Coaching and facilitation skills
 become much more critical in this
 context. Motivating and
 empowering staff also requires new
 and different approaches. Many
 traditional USAID leadership styles
 do not always provide good models
 for this setting. Indeed, some
 personality types that were a good fit
 with the old leadership styles and
 structures may not do so well in the
 new SO team system. Skill building
 and information sharing on what
 works will be important in helping
 our SO team chairmen to fully
 succeed in their new roles.

	 Tension between specialist and
 generalist roles: A fundamental goal
 of reengineering is to reduce the
 number of specialized job functions
 and create more generalists who are
 able to take on a wide range of tasks.
 The SO team concept promotes this
 by the simple fact that all members
 share joint and common
 responsibility for achieving SO
 results.

 This has at times created tensions
 when SO teams have sought to
 assign activity
 implementation tasks to
 members affiliated with
 functional support offices
 such as, in particular,
 Contracts Officers. The
 specialists have felt that
 assuming certain
 implementation functions can
 conflict with carrying out
 their critically needed
 specialized role. How to
 manage these tensions
 without slipping back into the
 old "project committee" type
 of structure is not always
 obvious. We are very
 interested in hearing how
 other Missions have
 addressed this issue.
	 Keeping expanded team members
 engaged: We very pleased at the
 interest shown by the outsiders we
 invited to participate as expanded
 team members. No one turned down
 our invitation. The skills,
 perspective and experience of our
 expanded team members is truly
 impressive and we want to tap this
 resource as effectively as possible.
 The difficult comes from the fact that
 these partners, stakeholders and
 customers represent widely varying
 backgrounds, personal interests and
 levels of knowledge about how
 USAID works.

 How to honestly tell them their
 thoughts are valued when the vast
 majority of our funding is locked
 into existing commitments, and new
 money is rapidly shrinking, is a real
 challenge. How well we meet this
 challenge will ultimately affect the
 quality of the expanded team
 members who choose to stay with us
 and the utility of contributions we
 receive from them. Effective SO
 team leadership is critical in this
 area.

	 Making non-members feel like
 part of a greater team: Due to the
 size of our Mission, and the need to
 keep SO core teams manageable, we
 could not assign everyone to core
 teams. Out of approximately 150
 professional and clerical staff, 97 are
 not serving as core team members.
 The Transition Monitoring Team has
 advised us that there is a significant
 feeling of being "left out of the
 action" among that group.

 We anticipate that the
 creation of results package teams
 will create opportunities for some of
 these individuals to become
 members of teams. Others will be
 satisfied with the knowledge that
 their work provides important
 operational support services to SO
 teams. What about the rest? We are
 trying to provide broader information
 sharing on SO team activities, but
 are not convinced this will be
 sufficient. Any ideas others may
 have on addressing this issue would
 be welcome.

	 Protecting autonomy and
 operational effectivness: The new
 Directives transfer substantial
 responsibility and authority to SO
 teams. Our new internal Mission
 delegation of authority has sought to
 delegate as many decisions as
 possible, concerning project
 selection, budgeting and
 implementation, to SO teams.
 Strategic Objective Teams
 are now USAID's key
 operational unit for doing
 development work.
 However, while SO teams
 may be our new "tip of the
 spear", the traditional USAID
 hierarchy continues to exist
 above them (Mission
 Director -> Regional Bureaus
 -> Central USAID
 Management).

 The relative bureaucratic power of
SO teams as decision making units versus
other levels in the hierarchy is not yet clear.
The basic question is how much autonomy
will we really give our SO teams? How
often will SO team decisions - appropriately
taken according to the directives - be
reversed or "reserved" by higher levels in
the hierarchy? How much this occurs and
how it occurs will determine how
empowered our SO teams really are and how
effective we will be in achieving
development results.

 We see the risk of this happening
particularly great when dealing with central
Offices and Bureaus who have, for whatever
reason, not yet made the reengineering
transition, and who don't realize that how a
particular decision is made is now much
more important than before. In the old
system, individuals higher up in the
hierarchy had the prerogative to make
decisions they felt appropriate, and those
lower down were expected to accept and
implement. How decisions were made was
not so important because the coherence of
implementing units was based on a
supervisor-supervisee chain.

 SO teams on the other hand, because
of very diverse membership and diffusion of
supervisory authority, gain their coherence
from an informal pact among members to
pursue common results and based on the
assurance provided in the Directives that
authority is appropriately balanced with
responsibility. Individual authority within
this system is granted by members rather
than imposed from the top. When such a
unit is located at the bottom of a
bureaucratic hierarchy, it is very vulnerable
to appropriation of decision making higher
up the chain. Appropriation of SO team
authorities by higher levels can, if done
badly and excessively, undermine the basis
for SO team operational effectiveness. The
risk is that expanded team members decide
to stop being active participants and core
team members become demoralized and stop
working as a team. How decisions are made
at higher levels therefore becomes much
more important than before.

 Developing and maintaining the
operational effectiveness of SO teams will
require that budgeting, implementation and
activity selection decisions that may be
taken at higher levels be done in a way that
recognizes and respects the operational
authority and autonomy of SO teams. This
will be particularly challenging in an era of
general budget reductions.

VII. The Need for Reengineering
Alignment

 The reengineering literature
describes three basic phases for an
organization undergoing reengineering:
design, transition and alignment. USAID
has completed the design of major new
operations systems and is well along the
transition phase. We need to begin focusing
on the important final phase, aligning
various systems, some old, some more
recent, to each other. This is important to
ensure overall coherence and prevent
"backsliding" to previous modes of
operation. We see a number of areas where
alignment of old systems and more recent
initiatives with the new reengineered
systems and core values is urgently needed.
From our point of view, the following three
areas are most important:

A. Procurement Reform

 We have carefully studied the
"Procurement Reform Report"9 to seek an
understanding of procurement reforms
implemented in the past two years. From
our field perspective, many of the reforms
that have affected us seem to contradict core
values such as customer focus, and
empowerment and accountability. We have
seen a steady and significant reduction in the
authority of Mission Directors and regional
contracting officers, while authority and
decision making are centralized in
Washington.10 This undercuts the ability of
SO teams and their regional contract officers
to assume the responsibilities given to them
under the new Directives. The report shows
that many of these reforms were initiated
before the reengineered operational systems
were developed and core values
promulgated. This explains the lack of
alignment. The result is that procurement
reform and reengineering appear to be
headed in opposite directions.
Centralization and greater "input" level
restrictions on the one hand versus field
empowerment and managing for results on
the other. The apparently contradictory
signals are undermining the effectiveness
and credibility of reengineering. This
situation can and should be turned around by
a concerted effort involving the Office of
Procurement and its customers in a
participatory information exchange process.
While few in the field will ever be satisfied
with our procurement processes and
restrictions, we should seek to make our
procurement systems as supportive of SO
teams as possible.

B. Relationship with USPVOs

 In the past two years USAID has
given renewed emphasis to an alliance with
USPVOs to help counter budget cutting and
restructuring efforts. This alliance has
clearly been useful. However, it seems that a
mixed signal is being sent to the field which
is creating confusion on exactly where we
stand with USPVOs. On the one hand,
USAID staff have been instructed to seek
out PVO partners in the field, engage them
in a dialogue on Strategic Objectives, and
work more closely with them to achieve SO
team developed and Washington approved
objectives (Directives and National
Partnership Initiative). On the other hand,
some local USPVO representatives are
evidently being told by their Washington
headquarters that USAID is reducing use of
traditional controls and agreeing to support
PVO defined objectives. Now that we have
a new reengineered operations systems with
a clear methodology for defining and
achieving results, we need to get everyone
on board so that we can work effectively
together to achieve our goals. Mixed
messages need to be replaced by signals that
are consistent to both field Missions and
USPVOs.

 The relationship with Title II
program PVOs is, in addition to the above,
complicated by a traditional dual reporting
to both USAID field Missions and a central
Bureau (BHR). This dual reporting makes it
difficult for Title II PVOs to know whose
results framework they should target their
program to, and makes it hard for USAID
staff in either Washington or the field to
develop a fully effective working
relationship.

C. Personnel Reforms

 Reengineering is changing many
roles and relationships. While in our
experience, the role of technical staff is
being enhanced, there has been some
concern on the part of other functional
backstops, such as Project Development
Officers, that their role has become much
less clear. In many Missions, Project
Development and Program Offices have
been merged due to down sizing. A clear
signal will be needed soon from Personnel
regarding what system of technical and
functional backstops it will create and
promote under reengineering.11

 Another key effort whose results are
not yet announced is the work of the Human
Resources Business Area Analysis Team on
redesigning the FSN grade and position
classification system to the new teamwork
requirements. The teamwork concept
requires that employees become more
"generalist" in their work and be willing and
able to do tasks that may be both above and
below current position descriptions. We
have seen that this can promote anxieties
related to perceived risk of future
downgrading for doing work below current
grade standards. A new kind of position
description and grading system is needed
soon for our FSNs.

 Finally, we have recently noted that
the current system of personnel incentive
awards is strongly biased towards
individuals at the expense of teams. This is
because the $1,000 ceiling on post approved
awards applies equally to individual and
groups awards. We will soon have an
awards ceremony with some individuals
(FSN PSCs) receiving $1,000 while
colleagues, named as part of a group award
and having worked just as hard, receive
$100. A USPSC co-worker who may have
deserved the award as much as others on his
or her team gets nothing because they don't
qualify. The message is that individual
effort rather than teamwork is still preferred,
and work of USPSCs doesn't even count.

 Other areas where an alignment
process is needed will undoubtedly surface
over the next few months as the
reengineering transition proceeds. We
should actively seek out apparent
discordance between systems and resolve
them using the core values as a principle
source of guidance.

VIII. Conclusion

 Looking back to our May 1995
"Brian Atwood Retreat" report
memorandum (section II above). Everyone
in our Mission would agree that the progress
made since then has, in many ways, very
much exceeded the expectations that existed.
While some skepticism still exists,
particularly with respect to procurement
reform, it has largely evaporated in areas
that we have had direct experience with and
control over, such as creating functioning
strategic objective teams. What has been
notable is the relative absence of resistance
to the change process.

 In thinking back on our experience
so far, we attribute the lack of resistance to
the following:

 A philosophy of training new
 concepts only when ready to be
 applied and adapting the training to
 be relevant and applicable to our
 immediate transition needs.

 Minimizing total time and effort
 needed to train and implement the
 transition. This kept us focused on
 specific steps that were most likely
 to yield tangible progress and which
 everyone could understand.
 Nebulous or unclear exercises of
 dubious value were eliminated.

 An introductory overview course
 which succeed in convincing
 skeptics that reengineering was
 worth trying. The second course
 built on this success and generated a
 critical mass of enthusiasm which
 sustained us in following months.

 Development of a transition Road
 Map through a participatory process
 to provide a sense of control over the
 pace and scope of changes. This
 directly addressed two of the main
 sources of potential resistance
 identified in the May retreat. A
 broad participatory approach was
 maintained with the use of a large
 Reengineering Steering Committee
 and the Transition Monitoring team.

 Getting immediately involved in
 improving internal processes.
 Everyone has their own complaints
 about internal processes. Picking
 ones with most complaints showed
 that the Mission was serious about
 addressing broadly felt problems
 with reengineering. This effort made
 the concept of customer service real
 and increased the credibility of
 reengineering.

 A senior Mission management
 decision to delegate all legally
 possible authority to SO teams. This
 made it clear that SO teams were in
 charge and encouraged Mission staff
 to do what they could to support
 them.

 Considerable efforts remain to fine
tune the new systems and make them work
well. This is especially true with teamwork.
The challenges to teamwork described
earlier show that much remains to be done at
all levels of the Agency to ensure that the
concept works and is not gradually
undermined by the traditional bureaucratic
hierarchy. We expect that the model of
integrating teams at the bottom of a
bureaucratic hierarchy will be studied
extensively when judgments are made as to
the final success or failure of USAID's
reengineering experiment. Some SO team
members at the bottom would feel more
secure knowing that similar teams were
functioning at higher levels rather than
layers of supervisors.

 While the NMS shows great
promise, it is clear that much software
development is still needed to make it live
up to its full potential. This effort will
continue to require significant resources and
political support. This fine tuning and
support of reengineered systems is very
different from efforts needed to resolve
fundamental incompatibilities between
reengineered and other systems (old or new)
not designed around core values.

 The fear expressed in May 1995
that we would be left with incompatible
parts of old and new systems is not yet
resolved. There is concern that with an
approaching presidential election and
possible changes in Agency leadership, we
may not be able to maintain the momentum
needed to complete the transition and
alignment phases. It would help greatly if
efforts to deal with alignment phase issues
were made explicit and given visible
priority. New structures may be needed to
do this.

 During the design phase, relatively
small groups of people worked intensively
in Washington to design the new systems.
During the transition phase, the focus shifted
to engaging thousands in Missions and
operating units to implement the new
systems. During an alignment phase, field
Missions and Offices will have to take a lead
in identifying alignment problems and
reporting these to groups in Washington
who have the authority and capability to
address them in ways consistent with core
values. The information flow will have to
change direction and Washington will have
to listen to the field. The resolution of
alignment problems can only be effective if
there is wide input from affected staff.

 It is not apparent at this point that
structures exist to accomplish this critical
step or to provoke the information flow
needed between Washington and the field.
One way to address this would be to
formally designate specific Missions who
have made significant progress in the
reengineering transition as "Reengineering
Alignment Labs". A special "Alignment
Team" could be formed in Washington to
work with "RAL" Missions in identifying
the most important systems alignment issues
and create appropriate task groups to resolve
them. Lead Missions could then be used to
pilot modified systems prior to agency wide
dissemination.

 As a federal Agency taking a lead
role in Government re-invention efforts,
USAID is positioned to make a major
contribution to reengineering in other federal
Agencies. Maintaining a leadership role by
solving the same alignment problems that
will plague others could be a very
appreciated complement to the successful
"Lessons Without Borders" Program.

 Footnotes

1. This paper is based on a presentation
given to the LAC Bureau on February 16th,
1996. The information contained is current
through March 1996. We would greatly
appreciate any comments or suggestions you
may have. Please send these to Lewis
Lucke, Acting Director, and Olivier
Carduner, Reengineering Coordinator, via
USAID e-mail, internet
(ocarduner@usaid.gov), or regular mail
(USAID LaPaz, APO AA 34032).

2. Administrator Atwood requested that
all units worldwide hold a retreat to view
and discuss introductory reengineering
videos and report concerns to him in writing.
See Memorandum dated May 18, 1995 from
Lewis Lucke, Director a.i. to Administrator
Brian Atwood, Subject: Report on
USAID/Bolivia's Reengineering Retreat
(available on request). Comparison of this
"pre-reengineering" feedback with the
present paper gives a good idea of how far
this Mission and the Agency in general has
progressed with reengineering.

3. Bolivia had to meet tough coca
eradication conditions by the end of June
1995 in order to maintain USAID assistance.

4. The June 1994 Action Plan
"Management Contract" cable from
Washington told us $99.6 million was
approved for FY95. By the end of the fiscal
year we had actually received $66.6 million.

5. Efforts were taken in Washington to
make the design of reengineered systems a
participatory process. However, only two of
USAID/Bolivia's 214 employees had had
any kind of exposure to reengineering
efforts in Washington, and that exposure
was too early and much too limited to
provide an adequate understanding of the
new concepts. Missions with employees
who had more direct experience may not
share this perception.

6. The books we found most useful for
understanding reengineering were: Russell
Linden, Seamless Government; A Practical
Guide to Reengineering in the Public Sector,
(1994); Michael Hammer and James
Champy, Reengineering the Corporation: A
Manifesto for Business Revolution (Harper
Collins, 1993); Michael Hammer and Steven
Stanton, The Reengineering Revolution: A
Handbook (Harper Collins, 1995).

7. See USAID/Bolivia, "Reengineering
Road Map", dated October 10, 1995.
Available from USAID/Bolivia upon
request.

8. Course materials including exercises,
handouts and Power Point slides are
available upon request.

9. Author and date of issuance not
shown.

10. For example, the Contract
Information Bulletin dated May 1, 1994
(CIB-95-12) replaced previous RCO held
authority with standard contracting and grant
document text and goes on to state: "Any
change to the standard text constitutes a
deviation, and applicable deviation
procedures shall be followed....A request for
deviation shall contain a complete
description of the deviation, the effective
date, the circumstances in which the
deviation will be used, the specific reference
to the regulation being deviated from, an
indication as to whether any identical or
similar deviations have been approved in the
past, a complete justification for the
deviation including any added or decreased
cost to the Government, the name of the
contractor, and the contract or task order
number. Prior to submitting the deviation
request to the Mission Director for approval,
written comments must be obtained from the
Procurement Policy Division (M/OP/P)."

11. See paper entitled "The Future of
PDOs and POs in USAID: A View From the
Field", available from Olivier Carduner at
USAID/Bolivia.


 ANNEX I
 CORE VALUES COURSE EXERCISES
The following three small group exercises
were developed by the Training Team for
use in the Core Values course. The first
focuses on the teamwork concept. The
second on customer focus and the third on
understanding the importance of partners,
stakeholders and customers in the context of
a development activity. The later exercise
uses a true to life case study of an on-going
design effort in the Mission.

A. Teamwork Exercise

 Each group of six to eight
participants was given an envelope
containing miscellaneous items such as
paper clips, cotton balls, construction paper,
pencils, scissors, masking tape, Band-Aids,
etc. from which each participant selected
one object at random. Each group was then
tasked with preparing a public mural
depicting what they as USAID employees
do.

The rules for completing the mural were as
follows:

 There was a 15 minute time limit.

 One person in the group acted as an
observer.

 Each individual's materials had to be
used.

 The group could use pooled resources
(such as flip charts, markers and items left in
the envelope).

 Each group then presented and
explained their murals to the class. The
observers then described how they saw the
group process working. Comments
generally focused on how each and all
members were eventually engaged by the
group to make their contribution. The
creativity and energy shown by the groups
was impressive given the constraints.
Murals were subsequently displayed in the
Mission cafeteria..

Comment

 This simple exercise, including
reporting out, took only about an hour and a
half to complete. It was quite effective in
getting across the concept of teamwork as
opposed to work groups (project
committees). While each member offered a
different contribution, all shared a common
objective (in contrast to a work group where
members often have different objectives). It
was then easy to make a conceptual link
between this exercise and the basic idea of
how the new SO teams were intended to
work (shared objectives, all members
contribute and give value added).



B. Customer Focus Exercise

 We used the process mapping
exercise provided to us in the Washington
training of trainers course, and added a twist.
Each group selected one process from a list
of common internal processes in the mission
such as obtaining approval for a project site
visit, filling a vacant secretarial position,
contracting for a conference facility,
obtaining GSO services to move an office,
and obtaining long distance phone call
approvals. These processes were as much or
more controlled by internal Mission policies
and procedures as Washington rules.

 The groups were tasked with
completing process maps showing the steps
involved and the total time required for their
process. The trainers then announced that a
(fictitious) customer survey was completed
which showed widespread dissatisfaction
(not so fictitious) with the process. Each
group was then tasked with establishing a
"stretch objective" or time target for
completing their process and then
redesigning the process to meet this target.
The only rule was that all applicable
accountability requirements had to be met.

Comment

 This exercise generated much
enthusiasm and debate. Most groups had a
mix of internal customers who used these
services and service providers who were
responsible for providing them. With the
stretch objective, it became clear that good
service to customers was now more
important than convenience of service
providers. Most groups came up with
radical redesigns of their processes. In the
two weeks following this exercise, real
teams were formed to reengineer several
mission internal processes. Having
completed this exercise, everyone knew how
to do it, and there was quite a bit of peer
pressure put on service providers to come up
with better systems (which with newly given
mandates for change they were able and
willing to do).

 On a broader level, this exercise
made concrete by the focus on daily
processes all of us experience provided
everyone with a conceptual understanding of
what the BAA teams had been going
through in reengineering agency wide
systems. This helped generate enthusiasm
for, and reduce resistance to, the bigger
operations systems changes. It also helped
to drive home the concept of what it means
to put the customer in the driver's seat.

C. Customers, Partners and
Stakeholders

CHACO PROJECT DESIGN
EXERCISE

INSTRUCTIONS

 Each small group will be assigned
the role of one (or two) customers,
stakeholder, or partner which are identified
in bold letters in the text. Read the text
below and in your groups, answer the
following questions from the perspective of
your assigned role:

1. What are your needs and interests?

2. Assuming that USAID has $1 million for
this project, how would you want that
money spent?

3. Will you support or resist the project?
Why? How?

 Each group will then select one
representative who will present the position
of the group.

CASE BACKGROUND

 In order to achieve its environmental
Strategic Objective -- Reduced Degradation
of Forest, Soil and Water Resources and
Protected Biological Diversity -- the
USAID/Bolivia Mission is designing a new
project in the Bolivian Chaco. The design
team is in the process of determining who
are the key customers, partners and
stakeholders and how to involve them in the
project design.

 The Chaco is a large region of dry
tropical forests located on the Bolivian/
Paraguay border south of Santa Cruz. It is
the largest biomass in South America after
the Amazon and is known to contain one of
the highest number of large mammal species
of any ecological zone in the Western
Hemisphere. It is one of the only remaining
dry tropical forests large enough to support a
sustainable population of large felines. The
Parapeti river flows for about 150 Km
through the west side of the Chaco region
and disappears into the ground in a swampy
area called "Baados de los Izozog". Due to
year round moisture this area serves as a
breeding ground for many species of fish,
birds and other wildlife.

 The Wildlife Conservation Society
(WCS), a US environmental PVO, is keenly
interested in protecting the biodiversity of
this unique region and has assisted in
developing a proposal to create a new Chaco
National Park. The World Bank and GTZ
(German Government) have agreed to co-finance the cost of setting up a National Park
if the Government establishes it. The
Government of Bolivia (GOB) is interested
and has commissioned a study on creation of
a Park, but the Government of Paraguay
claims that the proposed park boundaries
extend into Paraguay and would view
creation of the Park as an attempt to regain
territory lost by Bolivia during the Chaco
war. In a donor coordination meeting, it was
agreed that due to its excellent in-country
operational capability, USAID would tackle
the most difficult task: management of
buffer zones immediately adjacent to the
park boundary.

 The main group living in the buffer
zone is the Izozeo Guarani tribe. The
Izozeos have been struggling to maintain
ownership of their land, which includes
most of the proposed park boundary, for the
past 100 years. They live in 21 communities
stretched out along 100 Km of the Parapeti
river. These communities live at near
subsistence levels and depend heavily on
hunting and fishing for food. They have
traditionally applied their own method of
resource management by limiting hunting
and fishing in certain areas when they
noticed decreases in game.

 The Izozeo population has doubled
in the last 20 years to the present level of
7,000 people and many communities
complain that fish and game populations
have decreased dramatically, affecting their
food supply. The only significant source of
cash income is seasonal migrant labor to
sugar plantations in the Santa Cruz area.

 Health is a major concern. 90% of
the population has Chagas disease and
respiratory and diarrheal diseases are
common due to dry conditions and lack of
potable water. The Izozeos have just
completed a 15 year community health
program funded by the Swiss Red Cross and
are looking for other sources of funding to
continue this effort.

 The only significant infrastructure is
a rough dirt road connecting those
communities on the West Bank of the
Parapeti with the town of Charagua -- the
seat of the Municipality. A 22 bed rural
clinic was recently completed by
CORDECRUZ, but due to the lack of
trained staff is greatly underutilized. The
Izozeos have used part of the clinic as a
center for traditional healing by their
medicine men. A Swiss firm expressed
interest in exporting to Europe some of the
unique pharmaceuticals produced by these
medicine men from forest plants, but there is
insufficient cash or know-how for starting-up such an operation.

 The Izozeos have maintained a
traditional mode of social organization
characterized by a hereditary chief (Gran
Capitan) and sub-chiefs for each
community. Though most lack formal
education and few speak spanish, they are
very well organized and actively seeking
assistance from donors to help create the
Park, maintain control over their land, and
address some of their basic needs. To this
end they have created an NGO by the name
of CABI (Capitania del Alto y Bajo Izozog).
CABI has a small office in Santa Cruz
funded by WCS.

 Commercial and pleasure Hunters
from Santa Cruz, Paraguay and Brazil
frequently come to the area to hunt for wild
pigs, jaguars and other wildlife. Scent
glands of wild pigs are sold at high prices to
the perfume industry in Brazil. This has
created a situation where many hunted
species are now endangered. The hunters
want to maintain their traditional access to
the area and will likely to continue
infiltrating no matter what controls are
attempted.

 Big Ranchers own large tracks of
land adjacent to, and in some cases, in the
project area. The lack of fences and defined
boundaries means that their large herds often
roam freely and graze on Izozeo land. The
ranchers benefit significantly from this
practice. They would of course like to do so
indefinitely and will continue to undermine
Izozeo efforts to legitimize their land
claims, create a park or control movement of
cattle.

 Politically powerful Santa Cruz land
speculators have recently become interested
in the area due to expansion of commercial
agriculture and cattle ranching around Santa
Cruz. One speculator has obtained bank
financing (thanks to an IDB agriculture
promotion credit) and started building an
irrigation canal to divert water from the
Parapeti to his land. He plans to sell the
land at high prices to commercial cotton
farmers. The Izozeos are alarmed at the
impact this may have on fish and other
wildlife populations. A Bolivian
Anthropologist who for years helped the
Izozeos struggle for control of their land,
and who lobbied the GOB to support the
Chaco Park proposal was mysteriously
killed by a gunman in LaPaz a few months
ago. There are no suspects or witnesses.

 A large community of Mennonites
live southwest of the Izozeos on the
Parapeti river and divert large quantities of
water for growing soy beans which they sell
on commercial markets in Santa Cruz. This
community is growing rapidly with
subsidies from Mennonite groups in Canada
and other countries and they plan to expand
into the project area and increase use of river
water. Their technology is capital intensive
and involves converting large tracts of
forests to farmland. They would view any
attempt at containment as a threat to their
community, and a break in the promise of
free land and water made to them by the
GOB twenty years ago as an enticement to
settle in the area. The GOB encourages
settlement of groups such as the Mennonites
to help reduce Bolivia s food deficit.

 Yike Mates and his PDO have
concluded that a project can't succeed
without direct participation of the Izozeos.
The Izozeos have had several disappointing
experiences with intermediary groups doing
projects "to them" rather than "for them" and
are mistrustful of donors who insist on pass-through mechanisms for funding. The design
team has therefore concluded that USAID
must provide funds directly to the Izozeos
and give them a central role in the design of
a buffer zone management project. The
RCO advises that a grant to CABI is the
appropriate instrument to do this, but CON
advises that they cannot allow this because
CABI doesn't have accounting systems or
personnel procedures in place as required by
USAID regulations. Placing such pre-conditions on CABI will likely alienate the
Izozeos, and convince them that USAID is
too bureaucratic and demanding to work
effectively with them.

COMMENTS

 This exercise was conducted in
courses of 50 people who were broken down
into eight small groups. After the small
groups had read the background and
established their position, one member was
sent to the front of the room to play out the
group's position in a mock round table
discussion. The audience was told to
pretend they were all members of the
Environment SO core team. At the end of
the presentations, which always included
back and forth arguments between the role
players, the audience was asked how to
appropriately involve customers partners
and stakeholders to ensure maximum chance
of achieving results.
 What made this exercise particularly
effective and engrossing for the participants
is that they knew it was a real on-going
design effort. We advised them that any
good idea they came up with would be
considered by the real design team. A major
benefit was that the participants in this
exercise included all of the professional and
clerical support staff of the Mission. Most
had only a general and often vague
understanding of the actual work involved in
designing and implementing projects. None
had ever been asked to participate in a real
brainstorming process involving a real
project design. These people were generally
amazed at the complexity of project
development work and the need to deal
effectively with a wide range of actors to
ensure some chance of achieving
development results. The result was a great
increase in sympathy and even respect for
the work of our technical specialist, and an
awareness that our technical people needed
the full support of all Mission staff to
achieve the Mission's development
objectives.