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 Izoze¤o-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 "Ba¤ados 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 Izoze¤o Guarani tribe. The Izoze¤os 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 Izoze¤o 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 Izoze¤os 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 Izoze¤os 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 Izoze¤os 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 Izoze¤o land. The ranchers benefit significantly from this practice. They would of course like to do so indefinitely and will continue to undermine Izoze¤o 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 Izoze¤os are alarmed at the impact this may have on fish and other wildlife populations. A Bolivian Anthropologist who for years helped the Izoze¤os 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 Izoze¤os 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 Izoze¤os. The Izoze¤os 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 Izoze¤os 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 Izoze¤os, 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.