04/991Fundação Empreender, SC, Brasil / DOrg-82e.ppt Fundação Empreender SC, Brazil & Chamber of Crafts and Small Industries (HWK) for Munich and Upper

04/991Fundação Empreender, SC, Brasil / DOrg-82e.ppt

Fundação EmpreenderFundação EmpreenderSC, Brazil SC, Brazil

&& Chamber of Crafts and Small Chamber of Crafts and Small

Industries (HWK) for Munich and Industries (HWK) for Munich and Upper BavariaUpper Bavaria

Organisational Development of Business Associations (ACIs)

orHow to open the door for SMEs


Thesis 1

“Business Associations in Latin America

are corrupt are closed to SMEs are inefficient

“Motivate and use them to promote SMEs is impossible” (E. Oehring, FUNDES, in 11/90 on a leisure night on the beach in Fortaleza/CE, Brazil)


In 1987 ACIs looked for partnership with the HWK because ...

Large companies needed better qualified SMEs as suppliers -outsourcing

The main problem of SMEs according to ACIs:lack of adequate professional business training


1989 : ZOPP III

Definition of aProject to train SMEs

Instruments courses with HWK

masters / technicians practical training in

HWK member SMEs etc.


1989 : ZOPP III

Changes in the ACIs themselves are out of imagination and question!

Why? SMEs are the target group -

they have to change ACIs support SMEs but do not want to get

involved ACIs do not perceive themselves as an

object of the project


At the beginning of the project in 1991 ....

The president of the ACI:“We do not want a revolution !!!”

The executive director of the ACI:“We do not want to change the characteristics of the ACI”

Consequence for the project team:The word CHANGE is a TABOO


Organisational Development - what is it?

A planned process to change the behaviour, attitudes and capacities of the

actors in the organisation the culture and attitudes of the organisation the organisation and communication

structures the strategies

Objective: To improve both internal and external performance of the organisation


Some basic elements of OD

Organisation members’ participation in identifying problems in developing solutions in implementing changes

A moderator / consultant accompanies the process

OD is a learning process within the organisation


Prerequisites to start an OD process

The will to learn to change the organisation

(enterprise / business association) due to

internal / external problems or new visions


Prerequisite to start an OD process

A problem:negative situation, the organisation suffers

A vision:adequate situation,but the organisation wants to improve more

desired situation

current situation

problem

vision

current situation

future situation

+

-


Thesis 2

An organisation content with its performance

without problems / without visions which wants to contribute to the

development of others (i.e. SME)

during the analysis of the project scope, does not permit discussions about itself as a target for change

“The problems belong to the others!”


Thesis 2

Effects: The subject OD does not appear during

the ZOPP Project members (counterparts -

international consultants) - are not selected - are not prepared to deal with OD

When conflicts and organisational problems come up nobody is ready to treat them


Thesis 3

German project staff does not do what deemed necessary

It does what has learned what it is good at what is easy to do what leads to immediate success

Therefore, it does not do Organisational Development


1991: Orientation Phase

“The HWK / GTZ Project analysis” Key question:

What is going to happen in some SMEs after three years of training?

Answer: Nothing!

Consequence:Lack of sustainability


The logic of the “HWK / GTZ Project”

An unsustainable project

SME level

Time

Project: SME improvementthrough German know how

before

after

durin

g


The logic of a sustainable “ACIs and SMEs Project ” A project with effects in the long run

before

SME level

Time

Project: Start a development process

the process keeps going by itself

after

durin

g


This correspondents with new concepts about the development of organisations The institution as learning

organisation

traditional step by step improvement

continual improvement

Know how


Project: SME Improvement

Consequence

The logic of the “HWK / GTZ Project”

before

after

Think it over

again!!

durin

g

Forget ZOPP III


ACI

The search for a vision of a project starts up ...

With whom discuss and experiment ?

Project Team

Board of Directors

Executive Director

EmployeesSME


ACI

Rule: Integrate the Executive Director to gain trust and confidence! strategy

“from middle both ways”

Project Team

Board of Directors

Executive Director

EmployeesSME


Analysis: The participating agents in the know how transfer process

SME

Business Associations(ACIs)

Know howinstitutions


SME’ Characteristics

Poor school education and professional training: did not learn how to learn,how to look for new know how and how to apply it

Isolated: Other SMEs are seen as competitors = personal enemies

Mistrusting business associations Problems, needs and ideas are defined in

a diffuse and abstract manner


Know how institutions

Professional education and training bodies (schools, universities etc.)

Consultants and tutors (firms and freelancer)

Suppliers of raw material,equipment and services


Characteristics of the know how institutions

Are not familiar with SME’ reality Define problems and needs of SMEs

“from Top to Bottom” Offer products, services and know

how which they know to produce and not which SMEs need

Do not feel the necessity to actively offer and sell their know how


Characteristics of the Associations of Industry and Commerce (ACIs) Only deal with .............. Institutions of the elite,

closed to SMEs Poor / not professionalized Employees only administrate,

do not initiate, create ... Do not know the affiliated SMEs Function as social clubs rather

than business associations

ACI

LOBBY


Cooperation between institutions does not work

SME



SUPPLY

DEMAND

INTER-MEDIATE


A new vision for the ACIs

Lobby is not the only taskof a business association

They have two tasks: LOBBY and SERVICES for

affiliated members

ACI

LOBBY

SERVICE


Logic of the Development of Associations of Entrepreneurs

ServicesInformation / Consultation

Training / Support

Lobby in front of Government and other groups of the

society

Higher attractiveness for Entrepreneurs

Law of great number:the more members, the more influence

ACI

More Entrepreneurs apply for membership

More members pay more membership

fees

More means to finance more and

better services


Thesis 4

The business associations have never decided not to offer services to their affiliated members

They don‘t offer services, because they are not aware that this is a fundamental task of a business association


Development stages of an association

1. Stage 2. Stage 3. Stage 4. Stage 5. Stage

Situation Entrepreneurs observe in their town problems, which have negative effects on their business (traffic, market, taxes etc.)

More members and more external contacts cause more administrative and organisational workloads (meetings, calls, letters etc.)

Demands of the environment on the members provoke well pre-pared, qualified and founded positions, which due to lack of time and specialisation honoraries are not able to elaborate

The environment produces pressure to change for the members (new laws, technologies, management). They need professionalised services

A complex and dynamic environment causes high pressure onto the members to change. The association has to act and lobby on all political and business levels

Activity A businessman initiates discussion of common points of interest and the foundation of an association

The association rents an office

In a further step it contracts a (part time-) secretary

Employment of a Secretary General

Eventually he performs services to the members (legal / business administration, consultancy)

Employment of qualified consultants in different areas

Introduction of a complex organisation

A large number of qualified staff form an organisation with differentiated functions and hierarchies

Creation of a service network

The number of members ...

is small and homogeneous

is small and homogeneous

is larger and homogeneous / heterogeneous

is large and heterogeneous

is very large and heterogeneous

Activity of the asso-ciation

100 % Lobby 100 % Lobby 75 % Lobby 25 % Service

50 % Lobby 50 % Service

25 % Lobby 75 % Service


1. Stage 2. Stage 3. Stage 4. Stage 5. Stage

Tasks ofthe BoardofDirectors

InitiateDefine opinionsDecideRepresentAdministrateExecute

InitiateDefine opinionsDecideRepresentAdministrateExecute

InitiateDefine opinionsDecideRepresent



Tasks ofthe em-ployees

Inapplicable AdministrateExecute

AdviseAdministrateExecute

InitiateDefine opinionsAdviseAdministrateExecute

RepresentInitiateDefine opinionsAdviseAdministrateExecute

The per-formanceof the as-sociationdepends...

on 100% of theengagement andquality of thehonoraries

on 90% of theengagement andquality of thehonoraries, on10% of thesecretary

on 75% of theengagement andquality of thehonoraries, on25% of theSecretary General

on 50% of theengagement andquality of thehonoraries, on50% of theprofessional staff

on 25% of theengagement andquality of thehonoraries, on75% of theprofessional staff

After theelection ofa newboard ...

politic andperformance ofthe associationchangescompletely

politic andperformance ofthe associationchangescompletely

politic andperformancechangesconsiderably

politic andperformancechanges few onshort but more onlong term

politic andperformancechanges few onshort and longterm

Development stages of an association


Where are the ACIs?

In 1991 out of 105 ACIs in Santa Catarina

98 are on stage 1 or 2 07 are close to stage 3 None is on stage 4


Ideas for a partnership project

ACIs change through an Organisation Development Process and start to:

hire counsellors professionalize its staff integrate SMEs as members offer services to affiliated members

They finance themselves through membership and service fees


Instruments to initiate discussions about changes within the ACIs Provoke reflections by definition of

the terminology: “It is not a GTZ project! It is not a HWK project! It is not a German project! It is a Brazilian project! It is an ACI project! So, you are the ones to say what

to do and how!”


Instruments to initiate discussions about changes within the ACIs Speeches and presentations in the ACIs

about services offered by HWK to its affiliated members

Effect: almost zero !!!! Visit of ACIs representatives to HWK

and its institutional counterparts to get to know the services and support network offered to SME

Effect: Spark the debate on change in the ACIs!


Thesis 5

When starting a discussion about changes in the organisation mind this:

rational arguments are less important: if you want “A” you must do “B”

psychological elements are more important:- trust amongst participants- credibility on the part of the participating

institutions


Question:

Why a Latin American business association should trust in

GTZ HWK a consultancy firm in technical

cooperation

to a point to change its organisation ???


Steps to a vision for SMEs!

Proposal: “We research the SMEs’ needs in the areas of management, business administration, production and sales!”


Steps to a vision for SMEs!

Answer: “We already know the results. They are always the same: lack of credits, technology, well trained personnel etc. This does not help!”

The project team working


Thesis 6

SMEs only want to discuss those problems and needs they perceive / identify in a subjective manner

The identification of problems and needs is the final outcome of a communication process of the SME with other people, and not the beginning


The alternative: a discussion platform for the SMEs

Creation of organisational structures within the ACI

SME’s industry branch working group within similar business areas (Nucleus)

organised, managed, advised by a consultant (ACI’s employee)

which permit and maintain a continuous learning process


Task of a Nucleus counsellor

Initiate and manage a communication process amongst entrepreneurs = Moderation

Objective: Identify common subjects and problems Stimulate the exchange of information

and experiences Perform decisions and organise activities

(training, visits to suppliers, fairs, etc.)


Task of a Nucleus counsellor

At the “right” moment take part in the discussion actively bring into the discussion

- questions, - ideas,- experiences,- comparisons,- proposals

= Counselling


The didactic

What I hear, I forget What I see, I

understand What I do, I learn

(Confucius)


Elements of group counselling

Key strategy to start with: Keep the discussion focused on problems

SMEs have direct influence (internal causes - good chance of success)

Avoid problems on which SMEs do not have the power to decide on their own, because their are out of their hands (external causes - small chance of success)


The “Nucleus” in an ACI: the basic idea

Through a “bottom to top” structure strengthen the affiliated SMEs

demand for services in the ACI evaluation of the ACI performance influence on the ACI development

The membership paying affiliated SME has the right to demand, complain and influence


Working strategy for the project team

To develop ideas and assign its responsibilities to the ACIs employees does not work:- lack of confidence, skilled personnel ...

The project team itself has to: organise, invite, lead, advise, execute ...... to demonstrate what works and how it functions


The first results

The Nucleus in the first year: bakeries jointers plant producers

The Executive Director of the ACI:“I did not know that the SMEs do want and need us!"


After six months: ZOPP IV

ACIs decide to: change the ACIs professionalize them stimulate SME’s membership create “SMEs nucleus” offer them services

The ACIs decide to be the target of a project of organisational change in order to improve SME’s performance


The most important outcome

Nobody talks about the “HWK / GTZ German project” anymore

Everybody talks about the “ACIs Project”

This means:the responsibility is with the ACIs !


02.9

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80

5

10

15

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25

30

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40

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... and today ...

37 ACIs in Santa Catarina participate!

63 employees are working in the service area (42 posts are newly created)


... and today ...

the ACIs change their statutes in order to affiliate SMEs as members

integrate SMEs in the board of directors

cooperate on the level of presidents executive directors consultants

in the areas of lobby and services, planning of activities, staff training etc.


... and today ...

ACI Board of Directors plan “Objectives and Targets”:

what do we want and by which activities can we reach the

objectiveson the subjects of lobby (economy and community) services to large, medium a small sized

enterprises organisational development of the ACI


... and today ... the ACIs… with 9.000 members increased its number between 10% and 300% by 2.500 SME,

0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

02.91 01.92 01.93 01.94 01.95 01.96 01.97 01.98 07.98


... and today ...

200 nucleus in 59 business areas

3.000 SMEs participating

0

25

50

75

100

125

150

175

200

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500

750

1.000

1.250

1.500

1.750

2.000

2.250

2.500

2.750

3.000

02.9

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... and today ...

many nucleus activities problem / solution discussion training courses on subjects defined by

núcleo members evaluation of participating SMEs enterprises visits to suppliers collective equipment purchasing visits to national /international business

fairs etc . etc. ....


... and today ...

Nucleus’ start to lobby via ACIs to influence politics of know how institutions

ACI

Suppliers

Schools

SME Nucleu

s


A communication, services and influence network starts to work ...

SME



SUPPLY

DEMAND

INTER-MEDIATE


... and today ... in the enterprises Many changes

The joiners example: Employees increased by - 90 % Products’ quality increased by - 80 % Work planning increased by - 60 % Changes (machines, lay-out,

installations) - 80 % Introduction of new technology and products

- 70 %

average


Who contributes what?

Experience with services for affiliated SMEs

Serves as working example of a business association which gives - credibility,- confidencein the organisational change process

Intercultural aspects

Methodologies - ZOPP- Metaplan- Group Consultancy - CEFE- Action Learning

HWK gtz


Four years later ...

ACIs in Santa Catarina are open for SMEs work more efficiently offer services to SMEs

“Apparently you have found a way to get in move the ACIs in order to contribute to the development of SMEs” (E. Oehring, after a training session in SC)


Fundação EmpreenderFundação Empreender

A Foundation of Associações Comerciais e Industriais (ACIs - Chambers of Industry and Commerce) in Santa Catarina, Brazil, to promote and support business associations

In a partnership with the the Chamber of Arts and Crafts for Munich and Upper Bavaria, Munich

Supported by SEQUA, Bonn, and Federal Ministry for Economic Cooperation and Development, Bonn

The aim of the partnership project (which started in February 1991) is, inter alia, to diffuse experiences with organisational development in business associations, and with their opening for small firms. We diffuse our know-how via training courses, consultancy work, and publications.

This file is part of our material to present and illustrate our activities to professional and elected officials of business associations, personnel from technical cooperation projects, and other people with an interest in this field. We are involved in a constant process of elaborating and improving this material, and targeting it to the demands of specific groups (in the file name, the first number indicates the year, the second the version number). Currently, files are available in Portuguese, Spanish, German, and English.

You may use, copy, and change this file as you like (we do not insist on a copyright).

We would, however, like to ask you for the following: please send us a copy (as a file or printout) and additional information if you use the file or parts of it. We need this feed-back to demonstrate the effects of our work vis-à-vis those institutions which support the work of Fundação Empreender. Thank you!

The Fundação Empreender Team

Documents

04/991Fundação Empreender, SC, Brasil / DOrg-82e.ppt Fundação Empreender SC, Brazil & Chamber of Crafts and Small Industries (HWK) for Munich and Upper