Covid + w@h + Zoom = a big change for TA and Managing Contractors?

Starting….

In a recent edition of the New Yorker, Lawrence Wright considered how major crises through history have tended to bring about profound social change as people were forced to think differently.[1] So, now is a good time to consider the extent to which the shock of Covid and the resultant need to w@h (work at home) will change the way development is delivered. Will the experience of the last few months shift development from the current model (reliance on expats and rich world managing contractors ) to a new, potentially less costly, and possibly more developmentally appropriate one (reliance on nationals and local managing contractors)?

Credit – Greg Clarke, The New Yorker

Covid has accelerated the trend to w@h. The author of this blog has not seen the inside of an office on a Friday for about 15 years. So, with the improvement in IT, why has this trend not been even more marked? Possibly there are three reasons. First, until recently, no one knew for sure whether working in an office, with staff working in close proximity, was essential or not. The conventional wisdom was that standing around the water cooler generated new ideas rather than idle chatter. Was there ever any evidence for this? It may be that being co-located with colleagues is less important than thought.  Second, the onset of Covid solved the ‘first mover’ problem: no single company opted for remote working for fear that they would lose some competitive advantage. The pandemic forced all companies to adopt home working at the same time, and urgently. And third, in the past staff may have been reluctant to w@h fearing that out of sight meant out of mind. Not only may bosses be concerned about slacking on the job, but when promotions come around those that were always present would be shown preference.

Credit – The Economist, June 25th 2020

However, since March most of us have been working remotely. We have been Zooming in to meetings with colleagues in Melbourne, Moresby and Manila from our bedrooms, kitchens, and dining room tables. The sky has not fallen in. Programs have ‘pivoted’ to Covid. Reviews have been completed and workshops have been held.  The longer travel restrictions remain in place – and commentators expect some restrictions to remain in place until the end of 2021 – the more ‘institutionalised’ will remote working become. ‘Path dependency’ will have acquired a new exemplar. What could this mean for consultants and managing contractors like Abt?

Middling….

The first implication surely is that we should not expect our professional and commercial position to revert to the status quo ante. There are three areas where change may be forced upon us.

  1. The model for program delivery. For most larger investments, donors typically seek the services of a home-based managing contractor (MC) to take responsibility for in-country implementation and management. The Devex website is replete with requests for Chiefs of Party or Team Leaders to take charge of programs awarded to Chemonics, Palladium, DAI  or Cardno. MCs set up country offices to deliver the program and report as required to the donor.

2. The design and use of Technical Assistance (TA). Given its relatively poor record, it is remarkable that international TA has survived, and indeed prospered. One OECD 2016 estimate valued TA at US $18.4 billion –excluding project specific TA. Since March  this year much international TA has been withdrawn. In Australia. MCs worked closely to repatriate Australian TA from south and south-east Asia, and the Pacific. They continue to work from Brisbane, Broome, and Bendigo. Short-term travelling TA has stopped altogether, while remote work continues.

3. Donor – MC – local partner relationships.  Donors rely upon MCs for more than program delivery. MCs absorb implementation risk (the risk that activities will not deliver their outputs), developmental risk (the risk that while outputs may be delivered they may little impact on outcomes), and fiduciary risk (the risk that someone may steal the cash). If the MC cannot place its home-based staff in country, then just what is its value proposition?

The ‘offer’ from MCs therefore may have to change substantially.  The crisis of Covid may force MCs – and donors and partner governments – to rethink their approach to delivering development. The pandemic could prove to be a more powerful catalyst for ‘Doing Development Differently’ than a thousand learned papers from the Harvard School or the Thinking and Working Politically International Community of Practice. There are four ways (at least) in which such change may come about.

i. The model for program delivery.  Restrictions on travel (and possibly the reluctance of some international staff to deploy) will privilege rich world companies with an existing presence in partner countries. What can be called the ‘accountancy firm’ model of, for example, KPMG, PwC, and Ernst and Young will be better placed to win management contracts than firms whose country presence waxes and wanes on a project by project basis. Two options are open to MCs: put in place long-term strategic and commercial tie-ups with appropriately skilled and qualified local firms or buy them out. In both cases the role of the rich-world MC would be to provide strategic guidance, hand-holding and financial supervision.

ii. The design and use of TA. Will Covid spell the demise of TA? Unlikely – but it may dampen demand.. Countries the world over will seek advice internationally if it is not available locally. It is only a few months since the Governor of the Bank of England was a foreigner. Many Pacific Islands will need categories of TA in perpetuity. There is nothing wrong with this; narrow sustainability arguments are irrelevant when considering PIC human resource requirements. What may change, however, is the default resorting to international long-term TA as the answer to every problem. Further, partner governments may argue that “we have survived well enough without in-country TA for the last 12 months– do we need it at all?”. Can we meet this need by ‘localising’ TA and supporting them with appropriate remote working arrangements and advice, where advice is available on call, by ‘phone, by Zoom, by FaceTime, by WhatsApp video, all 24/7? However, while this may work for formal training, it may be less appropriate for mentoring, where TA provides a constant ‘stream’ of advice on what may appear to be mundane but important issues regarding the technical area in question.

iii. Donor – MC – local partner relationships. The most profound changes however may be reserved for the donor – MC relationship. It may be that, finally, the principal – agent relationship is replaced by one of a three-way partnership as in the schematic on the right, with the local partner involved more on equal terms. In the current ‘aid in the national interest’ context, this certainly is a long way off. But that is the thing about emergencies and crises – we cannot be sure how things will work out and how profound these changes may turn out to be.

iv. Greater use of national in design and delivery. This has been one of the holy grails of development for years, but only limited progress has been made. Covid may finally be the spur needed for donors and managing contractors alike to bring this about.

Finishing….

Although the future may be essentially unknowable, we do know enough to know it will not be like the past. And possibly not at all like the immediate past. It seems pretty clear that MCs and consultants will need to devise a new offer to remain relevant in whatever becomes the post-Covid world.

[1] Lawrence Wright, ‘Crossroads’. The New Yorker, July 20th 2020

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