In Pakistan’s chequered history of the last 68 years, the focus, too often, has been on the negative aspects of the country’s economic and social development. This is understandable, given the endless woes of the citizenry amid mounting socio-economic problems. The country’s development indicators are not only dismal, but have also deteriorated compared to other countries.

Despite this, there are candles in the dark environment of the country that shed light on another narrative. Amidst the hostile and fragile institutional environment of the country, there are organisations that are surviving well — thriving and meeting their stated objectives. This study selected nine such Pakistani organisations, cutting across all important sectors and of varying sizes and missions. Of course, these are not the only successful entities in the country.

The question this study has endeavoured to answer is: How are these organisations able to succeed in achieving their goals in an environment that is not conducive to growth and progress? In other words, how do these entities survive and thrive in the midst of major challenges and poor governance in the country’s institutional structure?

On how organisations of different kinds can prosper in an unfavourable institutional environment

The study identifies nearly a dozen factors responsible for the success of these organisations and illustrates how each one uses its coping mechanism to steer through turbulent institutional waters to reach their goals.

The study found that clarity and simplicity of mission and objectives is an important success factor. Organisations with clear, specific, and focused objectives and ones which are not encumbered with distracting responsibilities are more likely to succeed. By contrast, entities that are saddled with multiple and conflicting goals are handicapped in achieving their goals.

As with any enterprise in the world, a key ingredient in the recipe for success is strong and visionary leadership that is able to steer the organisation through turbulent waters. This means a leadership that can define and implement a clearly articulated mission, that is able to assure the financial viability of the organisation, and that is capable of buffering the organisation against unnecessary outside intervention. It also helps if this capable leadership has sufficient continuity of tenure to transform objectives into results and institutionalise the standard processes and procedures. The study has enumerated several cases where leadership at specific moments in the life of these organisations has made a difference. In some cases, this leadership is ensconced in a group of senior managers, while in other cases, such as the Edhi Foundation, this is based in individual, charismatic leaders.

The best leadership is also one that deepens and strengthens institutions, and clearly lays down and codifies the policies, processes, and procedures of these institutions. A good example of effective institutional strengthening is IBA [Institute of Business Administration], where the dean has clearly codified rules and procedures, based on which the relevant decision-making authority has been delegated to the faculty and administration. By contrast, Nadra [National Database Regulatory Authority], despite its good performance, has witnessed the ‘founder’s syndrome’, with the fortunes of the organisation closely linked to those of the previous chairman. Similarly Edhi Foundation leans very heavily on its aging founding father, with a question mark remaining on the future of the entity post-Edhi.

The success of organisations also depends on the competence and dedication of its managers and staff. The study concludes that a common characteristic of successful enterprises is their ability to recruit and retain competent staff who are given sufficient elbow room to perform their functions and pursue their initiatives. Putting in place rigorous and merit-based recruitment procedures and resisting pressures for politically-motivated filling of jobs are important ingredients of success. Exposing staff to international experience through well-designed training programmes certainly helps in this process.

Pivotal to the success of any organisation is financial sustainability, the entity’s ability to count on adequate and stable funding. Without this, the organisation will be heavily dependent on government resources, and hence, subject to public interference in the daily activities of the entity. The study illustrates how various institutions have managed to achieve financial sustainability over time and have thus kept the government at bay.

Designing procedures, such that there is an arms-length arrangement between the owners (government or private sector) and the management, is a prerequisite for the successful implementation of day-to-day operations. Where ownership is too intrusive, despondency sets in and there is a high turnover of management, which frustrates the initiative of the managers and staff. In the case of government entities, widespread political support facilitates the work of the entities — support that can survive changes in government and the accompanying changes in management.

Putting in place robust monitoring and evaluation mechanisms to measure success and learn from experience is another important building block for success. The sample of case studies included here illustrate the importance of building evaluations into the design of the programmes. Such arrangements not only increase accountability based on clearly articulated benchmarks, but also provide opportunities to organisations to learn from mistakes. Learning organisations are invariably successful organisations.

Serendipity or proactivity can ensure external financial support to organisations. Significant and timely financial and technical support from external donors can provide the oxygen needed, especially during the formative years.

Specifically, institutions such as LUMS [Lahore University of Management Sciences], BISP [Benazir Income Support Programme], and the Punjab Education Foundation have had their programmes boosted by sizeable external funding at appropriate times. On the other hand, excessive reliance on outside funds can blunt efforts to ensure long-term financial sustainability. And there are entities such as Edhi Foundation that specifically forego support from foreign donors (except from Pakistani expatriates) on grounds that this jeopardizes their legitimacy.

Finally, as with all organisations — private or public — the ability to adapt to changing circumstances is an important success factor. Institutions that fail to adapt to the prevailing environment are generally doomed to failure, whereas those that exhibit agility in facing unexpected changes are better positioned to be successful. Invariably, most organisations encounter such unexpected developments.

The nine enterprises included in this study are examples of successful enterprises, and the reasons for their success are summarised in the previous chapters. However, this does not imply that they do not have weaknesses. Indeed, these institutions have a sizeable agenda of unfinished business which needs to be addressed.

A key concern is the excessive dependence of some of these enterprises on external donor financing. Shaukat Khanum Cancer Hospital, Punjab Education Foundation, and the Benazir Income Support Programme all have heavy dependence on outside donors. This high dependency on donor funding can be a challenge to the long-term financial sustainability of these institutions.

Uncertainty around the future leadership of some of these organisations is also a concern. What happens to Edhi Foundation after the demise of the ageing Abdul Sattar Edhi? How will the operations of Rescue 1122 be affected in the absence of Dr Rizwan Naseer? BISP too needs to make a transition from dependence on leaders and champions to establishing a more sustainable institutional set-up that can weather political transitions.

Finally, many of these institutions suffer from problems which are not of their making. Foremost among these problems are those of security and terrorism, which have a debilitating effect on the domestic and foreign investment in these organisations. Similarly, the two higher education institutions reviewed in this study (LUMS and IBA) are failing to attract any foreign faculty or students. Two decades ago, this was not the case. Likewise, critical energy shortages are having a severe impact on most of these institutions. These problems are unfortunately expected to remain in the foreseeable future.

What are some of the lessons that emerge for policymakers, managers of public organisations, and international development partners?

First, the government should leave sufficient space for organisations so as not to stifle their initiative. There is nothing more distractive and destructive to organisations than meddling by public owners in the human resource and investment decisions of the enterprises. Rather than meddle in their day-to-day operations, the government should set benchmarks for organisations in terms of meeting agreed upon objectives and goals. Typical arrangements have included performance contracts between organisation managers and their controllers.

Second, governments should make sure that the organisations under their purview have simple, but effective, monitoring and evaluation systems in place that provide a practical and empirical basis for assessing results (both outputs and outcomes). These systems are also excellent evaluative instruments to learn lessons from experience.

The above excerpt has been taken from the chapter ‘Conclusion’.

Excerpted with permission from
Candles in the Dark:
Successful Organisations in Pakistan’s Weak Institutional Environment
By Mahmood Ali Ayub and Syed Turab Hussain
Oxford University Press
ISBN 978-0199403363
288pp.