Organization of American States Management Study of the Operations of the General Secretariat Part I – Executive Summar

1. Organization ofAmerican StatesManagement Study of the Operations of the General SecretariatPart I – Executive SummaryNovember 3, 2003Final Report Final Report – November 3, 2003

2. Table of Contents Part I – Executive Summary Part II – Detailed Observations and Options • Project Overview • Overall Option Analysis • Findings, Observations, and Options • Organizational Structure • Business Processes • Human Capital • Technology Part III – Appendices • Appendix A: Project Timeline • Appendix B: Current OAS Organizational Structure • Appendix C: Member State Delegation Meetings • Appendix D: Organizational Unit Meetings • Appendix E: Facilitated Session Participants • Appendix F: Current OAS Grade and Salary Structure and Description of United Nations Compensation System • Appendix G: OAS Personnel Register (June, 2003) with detailed OAS demographics • Appendix H: OAS Performance Appraisal Form • Appendix I: Detailed Deloitte Research Findings Related to OAS Human Capital Issues • Appendix J: Series of Charts Reflecting Deloitte Analyses of OAS Human Capital Issues Final Report – November 3, 2003 2

3. Executive Summary • Project Overview • Project Methodology • Major Themes from the Study • Major Observations and Findings • Organization • Business Processes • Human Capital • Technology • Looking Forward Final Report – November 3, 2003 3

4. Project Overview In March of 2003 the Member States of the Organization of American States (OAS) engaged Deloitte & Touche to conduct an outside, objective analysis of the operations of the OAS General Secretariat. The study was prompted in large part by rising personnel costs and questions whether the General Secretariat was operating in an efficient and cost effective manner. The results of the study were to be considered by the Member States as they made decisions concerning budget allocations and other management issues. The study was to include four major components: As the study progressed, the focus shifted to include a wider range of organizational issues that were raised by the Member States, by General Secretariat managers and staff, and by the OAS Staff Association. Those issues were more strategic than tactical, and involved the Organization's mission and priorities, its strategy for the future, relationships between the Member States and the staff, communications, and a number of other considerations. • Assess the current organizational structure • Analyze the current workloads, personnel structure, and processes • Identify areas for reallocation of resources • Identify strategies to increase effectiveness and efficiency, and enable the correct composition of staff to meet the organizational mandates in a cost-effective and efficient manner. Final Report – November 3, 2003 4

5. Project Overview (continued) We were guided throughout the project by a Steering Committee comprised of nine representatives from the Committee on Administrative and Budgetary Affairs (CAAP). We met with the Steering Committee at regular intervals and provided status reports and interim summaries of our findings and directions for additional analyses. While the Member States were our clients, General Secretariat managers and staff played a critical role in providing information, documentation, and other project support. A comprehensive summary of the data collection phase of the project was provided to the Steering Committee for review and discussion on July 15, 2003. After additional analysis, a Draft Final Report was presented to the Steering Committee on September 16 for discussion and comment. The Draft Report was also shared with several members of the General Secretariat leadership team for their information and comment. This Final Report now incorporates the major findings and observations that flowed from the study. Ourobservations are intended to provide the CAAP and the Permanent Council with options to be considered as part of their decision making process. The implementation of improvements is ultimately the responsibility of the OAS and the General Secretariat. Final Report – November 3, 2003 5

6. Project Methodology We gathered information and data about the OAS from a wide array of sources during the study, and used activity-based methodologies to conduct our analyses. Our primary sources included: Altogether, we solicited information from more than 400 General Secretariat managers and staff. We also collected human capital benchmark information from organizations in the Washington, D.C. area that are potential competitors for talent with the OAS: the United Nations Pan American Health Organization (PAHO), the Inter-American Development Bank (IDB), the World Bank, the U.S. Government, and private industry. • Periodic meetings with the Steering Committee • Meetings with 14 Member State delegations • A wide range of current and historical OAS organizational materials, financial statements, budgets, strategic plans, administrative policies, IG Reports, staff allocations, etc. • Interviews with 78 senior directors, managers, and staff in 54 organizational units • Group facilitated sessions with 72 staff and managers in the Directorate of Management to conduct activity-based analysis • A survey of 250 employees in the Technical Areas and IACD • A survey of 54 Directors and Technical Assistants in 28 offices in the Member States • Multiple meetings with the Staff Association and individual members • Attended various Permanent Council and CAAP meetings • Interview with a donor and a permanent observer state. • Attended the 2003 General Assembly meeting in Santiago, Chile Final Report – November 3, 2003 6

7. Major Themes from the Study The OAS is a critically-important organization that has a rich history of accomplishment and a vital role to play in the future of the Americas. This view is shared throughout the Organization, as is deep pride in OAS' role as a political forum and in its leadership in crucial areas such as democracy building, security and anti-terrorism, human rights, drug interdiction, technology sharing, economic development, and other areas. There is also general recognition that the OAS has gone through a significant modernization in the last several years that has introduced technology into every department and function, standardized many business processes and internal controls to operate more efficiently. These are all improvements; however, there is also a strong sense that the Organization's efficiency and effectiveness are hampered by the way it is organized and the way it operates. Some of these difficulties are inherent to a multilateral political organization, but others can be improved by adopting new ways of doing business. We believe the OAS is at a critical crossroads. Like many other organizations, it is faced with the challenge of getting the most value possible from limited resources. The difficulties outlined in this report may not individually jeopardize the Organization’s mission-critical operations. But collectively they clearly diminish efficiency, divert resources, and restrict the OAS’ ability to take on new and important mission objectives. We also believe these difficulties, if not addressed, will compound over time and further weaken the Organization’s effectiveness. Taking the right, corrective steps now in the short run will yield invaluable dividends for the long-term success of the organization. Final Report – November 3, 2003 7

8. Major Themes from the Study Five major themes arose repeatedly in our discussions. These themes are central to our analyses, our findings, and our options for improvement. • The organization's mission, objectives, and priorities are not clear. • There is no systematic strategic planning process to guide the organization. • There is a significant disconnect between the Member States and the General Secretariat. • The organizational structure is fragmented and roles and responsibilities are not clear. • There is a general lack of accountability in decision-making and expenditures. Each of these themes is discussed in more detail on the following pages. Final Report – November 3, 2003 8

9. Major Themes from the Study (cont.) 1. The organization's mission, objectives, and priorities are not clear. The OAS' mission, strategic objectives, and priorities are not clearly defined, and not clearly understood by the Member States and General Secretariat managers and staff. Many of the individuals interviewed have a general view about the mission and priorities, but also stated that insufficient clarity is damaging the organization's focus and effectiveness. Many pointed to the lack of prioritization among mandates as a prime example. As one Member State representative said: "if everything is a priority then nothing is a priority." 2. There is no systematic strategic planning process to guide the organization. There is no strategic planning process in place to identify the Organization's most critical objectives and priorities, and to allocate resources to those priorities in a rational, systematic, and disciplined manner. Nearly every manager and staff member interviewed stated that the allocation of resources (budget and staff) at the General Secretariat is not linked to the organization's priorities. Instead, most said that resources are allocated by historic tradition and political strength. 3. There is a significant disconnect between the Member States and the General Secretariat. There is a significant disconnect between the views, expectations, and priorities of the political body and General Secretariat managers and staff. This disconnect is due in part to a difference in focus: the Member State representatives focus on political goals and objectives during their assigned terms while the staff focuses on tactical implementation. Effective communications could help to close this gap, but in fact there is very limited communication between the two groups. Much of the time the staff is not sure what the Member States want and the Member States are not sure what the staff is doing. This disconnect creates confusion, misunderstandings, distrust, and potential wasted resources. Final Report – November 3, 2003 9

10. Major Themes from the Study (cont.) 4. The organizational structure is fragmented and roles and responsibilities are not clear. The General Secretariat is organized and operates more like a consortium of independent elements than an efficient, coordinated organization. Lines of authority and accountability are unclear, and there is no Chief Executive Officer or Chief Operating Officer to provide overall management guidance and coordination across the organization. The Secretary General and Assistant Secretary General positions have evolved to focus primarily “externally” on political and member-state matters. These external affairs are clearly important, but no one has delegated authority to lead the various elements “internally”. As a result, there is limited coordination and communication among the various departments and service areas, and there are competing interests and redundant functions throughout the organization. 5. There is a general lack of accountability in decision-making and expenditures. There is a general lack of discipline in both the political body and the General Secretariat with respect to lines of authority, financial planning, budgeting, operating within resources, and measuring results. Mandates are approved, meetings are scheduled, and programs are frequently started with little regard to costs and resources. As a result, the budget has little integrity, over expenditures are common, and resources are not allocated proportionately to the organization's priorities. Final Report – November 3, 2003 10

11. Major Themes from the Study (cont.) These themes permeated our conversations across the organization. Everyone interviewed -- without exception -- stated that the OAS must change the way it operates if it is going to be an effective force for the future. The constant conflict between increasing demands on the organization and limited funding is restricting the Organization's overall ability to meet its obligations. Something has to give: either the Regular Fund needs to be increased or the organization needs to operate more efficiently. Maintaining the status quo will only ensure that the same problems will continue to exist year after year. The pride in the organization described on the prior slide is an exceptionally valuable asset for the OAS and an important factor in attracting and retaining high-quality staff. The problems noted in the five themes are serious, but are by no means insurmountable if the organization is willing to take on significant change. Those changes will be difficult, but we strongly believe the long-term benefits will far outweigh the investment. Final Report – November 3, 2003 11

12. Major Observations and Findings Current Operating Framework The following graphic depicts the OAS’ current “siloed” operating framework and describes several of the organizational challenges we identified in the study. Budget and Performance Management Mission and Vision Strategy Priorities Organization • Not clearly stated and shared by the Member States and the General Secretariat. • Not communicated to employees across the organization. • Not used as criteria to allocate resources • No systematic strategic planning process in place. • Organization-wide objectives are not clear and used to allocate resources. • Individual department strategies are not integrated with one another. • Allocation based more on historical funding levels than on strategic objectives. • Budget does not include specific funds. • Little focus on metrics and results. • Performance management not applied consistently. • Mandates tracked but not with a focus on outcomes and measures. • Organization is highly fragmented with multiple functions not aligned in a strategic manner. • Lack of coordination among units; no central leader authorized to coordinate among units. • Duplication of effort, redundancy, and staff not used as efficiently as possible. • . • No system to prioritize mandates, initiatives, and programs. • Resources not always allocated to priorities. • Member States and GS do not have shared view of priorities, which creates disconnect and misunder-standings. • . Final Report – November 3, 2003 12

13. Major Observations and Findings (cont.) Current OAS Organizational Structure Final Report – November 3, 2003 13

14. Major Observations and Findings (cont.) We divided our analysis into four broad categories: Organizational Structure, Business Processes,Human Capital, and Technology. Following are summaries of the major observations and options for improvement for each category. ORGANIZATIONAL STRUCTURE Final Report – November 3, 2003 14

15. Major Observations and Findings (cont.) ORGANIZATIONAL STRUCTURE (cont.) Final Report – November 3, 2003 15

16. Major Observations and Findings (cont.) ORGANIZATIONAL STRUCTURE (cont.) Final Report – November 3, 2003 16

17. Major Observations and Findings (cont.) BUSINESS PROCESSES Final Report – November 3, 2003 17

18. Major Observations and Findings (cont.) BUSINESS PROCESSES (cont.) Final Report – November 3, 2003 18

19. Major Observations and Findings (cont.) BUSINESS PROCESSES (cont.) Final Report – November 3, 2003 19

20. Major Observations and Findings (cont.) HUMAN CAPITAL Final Report – November 3, 2003 20

21. Major Observations and Findings (cont.) HUMAN CAPITAL Final Report – November 3, 2003 21

22. Major Observations and Findings (cont.) HUMAN CAPITAL (cont.) Final Report – November 3, 2003 22

23. Major Observations and Findings (cont.) HUMAN CAPITAL (cont.) Final Report – November 3, 2003 23

24. Major Observations and Findings (cont.) HUMAN CAPITAL (cont.) Final Report – November 3, 2003 24

25. Major Observations and Findings (cont.) TECHNOLOGY Final Report – November 3, 2003 25

26. Major Observations and Findings (cont.) TECHNOLOGY (cont.) Final Report – November 3, 2003 26

27. Looking Forward This executive summary is intended to provide an overview of the study and its major observations and options for improvement. While much of the summary points to areas where improvements are needed, we want to emphasize that based on our interviews it appears that the OAS is currently performing its primary mission in a successful manner. It is first and foremost a forum for the open exchange of views among the Member States and also a broker for programs to improve the safety, security, and well-being of citizens across the Americas. We also want to emphasize that the managers and staff of the General Secretariat take great pride in working for an organization that has such prominence in the international community. There are many talented people at the OAS --in both the political body and the General Secretariat -- and it was clear from our interviews that they are all keenly interested in making the organization stronger for the future. Embarking on a major organizational transition should be viewed as a journey, not a series of quick fixes. The options we have presented are not intended to be viewed independently, but rather as interrelated and building on one another. The options presented may take months and even years to fully implement and realize benefits. The diagram on the following page illustrates how the various elements are integrated. Final Report – November 3, 2003 27

28. Potential OAS Operating Framework Priorities Organization Performance Management Strategy Budget Mission and Vision • Multiple Perspectives: • Organization • Program • Mandate • Personnel • Financial • Customer Clearly define the overall strategic direction of the OAS and General Secretariat. Translate the OAS mission, vision, objectives, and mandates into an operational strategy for the General Secretariat. What will the organization focus on? What is not a priority? If it is not a priority, does the organization need to provide it? • Focused on results, not just resources • Include Specific Funds in process • Make organization accountable for performance • Aligned Strategically • Grouped Functionally • Accountable • Outcome-Focused • Operational Leadership Communication Information Technology Final Report – November 3, 2003 28

29. Sample Organizational Structure: Option 2 (To align functions and improve use of resources) The technical areas (including IACD) would be staffed by a combination of subject matter experts and project managers, both supported by a staff of generalists that have general skills in both policy and project execution. The structure would encourage collaboration and provide flexibility for peak and down times on projects. Final Report – November 3, 2003 29