July 14, 2021 Sujeev Shakya

Building institutions

The focus on the individual must be replaced by a culture of organisation-building.

A couple of years ago, an international agency awarded our institution a contract, but they insisted that the contracts and payments will be done to individual consultants and not the institution itself. We did not agree and we decided to forgo that contract. They were perplexed and rather insisted we should change our ways. We responded that if international agencies in Nepal are propagating this, it is no wonder that there are few institutions being built in Nepal.

In Nepal, besides banks and a few international agencies, every sector is run through individuals, not institutions. In the development sector, the practice is even more common where the design is to promote a culture of individual consultants rather than consultant organisations. The procurement processes are designed to promote the hiring of individuals rather than organisations. These are so visible from all the job vacancies posted publicly. Many times, I have been asked to sign off as an individual consultant; that apparently would make procurement processes easier. We also hear about organisations who bill their people individually, ask them to collect the money individually and give it to the promoter of the organisation.

We hear of many great individuals in many fields. But what of the organisations these individuals have built? How have they ensured that the knowledge repository is institutionalised? In a country of 40,000 NGOs, why is it that we cannot even name ten that have been exemplary institutions? Dr Bhekh Bahadur Thapa decades ago managed to secure endowment money for the Institute for Integrated Development Studies (IIDS). That has ensured the institution builds on the endowment and institutionalises it. Currently, Swarnim Wagle is trying to continue to build IIDS.

There are many lessons to learn from global institutions that have built endowments for sustainability and carried on for centuries. Harvard University has existed for four hundred years, and the or University of Heidelberg for more than six hundred. Even in Nepal, at the Hiranyavarna Mahavihara in Patan, the institutional management of the temple has been passed down from generation to generation for more than nine centuries. In contrast, so many Buddhist vihara institutions established by monks in the 20th century have already disintegrated.

Just a year ago, I wrote about the need to reform these religious institutions. The United States has transformed in the past two centuries based on the concept of institutions. So, Apple exists after the death of Steve Jobs and Microsoft survives even after Bill Gates stepped down.

Corporates should show the way

My wife and I both grew up in the corporate culture at the offices of the Soaltee Hotel, where the late Prabhakar Rana was leading the first corporatisation effort in Nepal. We learnt the concept of corporation ownership being different from the management. We learnt how corporation management comprises of many individuals, where no single one is indispensable and succession planning is key. Three decades later, we are grappling to teach others these simple issues.

For clients, we need to continually tell them how it is important to hire a company rather than an individual. Deliverables in a company can be handled by a succeeding employee, but such deliverables come to a halt if an individual contractor is sidelined by an emergency. We insist on having non-poaching clauses in our contracts, since we find that some clients find it easier to poach one of the team members than hire the company. In a country where such basic corporate culture has not seeped in, we jumped to the concept of Corporate Social Responsibility (CSR) to better use available funds when donors have allotted it. Hopefully, we will find some development partners interested in pushing this corporatisation culture in Nepal and perhaps their operations also promote the culture of organisation building rather than the easy way out of working with individuals.

We have seen the weak corporate culture in Nepal making business leaders reluctant to open up the Nepali economy for international firms, as they will have to compete with corporates with deep global institutional knowledge and competencies. Even in large business organisations, it is difficult to name one or two exemplary professionals in their management team. This has been reflected in many private sector institutions in Nepal.

I have pointed out how it is important to build a strong secretariat like the Chambers and Private Sector Federations in many countries and even offered to volunteer to handle such reforms. But anything that is to do with institutionalisation, there continues to be tremendous reluctance. When I was working on reform of the Non-Resident Nepalese Association (NRNA), I had some hope of recalibration, but was proven wrong; building strong secretariats is what people do not want, as the focus moves from the individual to the institution.

The politics in Nepal is a result of the lack of institutional accountability. If the greater politics is to change, the focus will have to shift to building institutions and people leading institutions have to sacrifice their greed of wanting to be the centrepiece at the cost of the organisation. I am always open to working with those that have the drive to strengthen their institutions for the long run.