Dear All,I have been following the recent discussion which started with the plight ofloans officers in some MFIs. There is a problem in many MFIs as to how staffare treated and mission statements ignored. It is largely to do with theirdevelopment, or lack of development, as organizations. I don’t think manyset out to screw the staff, the poor or anyone else you can to think of, butwhen how much money are you making (or losing)? becomes the No.1 issue forboards and senior managers - is it any wonder that making money (as distinctfrom ‘making a difference’) becomes the be all and end all.Recently, I have been asked to work with two new MFIs in Uganda and havebeen asked to help them develop ‘holistically’-. They have all theenthusiasm of young organisations and are certainly 'value driven'. I wantthem to succeeed and become really good MFIs. But how do you know you areany good?Below are a list of 271 questions that I have prepared in order to help themassess themselves as good MFIs. The questions are grouped under fourheading: The Enabling EnvironmentOrganisational CapacityOrganisational MotivationOrganisational PerformanceYou might find the questions useful and even have others you might want toadd. If you want an outsider to come and help you assess yourselves – don’thesitate to call me!As ever,MartinTHE ENABLING ENVIRONMENTRules of the GameDoes the MFI have to cope with unexpected changes in rules and policies?Can the MFI expect the government to enforce major laws, rules and policies?Is the MFI informed about important changes in rules?Can the MFI voice its concern when planned changes affect its interests?Can the MFI feel confident that authorities will protect it and its propertyfrom criminal actions?Are the rules governing microfinance credible and clear enough to permit theMFI to carry out its activities smoothly?Are those responsible for enforcing rules punished for not enforcing them orenforcing them in the wrong way (corruptly, with bias or favoritism,inconsistently)-?Does the judiciary enforce rules (arbitrarily, impartially, unpredictably)-?Institutional EthosWhat are the memorable events in the history of a MFI?What is noteworthy in the evolution of the microfinance sector to which theMFI pertains?Are there inducements and incentives or disincentives for a particular typeof MFI, or its methods of doing things (incentives/ disincentives that areculturally based or historically influenced)?What historical, cultural factors in the MFI are likely to negatively affectthe MFI?What historical, cultural factors in the MFI are likely to positively affectthe MFI?CapabilitiesTo what extent does the MFI have access to an adequate labour market? Howimportant are labour constraints to organizational performance?To what extent does the MFI have access to adequate capital? How importantare capital constraints to organizational performance?Is the local infrastructure adequate to permit MFIs to carry out theirbusiness effectively and efficiently?Is the system of governance and the institutional milieu conducive for thebusiness to flourish?ORGANISATIONAL CAPACITYLeadershipDo people in the MFI support formal leadership?Do people in the MFI take on positive informal leadership roles?Does the MFI recognize the importance of distributive leadership?Is staff throughout the MFI willing to take on leadership roles?Is staff willing to try new suggestions made by those in leadershippositions?Are both internal and external stakeholders supportive of the formalorganizational leadership?Does all staff have an opportunity to suggest changes in the MFI?Is leadership that supports organizational goals rewarded?Strategic PlanningIs there a formal or informal organizational strategy? Is the strategysupporting a high level of performance?Does the board and staff members support the MFI’s strategy?Is the strategy generally accepted and supported in the MFI?Has the strategy helped clarify priorities and set indicators, thus givingthe MFI a way to assess its performance?Is the strategy used as a way to help make decisions?Is the strategy an impediment or a facilitator to capacity building orimproved performance?Is there a process for clarifying and revising the MFI’s strategy?Is there an ongoing process for scanning the environment to considerpotential threats and opportunities?Does the organizational strategy identify the opportunities and constraintsregarding core resource areas related to improving or detracting fromperformance?Niche ManagementHas the MFI defined its unique place (or places) within the localmicrofinancesector in terms of philosophy, mission and goals?Are its strengths matched with the niche selected?Does the MFI do competitive strength assessments to identify core anddistinctive competencies that reveal its strengths and weaknesses within itsniche (competitive position)?Does the MFI seek information about the services that the stakeholders want?Does the MFI collect information on its sector (market) and its role insidethe sector or market?Does the MFI have sufficient financial support to keep its niche?Does it communicate or promote its niche to both internal and externalstakeholders?Governing StructureDoes the governing structure have a clearly defined way to review and setorganizational direction?Does the governing body have a group responsible to scan the external andinternal environment to understand the forces affecting the MFI and itsperformance?Does the governing structure have a group that reviews safeguards andincentives to ensure that head teachers and staff do not compromise goals inthe interest of their personal goals?Does the governing body have a group responsible to respond appropriately tomajor trends and influences? For instance, are both quality and equityissues reflected in the minutes and discussions?Does the governing structure have the various committees necessary to ensurelegal and organizational accountability?Does the governing structure have the mechanisms to review and assessorganizational performance and, if appropriate, create conditions to supportchange?Operating Structure Are the MFI’s mission and goals supported by its structure? Are roles within the MFI (groupings as well as individual) clearly defined,yet flexible enough to adapt to changing needs? Are departmental lines or divisions between groups coordinated to improveperformance? Or are departmental lines jealously guarded, serving asimpediments to collaboration? Does the structure support or inhibit an efficient provision of services? Are coordinating units formed to facilitate performance? Are there clear lines of authority and accountability (individual, group andorganizational)-? Do people have the authority to set agendas that support improvedperformance? Are the work groups and units adequate for implementing the organizationalstrategy and improving performance? How centralized (versus decentralized) is decision-making? Does the existingapproach have negative consequences such as impeded productivity, lowmorale, etc.? Is it clear who bears responsibility for performance? Does the structure ofresponsibility and authority make organizational sense and facilitate thework? Are the functional units adequately centralized or decentralized?Are work processes clear and adequately structured? Are quality principles embedded in the roles and responsibilities?Planning To what extent does the MFI’s ability to plan for its human resources needsaffect its performance? Are the right people in the right jobs in the MFI? Can the MFI forecast current and future demands for human resources?Does the MFI know how and where to identify people with the skills needed tofill its needs? Can the MFI link its mission and goals to its human resources planning? Has the MFI developed a personnel policy manual?Staffing To what extent does the MFI have adequate staffing procedures to ensure thatit knows the type of staff required for high performance? Does the MFI have a competent approach to staffing? Does the MFI have appropriate job descriptions, competency reviews orequivalents to determine what staffing is needed? Does the MFI have an appropriate system for selecting candidates (reviewingcurriculum vitae, conducting interviews, and checking references)? Are individuals in charge of selection appropriately trained to carry outthis function (interview and listening skills, courtesy, and good judgment)?Is recruitment and selection material (ads, posting, interview questions)free of discrimination (gender, religious, tribal)? Is it transparent?Is there someone familiar with both the day-to day functions of the MFI aswell as its longer-term vision available to orient new staff members?Developing Human ResourcesTo what extent does the MFI have an overall approach to human resourcedevelopment?Does the MFI have a training and development policy?Does it have a budget for training and development and a way to track thesecosts?Does the MFI encourage staff to continue to learn and develop (by providingincentives for learning, by supporting training costs)?Is there someone in the MFI able to identify training needs?Is training demand driven (responds to needs in the MFI) as opposed tosupply driven (responds to whatever is offered on the market or by a donor)?Can and does the MFI assess training and its effect on performance?Does the MFI have plans for mentoring younger staff into their careers?Does the MFI have a way to deal with succession?Do people see career opportunities in the MFI?Assessing and RewardingTo what extent does the MFI have fair and motivational assessment and rewardsystems?Does the MFI have a compensation policy that complies with the rules andregulations of the country?Does the staff see an adequate correlation between compensation andperformance?Are staff members generally satisfied with their compensation?Are compensation packages externally competitive for the sector?Is there internal equity in salaries and benefits (i.e., equal compensationfor work of equal value)?Are compensation differentials appropriate to motivate staff?Does the MFI motivate staff with both monetary and non-monetary rewards?Staff RelationsTo what extent does the MFI have effective relations among its staff?Are there measures and procedures inside the MFI to deal with people inemotional or physical distress?Does the MFI seek ways to increase the loyalty and commitment of staff?Is morale in the MFI generally good?Does the MFI have measures in place to deal with harassment in theworkplace?Does the MFI have, if appropriate, a health and safety policy?Financial PlanningIs regular and periodic financial planning undertaken to supportperformance?Is there adequate budgetary planning?Are cash requirements analyzed through cash flow statements?Are budget plans timely?Are budget plans updated as financial information comes in?Are members of the governing body involved in financial planning andmonitoring?Are human resources adequate to ensure effective financial planning?Are comparisons of both actual and planned budgets monitored and analyzedfor decision-making?Are there appropriate capital and equipment forecasts?Are reports provided to the board on a regular basis (at least once aquarter)?Is financial information provided in a timely fashion to those who need it?Financial AccountabilityDo members of the MFI follow clearly stated financial procedures?Are the auditors satisfied with the MFI’s controls on cash and assets?Is there a clearly stated rule setting when the organizational year beginsand ends?Does the board review financial policies and procedures on a regular basisto assess whether they are adequate, inadequate or excessive?Are there competent staff and board members who understand the role offinancial procedures and information?Is the financial information contextualized within a strategic or businessplan?Is there a board committee to oversee financial issues? A managementcommittee?Financial MonitoringAre there financial reports and statements to support effectivedecision-making and good performance?Is there an adequate bookkeeping system that can generate monitoringinformation?Is there adequate staff to record financial information and generatereports?Are balance sheets and income and expense statements prepared on a timelybasis (at least quarterly)?Are there adequate reports that allow for control of the MFI’s assets?Are cash flow statements prepared in timely fashion and used by managers?Is cash managed so that the MFI can benefit when there is surplus, andminimize the cost of cash shortages?FacilitiesIs the infrastructure adequate to support performance?Does the organizational strategy identify the opportunities and constraintsregarding infrastructure?Are the buildings and internal services (water, electricity) adequate tosupport and facilitate daily work?Is there an adequate transportation system to and from work for employees?Are communications systems (hardware) functioning at the level required?Are there adequate maintenance systems and procedures supported by anongoing maintenance budget?Is such infrastructure as building and equipment maintenance managedeffectively and efficiently?Is there an individual or group responsible for adequate planning to addressongoing infrastructure concerns?TechnologyTo what extent do technological resources affect the MFI’s performance?Is there adequate technological planning?Overall, is the MFI’s level of technology appropriate to carry out itsfunctions?Is any particular unit seriously lagging behind the others technologically?Is access to international information provided to all units through libraryand information management systems?Are there adequate systems and training in place for managing organizationaltechnology?Are there adequate information technologies in place to manage the MFI?Programme PlanningTo what extent does the MFI appropriately plan its programmes?Is there a written plan for each programme area and each major project?Are programme and project plans linked to the organizational mission?Is there adequate programme planning and budget programming to ensure thatprogrammes support the mission?Are programmes and projects consistent with the mission, needs, strategiesand priorities of the MFI?Does programme planning take into account technological, economic, gender,social and environmental aspects to ensure the applicability of programmes?Are there adequate timelines?Are there adequate budgets?Is there adequate analysis of roles and responsibilities?Is there a procedure outlined to monitor results?Programme ImplementationTo what extent does the MFI appropriately implement its programmes?Does staff support the process of carrying out programmes and deliveringproducts and services to clients and beneficiaries?Are there good relationships among the staff who provide the products andservices?Does staff work together to provide good products and services?Does the programme team have good problem-solving skills?Are health and safety for staff and clients always a priority inimplementation?Are resources efficiently used to provide the product or service?Are time schedules adhered to in a reasonable fashion?Is staff motivated to work together to get things done?Are programme meetings productive?Programme Monitoring and EvaluationTo what extent does the MFI monitor its programmes appropriately?Are monitoring and evaluation systems in place?Is programme staff given feedback on programme performance?Are there adequate opportunities to clarify roles and responsibilities?Are there adequate opportunities to review programme indicators to measureprogress against plans?Are timelines monitored to reduce overruns?Are budgets reviewed in a timely fashion?Are programmes reviewed on a regular basis with respect to how theycontribute to the overall organizational strategy?Are lessons encouraged?Are corrective actions taken when difficulties arise?Are monitoring and evaluation seen as ongoing and normal processes?Problem-solvingDoes the work at various levels of the MFI flow smoothly, or is it blocked?If blocked, is an inadequate problem-solving process the cause?Has the real problem been diagnosed?Is the problem clearly defined?Is it possible that perception biases have distorted problem identification?Is the problem well structured, straightforward and familiar? Or is it a newor unusual problem regarding which information is ambiguous or incomplete?Are adequate organizational problem-solving skills found on the board andwithin the ranks of senior managers?Are problem-solving techniques adequate in departments and for importantprojects?Decision-makingDo all segments of the MFI have adequate decision-making skills?Is enough information available on all alternative courses of action?Can the degree of certainty or uncertainty associated with the correctnessof the decision be reasonably estimated?In a situation of uncertainty, what are the consequences of making the wrongdecision?Are decisions made in a timely manner?Are decisions made by groups?PlanningIs there adequate, inadequate or excessive planning and policy proceduredevelopment in the MFI at all levels (from the governing board todepartments and individual projects)?Is the process of planning contributing to the strategic direction of theMFI?Do plans provide adequate direction to organizational members?Are plans, policies and procedures generally followed? Why or why not?CommunicationAre there adequate channels for top-down and bottom-up flows of information?What are the main vehicles of internal communication?Do staff members feel that there is adequate and ongoing communication aboutthe MFI’s activities?Do staff members receive information related to the organizational missionand progress in fulfilling the mission?If information circulated about activities becomes distorted, are therecorrective mechanisms to remedy this?Do people have easy access to those in the MFI with whom they must deal? Canthey communicate easily with them?Organizational Monitoring and EvaluationIs adequate monitoring and evaluation occurring to improve performance?Are there policies and procedures that guide evaluation and monitoring?Are resources assigned to monitoring and evaluation?Are monitoring and evaluation valued at all levels of the MFI as ways toimprove performance?Are data obtained and used to monitor and evaluate the MFI’s units andactivities?Are the data gathered through organizational monitoring and evaluationactivities utilized?Do evaluation plans or performance monitoring frameworks exist?Are evaluation results mentioned in strategy, programme, policy andbudgetary documents?Do people have skills to monitor and evaluate?Are monitoring and evaluation valued processes?Are lessons learned from monitoring and evaluation, and do changes occur asa result?Networks, Joint Ventures, Coalitions and PartnershipsAre external linkages adequately established or pursued to supportperformance?Does the MFI have adequate formal and informal linkages with like-mindedMFIs?Are institutional linkages adequately supported?Do institutional linkages contribute efficiently to the MFI’s goals andmission?Are there fruitful and ongoing partnerships with external MFIs that bringnew ideas and resources to the MFI?Is the MFI communicating information about its work to externalstakeholders, including the general public?ORGANISATIONAL MOTIVATIONHistoryHow has leadership evolved? Have there been changes in leadership? Why?Have the roles and strategy of the MFI changed over time? In what ways?Has the MFI’s resource base changed over time? How?Has the MFI restructured or reorganized? How often? In what ways?What have been the MFI’s major successes and crises?What are the MFI’s key milestones?Have the MFI’s products or services increased, decreased or changed overtime?Questions: Vision and MissionTo what extent is there a clear mission that drives staff behaviour?To what extent is the mission linked to a larger vision?Does the mission give members of the MFI a sense of purpose and direction?Are organizational members satisfied with the mission statement?Does the mission recognize the interests of key stakeholders?Is the mission aligned with organizational goals and directions?Does the mission reflect the key values and beliefs held by organizationalmembers?Does the mission promote shared values?Does the mission help sharpen the focus of the MFI?Do people talk and work toward making progress in pursuing the mission?Is the mission seen as a living document? Is it updated and renewedperiodically? Are key stakeholders (internal and external) involved ingiving meaning to the mission?CultureWhat are the key defining values and assumptions that move the MFI toperform well or poorly? Why?Does the MFI attempt to learn about its culture?Does the culture support the priorities of the MFI?Do underlying assumptions support the improvement of performance?Do most people in the MFI identify with the MFI’s values?Is there a positive attitude toward change?Are organizational values and assumptions aligned with the MFI’s actions?Is the dominant organizational culture supported by the varioussub-cultures?Does the dominant culture seem appropriate for the mission?Do the MFI’s stories and symbols support a desirable culture?IncentivesDoes the MFI’s incentive system encourage or discourage good staffperformance?Do people feel rewarded for their work?Are people adequately compensated?Do non-monetary rewards support good organizational behaviour?Is the incentive system adequately managed?Is there an ongoing review of the incentive system?Are people treated equitably in the MFI?Is there consistency between what people are rewarded for and what the MFIsays it will reward?ORGANISATIONAL PERFORMANCEEfficiencyWhat is the relationship between the unit of output and the cost ofproducing the outcome?How efficiently is the MFI using its human, financial and physicalresources?Are costs of staff members related to their productivity?Are physical facilities (buildings, equipment, etc.) used optimally?Are financial resources used optimally? What are the comparative ratios ofcosts and results?Are there administrative systems in place that provide good value for costs?Are there quality administrative systems in place to support efficiency(financial, human resources, programme, strategy, etc.)?Does the MFI make benchmarked comparisons based on the performance ofsimilar programmes, or on the performance of the programme itself over time,or on some predetermined target at the beginning of the programme?RelevanceAre clients adequately surveyed or polled to obtain their perceptions of theMFI and product offerings?Has the MFI adapted and changed its work over time?Are programmes reviewed and revised regularly to reflect a changingenvironment and capacities?Is the mission of the MFI reviewed on a regular basis?Are assessments of stakeholder needs conducted regularly?Does the MFI regularly review the environment in order to adapt its strategyaccordingly?Does the MFI monitor its reputation?Does the MFI create or adapt to new technologies?Does the MFI encourage innovation?Financial ViabilityIs the MFI able to generate revenues to respond to the needs of itsstakeholders?Is there continued and sustained support from existing funding sources?Does the MFI consistently obtain new funding sources?Does the MFI depend on a single source of funding?Does the MFI consistently have more revenue than expenses?Can the MFI sustain itself within a competitive environment?Are assets greater than liabilities?Does the MFI keep a reasonable surplus of money to use during difficulttimes?Does the MFI monitor its finances on a regular basis?Does the MFI monitor capital assets and depreciation