The need for Systems Processes and strong Institutions

Today Everyone is talking about the ouster of Mohd. Yunus from Grameen Bank. Most of the discussion is judging its righteousness or the lack of it. My thoughts drift to a different reality. What do i learn from this event? a learning that stays with me for long.

Most young entrepreneurs entering the development / social / rural space in emerging markets and economies rarely realise what it really means when they say that there are so many other factors apart from performance that matter in order to survive and be sustainable. Politics and the burden of history or morality might be the most frequent or they might not, however the events of Bangaldesh and Grameen Bank highlight the need for systems , processes and strong institutions to effect development (whatever your definition of development might be) and the amelioration of people and thier lives.

Assume that Grameen Bank delivered a required service to some people of Bangladesh. ( please not i have not even claimed they are poor or needy). Also assume that the need for the service remains. What do events like the ouster of Mohd. Yunus mean for these people ? you can make your choice out of the options given below

a) uncertainty of whether the services will be the same or not.. for some if the services will be continued at all.
b) uncertainty if Grameen Bank will remain afloat and if so the uncertainty if their own investment and activities with the bank are safe or not. its an uncertainty of both the future as well as the risk exposure.
c) Loss of an inspiring figure and strong brand ambassador for Grameen bank and its services. This is likely to lead to another agency to deliver the same services and in an emerging economy the search costs can be susbtanital and the chances of committing an error high.
Given these three instinctive reactions from people. Do we realise that the strongest human instinct will stem from uncertainty of Future and the Financial and business risk they are exposed to ( some can read business risk as livelihood risk depending on the dependance on microfinance and Grameen for the respective livelihood).

If the unceratinty is about the future and the risk.. due to the sudden change in leadership..Do we need more evidence to see that leadership alone is not the best form of governance. It is clear that a governance system which survives beyond the individual leader, the larger than life founding father is an absolute must. How do we generate such non-indivudal leadership and directioning capability in an institution?

The answer is in making the Institution adaptive - capable of absorbing shocks like a crisis of individual leadership and resilient to be efficient and reduce the risk exposure of the clients. My Thesis is about creating such adaptiveness in institutions. ( you can get the same from this link...http://www.iimahd.ernet.in/library/ )one of the points that i highlight is the need for complete structures so that there is not one leader but more individuals are forced to come together and collectively work for the institution.

The open processes provide both flexibility and continuity by defining the routine procedures and leaving the speical requests to discretion. The binding force is nothing but a strong institution which is larger than the founder or the paternal / maternal individual leader. Suddenly the conclusion flows , to me at least smoothly.

To the youngest of entrepreneurs there is an important lesson - if you operate in an emerging economy or an environement where politics or some such external environmental force matters .... it is not a choice but an imperative that you need robust systems, superior processs and a strong institution to continue delivering services to those who require them.

The moral implication of this monologue is .. if the systems and processes are not in place and the weak institution crumbles - you might have to be ready to take the blame for breaching the faith of people twoards fulfiling their needs.