PM101 U3: Getting to Agreement to Implement and obtaining Resources for a Project

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 INTRODUCTION:  For this workshop, while commercial or construction or information technology projects are relevant, our main focus is on national or community development initiatives. A key constraint for such projects is that, when one puts forth a project beyond the reach of one's own resources, one must find a suitable investment partner (as well as a network of support to get the idea to a point where it is "bankable") and strike a deal in order to implement at full scale.  This is quite challenging, as potential development partners must always bear in mind the long (and unfinished) history of once promising but now failed grand development projects. This also means, that getting to agreement to implement a project and then actually obtaining resources to carry it forward will always be a challenge.

How to address this challenge, then, is the logical focus of this third unit; requiring that we focus on several fairly technical issues. Such as, the BATNA concept and negotiations, evaluation of net present value and other discounted cash flow based financial metrics, associated estimation of unit and life cycle costs of initiatives, requisites for "business cases" posed by development agencies, and more.

Where, too, given that the DFID-backed St Helena Airport investment was held up to us as a "yardstick" for development initiatives in Montserrat, the sobering outcome to date is a very instructive place to begin:

The St Helena Airport Project
(From "yardstick" to cautionary tale . . . )

In the DFID May 2012 report on its work with UK Overseas Territories, we may read -- yes, right from p. 1:

As Pitcairn is an isolated Pacific island territory with some fifty permanent residents at any given time, and as St Helena had already been awarded a major development project, it is fairly obvious that the authors of this report were trying to draw the attention of Montserrat to what was needed to follow the path laid out by St Helena. Namely, good governance reforms and linked transformation of financial management capacity to move to a self-sustaining local government based on a sufficiently large, growing and stable economy.

Where, Montserrat did just this between the 1960's and 80's -- itself a yardstick of the likely scope and duration of of effort required. Yes, a generation.

Of course, in the aftermath of financial scandals that hit world news in the late 1980's, followed by the devastating Hurricane Hugo in 1989, we were hit by the even more destructive volcano disaster since 1995.  Montserrat lost access to 2/3ds of its land, lost 2/3rds of its population, lost its main infrastructure (such as sea and airport, power plant, capital town, etc.) and had its economy crash in upon itself to the point where today it is about 50% of what it once was. It is likely that we will need a major development programme of 10 - 20 years to get back up on our own two feet.

Back to the yardstick, the very familiar economy transformation hope, and the huge scale and scope of the effort to begin its fulfillment:




Unfortunately, however, despite construction success, something has gone seriously wrong with the "yardstick."

First Comair flight to St Helena (HT: Wiki & Paul Tyson)

Something, that is commonly reported in the UK press in terms we may summarise as DFID incompetently wasting £ 285 millions of UK taxpayer funds to build a useless airport because it suffers a wind shear problem. (Cf. recent UK newspaper reports here, here, here.)

Ironically (given its sometimes all- too- deserved reputation for lack of balance),Wikipedia has a much more informative and fair-minded report, which reads in key part:

Wind Shear issue (HT: Guardian: it is convenient
to include this separate illustration here.)

In November 2015 a delay of the opening [of the recently constructed St Helena Airport at Longwood] from February to May 2016 was announced.[49] This was needed "in order to fine tune the operational readiness of the airport". On 26 April 2016 a further delay to the opening, without a specified end date, was announced by St. Helena Government because of concerns regarding wind shear, after a problematic landing by the [British Airways livery] Comair 737-800 intended for regular flights.[50] It is southbound landings (runway 20) that have wind shear problems, not northbound.[51] There is a need to define measurement methods for the wind shear in order to understand when landing can be done, and when to cancel flights. The late postponement has caused extra cost, for example contracted employees and contracted airlines that cannot operate, hotels that have been built, and also the need to extend the usage of the RMS ship, which was contracted to end its sailings.

UK-based Air Safety Support International (ASSI), a subsidiary company of the Civil Aviation Authority responsible for aviation safety in Overseas Territories, issued on 10 May 2016 a safety certificate after having conducted an inspection in April. The certificate indicates ASSI's satisfaction with the airport's infrastructure and aviation security measures, and that its air traffic control service complies with international aviation safety and security standards. ASSI did not allow the airport to go into commercial operation, however, due to concerns over operational readiness of monitoring and clearing issues that include wind shear and turbulence.[52]

There is a suggestion to use only runway 02, that is northbound landings and southbound starts, but then 737-800 aircraft cannot be used, because planes need to be able to land in tailwind.[53] If runway 20 is used, it will have severe wind restrictions. (This is the same one runway, designated differently as 02 or 20 depending on either north or south direction of travel).

An important reason to build the airport was availability for medical emergency evacuation. On 3 June 2016 the first ambulance flight took place, for a baby and its mother.[54]

A debate about the project was held by the House of Lords in London on 17 October 2016.[55]

A new certificate was delivered on 26 October 2016 by ASSI[56] [Acc: Dec 19, 2016, typo corrected and links, styles etc. removed.]

Wiki's discussion of key reasons for the project is also relevant, including the discussion of the planned wharf at Rupert's Bay:

• Air access would allow St Helena to develop its tourism sector.
• A planned wharf in Rupert's Bay could allow regularly passing cruise ships to land passengers at the island and bring tourists if sized appropriately. The lack of a protected landing facility represents a limitation on the development of cruise tourism. In unfavourable sea conditions, landing is hazardous and potential revenue is lost as many cruise ships refuse to allow passengers to land in such circumstances. In addition, because there is no protected landing facility, many cruise companies do not incorporate St Helena into their itineraries. The sea is roughest in summer which marks the peak of the cruise season.[60]
• Medical evacuations to South Africa for treatment of serious cases of illness would be sped up significantly: it may take up to one month until transport to South Africa by the RMS St Helena becomes available.
• The availability of heavy construction equipment would facilitate alternative energy projects, such as the construction of larger wind turbines, a tidal power plant or a dam with a hydro-power station in one of St Helena's valleys.[61] Limitations in cargo size of RMS St Helena and the unavailability of a large crane prohibit construction of larger wind turbines.[62]

Now, there is something passing strange here, as wind studies and computerised modelling of wind flows seem to be reasonable bits of due diligence regarding feasibility. These should be standard steps to design a modern airport. Plainly, something did not go right in the scanning of and response to the environment, especially the bio-physical environment; leading to a serious problem. But, apparently, one that can be lived with, many airports do suffer wind shear challenges but operate.

This unfortunate development, however, inadvertently highlights how tempting it is to short-circuit the project cycle management process, and how important it is to resist that temptation. Hence, we now turn to:

The pivotal impact of Programme-based Project Cycle Management [PbPCM]

A good first point of discussion is the older form of the EU project cycle management process. One, which emphasises documents and decisions at each phase -- and please pardon the fuzziness of an old diagram:

Older EU PCM framework, emphasisisng decisions and key documents. (NB: as always, terminology varies. E.g.
a "Project ID Sheet" is substantially equivalent to a 1 page project-at-a-glance backed by a concept note, and the
"[Draft] Financing Proposal" is a stand-in for "[Draft] Business Case"; on the premise that the portfolio of
projects is a strategic change investment portfolio.) Observe, especially, the pre-feasibility and feasibility studies.

Where, we may recall, projects are like the fingers of a hand (the programme) that help the programme to work towards its goals. So, let us again unpack what is inside the black -- err, blue -- box bearing the innocent and simple-seeming label "programming." A lot, frankly potentially involving a managerial mine-field:

Accordingly, we can see that when a strategic change programme is undertaken, its associated portfolio of projects -- in aggregate -- should make direct and strong contributions to achieving the programme's goals. This, we can assess and track by using an initiative-goals alignment matrix, e.g.:

 Here, we see how a programme's vision defines its end, while its means are the initiatives towards that end:

•  first, it needs to see about its own organisation and governance (which need to be credibly conducive to actually making good progress), then 
• there must be a sustained focus on the portfolio of projects and sub-programmes it considers, evaluates and undertakes, then 
• the actual implementation and supervision of projects (including handling inevitable contingencies), and also
• fourthly, tracking of what projects should do vs what they do in fact do, milestone by milestone.
• Stage by stage, project by project, lessons need to be drawn, learned and applied, in order to build capacity.

Patently, such a programme can fail at any stage, so it has to be carefully chartered and managed indeed. (Here in Montserrat, it would probably be an instructive exercise to look at the projects over the past 20 years (or even just the past 10 years), to see how well means and reasonable ends have been aligned.)

Nor, can we get away from this complexity by thinking, well . . . programmes are too complicated, let us stick to "simple" projects. The challenge here, is that projects of any serious complexity inherently involve programming issues and so the choice is: do we do the same over and over again project by project or do we co-ordinate the projects under one head and set up the capacity to do it right in one centre of excellence?

The better alternative is obvious: programmes.

All of this also has to be keyed to the inherent degree of complexity (and linked uncertainties/ ignorance/ risks) of a given proposed project. Which, we may illustrate:

 Some projects are fairly routine, like building a house. While there may be problems and contingencies, we can generally predict what will happen and so we can plan with high confidence that the plan can be made to work, maybe with a delay or two and some modest provision for contingencies.

Other projects face much higher levels of uncertainty and/or disagreement on requirements or the technology involved. Such projects necessarily will involve learning and adaptation to contingencies along the way. At moderate levels, these require adaptive planning such as the Agile methods that now dominate Information Technology projects.

But, there are projects that go well beyond merely moderate uncertainties and/or disagreements.

These are the most challenging and potentially chaotic projects.

When we face high uncertainty and lack of agreement as to what is feasible, desirable and good value for money on an important initiative, it is obvious that we need to explore possibilities and see if we can create the technology and systems to deliver the desired results.  Perhaps, as prioritised on a MoSCoW type schedule (as was already mentioned):

MUST have this requirement to meet the business needs.

SHOULD have this requirement if at all possible, 

(but the project success does not rely on this).

COULD have this requirement 

(if it does not affect the fitness of business needs of the project).

WON'T represents a requirement that stakeholders have postponed 

(due to the timeliness requirement)

When the degree of disagreement emerges across stakeholders that points to such a potentially chaotic project, a logical first step is to try to undertake a preliminary project to investigate what is credibly possible.  That instantly points to creating a programme of projects that start with explorations to reduce the uncertainties and clarify options so that we can move to a much clearer cost-effectiveness decision on performance and affordability.

And yes, that decision framework chart is needed again:

The arc BAC defines a frontier of credible or actualised possibilities -- backed by some evidence and analysis, and we then can reduce the degree of disagreement on requirements. Obviously, we do not want to fall far within the frontier, and yet -- given high uncertainty -- some alternatives may have two possible outcomes: (a) success, more or less along the frontier somewhere, or (b) failure which gives poor -- or no -- performance at a high price. A flop, and in the worst case, with funerals.

This, we wish to avoid or avert.

So, it is likely best to identify a clutch of candidates and explore initially, then hold a contest to identify which should go ahead. This points to the world of Acquisition projects, similar to what the leading militaries of the world undertake. In some cases, the best answer is a blend of the candidates (e.g. the World War I era British 18 pounder field artillery piece), but that, too, may fall between stools. So can the "compromise" to do an incremental upgrade on existing kit. (Typically, this sacrifices some degree of future performance in the interests of higher affordability. If you will pardon an extended military example, the successor to the 18 pounder -- the famous World War II 25 pounder -- started out as an upgrade to the 1918 upgrade of the earlier gun, then was itself upgraded. However, it sacrificed range requirements identified in the 1920's. It was only in the 1960's - 70's that a weapon with truly adequate range was finally developed and issued. The lesson is, if we extend or modify an existing system, what are we sacrificing, and is that vital -- a case where half a loaf is as bad as none? [Or, sometimes worse, as it may give false hopes or even breed over-confidence.] It is therefore suggested, we need to pay particular attention, here in Montserrat, to the hospital, sea port and air port projects.)

It helps to see what NASA -- a world expert agency carrying out this sort of project -- does with such projects, through its systems engineering engine:

 And yes, that is seventeen different standardised interacting stages in such a development, and that does not count the similar work on sub-levels for work packages or sub-systems.

There is a reason why they talk about "bleeding edge" technologies.

And while this workshop is not about preparing people to work on NASA Moon Shot type projects, sometimes it is necessary to explain to (or, work out with . . . ) stakeholders what sort of sharks may lurk in the waters we are swimming in.

In doing this sort of exploration, two worksheets -- they can be done as large wall-charts also! -- may be helpful. First, on environment scanning PEST+BP Alignment:

Second, SWOT-Strategy alignment, with an emphasis on strategic change:

When used with proper stakeholder consultation and investigatory studies -- a preliminary project -- these allow us to move to an agreement on reasonable options informed by a credible view of the facts, conceptual issues, complexity challenges and more.

Where, the key strategic issue is to move to critical mass informed by sound understanding. Recall, such critical mass involves:

 Idea Originators
Idea Champions
Sponsors at Middle/Senior Management level
Incubators that allow initiatives to be developed and practically demonstrated
Godfathers at Top Management level

When you have such, have satisfied significant responsible critics and are able to handle idea and implementer hit-men, then progress can be had.

Then, we may properly organise a sound programme backed by adequate support. Such a sound programme, obviously, must involve an agreed -- documented! -- standardised framework for project cycle management. (Or else, we will forever be moving in fits and starts: okay, go . . . no, stop . . . okay go again . . . no, stop, stop, STOP! . . . endlessly. [Sounds familiar? (For starters, cf. the EU PCM Handbook, here.)])

After these issues are tackled, we can get projects moving.

The next step in that process is:

The value for money (and linked risk management) challenge

Projects involve effort and resources, may require purchase of equipment and more, all of which comes with costs, directly in money or generally reducible to money. So, the natural question arises, is this project delivering good value for money, compared to alternative uses of the funds and effort required?

That is already a challenge as we have seen from the chart on performance vs affordability. (Notice, not costs directly!)

Closely tied to this is the issue that there is a time value of money. That is, once there is a rent on the use of money -- the rate of interest -- money takes on a time value, such that money now is equivalent to a larger sum later, which must be discounted to be compared to other relevant sums. Money must be compared to money as discounted to the same point in time, often "now."

Suppose, we have EC$ 1,000 now. Suppose also, the rate of interest is 10 percent. After one year in the bank on a fixed deposit, that EC$ 1,000 would grow to EC$1,100. So, EC$ 1,000 a year from now is obviously worth less in present value than EC$ 1,000 now. In fact, to get the equivalent in now-dollars, we would need to divide:

 [EC$1,000/ (1.10) ] =  EC$ 909.09 . . .  now.

For the now-cash equivalent of EC$ 1,000 two years from now, we would need to divide by 1.10 again (giving us EC$ 826.45), and so forth. (The origin of the term "discounted" cash flows is now obvious. The more distant a cash flow CF  is in the future, the lower its present value, PV, is.)

Discounting applies to cash inflows and cash outflows. And so, when we look at a project, typically we pay out a fairly large sum now, then more in several succeeding periods,  to get started. Then, we hope to receive benefits later. That already means that benefits are at a disadvantage, but that is the nature of things. We can picture this, through the net present value, the sum of the cash flows all reduced to now -- and the "M on the side" is the Greek capital letter sigma, for SUM:

A closely related idea is internal rate of return, IRR; in effect the value of the fractional rate of interest r that is such that NPV of a project's cash flows falls to zero.

While IRR is mathematically more problematic, it has the practical advantage of allowing potential investors to think in terms of rates of return. As in, is the effective "internal bank" that this project is, giving enough of a higher rate of return than putting the same sum in an external bank at lower risk of loss. For NPV, if the net discounted value of a project is positive, it is worth investing in. Though, of course, one would be well advised to test the sensitivity of NPV to reasonable contingencies and risks. And, rate picking is often a bit of a debate.

Economists often favour cost-benefits ratio analysis: taking a ratio of summed discounted cash values of benefits to that of costs, looking to see if this is at least one.

An older "simpler" evaluation is payback period, how long a project takes to pay back its costs -- without discounting. This is not recommended by financial professionals.

All of these methods target value for money invested or expended.

In a not for profit, or an energy conservation or a development project context, often projects do not turn over a profit. However, if a project significantly reduces costs that would otherwise have had to be met, that is a measure of its value.

We need not more than mention that there are ways to estimate the value of things that are not directly traded in markets, e.g. if an improved highway reduces accidents, the income losses averted is an index. For some things, surveys have been done on things like how much would you accept not to make a visit to a park to go fishing today, etc.

 Similarly, for energy projects, the Montserrat Energy Policy 2008 - 27 discusses cost per unit of electrical energy on p. 60 ff, using a levellised cost per unit model put forward by the Ampere Commission of Belgium:

(This model directly speaks to geothermal energy development, or to solar photovoltaic development or to wind development. It can readily be adapted to other cases where a capital-intensive investment provides small lumps of benefits to various users over many years. Think, cost per mile of use of a vehicle or fleet of similar vehicles, or the like. Cost per hour of highly technical services can be used to compare developing capability in-house vs. hiring an outside supplier or even putting one on retainer. This is a classic make vs. buy acquisition decision.)

Obviously, these waters get very deep very fast; one would be well advised to bring in professional advice. But, equally, we need to have enough of an idea of what is being done that we are not simply blindly accepting Expert X's say-so.

We now have in hand a way to look at investments, outlays, cash flows, costs or benefits in financial terms across time. This then allows us to for instance compare discounted life cycle costs and benefits of alternatives. However, as we readily know from say buying a car on a loan -- for which we have to pay "rent" to use the funds -- affordability is not the same as cost and affordability that brings benefit flows now may well trump raw differences in cost. In effect, we are implying that the value of getting benefits now outweighs the additional cost -- and our willingness to take up such a car-loan tells a savvy analyst an estimate of the implicit value of getting the benefits now.

We already know that performance can be assessed on a weighted score-card.

That brings us back to the "value for money" chart above, and its curve of the "frontier" of options. Obviously, alternatives along arc CAB exceed those inside the curve and given state of the art, we typically cannot credibly go beyond it. This means debate focusses on options along the arc. Of these, generally speaking, we are willing to pay a modest bit more to gain a jump from marginal or fair to good performance, but will find it harder to push on towards much more costly further increments of performance that challenge affordability or perhaps force us to "rob Peter to pay Paul."

The trick then becomes, can we find an alternative that builds in room for growth, so picking A for the long haul does not lock out adding increments as our ability to afford improves? Where of course such modularity and ability to add further performance can be duly factored into our performance scorecard. (A classic here is a starter home designed to be extendable. Similarly, we often see software with core features and add-on optional modules.)

The further issue on this is, we are often pushing technological limits and are less than certain that promised or hoped for performance will be actualised. So, we may find ourselves paying for flops. Which, contrary to lurid investigative reports, is not by itself proof of incompetence, waste, fraud or abuse etc. There is such a thing as a high-risk, high potential pay-off option, and a calculated risk sometimes has to be taken.

In this case, if we can reduce uncertainty by doing preliminary exploratory studies, this may well be worth it. Of course, we must expect to pay the realistic going rate for requisite expertise. Just make sure it can stand reasonable scrutiny in some of the more notorious Fleet Street tabloids that seem to see every overseas aid expenditure as waste or worse. It may well be worth the while to inform such, that the alternative to a global major aid effort is war followed by recovery and then development aid in the midst of post conflict fragility. Let us ponder an overview of current geo-strategic issues and challenges, for a moment, to give a deep background:

In short, there are major destabilising trends and there are those only too eager to pounce. Especially on Africa, the unguarded, distressed, largely poorly governed but resource-rich continent. Where, we of the Caribbean must understand that we are in effect an extension of Africa (and in the SE Caribbean, Asia) in the Americas. With the Panama Canal next door and the USA to our North. Which makes us an extension of what is credibly the principal geo-strategic target zone in this century.

Nor, can major powers simply withdraw from or try to ignore geo-strategic contests in an increasingly global world. That sort of failure of resolve simply hands an open invitation to would-be looters and conquistadores.

 So, it may be a lot cheaper, less risky and less bloody to simply go straight to aid backed by governance reform and security/stability efforts.

Where, it has been suggested that if the 40 or so leading countries expend 0.7% of their annual national income on aid, across a generation or a few, global poverty can be eliminated. In the case of DFID, there is an additional remit to see to the reasonable assistance needs of UK overseas territories as priority. And, under the UN Charter Article 73, the UK is duty bound to promote development transformation in its overseas territories. Something, acknowledged in the 2012 FCO White Paper on Overseas Territories, cf. pp. 13 and 17.

The ALARP principle of risk management -- as low as reasonably possible -- therefore applies; and, here we can give also a way to think about DFID's favoured "red- amber- green" scales:

The result of this balance is that we are back at MoSCoW priority rules, accepting good enough, affordable performance (and managing the degree of risk stage by stage) while looking to the future hoped-for increments. It is worth repeating these, for emphasis:

MUST have this requirement to meet the business needs.

SHOULD have this requirement if at all possible, 

(but the project success does not rely on this).

COULD have this requirement 

(if it does not affect the fitness of business needs of the project).

WON'T represents a requirement that stakeholders have postponed 

(due to the timeliness requirement)

We must not forget, too, that the implementer-oriented, adapted log frame allows us to highlight and manage risk of critical success factors and associated assumptions. This is to be achieved through contingency planning carried out stage by stage of the project:

This enables us to list business as usual -- make no significant change to the present situation -- and several alternatives along the arc CAB, and discuss the issues of risk, value for money, likely outcomes of various options, then to put forward one or more main recommendations.

Such becomes particularly important when we consider major development initiatives, but in embryonic form will be present even with simple projects being proposed under a small projects grant scheme. Indeed, the two can be tied together, as some small projects may well be exploratory, research phases for major development interventions.

All of this now points onward to:

 The risky, development-catalysing strategic project challenge

The St Helena airport case highlights how a catalytic initiative involving one or more strategic projects can credibly catalyse development. But also, such may be quite risky, and may fail. This often results in a "bubble" of unsustainable growth that looks rosy at first and feeds a consumption boom, but then one day, pop! And, the economy can then crash in on itself, getting stuck in long-term low-growth stagnation. (Arguably, our failure to adequately manage volcanic hazards here in Montserrat led to a situation where a significant slice of the growth trend up to the 1980's proved to be unsustainable because of failure to adequately identify and manage PEST + BP trends and potential shocks. [A point that we need to seriously discuss -- never mind the pain -- and draw lessons from.])

A useful context for understanding this, is, first, Myrdal's circular, cumulative causation:

The idea is, that when a new industry of significant size opens up in a community or region (or an old one receives a major investment), it induces onward growth in other industries, which spreads through the economy in waves. This then can come back full circle and there is a self-reinforcing growth in the economy. However, this also works in reverse, once an economy receives a shock, it can lead to waves of negative growth pushing it into recession and perhaps stagnation. In Montserrat, that is exactly what happened with the volcano crisis.

Now, this may seem a bit far afield for small development projects, but the issue here is that there needs to be an insightful background that shows in the arguments being made, building confidence that the proposers of the projects know and understand the strategic context for what they are putting forward.

Therefore, an "in a nutshell" is in order.  (As a start-point!)

In this context, it is worth pausing to look at the aggregate supply, aggregate demand [AS-AD] picture of an economy as a whole, as individual markets add up to give an overall level of performance:

Here, we see how the performance of supply (S) and demand (D) behaves in individual markets, and how this adds up to give an overall price level and real output picture. In effect, economies tend to saturate, there is only so much productive capacity at a given time. So, if aggregate demand is rather low, a stimulus can trigger growth with relatively low inflation, but then an economy can overheat, hitting its natural capacity Y* and attempts to push it beyond that level will only lead to rising prices as producers have to bid for very tight resources. This leads to inflation plus resistance to stimulus-triggered further growth. The solution, obviously, is that the economy needs room to grow, increased productive capacity; but that may take a long time to be put in place, for many reasons.

Also, economies are prone to shocks, which can cause a sudden loss of productive capacity. Suddenly, the shocked economy is stagnant and inflationary. This can trigger long-term stagnation too.

Austrian Economist Friedrich von Hayek provided a picture of what it takes to produce what we consume at a given time, which we can then put in a wider community context:

Here, we see that an economy has a long tail, tooted in the community and its key factors of production and stability: natural resources, community culture and capability of its people, how well it is governed, its economy and policies etc. Across time, investments are made that move us from what we mine, hunt, fish and grow, to intermediate goods and services, to the final goods and services consumers purchase.today's consumption depends on previous investments, some of them going back 20 or more years. To keep that process going, there is a continual need to re-invest, and that can be a challenge as investment is inherently quite risky behaviour.

Another Economist from the wider Austrian school of thought, Roger Garrison, gives us a useful bigger picture of the macro-economy:

The key issue here, is that when we make an artificial development intervention, we are in effect trying to push the economy out beyond its present sustainable production possibilities. This is inherently risky (it can trigger a mal-investment- led boom with amplification through unsustainable consumption, triggering a crisis and collapse well within the production possibilities frontier that can end in long term stagnation due to the havoc wreaked . . . ), but with prudence such can pay off dramatically. (Cf. KF Pamphlet here.)

In the Caribbean, that points to development banking initiatives as centres of excellence in supporting such interventions. (Where, yes, the Caribbean Development Bank has been such a centre of excellence for nearly half a century now . . . )  Also, to careful targetting of sound catalytic investments that have potential to trigger growth and transformation.

Development agencies such as the EU, DFID and other partners are also key potential partners.

Getting support and releasing resources:
deal-making, BATNA's and the multi-turn development game

At this point, we are close to getting a project to move ahead with a suitable partner.

A sound proposal, driven by a solid idea and involving implementers who are credible is exactly what development aid agencies and development banks are looking for. From a 2011 DFID guide to Business Cases, here is a summary of the sort of things they are looking for in a full-bore proposal for development investment:

. . . A Business Case sets out the rationale for choosing a project, programme, or approach to funding (referred to collectively as an intervention).  It aims to provide a consistent approach to the choices and design of DFID interventions.  This note is targeted at all staff involved in the design of interventions leading to investment decisions [ --> that is, this is viewed as internal to DFID]  . . . . The Business   Case   has 5  interdependent cases:

Strategic  Case – sets  out  the  context  and  the  need,  including  for  DFID intervention.  Sets out the Impact and Outcome we expect to achieve.

Appraisal Case – explores how DFID will  address  the  need  set  out  in  the Strategic  Case, appraises options,  and identifies which best  delivers value  for money.

Commercial Case – ensures that the option is commercially viable and delivers value for money through procurement;

 Financial Case – establishes that the option is affordable and that the principles of sound financial management for public funds are followed;

 Management Case – sets in place the arrangements necessary for the successful delivery of the intervention including procedures for monitoring and evaluation.

(An eye-opening example relevant to Montserrat is the 2012 case for a further injection of funding for the Montserrat Development Corporation, here. [NB: The Original bears only a file number, 3689352 and is stored in ODT format. I have provided a PDF copy as just linked.  This is the document that says of MDC, c. 2012, that:

From an institutional perspective the MDC has not performed to date as had been expected. The diagnosis of this failure is clear – too broad a remit given the staffing constraints, over ambitious targets and expectations, lack of clarity on how much independence and authority MDC was to be given, poor governance arrangements, a micro-managing Board of Directors and inadequate performance from the original implementing consultants. Upper Quartile¹ report was very clear on the institutional constraints:

“in our view, the single most important factor has been the lack of consistency and continuity in executive leadership. In the space of its first three years, there have been three CEOs, none of which have stayed in post longer than six months. There has been no CEO for the last 18 months. We do not think that the broad mandate is the problem – it makes sense to manage this range of activities in a properly integrated way especially in a small economy. But the task becomes impossible without a CEO and executive team that can build the knowledge, relationships, trust and credibility necessary to make such a broad remit work. Most of the other symptoms could have been treated or worked around by strong executive leadership. The lack of delivery has been a human resource problem rather than a mandate one” (Upper Quartile 2011) . . .
_____________

1 Upper Quartile consultants were commissioned in 2011 to review the institutional framework and mandate of the MDC with a view to proposing a viable way forward.

This document is crucial for understanding Montserrat's ongoing development challenges and should be carefully consulted in its own right, not just as an example for what a DFID Business Case looks like. Another DFID document to ponder is this, on evaluating the strength of evidence.])

In addition, DFID uses an "Intervention Summary," a form of executive summary, and specifies use of a log frame. The case shown is in a somewhat unconventional format relative to standard log frames (and flows over into a second page, making it harder to interpret):

The implication of this approach, is that DFID needs to receive and appraise a significant project proposal, which then triggers whatever internal processes are required to create a business case; perhaps in partnership. Such a proposal needs to be composed with the internal requirements of DFID in view. Unfortunately, relevant templates -- unlike the case for the Tasmanian Government -- are hard or impossible to find online, so it is advisable to work backward from an example such as the just linked.

 (BTW, I should note here, that in my view unless one is dealing with an actual business disciplined by need to be profitable based on controlling costs and selling products, and needing to be viable in equity and bond markets or with banks, "business case" is perhaps not the best term; organisations that operate administratively and are not disciplined by the need to be viable in customer and investment markets face very different incentives. Something like organisational strategic change case [OSCC], may more exactly describe what is being done.)

A subtle issue, here, is to see that small projects of exploratory and pilot character are very worthwhile, as building capacity and as setting the groundwork for the major projects to follow as the meat of a strategic change programme.

So, the argument needs to be made, and made by our regional governments and research centres, including universities and colleges. (Where, we should bear in mind that Cuba has some forty universities and is quite willing to work with the Anglophone Caribbean through Caricom etc.) Also, by small business associations, chambers of commerce and industry, farmers associations, even departments of government and community based organisations.

A very special place is there for educators, also. For, the central and most precious resource for development is found between our ears.

And, what is right or wrong with education today may well be opening opportunities or closing them off for the next twenty to forty years. So, we must have a vision for reform and transformation of education led by capable champions, using sound evidence gathered through significant research and analysis.

A similar case can be made for various sectors.

However, again, there are sharks swimming in deep waters here.

First, to get to agreement, we have to arrive at a stick-able deal in a situation of competition and actual or potential conflict and polarisation. This already brings out the pattern of styles of outcomes that may (and often do) happen:

 Too often, where there is a looter culture in an organisation or situation. Where, the issue is to win at expense of the weaker party, whose bargaining stance is in effect let me take what I can get -- a raw deal -- and make the most of it; perhaps . . . until I can get away to less oppressive climes. However, sometimes, we see the power of revenge: I have already lost, I don't care what happens to me now but I am taking you down with me.

 Oppression is not ultimately sustainable -- but it may work for a very long time.

 Compromises are often little better, we split the difference now, planning to come back for more later, after forging and sharpening a better knife to put in the back. (Let us not fool ourselves that many compromises represent a positive outcome. Especially, when a ruthless and irreconcilably hostile opponent sees a long-game solution of gradually weakening resolve and shifting power balance through an agenda of successive loaded compromises, to eventually impose a victory on his terms over a fatally weakened opponent. The only practical solution to this is to be resolute to deter such and to make sure one understands the long game. As the Romans said so long ago: if you want peace, prepare for war.)

The better option is based on principles of true peace, harmony and justice rooted in mutual respect and willingness to find grounds on which there can be a multiple turn, win-win, "positive sum" outcome. [Cf. Wiki article on the theory of repeated games, here; as a first level reference on a non-ideological topic.] One, that brings sustained and sustainable benefits to all relevant stakeholders. Start with armed compromise, then move to building trust and relationships then move to working together in an atmosphere of trust backed by trustworthiness, to incrementally build a sustainable win-win outcome.

In this context, it is not to be overlooked that the modern approach to sustainable development was championed by a socialist leader from Norway, Gro Harlem Bruntland. And while it is true that too often there has been a hidden watermelon environmentalist/ socialist agenda -- green outside, red inside -- it is equally so that the sustainability principle of better and more fairly meeting our needs today AND tomorrow, through better husbanding our bio-physical, socio-cultural and economic environment is a reflection of the Golden Rule and/or Kant's Categorical Imperative. Particularly, that we should hold each other as fundamentally equal in moral value and so act with mutual respect rather than treating others as mere means to our own particular ends.

This leads us, next, to the need to examine the Overton Window and BATNA concepts, in the following context of the grand ideological "game" -- in the game theory sense -- of our time:

Here, we have to reckon with media and education manipulation, marches of folly and the sort of distortion that may well create a topsy-turvy, Plato's Cave world in which darkness seems light and light darkness. Thus, first we need to seek genuine enlightenment on sound grounds, as a basis for moving beyond the oppression and hidden agenda of destructive compromises games. This requires creating, sponsoring and supporting centres of analysis and information that are sound and become credible. This "mainstreams" the possibility of moving to win-win solutions based on trust and trustworthiness. Of course, this points to the need to sponsor independent think tanks and associated small pilot project or exploratory initiatives that show on the ground what is possible: it is hard to dispute a demonstrated fact.

(Hence, the power of a programme of small projects, and the danger of using money to create an "astro-turf" false front of fake "grassroots" organisations manipulated behind the scenes by the ruthless. [For Montserrat, one part of a solution would be to create a community forum that represents local areas and a reasonable cross section of civil society which is then incorporated in consultation, participation and policy-making through mainstreaming.])

The Overton Window comes up in that context. For, we see how -- based on what has transpired and the balance of ideas, forces, credibility, capacity of people and institutions etc -- there is a relatively narrow window of feasible policies and alternatives in a community at any given time. Such is locked in by two BATNA's -- walkaway points where powerful coalitions will withdraw support for working together, leading to a down-spiral of polarisation, antagonism and conflict. In today's age, inevitably, such will be coloured by the Left vs Right debates.

BATNA and bargain-striking are very important, as the walkaway option . . . the best alternative to a negotiated agreement . . . is the ultimate basis of bargaining power. If I have a serious walkaway option, I will only deal to get a better option. So, we need to find something that is mutually advantageous -- which may require a fight first:

Obviously, we are here dealing with the big decisions, how they are made and how they are made to stick. That is, with governance.

And, it is further obvious that in a region with a horrible history of oppression and injustice, starting with the slave trade, piracy, plantations based on slavery and/or indenture and abusive colonisation, there will be a major trust challenge as well as a significant capacity challenge.

All of these point to a way forward based on building trust, capacity and a new tradition of trust and positive relationships in peace towards genuinely sustainable development. Which points to using small projects as a gateway to the big ones, and to the creation of centres of capability based on competence and credible partnerships. Thus, it makes a lot of sense to start moving forward now on a long-term programme of strategic development projects pivoting on creation of a strategic change portfolio and associated programme management office.

Not, that common sense solutions are not going to be fought against by those vested in the continuation of Business as Usual. They will, and these opponents will be helped by those afraid of change.

This is where a particpatory PEST+BP, SWOT and BAU vs ALT exercise (as has already been discussed) can prove very helpful in changing the balance of stakeholders in play and in changing the general understanding, highlighting the way forward. Or at least, helping us ponder where BAU is headed and what possible alternatives are sufficiently credible to consider; often, 

(a) BAU,
(b) near-BAU minimal change,
(c) moderate (possibly incrementally transformative) change,
(d) radical but feasible, transformative change. 

Too often, this sort of deliberation will involve the difficult challenge of bringing out why -- despite our inclination to prefer the status quo -- we must change now  or pay a price of riding a ruinous march- of- folly BAU path over a cliff:

It is now time to act, not to road-block.


FOR DISCUSSION: 

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