NFPs tripping over their own rules

Monday, 20 January 2014


    In addition to external regulations, self-imposed rules are compromising the ability of the Australian not-for-profit (NFP) and non-government organisations (NGOs) to deliver services, a new report has found.

    According to Deloitte’s Get out of your own way: Unleashing productivity, self-imposed red tape generates a significant additional burden on NFPs and NGOs, with the average worker in both sectors spending more than six hours a week on self-imposed red tape. These include:

    • Decision-making by processes – governance structures that require decisions to be ratified by multiple committees.
    • Federation causing duplication – NFPs doing the same thing in different states, but under separate legal entities, sometimes without sharing services, knowledge or information across states.
    • KPIs not supporting strategy – internal frameworks and KPIs do not align with strategic priorities.
    • Strategy v operations –role definitions between boards and management not being clear, resulting in boards becoming too involved in operational matters as opposed to focusing on strategy and risk.

    According to the report’s co-author, Deloitte Access Economics’ Chris Richardson, both the public and private sectors can benefit from a new approach to managing risk. “Where rules don’t exist, we create them. Where they already do, we make more. They overlap, they contradict, they eat our time and they weigh us down,” he said.

    “We’ve created a ‘compliance sector’ that employs more people than construction, manufacturing or education, and taking a long, hard look at the rules that individual organisations operate within will reduce the cost and complexity of doing business in Australia.”

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