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20 November 2018

Integrity Management for Water Sector Organizations

Executive Summary

Integrity Management (IM) is a change management approach to reduce unnecessary losses from corruption and bad practice in human resources, accounting, O&M and other work processes. It can help reduce reputational risks at time when citizens, clients, and financing partners are increasingly taking note of integrity issues and demanding transparency and accountability from water organizations.

The Integrity Management (IM) toolbox is an adaptable set of resources to support Integrity Management for private and public utilities, public water institutions and agencies, or water sector contractors.

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Introduction
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There are many examples of integrity risks that are relatively common in the water sector: from illegal connections to bribery, accounting fraud to unclear procurement guidelines. The Integrity Management Toolbox helps different types of water sector organizations to be prepared for such challenges.

The IM Toolbox supports organizations in making integrity a part of their strategic plans, business models, and—most importantly—their daily practices to reduce risks and improve performance. The underlying approach works with a business perspective of realizing performance opportunities and advantages that arise from improving integrity.

The IM Toolbox is more than a set of integrity tools or a training concept. It is a change management approach that support organizations through an integrity change process that starts with assessing their performance and describing their business model, identifying the most relevant integrity risks, using practical tools for better managing risks, to finally monitoring performance improvements.

The IM toolbox includes detailed descriptions of common integrity risks for utilities, public institutions, river basin organizations, and water sector contractors, as well as resources on practical mitigation tools and how to implement them.

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Who should use it
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Service providers & institutions

  • Use the IM toolbox to assess service models for integrity risks that can affect your reputation or drain resources.
  • Find and implement practical solutions in a step-by-step change process for integrity and compliance aligned with customer needs.

River Basin Organizations

  • Use the IM toolbox to facilitate dialogue and build trust between river basin stakeholders.
  • Create incentives for organizations to improve corporate governance and contribute to a basin-wide integrity plan.

Regulatory agencies, donors, networks

  • Mandate the use of the IM toolbox to increase accountability among the organizations under your purview.
  • Benchmark organizations on integrity and compliance as an incentive for better performance.
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How the integrity management process works in a water sector organization
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Individual water sector organizations that want to enhance their integrity management can use the toolbox to better fulfil their mandate, improve economic performance, and improve customer orientation. They will assess risks and address them by selecting and implementing the integrity tools most relevant to their organization. In developing countries, these processes will often be supported by development partners working with an individual water sector organization or a group of such organizations.

The toolbox proposes a step-by-step approach to preparing, initiating, and facilitating a management-led change process towards higher levels of integrity.

Phase 1: Preparation

Like any other organizational change process, integrity management requires leadership from the top management and the governance body of an organization. This is even more crucial if the toolbox is voluntarily used within an organization without formal requirements. Before initiating the integrity change process, the organization should be aware of its scope. This toolbox is not about attending a single workshop but about implementing integrity tools, which can take a few months to several years. The integrity change process requires time and commitment from people, and the organization has to invest in the people who are willing to drive the organizational change.

The preparation phase usually starts with informal consultations with the top management to define a more concrete objective of the integrity change process, and possibly to identify staff members who will be responsible for the process. A systematic assessment of the current integrity deficiencies and performance of the organization allows identification of the priority areas where change is needed. Based on that, it will also be possible to get a clearer picture of the scope of change the organization wants to undergo, and subsequently the time and resources that will be required.

Moreover, the preparation phase provides an early opportunity to align the integrity change process with ongoing reforms or strategic exercises of the organization. This may also entail amendments to the approach according to the organization’s need.

Phase 2: Workshop

The workshop phase takes between 1.5 and 3 days. With the help of a facilitator or coach, participants follow a seven-step methodology that allows organizations to assess their priority integrity risks and select the integrity tools most relevant to their organization. At the end of the workshop phase, the organization will have developed a road map to guide the organization in implementing the tools that were chosen in the workshop.

The following key tasks should be carried out in the workshop phase:

Step 1 – Introducing the integrity change process: To create a common basic understanding of issues related to non-integrity, their negative impacts on the organization, and the incentives for organizations that commit to integrity management.

Step 2 – Describing the organization’s business model: To visualize the internal dynamics of the organization and understand how and for whom the organization creates, delivers, and captures value.

Step 3 – Assessing context and mapping stakeholders: To understand the external environment of the organization, including the legal framework and potential partners, for achieving higher levels of integrity.

Step 4 – Identifying integrity risks: To detect the causes, practices, and consequences of non-integrity and to prioritize the organization’s integrity risks.

Step 5 – Analysing integrity tools: To discover possible tools for addressing the organization’s integrity deficiencies and to evaluate them based on their applicability and relevance.

Step 6 – Determining impacts on the business model: To understand how these tools will contribute to higher levels of performance, to prioritize and choose tools, and to set goals for the integrity change process.

Step 7 – Developing a road map: To understand and agree how the chosen tools will be implemented after the workshop.

Phase 3: Implementation & Monitoring

The implementation phase is where the actual change happens: the chosen integrity tools are implemented and improvements towards higher organizational performance are accomplished. It is also the longest and most difficult phase of the whole integrity change process. Depending on the complexity of the chosen integrity tools, it can take anything from a few months to several years. Monitoring in this phase is crucial because it helps track progress and facilitates understanding of why activities were completed while other milestones were not met. Thus it provides a basis for taking corrective action. Supporting the integrity agent and team—the staff members who take leadership for the process in the organization—is vital in this phase.

After having attended the integrity management workshop and been appointed as the integrity agent and team, participants return to their daily work with the motivation to make change happen. However, there is a risk that the integrity agent and team are absorbed in daily business and that implementation of the integrity tools is postponed until the momentum is lost. To make sure that this does not happen and that the implementation stays a priority, the integrity agent and team need to be motivated and supported by the external Integrity Management Coach. A debriefing with top management for the official approval of the road map and a kick-off event for communicating the purpose and goals of the integrity change process to the wider staff back up the importance of the integrity change process within the organization. Through such immediate follow-up activities, the Integrity Management Coach can support the integrity agent in managing the transition from the protected workshop setting into the real world of organizational practice.

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Integrity Management at the Sector Level
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When using the IM toolbox for a group of organizations at sector level, the process is generally led by a sponsor or lead organization, which is most active in the preparation and monitoring phases.

In the preparation phase, the lead organization can map stakeholders, carry out consultations, and develop an additional baseline to identify priority working areas. These steps are needed to adapt the tool to the regulatory framework and local context.

The risk assessments and action planning can be carried out with representatives of the different organizations together or in the individual organizations directly, depending on the scope of the integrity plan. Organizations then implement the actions agreed on with support from integrity coaches that can also be mandated by the lead organization.

The lead organizations monitors progress and possibly benchmarks participating organizations. Results should provide insight on areas to focus on for integrity management in the basin or sector as a whole, as well as on resource and capacity needs.

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Background
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The IM Toolbox was developed by the Water Integrity Network (WIN), cewas, and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ). It has already been successfully adapted and scaled to work for very different organizations: from small contractors in Zambia, to regulatory agencies and service providers in Latin America, river basin organizations in Indonesia or urban utilities serving millions of users in Bangladesh.

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