16 March 2024
By Katja Hemmerich
In response to the funding crisis unleashed by the United States and other western donors over the last few months, UN organizations are working to find efficiencies or new ways of working, including through restructuring of programmes or a review of priorities and mandates. Traditionally funding crises have been a key driver of UN reform efforts, including most recently the system-wide reforms of the development, peace and security and management pillars of the UN initiated in 2017 by the current Secretary-General (SG).
For any organization, including the UN, reforms are collective forms of ‘organizing’ in response to external changes or ambiguities. In order to figure out how to respond, decision-makers in organizations need to make sense of what, how and why their environment is changing. Such sense-making efforts need to provide plausible explanations for what is happening and how a potential response can address the situation to obtain collective buy-in for subsequent 'organizing' of a response.
As much as we want this process to be objective and rational, the emotions of sense-makers cannot be eliminated. New research highlights that when external shocks are potential existential threats to an organization, overwhelming anxiety can distort the sense making process and lead to ineffective responses to the perceived cause of the crisis.
This process of ‘defensive organizing’ outlined by Professors Fitzsimons and Petriglieri from INSEAD has surprising similarities to how UN reform processes work, even though it is based on research in private firms. So while I am generally loathe to adopt theory and practice from the private sector to international organizations, this month our spotlight explores whether UN reform is a form of defensive organizing, and if the problem it has been trying to solve is in fact the right one.
How do emotions distort crisis response?
Over a four year period, researchers at INSEAD followed how the leadership of a firm responded to a potential existential crisis, i.e. a decline in performance overall, and relative to its main competitors. Of note was that leaders reacted very differently privately and publicly. Privately, there was an implicit acknowledgement that they as leaders needed to get the company out of this situation, coupled with anxiety about whether they could in fact achieve the necessary change in performance. This anxiety was however never voiced when leaders came together with each other to analyze the cause of the problem or potential solutions. Because anxiety is generally not associated with competent leadership, acknowledging it only in private discussions is quite normal. But what the researchers noticed was that it exerted a surprising subconscious influence on group decision-making.
In their discussions, leadership very quickly found agreement that a lack of collaboration across divisions was the root cause of their problem, and that breaking down silos was the solution to their performance problem. The possibility that their own leadership approaches may have contributed to the problem never entered the sense making process, nor did leadership engage in a broader group reflection with employees to validate their analysis or explore alternative courses of action. Instead, there was a flurry of reform activity, including creation of an expanded senior management team for decision-making and inter-divisional task forces to foster collaboration amongst staff and design new ways of working. When that did not yield the desired results in the first year, leadership concluded that managers of these task forces were not up to the job and new configurations were sought. When that didn’t lead to results, the conclusions was that staff were not fully engaged in the change or did not perform effectively and new measures were initiated to address that problem.
I suspect, like me, many UN staff involved in reform efforts will find this story surprisingly familiar. What the researchers noticed before each new phase of ‘reform’, leaders seemed overwhelmed by their anxiety. Once there was visible activity intended to address the perceived problem, that anxiety subsided, and only resurfaced when the lack of real results became obvious. Although reforms were ostensibly for the organization, researchers found that they were also a subconscious tool for managing leadership’s anxiety. This ‘defensive organizing’ prevented leadership, and the organization more broadly, from recognizing that their problem analysis was flawed and therefore so were the responses. Not surprisingly, the firm never improved its performance and it eventually disappeared.
“Our study lifts a veil on how leaders who champion novel organizational features might be seeking cover, more- or less-consciously, from a foreboding of personal failure. When that happens, our theory argues, failure becomes more likely. Defensive organizing distracts leaders and members from the organization’s problems, becoming a problem itself.” - Declan Fitzsimons, Jennifer Louise Petriglieri, and Gianpiero Petriglieri, “The Fury Beneath the Morphing: A Theory of Defensive Organizing” (2024).
What problems are UN reforms trying to solve?
The energetic drive for UN reform of the last decade is generally considered as a necessary response to a funding crisis, with actions focused on improving UN performance while enhancing efficiency, transparency and accountability. But is our underlying problem analysis really correct?
Reform architects will point to plenty of feedback from member states that validates this sense making. After all, Antonio Guterres was nominated and elected as SG as a reform candidate whose key achievement had been leading UNHCR through a process of “continuous and intense reform and innovation, allowing it to triple its annual activities, increase its efficiency in delivery and coordination, and reduce to an unprecedented extent the burden of its structural and administrative costs” (A/70/768, S/2016/206). The diplomats and government officials providing this feedback will have gone through their own sense making process to come to these conclusions, which also warrants a reality check. Many of them are strong believers in multilateralism, and therefore it’s also conceivable that anxiety about their own abilities to support the UN and multilateralism may have influenced their sense-making process.
Representatives of donor countries have been telling the UN for years that there just isn’t enough money available for what the UN wants to do and that there is no tolerance for inefficiencies. But as publicly available data from the UN Chief Executives Board shows, there has been a steady increase in overall funding to the UN system despite the constant mantra of a funding crisis.
The increase is due primarily to increases in earmarked funding, despite repeated evaluations and independent studies have demonstrated that it leads to weaker results than more flexible funding to the UN. Efforts to deter earmarked funding, for instance through increased administrative costs levied by the UN Development Coordination Office (DCO), have not eliminated or even significantly reduced earmarking. None of this seems aligned with the assumption that there is less money available and no tolerance for inefficiencies - member states seem oddly happy to pay more to be allowed to use inefficient funding approaches.
The same disconnect is evident in the solutions that UN decision-makers have agreed. According to the UN’s Transparency Portal, the Global Funding Compact is a series of shared actions by member states and the UN agreed by the General Assembly in 2023. The UN commitments are focused on clearly demonstrating results, strengthening coordination, and improving efficiency and transparency in how resources are used. Member state commitments are focused on increasing predictable core funding, enhancing the use of pooled funding mechanisms and making non-core funding more flexible in how it can be used. Yet virtually every report of UN development entities to their Executive Boards in 2024 has shown that UN entities are achieving their targets while member states are not.
If it’s not a UN funding crisis, what needs reform?
All of this begs the question, whether our collective sense-making of our current situation as a funding crisis is really correct. Is anxiety distorting our ability to consider that there is in fact a much bigger crisis of multilateralism playing out, one that may be much more difficult to solve than a funding crisis?
The current Trump administration has been quite open about rejecting any of the restrictions on sovereignty inherent in multilateral cooperation and participation in international organizations. It is currently requiring aid projects to justify how they “reinforce US sovereignty by limiting reliance on international organizations or global governance structures (e.g. UN, WHO)” according to a questionnaire leaked to journalists. But there were actions like this already in the first administration which were also continued in the Biden administration. Since 2017, the United States has consistently blocked the election of new judges and the renewal of existing ones at the World Trade Organization (WTO). As a result, the WTO’s dispute resolution mechanism was force to shut down in 2020 when the last judge’s term expired.
But the United States is not the only countries that has pushed back on the reduction of sovereignty inherent in working with international organizations. Mali’s withdrawal of consent for the UN peacekeeping operation MINUSMA in June 2023 without any advance notice for the UN was a particularly jarring example. Numerous other host countries, including the Democratic Republic of Congo (DRC) which hosts one of the largest remaining multi-dimensional missions (MONUSCO), have also requested an accelerated withdrawal of UN peacekeeping missions.
At the same time, there are other signs that we are not seeing a wholesale rejection of multilateralism. Although large UN multidimensional peacekeeping missions, like MONUSCO, seem to be a thing of the past, the Security Council did endorse the Multinational Security Support (MSS) mission for Haiti in 2023, indicating there is still a desire for multilateral interventions in countries that pose a risk to international peace and security. When donor governments paused or cancelled their funding for UNRWA in 2023, it managed to raise $150 million in funding from private sources. There clearly is still support for what the UN was set up to do - but perhaps through fundamentally different business models than what we have been using so far.
The UN needs a new business model, not just reform.
Interestingly, this is precisely a core point made by the High Level Advisory Board on Effective Multilateralism (HLAB), and one which was largely overlooked, perhaps because it did not fit our existing sense-making.
“To be people-centred, it also must be radically and systematically inclusive, offering meaningful opportunities for participation in global decision- making by all States, civil society, private sector actors, local and regional governments, and other groups that have been traditionally excluded from global governance. We must accept that individual aspirations are no longer principally mediated by national governments, though States continue to play a central role. Each one of us is simultaneously a stakeholder in multiple overlapping communities. Our vision of networked and inclusive multilateralism makes room for representatives of these communities in global governance.” - HLAB, “A Breakthrough for People and Planet”, (2023).
The Advisory Board does not spell out what this new business model looks like in practice, although it recommends, for instance, creating a special status and role for cities and subnational regions in multilateral decision-making. And similarly, given the slow deployment and limited results of the MSS, this is also not necessarily the best new business model for peace operations. Nor has private sector funding for UNRWA or other entities been able to replace government funding. But all of these things highlight that there is room and a desire for innovation in UN business models, something which change agents should be capitalizing on.
The UN system has invested considerably in increasing its innovation capacity, yet most of that is devoted to exploring innovation in what is delivered to member states within current mandates or how to make existing processes more agile and efficient. Perhaps it is time to unleash innovators on exploring innovative new business models for multilateralism. And to do that, we may all need to better manage our anxiety and make sense of this current crisis as something much bigger than a funding crisis.
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