The five example cases here serve a dual purpose. One is to indicate the kinds of work that Harmattan has undertaken or been involved with in the past, and the other is to illustrate how important insights can arise not just from an end-to-end project, but from mutual interaction along the way. Our evolution to a more fluid advisory role is partly based on this experience. Step-by-step research projects, if well targeted, often result in useful detail about a situation, but once that process begins everything is secondary to producing the “final report” as originally scoped. Using only this approach can hinder opportunities for less tangible insight, especially in terms of socio-political risk experience and perception within the client organisation, and practical ideas for improving resilience capabilities. Any details that might contravene discretion have been omitted.
1/5 International construction company
The client had a gas infrastructure operation in a country pulling out of years of violent civil strife and insurgency. The company had premised its resilience planning on a set of conditions that seemed to be changing, and needed to reassess their current risk management priorities in light of the evolution of the political landscape.
After a period of desk research and consultation with country experts, Harmattan worked with the client team on the ground in the country office and operating location to discern both formal and tacit risk management practices, and the project resulted in several recommendations for adjusting approaches to align with changing dynamics in the country and operating area. One such recommendation was that the security situation was now stable enough to cautiously explore more social investment opportunities by way of increasing acceptance in the host community in advance of a likely re-opening of organised civil society activity.
One corollary finding was not in the original scope. Discussions had discerned that a major concern of expatriate managers was the effects of the human rights situation on national staff employed by the company. In the past there had been instances of the disappearance of staff, and arrests made from the work place, usually during periods of especially high tension and widespread security sweeps. It was well known that security forces were often indiscriminate in whom they detained, and that serious abuses were common. Managers had sometimes gone out on a limb to try to intercede in detentions or to get information on and support for detained staff members, usually to little avail.
Even though the overall security situation was improving, this remained a concern, and indeed the problem was likely to arise in other countries experiencing high tensions and security abuses. One outcome from the project was an initiative to derive a clear policy and mutual support base for project and country management who could encounter the problem, ensuring that managers had guidance and corporate support rather than trying to deal with this sensitive and potentially dangerous issue on their own.
2/5 International community sustainability research institute
This was a very interactive project and hence yields considerable grist in terms of what can derive from working closely with the client organisation.
The client organisation was a sustainable resource subsidiary of a transnational organisation, and the client operated across 20 plus developing countries spread between different regions. Both operational management and the board increasingly felt that because of the exposure of their main asset, personnel, to potentially weakly governed and unstable environments, there needed to be a policy on how to handle personnel risk.
Harmattan conducted a baseline assessment of risk in each operating environment, with emphasis on those with a combination of high staff levels or travel frequency, and high unrest, and also derived a short list of the key cross-regional types of challenges to personnel security. This assessment created a baseline context for a look into current practice. In addition to reviewing current policy documentation, we conducted interviews with 15 country / region / practice managers to discern current risk management approaches, concerns, and ideas for what worked and what still needed improvement.
The findings put forth policy guidelines on personnel risk management, including for country office staff, travel and research excursions, and crisis management. An especially useful element of the interviews was the identification of specific country and individual initiatives that could serve as role models and be built upon through collaboration within the wider organisation.
A presentation of the findings at the annual board meeting in the group’s Asian HQ was followed by a week of working closely with the corporate services team to design an implementation road map by which the guidelines would move to specific initiatives, and Harmattan subsequently continued to advise on this process at certain key decision points.
There was some degree of balancing act in the guidelines and subsequent policy implementation – all interviewees and the board suggested that the organisation had an aversion to “bureaucratic balls and chains”, while still recognising the necessity of explicitly addressing personnel risk. Internal positioning had to indicate the enabling aspect of risk management, and the benefits that accrued from “old hands” setting an example of personal caution and responsibility. There was an initial preference to make a personnel risk policy an extension of Health and Safety, but it was finally agreed that HSE was more oriented around accidents and natural hazards, and that an explicit focus on threats from predatory or violent behaviour was useful in putting these issues front of mind.
Several unexpected but important insights derived from the interviews and subsequent follow ups, and two are particularly noteworthy. One was a concern among less experienced staff that they felt some pressure to be as cavalier as the “old hands” for whom personal security was seldom a restraint on where they would go or what missions they would undertake. This was explicitly addressed in the policy guidelines and discussed at the board meeting.
Another insight was the question of corruption pressure and business integrity in dealing with local NGO (non-governmental organisation) partners. Several country offices reported the issue of subtle governmental pressure to select local partners that were affiliated with regime cliques, and the subsequent opacity of partner activities and use of funds. Integrity and corruption issues were not part of the original scope, but they necessarily had to be addressed, not least because of the potential connection to security issues (subtle pressure can escalate).
The project helped to put such issues firmly onto the corporate radar, giving visibility to challenges that some staff and managers had been struggling with on their own without policy guidance or mutual / senior management support. There had not been any corporate aversion to listening, but the old policy, or lack thereof, and internal communications process had not accounted for such nuanced security concerns and how to take them on board for corporate learning and adjustments in practice. The project helped to formalise communication about risk concerns, and their translation to policy and corporate support.
3/5 International oil and gas company
This was a project in which Harmattan was embedded with a main contractor, a specialist political risk advisory. Harmattan’s remit was project analytical design, country visit and local interviews in conjunction with a permanent consultant on the main contractor’s team, and contribution to the final report and presentation.
The client was an oil and gas company working in an awkward and changeable country environment with a legacy of violence, human rights abuse and weak governance. They had a long-established presence in the country and were keenly awaiting their next project, having staffed and prepared accordingly. But the final approvals did not come, and much overhead was left waiting for the green light. This situation in addition to a perceived need to refresh an understanding of the socio-political landscape led to the commissioning of a stakeholder assessment project, with a combination of desk research, expert consultation, and a country visit to learn country management perspectives and for interviews with local stakeholder representatives.
The stakeholder assessment, rendered as scoped, was very extensive, covering a range of actors and interests from regime and regulatory to civil society organisations.
Perhaps it was too extensive in some ways, the bulk concealing key insights. Along the way and through working the client at the country office, we identified a small handful of key questions that seemed to be driving the project, and in the final reporting we tried to extrapolate from the range of material on various actors to address these key questions. Had there been a prior needs assessment to narrow down the scope, the results might have been more focused, but it was a tendered project that did allow for discourse prior to rendering a proposal.
In addressing the key question of the reason for project approval delays, the root causes were identified and we counselled a combination of patience as relevant agencies worked through recent bureaucratic changes and anti-corruption campaigns (perhaps politically motivated), with persistent but light-touch corporate diplomacy to keep the merits of the client’s project top of mind for relevant authorities.
The resulting encyclopedia was no doubt useful and to our surprise, most departmental managers did read the report in detail and gained useful insights from it. But we maintained a sneaking suspicion that a few of our more intangible and accidental findings held as much weight as our prescribed findings.
One was that national partners and counterparts regarded the client company as a hesitant partner, partly because of quick staff rotations that left any single management function lacking in cultural and socio-political know-how and starting from scratch after barely more than a year of their predecessor’s tenure. There were a few functions, including external affairs and supply / procurement that had more open-ended deployments, but this was a recent move that had not yet accrued the full benefit of long-time country experience. Senior national staff in the client organisation said that it was really not that hard to negotiate approvals if the company really knew the terrain, and this assertion was backed up by interviews with managers of other foreign companies who, after at least three years of learning, had a decent experience in dealing with regulatory authorities.
Another unanticipated finding was that there had been extortion attempts by national staff in order to augment their career and promotion track, claiming discrimination or harassment while using the threat of selective disclosure of sensitive corporate documentation to boost their case for promotion and overseas training opportunities. This even came down to one staff member bringing a relative to the office who was in fact a police officer. Neither Harmattan nor the main contractor consultancy detected any wrongdoing on the part of the client organisation in how it dealt with national staff, and these seemed to be opportunistic forays against an unsuspecting employer.
What was more worrying was that senior management, security and external affairs did not even know about this until being informed in the research process, and more fully after reading the final report. While the legal team had helped with the issues, even their engagement did not trigger an office-wide recognition of internal extortion risk. There seemed to be considerable delicacy on the part of expat managers with respect to the perception of national staff, who indeed had to, by labour law, form internal “syndicates” to consider and report potential breeches of employer obligations, and this concern seemed to have been taken too far, abrogating the company’s own self-protection obligations and rights. There was a need to modify the approach to national staff with any access to legitimate but commercially sensitive documentation, to lay out clear expectations on a merit-based career development path, and to exercise more due diligence in the hiring process. Putting this one question onto the corporate radar was of considerable utility in itself, even though it was initially outside the external-looking project brief.
A final point is instructive. Two major elements of overseas resilience are social acceptance via targeted consultations and corporate social responsibility, and the security of personnel and assets and deterrence of threats. In this project, the two functions responsible for these elements were remote from each other and indeed each regarded the other as necessary evils. This went as far as each department buying the same external risk reports separately from the same suppliers, paying twice for a resource that could have been shared internally (the supplier had not even noticed this). This lack of cohesion and “synergy” was mentioned in the report and presentation, and it can be hoped that it led to cross-sharing of information and risk initiative resources.
The project produced a heavy text on socio-political stakeholders, but had it been scoped more flexibly as a problem-solving discourse rather than only as an information-gathering exercise, it could have been much more cost-effective in coming to the same more relevant conclusions. There was much “beating around the bush” to satisfy an original brief which seemed increasingly irrelevant the more the client and consultant teams aligned around key challenges. This was a mutual mistake based on a rigid tender process and the expectations that it set, and afterwards we did discuss how to pre-define a more concise focus in future engagements, starting with an upfront needs assessment prior to full project scoping, and taking the internal perspective into account without this being secondary to the main objective.
4/5 Communications technology support company
This company won a contract to provide maintenance, trouble-shooting and optimisation support for a major mobile communications provider, a specialist in emerging markets. The support contract included an initial set of locations, with any additional locations to be agreed upon. The initial contract still meant having people and expertise in diverse and new emerging markets, but thus far most of the client’s experience had extended only as far as eastern Europe. Unlike in infrastructure and oil/gas sub-contracting, the “supplier” in this instance was not included in the main contractor’s risk management umbrella, and had to devise its own ways to stay attuned to and respond to challenges.
Harmattan conducted a top-level review of the kinds of issues that the company could experience when staffing and equipping new overseas offices and seeking operating permissions in the regions in question, and a top-level review of internal risk management, duty of care, and integrity policies and guidelines in relation to a complex emerging market presence (“top level” meant that we did not try to foresee every contingency, but we still tried to envision realistic contingencies).
It became clear that the company, while technically adept and suited for its support contract, was not suited for independent risk management in more challenging business environments, having internal policies and risk awareness that were tailored by a European experience and a lack of familiarity with less institutionalised business environments and complex political terrain as encountered, for example, in Africa, South Asia and the Middle East.
In addition to recommendations to augment and adapt existing policy and staff awareness for more sensitive terrain, we and client management also derived arguments to share risk with their client, in other words linking intelligence, risk management, and crisis response capabilities to those of the far more experienced mobile comms company. In addition, Harmattan suggested making explicit that the risk tolerance of the customer company might sometimes exceed that of our client, and that there should be a systematic process by which the client could decide if any one additional presence or operation outside the original contract exceeded its own risk tolerance and needed to be addressed by perhaps a local firm more adept in local contingencies. Suggestions for getting better at dealing with risk issues in more sensitive environments, to enable the company to confidently take on more complex emerging market opportunities, ensued from the project.
The unexpected element was the divergence between their client and our client in terms of risk tolerance and preparedness. In order to keep up with a fast moving and more risk-aware player, new skills and awareness had to be developed and institutionalised, and the company also had to have a firm basis on when to say “no thanks” if risk exposure went beyond risk appetite, in this case defined as their ability to look after themselves (staff and core assets). Companies used to the issues that one can encounter in higher risk settings tend to internalise lessons over time. For a newcomer, caution is warranted and the “no thanks” option is a viable option even as there is an initiative to develop the right skills over time.
5/5 Emerging markets private equity company
The client was expanding its investments into frontier markets, and the Middle East / North Africa (MENA) region had been of considerable interest. However, changes wrought by the Arab Spring increased uncertainty and the evolution of the phenomenon was unclear. The company needed to understand potential change directions in its target markets and the regional generally, and potential implications for its own medium and long-term prospects.
A critical but unplanned insight was that despite a growing emphasis on frontier markets, the investment due diligence process still focused heavily on commercial and legal attributes of the immediate investment target, and remained appropriate to more stable and institutionalised business environments. Socio-political dynamics in the country and in the target’s direct political ecosystem were only considered on an ad hoc basis, usually after a country had been in the recent news, and there was no established process for integrating such assessment into the decision process. As the implications of the Arab Spring on planning had made clear, when operating with a direct presence in more volatile emerging markets, the socio-political dimension could become critically important.
One outcome of the project was a decision to integrate a socio-political risk assessment into the due diligence process. Furthermore, because of the close collaboration with the local investment recipient and the required on site activity of core personnel, travel and deployment security protocols had to be to better defined. Harmattan continued to periodically advise on the development and testing of this initiative, which led to a process that aligned depth of investigation with the existing structure of investment approval “gateways” and prospect due diligence.
These cases are only a handful from a more diverse set, but the common theme was that intelligence about an external situation and mechanistic best practice falls short unless aligned to a deeper understanding of client concerns and capabilities. “About the situation” is only one half of the equation, and while we respect that element, we recognise the necessity of wedding it to the other half, the client and its organisational realities.