by David P. Michaels

“Fortress UN: The New World Order & The Fiefdoms Within The UN” was first published during 1993 in  “Leaders” magazine. Although well received by the principal donor nations, reaction from within various departments within the UN, was less than enthusiastic, and both authors experienced the wrath of those that, even today, resist change and refuse to accept accountability.

The original commentary was introduced by Professor, Sir Alan Walters, the personal economic advisor of Prime Minister Margaret Thatcher.

“The United Nations, like democracy, may not be perfect, but it’s the best we have. With the removal of cold-war tensions that have paralyzed much of the U.N.’s work, a new, high-profile role is opening up for this bureaucratic giant. Many of its member-governments have effected change in their own countries. Will the era of privatization and efficiency adopted by these governments be accepted by their international representative agency, the United Nations?”

Sir Alan Walters

NOTE:   “Fortress UN: The New World Order & The Fiefdoms Within The UN” was published again in 2004. Very little was changed. Not unlike the United Nations!



“The New World Order & the Fiefdoms of the United Nations”

Paul Volcker’s recent report about the mismanagement in the UN is devastating.  “The organization requires stronger executive leadership, thoroughgoing administrative reform, and more reliable controls and auditing.” Chief of staff, Malloch Brown agreed saying, “Nobody could possibly read Paul Volcker’s report and not conclude that structurally and systematically the organization is not up to the task entrusted to it.” Yet, Kofi Annan is an insider with extensive UN experience. He was Assistant Secretary-General for Finance and was then promoted to Under-Secretary-General for Peacekeeping, responsible for management of peacekeeping operations, covering almost 70,000 military and civilian personnel from 77 countries. Why then has Kofi Annan failed in his pledge to streamline UN bureaucracy and create a less corrupt and more efficient organization? What can be done to save it or has the time has come to think the unthinkable, close down the UN administration, and start all over again? In fact, the UN system is far larger than most of us realize. It comprises specialized agencies such as FAO, WHO and the World Bank, which are generally autonomous, and a score of Progammes, Councils and Commissions. Some bodies are fully funded by the UN; others are financially autonomous whilst still others, such as the UNDP, depend largely on voluntary government contributions.

Not all UN agencies were created in the late 1940’s; the International Telecommunications Union, for example, was founded in 1865 and became a UN associate 80 years later. The UN system has steadily grown since the 1960’s as aid and development increased so that it is now a complex  sprawl  of  agencies,  programmes,  councils  and  commissions  comprising  around  45,000  staff  with headquarters in New York and offices throughout the world.
To begin with, ground rules set by governments make some inefficiency inevitable; recruitment by quota, for example, makes for a good mix of nationalities but causes complications when it comes to designing efficient staffing structures. At the heart of the problem lays an outdated management system, (inherited from American, British and French, Civil Services of the 1940’s), that now stifles initiative, rewards mediocrity and encourages inefficiency. The potentially good managers that do exist are crippled by lack of the right management tools. On the one hand, there are no simple financial incentives with which to reward high performers and, on the other, it is virtually impossible to discipline any level of staff once they are on permanent contracts.
The pay system needs a complete overhaul, and promotion is often based on seniority rather than ability. Overall, concerned management feels it cannot effectively promote, motivate or fire staff even when it feels inclined to do so. The System at best discourages productive change, and in fact suppresses those who might seriously encourage it. The UN needs clear, measurable objectives against which it can assess performance. It needs to know where it is going  and  to  be  led  there  by  motivated  and  decisive  managers  who  are  firmly  backed-up  by  an  efficient organizational structure and modern personnel practices.


Paradoxically, private sector organizations are probably easier to manage than their not-for-profit counterparts like the UN. Profit driven organizations have financial benchmarks against which to measure their performance; objectives are clear; employees know what they have to do to succeed, and are rewarded accordingly. Not-for- profit  or  budget  driven organizations, particularly the UN, have a far more complex, loosely defined array of business and political objectives for which there is no  one, clear and immutable performance measure such as profitability. The primary objective of providing assistance to the third world has becomes blurred due to political pressure and fudging from the 191 member states. Having  no  clear  primary  objectives,  UN  bureaucrats  create  their  own,  secondary  objectives,  which  can  be dysfunctional, wasteful, and serving the interests of the bureaucrats rather than the poor in the third world. The most common secondary objective is to manage the largest number of staff possible since this brings increases in job grade, salary and status. There are a number of tactics used to justify increases in staff numbers.  For example, managers expand their operations into new areas, which in turn require more people to run them. Some make their existing operations so complex (by continually applying ‘sticking plaster’ solutions rather than root and branch surgery) that they need more and better-qualified people to work them. (The UN compensation and benefits system is a good example.) The organization is then drawn into an inevitable spiral of increasing staff numbers but decreasing efficiency. Eventually,  the  organization  structure  becomes  so  complex  with  so  many  competing  interest  groups,  that managers spend most  of their time consensus  building at meetings. It demands superhuman effort to achieve anything at all. A state of organizational gridlock is reached!

The Road to Organizational Gridlock
Lack of clear, measurable prime objectives cause managers to look for other secondary measures of performance against which they can be judged and judge others. The most common is numbers of staff supervised. Managers search out new projects and growth areas. Staff numbers begin to swell. New growth areas become established and develop into many work units. Staff numbers swell again. Lines of communication become difficult.  More staff time spent at meetings reaching consensus and clarifying responsibilities. Real objectives and accountabilities are now unclear to most staff members. Work begins to suffer. Departments now spend time defending their Fiefdoms. New  departments  consolidate  their  position  by  making  their  work  increasingly  complex.  e.g., pay systems become so complex few understand them. We have called this a Complexity Ratchet. Once installed, complicated systems are almost impossible to eliminate. New departments, often called think tanks, are created to look into the problem. More staff are needed …… More complex work calls for more sophisticated people with higher academic qualifications; they require more secretarial assistance and recruit consultants to carry out the legwork. Even straightforward changes now require extraordinary effort and perseverance to push through; there are just too many different interest groups and too many complex systems to permit the organization to react quickly and flexibly. ORGANIZATIONAL GRIDLOCK ATTAINED!

While  the  natural  state of  a profit  driven  organization is to  do  more with  less, it  seems that  budget  driven organizations, like the UN, does less with more!


While  profit-driven  organizations  are  naturally  self-regulating,   and  ‘default’  to  minimizing  staff  numbers whenever possible, budget-driven organizations, like the UN, will not. They will always grow to fill any available budget, since the reward systems encourage managers to grow staff numbers in order to gain rewards through promotion. In order to consolidate the growth in their departments, managers ensure that the work increases in diversity and complexity. Once accomplished, this position is almost irreversible: a ratchet effect.





Staff Reduction: Do not make cuts “across the board”
Sooner or later even UN organizations face budget cuts but their response is usually different from that of profit- driven organizations which look for large cuts in non-revenue earning areas such as personnel and training Budget-driven organizations, rather than cutting out complete functions and the staffs that go with them, carry out cuts “across the board” because their organizational goals are unclear and the process looks more equitable. Unfortunately, all the inefficiencies that were present before, remain but in a scaled down form. Instead of being fat and ineffective, the organization becomes thin and ineffective; it may even be less effective, for its size, than it was before!

Centralization or Decentralization
Profit-driven organizations decentralize because this usually pushes responsibility down the line and makes employees even more aware of their profit responsibility than they were before. In a UN bureaucracy the reverse is true; the decentralized units see their situation as a heaven sent opportunity to grow all over again. Rather like breaking up clumps of weeds.

How can the UN be helped out of its gridlock to become the responsive, flexible organization that the world now needs? Real and lasting change can only be driven from within the UN; externally imposed change will be fiercely resisted. UN staffs have been around a very long time and are experts in survival! The key is to put in place personnel systems that will motivate UN staff to make the necessary changes for themselves.

Change would require a two-stage process:
First, the present personnel management systems, that reward slothful behavior and penalize initiative, must be swept away. Second,  new  motivational  schemes,  based  on  private  sector  models,  should  be  implemented  to  positively reinforce the new behavior.


Sweep away the old personnel systems:
The UN System is like a fortress; the full-time civil servants within are insulated from the real world outside and run their organization the way they see fit; it even has its own employment laws which operate outside those of its host nation, the USA. While this does ensure the UN some measure of independence, this insularity has bred a complacency and arrogance amongst some staff that must now be changed.

Second high potential staff at all levels of seniority into the private sector in order to broaden their horizons and develop new working attitudes. At the same time, encourage secondments into the UN from the private sector in order to quickly introduce new skills, ideas and attitudes.

Tighter organization structure:
Simplify and strengthen the organizational structure by introducing clear lines of communication. Reduce the layers of deputies and assistants and remove “one to one” reporting structures.

Make individuals accountable, not committees. Force individuals to accept responsibility for their decisions. Praise and reward good performance; identify poor performers and give them a means to improve or remove them.

Permanent Contracts:
Once employees are on permanent contracts they are virtually impossible to fire. No one anywhere should have a contract that is called permanent, and there should be no such concept as a job for life. In fact, ‘term limits’ of 10-15 years should be seriously considered for all staff in order to assure a regular influx of new ideas and to avoid the stultifying effect that the job for life has on motivation and initiative.

Promotion should be based on merit and merit alone.  Pushing minority groups through the promotion system might make the quota statistics look good but it is demeaning for minority group members who genuinely deserve promotion and de-motivating for ‘majority’ groups who feel that, no matter how hard they work, they will never gain promotion.

Staff Rotation:
The time of the “gifted amateur” must end.  Staff still rotate into positions for which they are not qualified or experienced. This is fulfilling for the staff and an excellent learning experience, but it cripples organizational effectiveness. Much needed changes are never made because staff have neither the experience nor inclination to implement them. Why should they when, within three or four years, they will move on to new areas? A  majority  of  staff,   at   least   in  the  Finance,  Management  Information  and  Personnel  areas,  should  be professionally qualified and have relevant experience gained from both inside and outside the UN.

Clear Communications:
To help make themselves more indispensable, units within the UN System make their written procedures as complex as possible. This helps ensure their survival since other people find it almost impossible to really understand what is going on and therefore cannot interfere or make changes. Readability tests should be used on all written instructions and manuals to ensure language is clear and easily understood. This is particularly important in a multicultural society where many people do not work in their first language.

Remuneration Reform:
The present remuneration system is a structure of labyrinthine complexity; it stifles initiative, rewards mediocrity and is understood by virtually nobody in the entire UN System. It needs a complete overhaul so as to reward initiative and not just length of service. Simplifying the pay system, as if the World Bank managed to do, will also save on administrative staff.


Introduce new motivational systems:
New reward systems must be found that encourage initiative and reward effective work. For this to happen, there must  first  be  clear  performance  standards  related,  if  possible,  to  financial  benchmarks.  False  performance indicators  such  as  the  numbers  of  staff  managed  or  number  of  academic  papers  produced  should  not  be rewarded.  One approach would be to introduce Merit Awards based on savings in staff costs. Division Heads and their high performing staff could be paid a bonus in recognition of their good work, but only as a percentage of savings made in the staffing costs of their Division. In this way, senior management would be given financial encouragement to make more effective use of their staff. Ironically, the UN already has in operation systems that could be used more widely.

Self Financing Programmes:
The United Nations Development Program (UNDP) sometimes sets up ‘Revolving Funds’ which are intended to be self financing, using returns made on successful projects for further reinvestment. Imagine the effect on fund managers if staff salaries also had to be met by their funds!

Profit Centers & Competition:
Certain parts of the UN System already run on a self-financing basis. The Office for Project Services (OPS), part of UNDP, is an agency set up in competition with other UN agencies to carry out UN projects throughout the third world. It charges a fee for its services and makes an annual surplus.

Contracting Out Work to the Private Sector:
The UN System already uses thousands of independent consultants each year for its specialized programmes of work throughout the world. There is no reason why this principle should not be extended to other UN functions such as pay administration and security. None of this will be easy.  As  Malloch  Brown  says, “There  is  a  tremendous,  seething  resistance  in  the organization, a wish that all this would go away and that it could settle back into comfortable mediocrity again.” However, the United Nations employs many able and highly motivated people with the capability and potential to effect productive and beneficial change, but they are imprisoned in a bureaucratic system, which erodes their initiative and inhibits their ability to manage. Only when Kofi Annan has freed his most talented managers to really perform, can the world really benefit. However, will these managers have the courage to actively support the Secretary-General in his attempts to transform the UN into an international agency of initiative, action, and efficiency?  Will  they  help  break  down  the  buttresses  of  bureaucracy,  or  will  they  support  those  who  feel arrogantly secure in their belief that “Secretary-Generals come and go. We go on for ever.”

About the authors
David Michaels is an economic and political strategist.  He has over thirty-five years of experience as an advisor to corporations, governmental entities, and political leaders on matters associated with business, economic and political restructuring, strategic problem resolution, and the related financial and economic negotiations. With a divergent problem solving capability and ability to synthesize highly complex issues into workable solutions, he has spearheaded dynamic and critical innovation in business and economic development. Mr.  Michaels  contributes  to  the  policy  and  strategic  planning  debates  through  commentaries  and  publications  on  strategic business/economic planning and restructuring; international debt, trade, investment, and economic restructuring and development, and often reports direct from the United Nations in New York.
Andrew West is a chartered psychologist and a founder principal member of the Association of Business Psychologists and a chartered fellow of the Institute of Personnel and Development. He was Senior Advisor with the United Nations Development Programme in New York.   Andrew worked with British American Tobacco as Personnel Operations Manager in the Far East and then as an expatriate in Cameroon. He  was Human Resources Director for  Africa and the  Near  East with  Johnson  Wax and VP  of  HR  with  Avnet whilst managing a merger and  acquisition programme across Europe.  He is managing partner of West Associates, working with senior managers on strategic, management and personal development issues in Human Resources.

Aaron Miller