DESIGNING THE INNOVATION PROCESS

The course for this paper is Operational Process and the chapter for this case study is Designing the Innovation Process.1
Action Response
Introduction
Action Response is a London-based charity dedicated to providing fast responses to critical
situations throughout the world. The charity receives requests for cash aid usually from an
intermediary charity and looks to process the request quickly and provide funds where they are
needed, when they are needed. It was founded to provide relatively short-term aid for small
projects until they could obtain funding from larger donors. Generally, Action Response is
regarded as one of the success stories in the charity world. The consensus of opinion is that it
has filled an important gap in aid provision to relatively small scale recipients.
Susan N’tini Chief Executive of Action Response explains the background. “Give a man a fish
and you feed him today, teach him to fish and you feed him for life, its an old saying and it makes
sense but, and this is where Action Response comes in, he might starve while he’s training to
catch fish.”

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Nevertheless, Susan does have some worries about how parts of her enterprise are managed.
She faces two major issues in particular. First she is receiving complaints that funds are not
getting through to where they are needed quickly enough. Second the costs of running the
operation are starting to spiral. She explains. “We are becoming a victim of our own success. We
have striven to provide greater accessibility to our funds, people can access via the internet, by
post and by phone. But we are in danger of losing what we stand for. It is taking longer to get the
money to where it is needed and our costs are going up. We are in danger of failing on one of our
key objectives: to minimize the proportion of our turnover that is spent on administration. At the
same time we always need to be aware of the risk of bad publicity through making the wrong
decisions. If we don’t check applications thoroughly, funds may go to the “wrong” place and if the
newspapers gets hold of the story we would run a real risk of losing the goodwill, and therefore
the funds, from our many supporters”.
Susan N’tini held regular meetings with key stakeholders. One charity that handled a large
number of applications for people in Nigeria told her of frequent complaints about the delays over
the processing of the applications and they felt there was a danger of losing the key purpose for
which the charity was founded. A second charity representative complained that when he
telephoned to ascertain the status of an application the ARAPU staff did not seem to know where
it was or how long it might be before it was complete. Furthermore he felt that this lack of
information was eroding his relationship with his own clients some of whom were losing faith in
him as a result. This was affecting the other work the charity was doing; ‘trust is so important in
the relationship’ he explained.
Some of Susan’s colleagues, while broadly agreeing with her anxieties over the organization’s
responsiveness and efficiency, took a slightly different perspective.
“One of the really good things about Action Response is that we are more flexible than most
charities. If there a need and if they need support until one of the larger charities can step in, then
we will always consider a request for aid. I would not like to see any move towards high process
efficiency harming our ability to be open-minded and consider request that might seem a little
unusual at first.” (Jacqueline Horton, Applications Assessor)
Others saw the charity as performing an important advice and counselling role.
“Remember that we have gained a lot of experience in this kind of short-term aid. We are also
often the first people that are in a position to give advice on how to apply for larger and longer
term funding. If we developed this aspect of our work we would again be fulfilling a need that is
not adequately supplied at the moment.” (Stephen Nyquist, Applications Assessor) 2
The Action Response Applications Processing Unit (ARAPU)
Potential aid recipients, or the intermediary charities that represent them, are required to apply (or
‘claim’ as Action Response termed it) using a standard form. These application forms can be
downloaded from the internet or requested via a special help line. Sometimes the application will
come directly from an individual but more usually it will come via an intermediary charity that is
aware of Action Response and can help the applicant to complete the application form. The
application form is then sent to the Action Response Applications Processing Unit (ARAPU)
The ARAPU employs seven applications assessors with three support/secretarial staff, a pool of
nine clerks who are responsible for data entry, coding and filing, and nine “completers” (staff who
prepare the final paperwork and send the money, or explain why no aid can be given). In addition,
a board of non paid trustees meets every Thursday, to ‘ratify’ (approve) the applications.
Action Response’s IT system maintains records of all transactions. It provides an update of
number of applications (by week, month and year), the number and percentage of applications
approved, number and percentage of those declined, the number and amount of payments
allocated. These reports identified that the Unit received about 300 applications per week (the
Unit operates a 35 week) and whilst all the Unit’s financial targets were being met at the moment
the clear trend indicated that costs as a percentage of applications handled was increasing. Most
internally set operations performance criteria were being met. The target for the turnaround of an
application, from receipt of application to the issue of funds was 20 days. Accuracy had never
been an issue as all files were thoroughly assessed to ensure that all the relevant and complete
data was collected before the applications were processed. Productivity was also high and there
was always plenty of work waiting for processing at each section with the exception that the
“completers” were sometimes waiting for work to come from the committee on a Thursday. Susan
had conducted an inspection of all sections’ in-trays that had revealed a rather shocking total of
about 2000 files waiting within the process.
Processing applications
The processing of applications is a lengthy procedure requiring careful examination by
applications assessors trained to make well founded assessments in line with existing charity
guidelines and values. All applications arriving at the Unit are placed in an in-tray. The incoming
application is then opened by one of the four “receipt” clerks who will check that all the necessary
forms have been included in the application, the receipt clerks take about 10 minutes per
application. This is then placed in an in-tray before collection by the coding staff. The five coding
clerks allocate a unique identifier to each application and code the information on the application
into the computer. The application is then given a front sheet, a pro forma, with the identifier in
the top corner. This coding stage takes about 20 minutes for each application. The files are then
placed in a tray on the senior applications assessors’ secretary’s desk. As an applications
assessor becomes available, the senior secretary provides the next job in the line to the
assessor.

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About one hundred of the cases seen by the assessors each week are put aside after only 10
minutes ‘scanning’ because it is clear that there is a need for further information. The assessor
returns these files to the secretaries, who write to the applicant (usually via the intermediate
charity) requesting missing or additional information, and return the file to the “receipt” clerks who
‘store’ the file until the further information eventually arrives. When it does arrive, the file enters
the process and progresses through the same stages again. Of the applications that require no
further information, around half are accepted and half declined. Some applications clearly fit the
charity’s criteria, or clearly did not. But others could take more time to assess. On average, the
applications that are not ‘recycled’ for further information take around 60 minutes to assess. 3
All the applications, whether approved or declined, are stored prior to ratification. Every Thursday
the Committee of Trustees meets to formally approve the applications assessors’ decisions. The
committee’s role is to sample the decisions to ensure that the guidelines of the charity are upheld.
In addition they will review any particularly unusual cases highlighted by the applications
assessors. Once approved by the committee the file is then taken to the completion officers.
There are 3 “declines” officers whose main responsibility is to compile a suitable response to the
applicant pointing out why the application failed and offering, if possible, provide helpful advice.
An experienced declines officer takes about 30 minutes to finalize the file and write a suitable
letter. Successful files are passed to the 4 “payment” officers where again the file is completed,
letters (mainly standard letters) are created and payment instructions are given to the Bank. This
usually takes around 50 minutes, including dealing with any queries from the Bank about
payment details.
Finally the paperwork itself is sent, with the rest of the file, to two “dispatch” clerks who complete
the documents and mail them to the applicant. Each part of the process has trays for incoming
work. Files are taken from the bottom of the pile when someone becomes free to ensure that all
documents are dealt with in strict order. The dispatch activity takes, on average, 10 minutes for
each application.
The feeling amongst the staff was generally good. When Susan consulted the team they said
their work was clear and routine, but their life was made difficult by charities that rang in
expecting them to be able to tell them the status of an application they had submitted. It could
take them hours, sometimes days, to find any individual file. Indeed two of the “receipt” clerks
now worked full time on this activity. They also said that charities frequently complained that the
money seemed to be taking a long time to agree and send.
Required
1. Map the process
2. Understand the throughput time
3. How could the ARAPU process be improved?

Type of paper:
Case study
Topic:
Designing the innovation process
Pages:
2 pages / 550 words
Discipline:
Business and Management
Format or citation style:

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MLA