The institutional environment (e.g. the policy environment, other stakeholders, political realities and financial resources) within which an institution operates greatly affects its work and can be the underlying cause of poor performance. Interventions to strengthen a public forestry institution must be grounded in a solid understanding of this environment. For example, it is not uncommon for forest policies to envision only a limited role for non-state actors, thus leaving the public institution with a burden of responsibility that is not commensurate with its resources. Policies may also lack harmonization, thus providing contradictory guidance. A public-sector review process initiated by government may provide an opportunity for a forest policy and institutional review, as might projects that aim to improve forest governance. A forest policy and institutional review is a process that identifies the policies, strategies and plans that are relevant to forests (e.g. national development policies, poverty reduction strategies and forest policies). It clarifies the consistency, conflicts and gaps in the objectives and approaches of these policies. A forest policy and institutional review also identifies public and private stakeholders (e.g. though stakeholder mapping), their mandates, and the arrangements that exist for them to work productively together.

An organizational assessment is a systematic review of how an organization has been performing, what factors are impeding performance, and how the situation can be improved. Having identified (in the forest policy and institutional review) the issues that are external to the organization, this assessment addresses the internal functioning of the organization. Depending on its scope and the resources available, it may cover:

• strategic leadership (e.g. good governance and the clarity, quality and use of strategies and plans);
• technical, strategic and organizational capacities (e.g. skills, technology, information management and policy instruments);
• human, financial and material resources (e.g. staff levels and budgets, by key function);
• programme and process management (e.g. the efficiency of decision-making, including the delegation of responsibilities);
• transparency (e.g. of information and decision-making processes);
• oversight and accountability;
• motivation (e.g. the presence of incentives and rewards); and
• the division of authority and coordination within and across agencies.

Organizational assessments are helpful in identifying the need to revise functions, structures, managerial procedures and information management systems and in refocusing the strategic priorities of an organization. They can also be useful in drawing up action plans and identifying the resources needed to implement them. Self-assessments are particularly helpful in building internal awareness of the need for change and identifying practical solutions. Depending on its purpose, scope and available resources, an organizational assessment may focus on specific organizational functions or address organizational performance more broadly. Successful organizations appropriately track selected key performance indicators.

Institutional reviews and organizational assessments provide a picture of the current situation in terms of organizational performance, the institutional environment within which the administration operates, and the organization’s capacity to fulfil its mandate. They also allow a comparison between the current situation and the stated objectives, requirements and operating principles, thereby identifying the gap between the current and desired state. An understanding of this gap can be used to prioritize changes and related support activities (e.g. in a capacity-development program). It can also help define decisions and activities that will bridge the gap, such as choosing a different instrument to implement the policy or instigating institutional arrangements that enable better intersectoral and inter-agency coordination. Having identified the gap between the current and desired state, a change process needs to be designed and implemented, which requires certain key “ingredients”. For example:

• The process must have a high-level champion (e.g. a minister, permanent secretary or forestry director) with the will and influence to see the change through.
• The process will benefit from the support of a change team tasked with building momentum and continuity through communication about the importance of the change, the vision of where the organization is heading, and the strategy to get there.
• Effective processes have short-term unambiguous “wins” that reassure staff they are on the right path.
• Quite often, capacity-development interventions need to be part of the change process – not only to modify how the organization works but also to equip staff with new skills and competencies, where needed.

The change process may also involve a revision of how the organization funds its activities. For example, some countries have decided to allow their forestry administrations to retain forest revenues rather than send them to the treasury. Other countries have established national forest funds. Some countries have decided to create separate units specifically tasked with the search for alternative sources and mechanisms to finance policy implementation.

Because organizational change may affect people’s work, the involvement of the entire organization is important to ensure acceptability. To obtain “buy-in” by all staff members, some of whom may feel threatened by the change, their concerns must be addressed appropriately.

Institutional adaptation and strengthening is not a one-time intervention. The environment in which most forest-related organizations operate is continuously changing, possibly at an accelerating pace. Organizations need to institute processes to track how they are doing and to anticipate change so as to take advantage of emerging opportunities and challenges. Recent emphasis on results-based management provides an opportunity for public forestry institutions to more clearly articulate the outcomes they seek to achieve and the indicators they will use to measure progress.