By Frank Spranger
Having worked with many NFPs it is clear to me that organisations that do not objectively assess themselves against The Golden MILE are far less likely to survive let alone prosper over the longer run.
So lets cruise down that MILE?
There’s an expression used in financial markets: ‘the trend is your friend’ which equates to ‘miss the market and you’re dead’. Market places have been operating for 5,000 years yet NFP leaders rarely acknowledge that they operate in a market place for all revenue sources, including government and donor/member.
Look at the movement away from care and join toward click and credit card, and the impact this is having on organisational relevance. New NFPs are born every day on the back of a moderately successful social media campaign. Everyone, including business and government, is saving humanity or the environment and/or making or saving money to do so.
Focus on the trends relating to your core business and changing donor/member needs. There’s always opportunity in a marketplace: grow existing products/services to existing or new markets, and/or new products/services to existing or new markets
NFP market places are shifting and occasionally organisations are at risk of being out of kilter and need to realign themselves.
If you are punching out a strategic plan each year that is very similar to the last, then its unlikely your NFP is highly innovative. In fact sometimes we are at greater risk continuing with the status quo and potentially over planning ourselves out of existence.
You are likely to need an improved innovation focus if strategic planning is undertaken to fit the existing business model – rather than a new business model. Similarly if it is focused on today rolling into tomorrow, not understanding tomorrow and making a bridge back to today.
One tactic is to dedicate a manager/s to develop a innovation strategy, targets, outcomes, deliverables. (Cause & Effective have a number of experts who can help in this regard).
Reaching Board agreement on tolerance for risk and reward appetite is fundamental here, noting that Boards generally don’t accept the need for change until the risk of inaction is greater than action!
Just like people lives, all NFP organisations are positioned somewhere on this Lifecycle diagram. The challenge is for you and your Board to agree where you are positioned, what to do about it, and if needed accept the journey and steps that have to be taken to make a change or a turnaround.
There are questions and tell tale signs to help determine where you are in your Life cycle:
- Have you achieved consistent growth in: A. Supporters (members or donors), B. Total revenue, C. Assets over each of last of the 3 years? (if not you are probably declining).
- Is your NFP generally more innovative and reward focused (growth phase), or is there limited risk taking within a more conservative mindset (mature phase).
- Do managers often come up with ventures or initiatives that are outside of the charter of the organisation (mature phase).
- If you were to fully reboot and restart you organisation tomorrow with your existing asset base, how would it be structured, who are the customers, what would the business model be and what type of resources and infrastructure do you need to operate it successfully.
In your planning assess where is your NFP is positioned currently in relation to the Evolution of NPFs in Australia, and where it needs to be positioned in future….
Stage 1 – Community based; 100% volunteer; Incorporated Association; CEO has a heavy direct operational focus
Stage 2 – 50% Volunteer/50% Staff; Increasing revenue sources; Moving towards owning property.
Stage 3 – 95% Staff/5% Volunteer (e.g. Board); Company Limited by /Guarantee; CEO has fully delegated responsibilities; Multiple subsidiaries; Strong asset base.
Having gone down the MILE, how is your organisation looking?
About Frank: He is a Cause & Effective Associate who works with cause-based organisations in areas including transitioning into the future, strategy, harness opportunities in changing environments, 360 degree revenue reviews, feasibilities, risk reviews, commercial enterprise development, and building and property options. Frank can be contacted here