Two slightly obscure and perhaps seemingly unrelated things have prompted me to write this post. Firstly I was listening to an episode of the Tim Ferriss show featuring Eric Weinstein and secondly I was reading responses to The Australian Institute of Directors (AICD) report on the need for Investment governance in NotForProfits (NFP). Both prompted me to think about the challenges the social and NFP sectors face. The comments on LinkedIn in response to the AICD report reflected common challenges and barriers to change; not enough money, culture and values vs mission.
The thing that struck me is that these challenges are not unique to a profit or NFP environment. They’re not even unique to a startup or multi million dollar business. They are instead functions of people in the business and perhaps reflect the culture of the NFP sector. Which retains, to my eyes an altruistic, expectation of giving and self sacrifice, where the rewards associated with corporate employment are to be turned down in favour of the good karma which indeed comes from contributing to a cause bigger than yourself.
Perhaps coupled with a fear of being judged by the same standards as your corporate peers.
Significant for a sector employing 9.3% of the Australian workforce and contributing approximately 4% to Australia’s GDP (ref) For context, in 2012-13 this contribution was more than double that of the state of Tasmania, and larger than the forestry, fishing and agriculture industries. And growing!
For those who have read or listened to Dan Pallotta, his proven premise that you have to spend money to make money is entirely relevant here (if you haven’t watched The way we think about charity is dead wrong please take the time to do so). Pallotta also contends that it is the public whom are opposed to this approach, however I have witnessed opposition from within the NFP industry itself, those with the closest personal values alignment whom I had hoped would also be most willing to maximise impact.
Struggles with competing skills sets or priorities happen within profit driven business too (think the IT team who wish to implement change but face resistance from the current users). Yet increasingly, cross functional skill sets where understanding the needs of the client are equal to technical ability, are being recognised and valued for the solutions they deliver. This understanding is an advantage the NFP sector holds in abundance, a deep empathetic connection to the sections of our society who most need understanding. An understanding which coupled with sustainable business models should enable them to deliver high impact solutions.
I acknowledge the NFP industry does struggle with a constant tension between purpose, values and the realities of operating in a capitalist society. However to find mutually inclusive solutions (financial, operational and high impact) in Eric Weinsteins words,
This is not a capability that everyone possess but one that Weinstein does offer some suggestions for cultivating. Suggestions such as partnerships between non tradition organisations, like MasterCard offering cash free banking to refugees, provide exciting opportunities for NFP and for profit entities in a time where much of a businesses value is derived from its intrinsic value not its tangible assets.
Business solutions that are at once efficient, effective and deliver change in the areas of society that need them the most are unlikely to be staring us in the face or someone would have addressed them already! By using the principles of lean management (efficiency), action research (effectiveness and continuous learning) and Lean startup (fail fast, fail forward) small successes will enable large scale solutions. All these techniques are agnostic of environment and rely on a try, fail, observe, learn and try again methodology. Key is that we have to be prepared to fail and for others to fail, and rather than gloat or dwell on the failure, celebrate the learning that comes from if failure. If we seek opportunities to celebrate the commercial value of deep empathetic understanding, look for partnerships beyond the traditional and invite thinking that looks beyond options A to C. Success will determine success and the NFP and social sectors can transform our communities.