Transcript Collaborations, Alliances, Partnerships and More: Winning

Collaborations, Alliances, and Partnerships:
Winning Strategies for Uncertain Times
Sponsored by
American Savings Foundation
Community Foundation of Greater New Britain
Monday, September 14, 2009
Jane Lennox, Lennox Associates and the Nonprofit Consulting Group
860-561-3376 [email protected]
Outline
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Introduction
Concepts
Examples
Tools
“Watch Outs”
The Future
Paradox and Uncertainty
The danger in times of turbulence is not the turbulence.
It is to act with yesterday’s logic.
Peter Drucker
Managing in Tough Times
Bridgespan Survey
www.bridgespan.org/nonprofit-managing-in-tough-times-survey-update-may-2009
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Financial situation for nonprofits is worsening, service demands
increasing, and nonprofits are focusing on their core programs.
More organizations are tapping into reserves and making
contingency plans for both crisis and better times ahead.
More nonprofits are laying people off and taking other employee
related cost saving measures. Real danger of losing good people.
Most nonprofits remain optimistic and many have received
emergency funds to help with the immediate fallout.
Tough times = tough choices. Opportunity to emerge stronger and
smarter.
Perspectives:
Good Minds Differ
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Collaboration isn’t viewed as positive, possible, or preferred by everyone.
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For collaboration to work the participants must be able to:
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Unshakable beliefs, control, independence, stubborn, rigid, impatient, have to
resources to go it alone.
Truly understand perspectives different than their own.
Make choices that are in the best interest of the enterprise and not necessarily
what they would choose if they were working on their own.
Achieve policy change, cost savings, new solutions to old problems, and
innovations in thinking.
Collaboration is hard, time consuming and frustrating, and requires new
skills that often are not in the toolbox of many nonprofit executives, staffs,
and Boards.
Options
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Close
Reduce activities across all programs.
Scale back or eliminate programs. Get smaller to get stronger.
Reallocate expenses.
Lay off staff, cut salaries, furlough staff.
Cut overhead.
Restructure.
Ramp up fundraising.
Change business processes to increase efficiency.
Collaborate, merge, acquire.
The important thing is that you choose.
The Nonprofit Starvation Cycle
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Unrealistic expectations about the cost of running a
nonprofit and the infrastructure requirements.
Nonprofits succumb to pressures to keep costs low and
come to believe the unrealistic expectations.
Nonprofits spend too little on infrastructure and
underreport what they do spend in order to meet
expectations.
The unrealistic expectations are perpetuated.
Nonprofit Overhead Cost Study
www.nccsdataweb.urban.org/FAQ/index.php?category=51
The Nonprofit Starvation Cycle
www.ssireview.org/the_nonprofit_starvation_cycle
Break the Cycle
Shift focus from costs to outcomes
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What are we trying to achieve? What does success look
like?
Funders and nonprofits talk candidly about what it will
really take to deliver the desired outcomes; not how
cheaply it can be done.
Nonprofits understand their true program costs.
Standardize, consolidate, streamline.
Types of Collaborations
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1+1=1
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1+1=2
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2, 3, 4... = 1 supporting
or leading the group
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Hybrid
Collaboration Ladder
Strategic partnering: both partners assume
responsibility for each other’s customers
success
Solutions: one partner assumes responsibility
for the satisfaction of the other’s customers
Bundling: Value-added integration
Arms Length: Buy/sell transaction
QuickTime™ and a
TIFF (Uncompressed) decompressor
are needed to see this picture.
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Big Theater: Small Town
Artistic excellence.
Major impact on tourism but there are “town/gown” issues.
Theater wants a new building and someone will donate the land.
Theater can raise the money, but needs town cooperation to build.
Town wants a new library, childcare center, and affordable housing.
Should the theater and the town collaborate and create a
community development project that addresses all four needs?
Nonprofit Collaborations in Boston
The Barr Foundation
Roy Ahn
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Pay attention to the soft skills
 Trust.
 Do not jump too quickly to outcomes.
 Set ground rules and build relationships at the executive Director,
staff, and Board levels at the outset.
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Costs and benefits
 Technical assistance fees, staff time, and opportunity costs are
upfront investments that pay off later.
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Implementation is very challenging.
The Barr Foundation www.barrfoundation.org
Trust
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Get along on a personal level.
Committed to shared mission, and willing to act in the best interests of the
collaboration even when it is not what you prefer.
Confidentiality.
Highly competent, respected.
Reliable
I think the biggest thing you need in order to collaborate is confidence in
yourself as an organization and trust in your colleagues, both within the
organization and with the people you’re partnering with.
What you cannot be doing, and no amount of TA will overcome it, is to feel like,
“I can’t partner with you and have to look over your shoulder because I don’t
trust you.”
A nonprofit executive director
Know Yourself and Your Organization
Mission Vision Values
Governance
Infrastructure
Capacity
Capability
Strategy
Culture
Ethos
Behavior
Herrmann International
www.hbdi.com
5 Dysfunctions Of A Team
Patrick Lencioni
www.tablegroup.com/books
Technical Assistance
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Technical Assistance (TA) for collaboration differs from TA for
individual organizations.
One-size does not fit all.
Need multiple TA providers using a team or General Contractor
approach.
TA must be sequenced and timed appropriately.
Funders
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Financial and convening resources that can spur nonprofit
collaboration.
Facilitate introductions and communication. Provide a nonthreatening way for organizations to say, “This is what I might be
interested in.”
Subsidize the costs of technical assistance and/or the cost of the
impact on the organizations.
Provide realistic financial incentives for collaborators to collaborate.
Essential that assistance is matched to the needs of a particular
collaboration, because every collaboration is unique.
Funding
“The major finding of this study is that the current financing system
for nonprofit infrastructure—including foundation funding—favors
organizations that support and represent the larger nonprofits of the
sector (which make up a small fraction of nonprofits overall) while
networks and infrastructure organizations that serve tens of
thousands of small to midsize nonprofits have been consistently
under-funded.”
The Nonprofit Quarterly Study on Nonprofit and Philanthropic Infrastructure
http://www.nonprofitquarterly.org/images/infrastudy.pdf
Constellation
Organization
www.boozallen.com/publications/article/658308
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Do what you do best and form relationships for everything else.
Your primary business becomes managing relationships in the
constellation.
Make money from the things you do best. Sell your value. Stop
doing anything you’re not great at.
Don’t think of yourself as a single organization. Think of yourself as
one star in a constellation.
Instead of building capacity yourself, buy, borrow, lease it.
Constellation imperatives: collaboration, connectivity, security,
individualization, transparency
Wraparound Milwaukee
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System of care for children with serious emotional, behavioral, and
mental health needs and their families.
Kids involved in at least 2 and often 4 different state systems.
Shared philosophy.
Integrated services and broke down funding silos.
Accessed a little used section of Medicaid reimbursement.
Became the single payer for all children's services.
Reduced residential placements, hospital visits, recidivism.
Increased clinical scores, school attendance, living at home.
$9,000 per month residential; $3,800 in Wraparound Milwaukee.
Aligned with goals of public funders and family preferences.
www.milwaukeecounty.org/WraparoundMilwaukee7851.htm
www.youtube/watch?v=P1CTskgyYMg
MacMillan Matrix
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Competitive analysis
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Are we the best organization to provide this service?
Is competition good for our clients?
Are we spreading ourselves too thin without the capacity to
sustain ourselves?
Should we work cooperatively with another organization to
provide services?
Four main assessments:
 Fit, program attractiveness, alternative coverage,
competitive position.
Modified
MacMillan Matrix
High Mission/High Money
High Mission/Low money
Low Mission/High Money
Low Mission/Low Money
Process
Management and
Communication
RACI Chart
Strong Field
Framework
James Irvine Foundation
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Coordinating the efforts of multiple organizations and individuals around a
common goal and creating the conditions necessary for them to succeed.
Rising tide supports weaker organizations and fills gaps in service, enhance
peer bonds and knowledge, common goals, and communication
Promotes diversity of types and sizes of organizations as well as in strategy
and approach to the issue
A Field has:
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Shared identity
Standards of practice
Knowledge base
Leadership and grassroots support
Funding and supportive policy
www.irvine.org/publications
Strong Field Framework
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Define the Field as narrowly as possible to maximize potential
alignment.
Map, research, and assess the organizations focused on solving the
problem.
Analyze results and formulate recommendations.
Form collaborations based on the findings and recommendations.
Tactical
Mapping
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Map the relationships among the people, institutions, and
systems that perpetuate the condition you seek to change.
A planning tool for building more comprehensive strategies and
better coordination with allies.
Visualize the terrain.
Identify points of leverage.
Center for Victims of Torture: New Tactics Project
www.newtactics.org/en/tactical-mapping
Collaborating
from Strength
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Synergies between philosophies and missions.
Combine strengths to make each more effective in their mission.
Half the Sky: education and nurture. China Care: specialized
medical care.
China Care allows Half the Sky to save fragile children. Half the
Sky allows China Care to expand exponentially.
Aligned with the new Chinese government plan to improve orphan
care in its welfare institutions throughout the country.
The partnership makes for a better overall plan for the well-being
of orphans in China and will helps both organizations serve more
orphans with special needs.
Barriers to
Collaboration
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Few financial incentives driving deals.
Few financial “matchmakers” (as there are in the corporate world) to help
leaders identify, explore, and finance deals.
Little guidance on how to evaluate and structure potential deals.
Often used to shore up finances, make organizations appear more
attractive to funders, or to address a succession vacuum.
Frequently reactive and involve at least one distressed entity.
Infrequently seen as a way for healthy organizations to strengthen their
effectiveness, spread best practices, expand reach, improve or transform
the system, and do it more cost-effectively making best use of scarce
resources.
Watch Outs
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Avoid the dragonfly method.
Inadequate time and attention to relationship building.
Insufficient data collection and analysis. Flawed assumptions.
Myopia. Incomplete perspective.
Absence of strategic rationale.
Lack of clarity. Trying to accomplish too many things with one strategy.
Mismatched goals, skills, operating cultures, communication or management styles.
Not getting help. Not learning new information. Not changing.
Executive Director centered.
Conditions Favorable to
Collaborative Activity
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Fragmentation
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High degree of competitive pressure
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Variable performance that is measurable. Pressure to improve, change, adopt
new practices, technology.
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Predominantly institutional funding sources.
Inherent barriers to “organic”growth
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Asset and labor intensive.
Importance of local brand.
Saturated market.
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Highly regulated environment.
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Large number of nonprofits with many small players.
Hot Issue
Power centers want change.
The Future
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Paul C. Light
David La Piana
Booz, Allen, Hamilton
Connecticut Legislators
Rescue
Fantasy
(aka The Blanche DuBois Strategy)
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Donors rise to the challenge. Philanthropy saves the day.
Public sector bailout.
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Not enough money.
Only a few nonprofits benefit. Least well known, but most necessary
left out.
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Favors large single organizations or small sub-sectors
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Service Nation
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A good, but inadequate response.
Withering
Winterland
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Every nonprofit suffers.
Government deficits reduce contracts and grants.
Nonprofits starve themselves into a weakened state with such
inadequate infrastructure they can barely function as an
organization or serve their beneficiaries.
Large organizations become predatory.
Layoffs swell the unemployment ranks.
Arbitrary
Winnowing
(aka Big Box Strategy)
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The most likely scenario.
Rebalance the sector toward larger, richer, and fewer organizations.
Marketing budget, brand, connections, and broad community
support will be the best predictors of survival.
Eliminates the middle class of nonprofits.
Alters the role and purpose of the sector in society.
Transformation
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The most hopeful and most challenging scenario.
Relies on nonprofits leading, collaborating, changing the way
they do business and relate to each other and the business and
government sectors.
Deliberate, collective action by many players.
Requires a new mindset and bold action
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Speed, flexibility, interactivity, and a high tolerance for volatility,
negative feedback, ambiguity, and redundancy.
David La Piana
This transformation will not be optional. Just as the day has nearly
passed when nonprofits are viewed as charities, so too will the
current conceptualization of nonprofits as institutions and perhaps
even as organizations give way.
Many top nonprofit brands will instead operate through and be
known primarily as networks. Even those that maintain institutional
cohesion will be organized to a far greater degree around shifting
coalitions, online activism, and a mobile workforce, using volunteers
with day jobs in unrelated fields to replace many staff functions.
La Piana Consulting
NonprofitNext Initiative
Megacommunities
Mark Gerencser, Christopher
Kelly, Fernando Napolitano,
Reginald Van Lee
Booz, Allen, Hamilton
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Large multifaceted, ever-changing organism. Decentralized,
interconnected structure.
Tri-sector engagement and overlapping vital interests. Reach goals
they cannot achieve alone, interacting according to their common
interests while maintaining their unique priorities
New degree and type of connectedness among players and a new
set of mechanisms to manage the connections.
Balance tensions with operating order not hierarchical control.
Echoes the attitudes of the younger generation.
General Assembly Proposed Bill No. 163
January Session, 2009 LCO No. 924
Introduced by: SEN. DEBICELLA, 21st Dist.; REP. ROWE, 123rd Dist.; REP. HWANG,
134th Dist.
AN ACT CONCERNING THE PRIVATE ADMINISTRATION OF SOCIAL SERVICE
PROGRAMS.
Be it enacted by the Senate and House of Representatives in General Assembly
convened:
That the general statutes be amended to transfer the administration of all social service
programs from the Department of Social Services, the Department of Developmental
Services and any other state agency administering a social service program to
community-based private providers no later than July 1, 2010, without any reduction
in services, except, in geographic areas where a community-based private provider is
not available to provide a particular service, as determined by the Secretary of the
Office of Policy and Management, the state agency currently administering a social
service program may continue to administer the program through July 1, 2011.
Statement of Purpose:
To transfer to private, community-based providers all social services provided
by the Department of Social Services, the Department of Developmental
Services and other state agencies.
Referred to Committee on Human Services
General Assembly Proposed Bill No. 5415
January Session, 2009
LCO No. 2011
Introduced by: REP. MOUKAWSHER, 40th Dist.
AN ACT CONCERNING THE CONSOLIDATION OF PRIVATE SOCIAL SERVICE
PROVIDERS.
Be it enacted by the Senate and House of Representatives in General Assembly
convened:
That the general statutes be amended to require the Department of Social Services and
all state agencies that provide funding to private providers for the care or group living
arrangements of state citizens to develop and implement a plan to consolidate
providers of such services.
Statement of Purpose:
To attain greater efficiency and cost containment in the delivery of social
services provided by private nonprofit providers by eliminating excessive
executive and administrative costs incurred by the state due to the number of
such providers and their individual executive and administrative personnel and
salaries.
Referred to Committee on Human Services
The Last Word
Tao Te Ching
Lao Tsu
True leaders are hardly known to their followers.
After them, come those that are loved and admired.
Then, those that are feared.
Then, those that are despised and defied.
If you don’t trust the people, you make them untrustworthy.
In the end, when a great thing has been accomplished,
the people say, “Ah! We did it ourselves.”
Thank You!
Jane Lennox
Lennox Associates and the Nonprofit Consulting Group
20 Flagstad Road
West Hartford, Connecticut 06107
860-561-3376
[email protected]