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Archive for February, 2010

Boards of Directors, Strategy and Funding

February 28, 2010 Leave a comment

I am not sure how many really good boards of directors exist in the social sector here, never mind exceptional boards. There may be differences between the voluntary, community and charity parts of the sector in this regard, but overall experience has taught me that governance is a major issue. 

Some of this is not the fault of the sector, as in so many cases board membership is imposed by funding streams, in particular government departments or government agencies. Now many non-government funders such as the new breed of social philanthropy funds are also seeking board membership.

Representative boards, often loaded with stakeholders, might seem like a good idea.  Yet without training or even a basic understanding of their role of directors, such positions often lead to disaster. I have advised social enterprises and have been asked to attend board meetings over the years and have often seen such issues first hand. Talking to colleagues in a class I was teaching on Friday morning it seems that I am not the only one. 

Another colleague of mine pointed out last week that it is too often the case that funders, offering an amount of money for a particular tactical direction, can lead organisations astray – mission drift. The temptation to take funding, particularly in these recessionary times, is often overwhelming.

So organisations adjust their objectives and the drift begins. But what happens when the funding runs out, the funding organisation (including governmental entities) disappear into the sunset and the social enterprise is often left with a high risk strategy not of their making? 

A strong board needs to be in place to ensure that these events don’t happen. We have seen more attempts to match mature, wise potential directors with social sector organisations in recent years. But the gene pool we seem to be using is very small and more needs to be done to entice potential directors from the commercial sector. I am not saying that we ‘load’ the boards with commercial people, but a few carefully chosen directors can make a huge difference.

Strategic direction and adherence to the mission needs to be as important in board meetings as the oversight objectives. It is all a matter of balance.

Its the Kids, Stupid

February 25, 2010 2 comments

One of the interesting things about the BT Young Scientists competition this year was the winner – a young Cork student who invented a low cost, low tech biomass-fired cooking stove for the developing world. Richard O’Shea from Blarney is now working with Trocaire and Concern to get these to the developing world as quick as possible. Like the stove mentioned in an earlier blog, this one is also safer to use and will help the environment – the double or treble bottom line in action.

I have always thought that the entrepreneurial future of this country is in the young – even the tech transfer out of the university sector. Look at the top tech start-ups of recent times: Yahoo, Google, Facebook – all students, from undergraduates to postdocs. Not just academics.

Perhaps we should be concentrating more on our students in terms of entrepreneurial pursuits. We should be widening entrepreneurship, and indeed social entrepreneurship, teaching and training in all levels of education. Indeed not only should entrepreneurship be taught in second level schools, but is there room for social enterprise to be developed in the school system, never mind in higher education?

Too Many Charities?

February 24, 2010 Leave a comment

A follow-on to several of the posts on this blog, todays Irish Times has an article by Sarah Carey on charities and in particular ‘value for money’. In the article the journalist talks about the Niall Mellon Township Trust (would it be better to train local builders, invest in local firms, create employment) as it seems the NMTT is now building a large portion of local social housing through the Peoples Housing Process (this via another article in the Sunday Times by Mark Tighe) which is subsidised by the South African government.

She goes on to comment on other charities, in terms of having several basically in the same area and whether this is a good use of funding or not (this has been discussed here a number of times in terms of collaboration, mergers). There is no doubt that in these recessionary times there will be an increasing spotlight on the social sector in terms of ‘value for money’, again the SROI model will be pertinent in this regard. In a fragmented sector, the question posed is: do we simply have too many organisations trying to do the same thing?

Importance of SROI

February 24, 2010 1 comment

For those getting involved in a social enterprise, or those thinking of setting one up, a key area to look at is Social Return On Investment or SROI. Those involved in a commercial start-up would be familiar with ROI or Return on Investment. SROI should express social value in monetary terms, which allows a relative view of the impact of the activities to be made. This is of particular importance to investors or financial stakeholders in the organisation. This allows a social enterprise to concentrate on critical impacts, rather than inputs or indeed outputs. It is not always easy to do which is why at the European Venture Philanthropist Association (EVPA) conference last year there was a lot of discussion about indicators of impact.

Use of SROI is not just for the ‘traditional’ social enterprise sectors such as employment or poverty but is often being applied now by arts and culture organisations. With government funding being cut there is increasing competition for funding and a good SROI analysis can be a strong indicator of success. As social enterprises are created to solve or usually alleviate a social problem, therefore actual impact is critical. But in many cases measuring an impact particularly those involved in human beings is difficult – when do we take the impact point? For example if the impact is in young people when do we measure the impact? This leads to a mixture of impact measures some of which may not be possible to be communicated in mere numbers.

One of the aims of this blog is to disseminate thought leadership, practical examples and information about the sector. We will be concentrating on SROI in the coming months in particular, as its use will be a critical development across the sector in the coming months and years.

Future-Proofing the Organisation

February 23, 2010 Leave a comment

One of the big difficulties in these times is knowing what is ‘coming down the line’. Technology in particular and society in general is moving at such speed that it is difficult to develop planning, mitigate against risks or indeed spot opportunities. Future proofing the organisation has become a major issue. Much has been written about ‘strategic shocks’ and ‘strategic surprises’, so-called Black Swan events, the negative side to not being aware of future trends.

Many organisations and leaders today are questioning their strategy, in part due to the huge shocks that have occurred in recent years, particularly the financial crisis that began in 2007.  

But there are ways to prepare oneself and ones organisation. The Ryan Academy is aware of such issues which is why we have developed a foresight and future trends two-day module on the 25th and 26th of March. This module is designed to help organisations, including those involved in policy, strategic planning, or entrepreneurs seeking the next market wave. It is useful too for the social sector, as the organisations and policy makers here need to be able to discern the future and make preparations for it.

We have persuaded one of the top futurist planners in Europe to come to Dublin to do a two-day workshop on how to identify future trends. Sheila Moorcroft is Director Research for Tomorrow, Today, and has over 20 years experience
in futures research. Sheila specialises in identifying and assessing the potential (and constraints) of ‘soft’ changes – social change and changing values and attitudes – likely to affect the development of new markets and the application of new technologies. Her approach to futures relies heavily on workshops to create new insights by integrating wide-ranging knowledge together with research findings. Sheila works extensively across the private and public sector.

In the more extreme cases, many of these ‘black swan’ events or strategic shocks can be identified in advance. Events such as Pearl Harbour, 9/11 or even the economic meltdown had advance warnings if one knew where to look and how to piece together the information.

The fact is, it is often the smaller trends that catch us out – not necessarily the seismic shifts. Whether it is future-proofing the organisation against risk or seeking out new opportunities, this is something we all need to think about.

Space to Experiment

February 22, 2010 Leave a comment

One thing that years of research on innovative organisations has proved is that really innovative organisations have room to experiment. It is like the Samuel Beckett comment: Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.

One of the unfortunate outcomes, of so many Irish social enterprises being dependent on government funding, is that it tends to lead to little or no experimentation. We discussed this during the social enterprise development class in the Ryan Academy on Friday morning. The participants in the class are all involved in social enterprises, from board level to senior managers to those embarking on creating new social enterprises. The consensus was that the rules under which funding is given means that very few have any funding spare to experiment with new ideas.

If we are to really invoke the spirit of innovation, which the country needs so badly now, we need to allow our social enterprises to try and fail. There is a cultural issue about failure in Ireland and a form of civil service mentality that says it is better to keep the head down and not try new things. Perhaps this mentality is one of the reasons the country seems to be in the deep mental funk that it is at present.

We need our social enterprises to experiment, to try new things and yes, to be allowed to fail. I have been on non-profit boards that have tried new things and those that haven’t. I can tell you the ones that tried new things, or had the space to try new things, were the more innovative organisations and it showed in their delivery on the ground.

Again this leads back to Your Country Your Call, which is really a grand social experiment. It was discussed at early meetings during it’s development – what happens if no one applies? What happens if there is no clear winner? What happens if there are too many applications? And so on…..but all of these fears were overcome and the experiment has begun.  So far there are over 700 ideas listed and still 67 days to go. Go on Ireland, experiment.

Mergers in Social Enterprise

February 18, 2010 Leave a comment

If the funding crisis for the sector turns out to be as bad over the next number of years (on the assumption that significant government cuts will continue for at least another two years) then one of the outcomes could be more mergers in the sector.

Today saw another announcement in the UK around this area. Two London-based charities that provide services for people with learning disabilities and mental health needs will merge at the beginning of April. Support for Living (operates in west and north-west London) and the Southside Partnership (south London) will form a group with a combined turnover of £25m and with over 650 staff. A name will be announced after the legal merger takes place on 1 April although interesting to note they will be able to use their brand under the new branding (this is a tricky marketing ploy, and also leaves the way open for other organisations to join at a later stage). At the moment no cuts are planned, but pooling of resources and I presume better bargaining power will be some of the results.

In a sector that tends to be very fragmented, this is one trend which isnt going away. Of course there are issues around mergers. Having worked in the mergers area many years ago as a consultant, I can confirm that these things need to be planned well. And not just on paper. Merging two organisational cultures is often the hardest thing to do, in any sector.

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