Becoming more entrepreneurial: guest blog by Bill Freeman, NAVCA

This is a guest blog from Bill Freeman, Director of Services and Business Development at NAVCA. We are working in partnership with NAVCA to bring local support and infrastructure organisations a series of masterclasses on income diversity.  This article was written and presented by Bill, to set the context of our first session, ‘Becoming more entrepreneurial’.

Bill FreemanIn setting the context, I’m going to do two things. Firstly, tell you about the results of recent survey work about the challenges and responses facing the NAVCA membership and then share some insights into the journey my own organisation is on as it becomes more businesslike.

There are some big trends affecting support organisations:

  • State funding for infrastructure support and services is in decline, which is well documented and the Big Lottery Fund is rethinking how it funds infrastructure support.
  • In the drive for quality, innovation and efficiency we are being encouraged to increase collaboration and become more competitive at the same time.
  • There is a drive for a more demand-led approach to capacity building.
  • There is a greater emphasis on role of the private sector in government narrative and the sector being more businesslike.
  • The pace of change in the policy and funding environment requires infrastructure organisations to respond faster, whilst not being immune from the pressures themselves.

Leading in difficult times

The most frequent areas of challenge identified in NAVCA’s survey of our Chief Executives in May 2011 are:

  • financial climate and funding
  • workload and capacity issues
  • uncertainty and responding to change, and
  • Managing relationships and dealing with conflict.

The survey also identified six areas of development need. These are:

  • managerial skills
  • commercial/enterprise skills
  • influencing skills
  • skills for collaboration
  • strategic planning skills, and
  • communication skills.

We also asked about common practices and promising solutions that some organisations are adopting to increase and diversify their income. They told us what they were doing already, future actions they planned to undertake and activities they would not consider doing.

Of the activities that were being done already the most prevalent (94 per cent) was reducing operating costs and achieving efficiency savings. Next was leading or participating in bidding consortia, at 72 per cent, and 60 per cent were managing a building or premises where they host other organisations and provide services to them.

Looking at what people were not doing, but were planning to, we found around half of the respondents were planning to create more member only benefits to increase the value of membership; to work with local businesses on corporate social responsibility and to sell support and services to and through other support and development organisations.

Interestingly, of those activities which people were not doing and had no plans to start, top answer (77 per cent) was receiving commission for promoting or selling commercial products on behalf of a third party, next was asking philanthropists and individual donors to support infrastructure work and these were followed by owning a trading company at 45 per cent.

Changing our approach

I would say that most organisations like us did not grow by diversifying the types of funding we received. It was more likely that we grew by a finding a single type of funding that was a natural match for our mission and by creating an organisation tailored to the needs of that type of funding – the result being that our structures, systems, processes and our people are all aligned to work in a certain way.

Our preferences for funding from the state, in its many forms, are pronounced. Let’s not apologise for that. This type of funding has traditionally helped us perform our most mission-related activities – the kind of activities for which there is no market, things that you cannot price, sell and control access to the benefits of – such as lobbying, campaigning, advocacy.

The fortunes of so many support organisations, NAVCA nationally and our members locally, are linked to public funders’ willingness and ability to invest in infrastructure support and services. It would be difficult to conceive how we could fulfil our role effectively without some funding relationship with public bodies.

But if this type of funding is diminishing then funding for the “invaluable but un-priceable” activities will have to come from somewhere else.

Organisations often talk about replacing one type of funding with another but its not just about replacement – its about new business models which attract different types of income and having a business plan which signals how our structure, systems, processes and people need to change so that we can continue to be successful and sustainable by working in a different way.

At NAVCA we are trying to have a more sophisticated understanding of our market and our products and services. We are doing this by embedding marketing principles and practice into our thinking, planning and doing.

NAVCA provides a range of products and services for members and users report high levels of satisfaction but, without the effective use of marketing, the scope and reach of our work with members is likely to fall short of its potential.

By auditing and analysing all of our products and how they relate to each other, we have a better understanding of their current performance and future potential. We are able to make judgements about their financial viability and how they can be delivered more effectively and efficiently in the future. We also know what we need to do ourselves and what’s best done by others, often by working in partnership with them.

We only want to deliver products which we know are viable, have value and which contribute to our strategy.

High levels of trust with our members put our organisation in a good position to identify needs which are unfulfilled or not being met well enough by anyone else in the marketplace.

Many of the emerging needs we identify within our membership can be addressed with a solution which resembles something that we already offer. The cost and risk of working in this way are quite low. Many of these products and services can be adapted for use in other markets.

We would no longer develop something when there is insufficient evidence of a market for a product or service. However sometimes our understanding of the market potential is not sophisticated enough to help us make decisions about the viability and value of new products and services.

The costs of investment in the exploration and experimentation stages of product development have largely been covered by state funding but we cannot rely on this as the main driver of innovation within the organisation in the future. Before we decide to invest the charity’s own resources in the development of a new product or service in the future we will need a much stronger insight into its viability and value.

I enjoy working this way but it has its risks. If we are too focussed on the products and services, and not enough on the people who we want to support, then we would be perpetuating the supply-led services culture which often falls short of an individual organisation’s needs and demands.

I know our members aren’t sat on the edge of their seats waiting for the next offering from NAVCA. What’s at the forefront of their minds is dealing with those things which are standing in the way of their success. Our transformation is about ultimately changing our thinking, behaviour and conversation with members from “what we do” to “what we can do for them”.

Bill Freeman

Further links

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