A conversation with my CEO: Why Strategies Fail

March.Blog

This is always a pleasure to get an opportunity to work with a CEO, who is accessible, responds to your questions and feedbacks in impressive time and drives an organisation with exemplary motivation and zeal, because of which, his employees feel ‘free to innovate and deliver results’.  We are lucky to have such a CEO in SNV Netherlands Development Organisation, with whom; all the employees get opportunity to have an open chat in a month. In one of such chat sessions, I was asking my CEO about SNV’s strategic focus for next five years; mainly to understand, where do we [SNV] want to go and what do we want achieve and how quickly and efficiently we can do it together!

Response of my CEO for that question was built on his pragmatic understanding of the subject, which was evolved based on his long term engagement in planning and strategy development for government of Indonesia as well as his works with other development organisation and bi-lateral agencies. The answer was short and simple: ‘to survive in a competitive market, we need constantly evolving strategies and success is possible, even in a hostile environment. Long term planning may not work all the times although we can do a planning for plan sake’.

I believe the above mentioned statement reflects that understanding the value of and need for a strategic plan is a great place to start, but just wanting something, isn’t enough. Developing a strategic plan takes discipline, foresight, and a lot of honesty. Regardless how well we prepare, we are bound to encounter challenges along the way. I could find out six key points[1], which should be considered to introduce effective planning in organisation and translating it into real actions, which will bring us, closer to our goal of implementing a strategic plan that actually achieves results and improves our business.

  1. Understanding the environment or focusing on results. Planning teams must pay attention to changes in the business environment, set meaningful priorities, and understand the need to pursue results.
  2. Full commitment.Organisational leaders like CEOs, Managing Director, Country officers must be fully committed and fully understand how a strategic plan can improve their enterprise. Without this knowledge, it’s tough to stay committed to the process.
  3. Having the right people involved.Those charged with executing the plan should be involved from the onset. Those involved in creating the plan will be committed to seeing it through execution.
  4. Willingness to change. Organisation and our strategic plan must be nimble and able to adapt as market conditions change.
  5. Having the right people in leadership positions.Management must be willing to make the tough decisions to ensure the right individuals are in the right leadership positions. The “right” individuals include those who will advocate for and champion the strategic plan and keep the company on track. However, we must avoid micro-managers, which is very evident in many instance and I have witnessed such ‘management killers’’.
  6. Unrealistic goals or lack of focus and resources.Strategic plans must be focused and include a manageable number of goals, objectives, and programs. Fewer and focused is better than numerous and nebulous. Also be prepared to assign adequate resources to accomplish those goals and objectives outlined in the plan.

By adhering to these success factors, we can create an effective planning process, build a realistic business direction for the future, and greatly improve the chances for successful implementation of our strategy.

Keshav C Das, Senior Advisor, SNV Netherlands Development Organisation

New Delhi, March 01, 2015

[1] http://www.forbes.com/sites/aileron/2011/11/30/10-reasons-why-strategic-plans-fail/

Why does ‘not for profit’ pathetically fail in business development?

October.BlogThere is a paradigm shift in accepting ‘business development’ as one of the core activities in not for profit organisations in recent days. This ‘shift’ is mainly triggered due to the reasons that funders and donors are demanding more accountability, traditional forms of funding are becoming smaller and less reliable, donors are focusing for an increasing engagement with private sector instead of not for profit entities and hence, for-profit businesses are competing with non-profits (not for profits) to serve community needs and lastly needs of community are growing in size and diversity!

In the face of this new reality, an increasing number of forward-looking non-profits are beginning to appreciate the increased revenue, focus and effectiveness that can come from adopting “for profit” business approaches. Increasingly, they are reinventing themselves as social entrepreneurs, combining “the passion of a social mission with an image of business-like discipline, innovation, and determination.”[1]

For many not for profit organisations, this new reality is still a surprise and struggling in a confusing state of operations to survive; taking up quick-fix based remedies like reducing size of human resources, cutting cost, merging with other organisations or merging it multi-country operations into a regional operations. Will this change bring brighter days to them? Answer is clearly NO!

To survive in the present competitive development market, not-for profit companies really need to look for a systemic change in its overall process of business model, orientation and strategies. Non-profit organisations now need to carry out a serious self–reflection and identify its key strengths and services (offerings), which are unique, competitive, affordable and having a ‘brand ’ of these offerings in market. To formulate its services, accurate understanding of community and development needs to be ensured so that organisation can offer higher quality of services by focusing on what it does best, which will eventually enhance credibility with clients and funders. Needless to say that such transformation will happen in organisation only through a continuous learning and improvement.

We have several myths on pursing business development activities; such a business development is a team work, funding can be mobilised with a smart and innovative business proposal or even for many non-profit workers; business development can also be done over an informal beer meeting. These beliefs are relative and its success is also isolated, but it can’t be considered as organisational business development strategy.

In the contemporary competitive environment, non-profit business development should be built upon five key principles:

  • Identifying a set of best mission-related earned income opportunities, where fund raising will be smooth and there is a better chance of winning (it could be water, health, energy or agriculture and any other opportunities). A continuous researching on feasibility of these opportunities is crucial, based on which organisation can select the most appropriate ones to develop realistic business plans
  • Identifying the major assets and capabilities that organisation has to invest in its business development. These asset could be a team of experienced ‘warrior’ for business development or internal fund to invest for business development
  • Recognising that organisation’s vision, mission and strategic goals represent the purpose and context for business development.
  • Gaining a better understanding of the motivations and support for doing business development, both within the organisation and in peers, and, at the last
  • Leadership in the organisation, to drive business development with proven knowledge and skills. We must remember business development is a specialised job.

Sad part is that most organisations do not consider these principles, instead take up business development activities without a clear strategy and plan of actions. Outcome of such initiatives is ‘A Bad Dream’.

Keshav C Das

Senior Advisor

SNV Netherlands Development Organisation

[1] “The Meaning of Social Entrepreneurship” by J. Gregory Dees.

Soft Power, Great Indian Painting and Development Organizations

It is increasingly axiomatic today that an organization can’t sustain merely with offerings of services, making knowledge available to its customers (do not like the word beneficiaries or client) and providing advocacy. This approach can be considered as conventional business strategy, which is good enough to survive but not sufficient to grow. I find it as an assembly unit with well-defined process and controls, which employs enormous resources (human, money and time) but produces outputs, which is even less than for its own subsistence consumption.

This is a classical instance of learning disability of an organization, which was conceived and operating for many decades with shareholders capital and the so-called management is unknowingly transformed into an obsolete operating system (OS), which was relevant many years back, but now, such OS does not have any relevance and compatibility owing to the changing market scenario, new breed of customers-who have unique demands and different environment for investing resources, which are utter confusing “post-modern market web’ for the old OS. And, needless to say, that this is the ‘point of no-return’, from which turnaround strategy is not practically feasible.

Perhaps, in the contemporary time, many non-profit development organizations are facing this problem. Economic and political pressures, taxpayer revolts, and a few high-visibility scandals have all hurt the nonprofit sector. As a result, nonprofits face critical decisions about their future—and perhaps their very survival. Many nonprofits are considering a fundamental change in organizational structure because of economic pressures such as increased competition from business, government, and other nonprofits; a shrinking supply of experienced leaders willing to remain in the sector for inadequate wages; and increasingly urgent and complex community needs.

Without going into the details of specific cases, it is easily understandable that there is a gradually increasing concern of communities, customers and general public on the fidelity of the very concept of non-profit. The primary question is: how does an organization work for not making profit? And, why there is no remarkable evidence of poverty reduction, even after providing enormous financial aids, capacity building services to poorest nations of the world? Indeed, these are not new questions; answered for last few decades and it is an established fact that non-profit organizations are important and necessary for development. However, to inject a true spirit of development into most least developed areas of the world, non-profit organization needs re-structuring in the operating system with timely and relevant marketing principles, which should be powered with a new breed of development professionals with latest skill sets, expertise and outlook. Unfortunately, such changes are rare and one of the reasons for resisting such changes is the so called ‘dead woods’ and their enwrapped traditional outlook about development which is completely inert and unaffected with the new world of development.

This is purely a problem of limited understanding of actual marketing principles and its application in development. This is crucial for non-profit organization to give up a utopian philosophy of development which is derived from conventional donor driven, grant oriented activities, propelled with very general impact parameters like ## people having access and using renewable energy technologies in least developed countries. Why can’t we teach the community to fish, instead of providing the fish?

I believe, development model shall be linked to market forces and the prime objective should be to empower poor households with entrepreneurship skills for functional business enterprise building. Anything without profit and anything for free is unproductive, unattainable and counter-productive. And, therefore, we shall have capacity development services, to build entrepreneurship, business and employability skills at community level. This is inevitable.

The development organization should only enable community/households to have the access to market and market forces. This should be the community, who will decide-what do they like to produce, process and trade for enhancing their living standards, socio-economic growth and bringing happiness to their lives. Unfortunately, it is experienced that many development organizations do not provide freedom to community to decide. Community’s prosperity should be built on its ability to perform economic activities, which would attract appropriate funding through windows like microfinance, payment for environment services, climate financing (not necessarily grant, aids). Anything that jeopardizes the community’s true desires for development (economic and social) endangers the future of development and anything that jeopardizes development endangers sustainable growth of the world.

Soft Power and Great Indian Painting:

The notion of soft power is relatively new in international discourse. The term was coined by Harvard’s Joseph Nye in his book The Paradox of American Power to describe the extraordinary strengths of the United States that went well beyond American military dominance. As the former head of communication of UN, Shashi Tharoor quoted Nye: Power is the ability to alter the behavior of others to get what you want, and there are three ways to do that: coercion (sticks), payments (carrots) and attraction (soft power). If you are able to attract others, you can economize on the sticks and carrots.
I can see a clear relevance of the concept of soft power for the development organizations. The soft power, a not-for profit (development) organization rests primarily on three resources: its culture (in aspects where it is attractive to others), its development values (broadly the global value proposition) and its implementation modality (again, teaching –how to fish). In today’s information era, only those development organizations are likely to gain the inherent control of soft power and so succeed: those whose dominant cultures and ideals are closer to prevailing global norms (which now emphasizes liberalism, pluralism, autonomy and localization); those with the most access to multiple channels of influence over how development issues are globally and regionally framed; and those whose credibility is enhanced by their regional and international performance. Indeed, as stated above, all these aspects are linked to marketing and its essential forces. Therefore, to make relevant and contemporary, development organizations must meet fire with fire and that is only possible, if they are powered with ‘soft power’.
The other reference on great Indian painting came from a passage of the much-misunderstood novel of Salman Rushdie: The Satanic Verses. Mr. Rushdie writes of the ‘the eclectic, hybridized nature of the Indian artistic tradition’. Under the Mughals, he says, artists of different faiths and traditions were brought from many parts of India to work on a painting. One hand would paint the mosaic floors, another the human figures, a third the cloudy skies: ‘the individual identity was submerged to create a many-headed, many-brushed Over-artist who, literally, was Great Indian Painting’.
This evocative image could as well be applied to the very idea of re-structuring of development organizations with competent, advanced skills human resources. This can also be an idea of organizational team building and oneness. Unfortunately, this oneness and managing human capital is still scratch a living from the soil. Undoubtedly, to transform this scenario, we need new stream of financing and investment model. Development organizations cannot rely solely on aid or unsustainable business models; it needs to mobilize the power and scale of capital markets, which provide a far greater capital opportunity than current public sector or philanthropic funding. In order to achieve this, organizations need to make it as profitable to invest in tackling pressing social issues as it is to invest in regular commercial activity. One of the inspiring leaders of modern world rightly says: “With a donation, money has one life. With a business it has many lives” – Muhammad Yunus, Nobel Laureate, Founder Grameen Bank.

Keshav C Das

Advisor, SNV Netherlands Development Organisation.