Numerous reports have been released in the last few years highlighting tumultuous trends such as climate change, mass urbanisation, income inequality, migration, the felt impact of the third industrial revolution, and the anticipated disruption of the fourth industrial revolution.
In the UK there are the questions around Brexit, the decline of trust in institutions, challenges to fundraising practices, ageing donors and millennials entering the workplace.
These trends are not siloed from each other; they interplay with each other, creating a level of complexity that our linear models struggle to deal with. Not only are these phenomena impacting on each other, but they appear to be generating greater velocity from their interactions. These changes will have significant impacts on NGOs and the work that they do.
The impact of these trends on NGOs’ audiences and target groups is mirrored by the impact they will have on NGOs’ business models. In many ways NGOs have managed to ride the changes of the last few decades without fundamentally changing their business models. However, the horizon for this period of grace is rapidly coming into view. The last decade has seen the emergence of some new organisations applying new business models. The question for traditional NGOs is whether they see these start-ups as upstarts, or as organisations leading the way in a revolution.
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The rise of 21st century development organisations
The emergence of different types of models can be seen in examples such as:
- Change.org for advocacy
- Kiva for micro-finance
- New Story for crowd funding
- Field Ready for micro-manufacturing
- The Digital Humanitarian Network for tasks such as crisis mapping, leveraging digital volunteers
- Charity: Water for innovative cost modelling
- Give Directly for completely disintermediating the role of the traditional NGO
In addition to this, there are social businesses springing up across the global south to address development issues on their doorsteps. A small sample from Kenya alone unearths:
- Peepoople for affordable sanitation
- Sidai for franchised services to farmers
- BRCK for mobile internet and computing, an incubated start-up within iHub
These organisations are using different business models and different technologies to provide new services and products for development in a changing world. They are the canaries in the coalmine for those who are rooted in outdated paradigms and models.
What got you here won’t get you there
Where does this leave traditional NGO business models? Global and UK trends, coupled with an understanding that new business models are emerging, clearly outline why change is needed for many NGOs. The questions for leaders of existing NGOs therefore no longer relate just to what they should be focusing on as organisations, but also to the very nature of the organisation itself in the development process.
Although the “why” for change is clear, “what” the change could be or “how” to embark upon the change journey is less clear. These aspects of change will require organisational agility as increasing complexity does not lend itself to traditional blue-print strategies and organisational models based on static markets and environments. However, agility and flexibility are easier to say than develop for organisations with deeply embedded processes and cultures. Agility and lean entrepreneurship skills are key for senior leaders to be able to navigate their organisation through these choppy waters.
Innovating your Business Model
Bond’s Business model innovation for NGOs uses the business model canvas approach to explore how NGOs can experiment and change their business models in order to meet the new challenges and opportunities presented by emerging mega-trends. The programme not only looks at the types of services, products, facilitation and advocacy that will be required in the future, but also what business model options there are to support these.
Unlike many courses looking at business models, this one will not presume that participants are starting with a blank piece of paper but rather will focus on enabling NGOs to adapt from their current positions. It will support leaders to recognise where their organisation is in its maturity cycle, and what business model migration routes are most promising to test from that position.
Most importantly, this course will provide skills on how to envisage, test and iterate new products, services and business models so that senior leaders can enable their organisation to continually adapt and remain relevant in a perpetually changing environment.
Bond’s Business model innovation for NGOs is running on 12-14 September in London. See Facing your innovation fears for a personal view from a previous participant.