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Sunday, 10 June 2012

Strategic Alliances - How Does Your Organisation Proceed?

Strategic Alliances  - How Does Your Organisation Proceed?

As highlighted in the 2010 Productivity Commission report, Australia is home to approximately 600,000 not-for-profit organisations. Based on the 2010 census, this represents 1 not-for-profit organisation for every 37 Australians.  Comparative figures for the United States in 2005, identifies 1,400,000 not-for-profits covering a total population of 294,000,000 which represents 1 not-for-profit organisation for every 210 Americans.

Australia seems overly endowed with not-for-profit organisations. The question must be asked – to what extent is the current structural attributes of the Australian not-for-profit sector sustainable in the medium to long-term, and if lingering doubts remain regarding this question, then what could the future look like for this sector that in 2007 employed 8% of the Australian workforce, contributed $43 billion to Australia’s GDP and attracted 4.6 million volunteers? 

Whilst I don’t have the answer to the bigger question, I do suggest that some degree of rationalization may be on the cards at some time in the future. Perhaps the creation of The Australian Charities and Not-for-Profit Commission may be the precursor to such rationalisation – but then again that may just be the pessimist in me!

Whatever the outcome and whatever the process, I think it fair and reasonable to suggest that a range of market related factors may put pressure on a number of players within this sector, to address the ever growing challenges that lay ahead. These include:

  • Organizational identity where numerous NFPs represent common causes that confuse the market place in terms of who is delivering what;
  • Donor fatigue where a constant stream of NFPs chase a limited number of available and willing donors;
  • Competitive employment environment, where an expanded skills framework is needed to cement NFPs activities, especially so in the current changing environment of the NSW Disability Services Sector. This is a direct result of the changes to the sector resulting from the introduction of Person Centered Planning, and the funding, marketing and competitive issues that ensue.

So where to from here?

In response to these market-related environmental challenges, it would be considered prudent for not-for-profit organisations to realistically consider the pros and cons of developing appropriate strategic alliances that are predominantly aimed at improving their service levels, as measured by the outcomes being achieved in the supply of these services to their target customer groups. This includes their ability to source donor and other funding for existing and future programs.

To plan and execute effective strategic relationships, consideration must be given to the following processes in order to maximise the benefit of such relationships:

  1. Be careful who you align your organisation with. At the end of the day your prime consideration should be the people that you serve; 
  2. Make sure you really appreciate and fully understand your own strengths and weaknesses – you need to be brutally honest about these; 
  3. Your organisation has values by which you gauge yourself – make sure that your intended counterparty shares these values, as a minimum; 
  4. Executives and management from both organisations must be mindful and respectful of the relationship being entered into; 
  5. Ensure that any such strategic arrangements are routinely monitored and assessed to ensure that they continue to add value to BOTH organisations; 
  6. Remain flexible enough to recognise when terminating the relationship is in the interest of both organisations; 
  7. Plan to involve and include a wide cross section of staff from across both organisations; 
  8. Develop formal communication and structural frameworks to accommodate the relationship – don’t leave things to chance and definitely don’t rely on serendipity to  see you through the relationship, and finally, 
  9. See this as a cultural change to both organisations and deal with it accordingly.

David Rosenbaum of OPTIMUM NFP has sourced and developed many strategic partnerships across many organisations and sectors over the past 30 years or so and as an active organisational change enabler can assist not-for-profit sector organisations in developing the appropriate frameworks to get the most out of such relationships.

Post your comments on this Blog if you would like to further discuss how such strategic relationships may benefit your organsiation.

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