Are you determined to grow as an organisation and do you have a plan to do it?
How do you determine which service areas your organisation should invest in and what your growth targets are? Importantly - How do you balance growth in impact and growth in revenue?

Mission-led organisations need to focus on delivering both revenue (financial sustainability) and social impact (outcomes that matter to clients of our services). But in an environment of finite resources (and potentially diminishing resources) the question is how to assess where these limited resources should go to achieve growth goals and targets.

One way we have helped clients think about their growth is to review each of their programs across two dimensions using our Strategic Growth Matrix©. The purpose of the Strategic Growth Matrix  is to force critical thinking about each of the services and programs the organisation offers and prioritise resources in a way that best achieves the mission of social impact. Sometimes organisations with lots of revenue and staff can feel their goal is simply to grow as an organisation - more money, more staff. But the Strategic Growth Matrix helps make the social impact goals of the organisation more explicitly reflected in strategy, not just the financial sustainability goals.

When should you engage external, critical thinking in responding to a tender and when can you manage it in-house?  We think you should answer two key questions to determine this:

• How complex or novel does our approach need to be?; and
• How competitive will the tender be?

​Where funders are looking for the most efficient and cost-effective way to deliver well-established services, you need a sharp focus on your operating model and being able to scale and/or replicate that with fidelity and at lowest cost. You will have a clear understanding of the costs to deliver and a target margin. In short, you need to deliver maximum services.

Strategic tender support is not likely to be a good investment in this case.

Where tenders are looking for novel approaches (for example, a collective or ‘alliancing’ approach to governance), or where there is added complexity (for example, where a sizeable proportion of the funding can be distributed flexibly) you really do need to think more deeply, strategically and innovatively about how you will respond. The traditional approach won’t maximise your chances in this case

In an effort to deliver better outcomes and prevent homelessness in South Australia, the South Australian government has run a competitive tender of homelessness services in the state under a new structure. It sought responses from alliances of social service organisations to work together to address problems in the homelessness system under a single funding contract for an entire region covering all homeless cohorts. The previous system for the Adelaide City and South region was a series of separate funding agreements across 15 different agencies without a common outcomes framework or formal methods to interconnect between services.

Latitude Network supported the Toward Home Alliance to develop a ground up homelessness strategy and program logic based on prevention. With the team, we identified the wide range of cohorts with differing needs across the homelessness system. We zeroed in on those at risk of entering the homelessness system and identified a way to capture data and shift resources towards preventing entry into the crisis accommodation system. 

The alliance partners developed a professional and mature way of collaborating which provided a strong platform for development of a more ambitious program design. This represents one of the most significant changes to the homelessness system in some years, and provides a pathway for better collaboration, use of data, and continuous improvement with transparent sharing of outcomes between the social sector partners and government. 

​The new outcomes–oriented approach helps to align government and social service organisation interests more directly with client interests.  The achievement of client outcomes and prevention of entry into high cost homelessness services provides benefits for all parties.

Congratulations to the alliance partners that will now deliver integrated, outcomes-based homelessness services for the Adelaide City and South region - 

• Aboriginal Community Services
• Baptist Care SA
• Lutheran Care
• Mission Australia
• Sonder
• The Salvation Army

Also see - 

• ​SA Premier's Statement
• Lutheran Care announcement

This article was originally published in Pro Bono News on 4 May 2020.

In the social sector today, there is an understandable rush to manage immediate operations, protect staff, and review face-to-face service delivery. It’s a complex time and it is difficult to see beyond the next week or two. However, senior managers need to start thinking about the phases of adjustment to the COVID-19 crisis across time:

• Phase one: Manage the crisis. This is the operational reaction to shutdown – how to continue, protect staff, and manage the needs of clients whose services are stopped by social distancing, with particular complexities for residential programs (most organisations are here now).
• Phase two: Stabilise and deliver. This means delivering during six to 12 months of constrained activity, including preparing for delivery of services under different levels of social distancing rules.
• Phase three: Leverage the upswing. This is about delivering in the post-pandemic world – and being prepared as an organisation for the “permanent” effects of the crisis.

The pandemic is driving change for both commercial and social organisations across the globe. 

There are a number of significant forces at work:
Increased use of technology – In phase two, social distancing will continue to test the sector’s ability to deliver services in the traditional face-to-face mode. Back office functions will need to simplify but it is also a time to experiment with what parts of the service model can be delivered via technology and what parts require face-to-face interaction.

• Consolidation of organisations and concentration of power – Financial crises usually accelerate concentration of power (organisations with shallow reserves may shrink or merge with larger organisations with deeper pockets). In some parts of the social sector donations have fallen significantly, leading to the need for some organisations to consider their financial viability and the options for ensuring the continuation of their best programs. Non-viable social enterprises will need to be closed down or merged. Financially secure organisations might find opportunities to pick up successful programs.
• Increasing social problems arising from lockdown – The steep increase in unemployment (even if “most” people who lose work will return to it, the effects will be long term especially for more vulnerable groups) and other heightened social issues (domestic violence, mental health, school dropout) will require fresh and effective solutions. Governments will be seeking new solutions from the social sector. Social organisations can develop “proactive” funding pitches to governments with high quality programs.
• Increasing role of government in the wider economy – The Job Seeker package is likely to establish new norms and expectations about government support for people out of work. It will be hard for the government to return to the previous low level of Newstart payments. This flow of cash may mean opportunities for some programs that rely on client financial contributions (e.g. in housing). 
• Longer-term funding crunch as the government pays off debt – While it may be a year or more away, at some point the federal government in particular will begin belt-tightening to manage the huge increase in government debt. Social organisations should be ready to prove the cost-effectiveness of their programs (including with “avoided cost” financial models) alongside the “social”, to make sure they can withstand this pressure. Along with positive social outcomes, governments will be looking for improving efficiency in provision of welfare, with reforms potentially around simplification and poverty reduction.

What does this mean for social organisation strategy? While most organisations have rightfully been focused on phase one adjustment, some of our clients are now entering phase two stabilisation period. We think it is now time to plan for “living with constraints” and for phase three, the “leverage the upswing” phase after social restrictions begin to ease. One way to think about it is that operational management should be focused on phase one, while CEOs and boards need to be planning for phases two and three.

While it is incredibly disruptive, Latitude Network believes that the current upheaval also provides an opportunity for social organisations to accelerate the innovations and performance improvements needed over the next few years. This is exactly what is happening now in manufacturing around the world – technology improvements that might have taken five years are being implemented in one year. 

The high-performing social organisation

What does a high-performing social organisation look like? We will need social organisations that use data for evidence-based decision making and continual improvement, leverage technology, have a laser focus on their social impact and outcomes, and develop a “flexible playbook” of opportunities and programs that enable adaptability to changing needs and funding environments. An organisation that can evidence performance to government and other funders, and can also make a convincing case for the economic savings arising from their work.

The daily charting of COVID-19 cases and the entry of epidemiological models into the mainstream discourse have demonstrated how vital good data is at times of uncertainty. Social organisations need live, relevant data that enables them to pinpoint barriers to achieving impact, to identify service approaches that work best for specific cohorts and sub-cohorts and help allocate resources to where the organisation can have the best impact.

Social sector boards are tasked with ensuring organisations maximise their impact. They therefore need to be asking these questions to help with this transition: 

• What is the impact we want to achieve and for whom?
• Where do we currently achieve our best impact?
• How can we use technology and automation to both operate in a constrained medium-term environment (under social distancing rules) but also to improve our longer term impact and efficiency?
• What data should we collect and how do we use it to focus our efforts?
• How do we position ourselves for the future funding crunch?
• How can we demonstrate our effectiveness and make an evidence-based case for funding high-impact programs?
• If the wider changes are a fundamental threat to our financial sustainability, how do we ensure our best performing programs continue (either through partnerships, licensing or mergers)?
• What shifts in funding will occur in our sector, and how can the organisation position itself as having solutions to the looming challenges across unemployment, mental health, domestic violence, homelessness, etc.?
• What planned innovations and “moonshot” solutions do we have that we can propose to governments in relation to these rising social issues?

Special thanks to Dave Wells at Melbourne City Mission for is contributions to this article.

Invitation
As our way to contribute to social organisations in this time of uncertainty, Latitude Network is offering free “Sounding Board” online workshops for the boards and executives of five social sector organisations exploring the questions outlined above. If you are interested please contact us at dale@latitude.network to book your workshop. We will provide a pre-reading document and a summary of recommendations after the workshop.