Sector dynamics – knowing the beast

It was over twenty years ago that Kendall and Knapp famously termed their book on the range of organisations within what is sometimes known as the voluntary, third or social sector, ‘A loose and baggy monster’*. When reflecting on the nature of the sector this was the image that returned to me repeatedly because it serves as a reminder that charities, social enterprises and any other number of hybrids are all different from one another. The monster refers to the vast array of organisational forms we find in that ill-conceived space between the state and the private sector (i.e. a creature with various parts NOT one that is wicked or inhumane!). This diversity means that whilst some assertions can be made that hold the various body parts in common, for example “we do not distribute profit to shareholders”, the features that differentiate them are just as valid.

The aim of this piece is not to dwell on sector boundaries but to recognise that each organisation’s perception of the sector will largely depend on what they do, where they are located and who they come into contact with. At ACEVO Solutions we frequently apply this process to organisations with which we are working, alongside the board, staff and/or volunteers. I find it that even the most successful (in whatever terms you wish to apply) organisations, there can be a tendency to focus internally at the expense of understanding the implications of external events, trends and competitive activity. As such, we have developed an analysis tool based upon a framework popularised by management consultancy firm McKinsey, applied through a social sector lens. In the first stage we provided a series of Prompt Points that guides organisations to consider external factors, ideally outside of a crisis moment. In this second piece I take you through a series of questions, which if followed will help to consider the dynamics of the bit of the sector in which you operate. It may be more easily applicable to those providing services, but can equally be applied for community groups, trusts or advocacy organisations. This is a tool for organisations of any scope, scale or structure.

  1. ​Demand: Who or what is at the heart of your mission? Where is the need coming from and who is prepared to pay? Are needs increasing and at what pace? What other solutions to meeting these needs emerging? How predictable or consistent is the level of demand?
  2. Supply: With so many competing voices out there, what is it that makes you different? Who else provides services or offers a perspective that is in any way similar to yours (either in your locality or in your specialist field)? What makes you different from them and what would happen if your organisation was not there? How well do you understand your current and future costs?
  3. Market: Why does your organisation exist? Has the state withdrawn from an area of provision or has need increased as a result of policy change (or did it in the past, and how has that changed)? What information do you have regarding commercially available goods or services into which you have particular insight? Are people able to choose your services over a for-profit alternative, and how does quality affect their choice? Are you familiar with the reasons that non-profit making organisations can be perceived to fail, and mitigating these risks? **
  4. Power: Who makes decisions that affect what you do? How can you influence these, both directly and indirectly? How are user-donor-organisational relationships shifting? How can you meet professional and public expectations whilst also valuing staff and volunteers? Where is your bargaining power and do you know how to use it?

When you are so busy day to day focussing on what you do it is so important to take a moment for air. This is a plea to look up, and look back, and forwards, for a moment. The monster does not stand still.

The third stage of this strategic change tool, to be issued next month, will focus on market awareness in a world of partnerships.

​*Kendall, J & Knapp, M (1995) A loose and baggy monster: boundaries, definitions and typologies, in J. Davis Smith, C. Rochester, and R. Hedley (eds) An Introduction to the Voluntary Sector, Routledge

**Salamon, L (1987) Partners in Public Service, the Scope and Theory of Government-Nonprofit Relations, in W. Powell (ed) The Nonprofit sector; a Research Handbook, Yale University Press. His concept of “voluntary failure” included philanthropic insufficiency (i.e. donor discretion), philanthropic particularism (i.e. tendency to focus on one niche, such as ethnic or geographic leading to gaps in some areas and duplication in others), paternalism (i.e. treating problems as the organisation perceives them, rather than from the perspective of service users) and amateurism (i.e. staff and volunteers without extensive professional training). Several of these may not seem to apply, particularly in more professionalised and user-focused organisations, however they are useful considerations as check-points.

 

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