Throughout November and December 2015 the Community Council for Australia CEO and Board Leaders Forums plan to bring together CEO’s and Board Leaders from across the Not For Profit sector to discuss and learn more about collaborations and mergers. I am looking forward to being a part of these Forums hoping to stimulate some great debates around Australia. This Blog and ProBono’s special Collaborations and Mergers edition sets the scene for such a debate.
As an additional scene setter Whitelion presented a taster including a two day conference around merging to create ‘super charities’ in Australia. David La Piana the international keynote’s message was to also consider the merging of strong organisations not just stronger ones taking over weaker ones.
The dialogue around merging is most topical and having led an Australian merger (#GoodSave) representing two strong organisations but with exceedingly different size capacities from the inception to successful orientation (1 July 2015) I have some key thoughts to share. I welcome the opportunity to contribute to this debate and through the case study #GoodSave there are many Australian lessons to be shared.
I’d like to firstly begin with the observation and statement made by La Piana as reported in ProBono News 29/10/15:
“Australian Not For Profits were yet to accept the idea of major organisations merging.”
La Piana was not aware of #GoodSave and was predominantly basing his comments on the approach of Whitelion. Successful Whitelion CEO Mark Watts refers to Whitelion’s approach as ‘parent subsidiary’ and La Piana considers this to be just one component of what he refers to as ‘strategy restructuring’. Both of these phrases represent governance arrangements that surround the concept of mergers. The parent subsidiary is well demonstrated by Whitelion as working with other organisations to achieve a positive output of better utilizing resources. For example, savings between Open Family, Stride and Belga equated to $1m.
Expanding the thinking La Piana’s argues that ‘strategic restructuring’ as being different from collaboration and more of a shift in the locus for control.
This is an interesting junction for me to expand on #GoodSave most importantly the 18 months that preceded 1 July 2015. The dialogue around #GoodSave actually began May 2013. It was during this 22 month period that I created the Social Connect platform, which was fundamental to achieving one of Australia first ‘super charity experiences’.
I support LaPiana in his sentiment and warnings how simply merging weak organizations with strong ones isn’t the greatest idea. Whilst Australia may be behind the world in our merger practice and thinking there are many issues that countries such as USA and Europe are grappling with that we are not. Australia does not have either the complexity nor austerity issues of the rest of the world and to quote Joseph Stiglitz 2013- Australia you don’t know how good you have it – his sentiments inferring if Australia was in trouble then the rest of the world was in free fall!
Using this sentiment to Australia’s advantage lets draw on an Australian case study such as #GoodSave. It is important to not simply adopt and emulate governance arrangements that mimic those of other broken or limited systems including those from other sectors such as the Corporate arena. My main driver was to not contribute to a broken system but tackle the issue of the crowded Not For Profit space in Australia and most importantly achieve the moral obligation, which for Good Beginnings Australia was ensuring that more Australian children had a good beginning. This meant the future was not about me, nor my professional positioning as CEO, nor Good Beginnings Australia’s growth trajectory it was about the shared purpose. I knew it would be important to demonstrate through an Australian case study what this looks like to be able to be part of the future solution for Australia.
It is not all about $ growth options but more about growth in outcomes. A clear mandate in Good Beginnings Australia as it was preparing for #GoodSave was how we were not growing the organisation but growing the influence we could have on achieving outcomes such as achieving a good beginning for every child in Australia. Another key task for me as CEO was not only arriving at that decision personally but leading the Board, the Executive, the organization of Good Beginnings Australia to collectively share and action this long term view.
My commitment to pursuing the long-term agenda came to an exciting pinnacle as my CEO and PhD roles converged. At the interface of my PhD studies and final term as CEO of Good Beginnings Australia I began to see the importance of a platform to enable change at a systemic level. I created Social Connect as the platform and describe it as a mobiliser to achieve long-term systemic change particularly across the Australian Not For Profit sector.
I have drawn on my global experiences across sector dynamics to create three breakthroughs that enable such governance arrangements along the Social Connect platform and to assist CSuite/Board level relationships for the Not For Profit sector.
The three breakthroughs include:
1. Key principle – adequate resources – see my Consequences Blog#6
2. Missing link – leadership for collaborative advantage –see my Consequences Blog#7
3. Confounding factor – fragmentation (positive and negative).- see my Consequences Blog#8
I describe Social Connect as a platform, which defines a standard around how a system can be developed. In an environment such as collaboration and mergers the opportunity to move forward is one of emergence. As this is entering the unknown and new systems, the Social Connect platform provides an ability to navigate the unknown –a bit like a satellite navigation system.
The basics to the platform begin with understanding the fluidity needed around governance arrangements. To assist with this it is important to clarify the governance arrangements and sector dynamics that make up the Social Connect platform.
For simplicity purposes when referring to sectors the following four sectors represent ‘distinct parts of society’:
• Public sector – government
• Private sector – Corporates and businesses
• Community sector – civil society/consumers
• Social Purpose sector – Not For Profit
In the case of #GoodSave the two organisations were both from the Not For Profit sector. In Good Beginnings Australia the shared purpose was captured internally through a manifesto which was also used as part of the external facing dialogues. An emergent strategy (Mobilise 2026+) was developed with its key message of “disrupting the system till it works for children” – most importantly this sentiment underpinned the shared purpose.
With regard to governance arrangements although there is much good practice available the lens of common wisdom is often taken from the corporate sector/legal perspective. Although due diligence and legalities must always be upheld, the Not For Profit sector demands an additional lens, and the Social Connect platform presents a pathway to navigate this. There are four basic governance arrangements that need to be considered across the whole ecosystem:
In the case of #GoodSave the governance arrangement was a mixture of an acquisition and merger. The shared purpose maintained an expectation that the individuals involved would be able to shift from ego to purpose and more importantly be part of an even bigger ecosystem. Although an understanding of the ecosystem takes time it is imperative that it underpins all of the preparation and decisions that consequently influences the choice of governance arrangements.
To operationalize the ecosystem the Social Connect platform is divided into two phases. The first phase ensures the organization is ready to collaborate with clarity for long-term systemic change. The second phase introduces the three Social Connect breakthroughs that enable the desired long-term decisions to be made and changes to become a reality.
The Social Connect platform assists Not For Profit organisations be more focused on their purpose and willing to embrace governance arrangements that are most suitable for the requirements of societal needs.
It is well understood that we are currently moving into a new era and this new era is described as the sharing economy. Although this new era brings much excitement it also suffers from dramatic distraction thus presenting difficulties in assimilating long-term systemic change. A focus therefore on long-term systemic change is integral to manage and enable change around the shared purpose. Being clear on shared purpose was key in #GoodSave and size of organization does not inhibit this.
Good Beginnings Australia may not have been a large organization in dollar value ($8m) but it was strong in its outcomes achievement and a leader particularly in engaging vulnerable communities leading to better outcomes for children. Like wise Save the Children held both a financial ($140m) and service delivery position of strength.
Just because Good Beginnings Australia was the smaller organisation it doesn’t mean it wasn’t strong. Quite the opposite as the realization that together 1+1=3 was a mandate that both organisations were committed to. An example of a key celebration point presents a great example of how size does not impact on being a strong organisation. In fact Good Beginnings Australia being the smaller organization had developed a sophisticated outcomes framework and Save the Children Australia was keen to adopt this.
As part of the Community Council for Australia CEO and Board leader Forums I will be sharing the lessons of #GoodSave – what went well, what didn’t, what we would have done differently and what was to be celebrated.
Consequences –Jayne Meyer Tucker Social Engineer considers ‘consequences’ incorporating the social purpose lens from the viewpoint of social mobility and early intervention and prevention issues. Much of the thinking in this Blog is underpinned by evidence that comes from the exemplar demonstrations across Jayne’s global experiences and the work of Jayne’s PhD. The study is exploring the global governance influences on social mobility. Jayne has created Social Connect a platform for long-term systemic change.
Australia you don’t know how good you have it! Joseph Stiglitz 2013
Consequences Blog #6 – Engineering for social purpose
Consequences Blog #7 – Is leadership the only missing link?
Consequences Blog #8 –J.A.N.E. and a confounding factor!