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Designing Your Engine: Business Models that Power Mission
Transcript of Designing Your Engine: Business Models that Power Mission
Business Models That
What kind of car is
If a nonprofit is
like a car...
Executive Staff and Board = Drivers
DESTINATION = VISION
STRATEGY = TRAVEL ROUTE & MAP
The Nonprofit Finance Fund's annual survey found that 41% of the nonprofits
surveyed reported long-term financial sustainability as their greatest challenge. And 47% said they planned to engage in long-term strategic or financial planning in the coming year.
The survey also found that in the next 12 months:
31% will change the main ways in which they raise and spend money.
26% will pursue an earned income venture.
20% will seek funding other than grants & contracts, such as loans or other investments.
In the past 12 months 49% collaborated with another organization to improve or increase services.
In the past 12 months 48% invested money or time in professional development.
Recent GPNP Meeting
What is a Business Model?
Business Model = Engine
A DESIGN for how the organization creates and delivers VALUE to its clients and community
Board & Risk Issues
Change, Transition & Adapting to a new car
New Driver Issues
(& Business Models)
Executive Staff and Board = Driver
Dashboard = measures, outcomes or data
SYSTEMS & PROCESSES
Vehicles & Equipment
Reserves & Endowments
What are the components of a business model?
How do we know if our business model is working?
High staff turnover
Cash flow problems
When organizations talk about:
Adding new programs
Going after new funding sources
Buying or selling buildings
They are talking about redesigning their business models.
Without a strategy, or alignment on a vision (destination), the Board and Executive drivers can often fight over the best route, or drive the car in circles !
Nonprofit = Car
If you have a bad or simply untrained driver then the best-designed, most fuel efficient car in the world will not get you where you are going. In the wrong hands the car can be driven over a cliff.
Without strong leadership, from both staff and board working together, chances of developing and agreeing on an effective Business Model shrink considerably. Implementing a new Business Model with the wrong driver is even harder.
Leadership can also impact a Business Model when there is a transition either in the CEO or a significant percent of the Board. New Leaders often come in and want to rebuild the engine to make it their own or they simply don’t know how to work the existing Business Model and abandon it in favor of something they do understand.
A nonprofit Board (co-driver), can be an accelerator or a brake. A risk averse Board, or one in denial, can ride the brakes...
Of course there are times when the Board needs to take over driving the car... succession planning/leadership transition, executive burnout, or distracted driving are examples
Boards arent the only thing that can stall the car. Changing individual and organization behaviors to the newly adapted Business Model is hard. Changing a longstanding culture is even harder. Think of trading in the 1980 station wagon with automatic transmission for a high performance, agile, manual transmission, race car.
SOMETIMES IT'S LESS ABOUT THE BUSINESS MODEL AND MORE ABOUT THE DRIVERS
Baby you can drive my car
Yes I'm gonna be a star
Beep beep'm beep beep yeah
"you can't go on
thinking nothing's wrong
who's gonna drive you home tonight?"
From Drive by The Cars