The Convergence
Nonprofit consolidation (M&A) is on the rise as a strategic priority, as is the level of investment in more advanced technology infrastructure. Given the way technology is converging all that we know, these two areas of focus have become priorities and they often go hand in hand.
Technology is converging services, user experience, information flow, data interpretation, ability to scale, innovation, linking a continuum of services throughout a lifetime, and integrating all aspects of business operations.
Why is this important? Threats to an organization’s sustainability can come from external sources such as better positioned competitors, innovations and disruptors, or regulators looking to require a certain level of sophistication. But more importantly, threats can come from within an organization, such as failing to evolve within a changing landscape, being of size or scale that negatively impacts the ability to compete, having infrastructure that is unable to support growth, or lacking of technological skills.
With everything converging through more advanced technological capabilities, organizations need to be strategically prepared to operate and remain relevant in a more tech savvy world. In fact, organizations should be asking themselves a very important transformational question: “How do we become a technology company that delivers outstanding services?” versus asking “How do we as a service company adopt good technology?”
Nonprofits may struggle with considering themselves a technology company, but being a technology company does not mean you can no longer be service mission-minded. Nonprofits that can take advantage of the convergence are implementing technology solutions that are allowing them to function more efficiently and improve the experience of those they serve.
As an organization looking to evolve and take advantage of the convergence, there are three factors to consider:
Skills: Do we have the skills or talent necessary to understand our options, develop strategy, and support the implementation and change?
Scale: Do the systems, processes, and user experience model have the ability to grow and scale? Is our infrastructure able to support growth or do we need to change the business model?
Size: Are we the right size to be able to invest in new talent or technologies or do we need partners?
When the answer to these questions are yes, then a focus on planning and organizing is the next step to evolve and drive change.
But if the answer is no, it may be time to consider consolidation as a strategy to remain relevant.
The starting point for this journey is to become educated on your options and what is happening within the nonprofit market in which you operate. Identify and fill gaps in knowledge and learn about solutions, and strategic options. Take advantage of Health-Tech and Ed-Tech groups and conferences that showcase the latest and greatest information. Become informed about new market realities s by engaging in these innovative forums. Speak with fellow Nonprofit CEO’s of larger organizations that have achieved the desired level of growth you want to reach.
The second step is to test the level of understanding the market trends with your nonprofit board of directors and senior staffing team. This journey will require the team to work together cohesively, which may mean you need to provide background knowledge to build shared understanding.
The third step would be to assess the internal capabilities and develop an ideal state for the future. This will showcase the gap between the as-is and to-be vision for the future. You can then develop a strategy to close that gap, which may involve investing in technology and skills, or a partnership that automatically provides the value or capabilities required.