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Alien versus Predator:NCVO takes on Added Value

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Last week I attended my first ever Performance Hub event at the National Council for Voluntary Organisations in London.  The event was jointly run by NCVO and the New Economics Foundation and played to a full house.

In essence the message was:

  1. the third sector doesn’t understand ‘added value’
  2. ‘added value’ is therefore a concept that is passed it ‘sell by’ date
  3. luckily we have developed a concept that can take its place – called ‘full value’
  4. even more luckily we have managed to reduce this to a 2×2 matrix that can be explained easily.

Now the origins of ‘added value’ are pretty old and extremely well respected.  Like any models or concepts they have their uses and their limitations – but this concept has done much to drive economic development, competitiveness and strategy over the last 3 decades.  Michael Porter, Harvard Professor and father of the ‘value chain’ has just celebrated 30 years of world leading consulting developing the competitiveness agenda using the concepts of value added, the value chain and the 5 forces model.

No doubt he will be devastated at the judgements passed down on his work by the NCVO.

While I admire the nerve of the Third Sector to challenge the business orthodoxy I can’t help but think that sometimes it shoots itself in the foot.  Surely if the idea is still good enough for the Institute for Strategy and Leadership at Harvard Business School we should not be too quick to dismiss it out of hand and replace it with a dinky 2×2 matrix?

Perhaps we just need to work a little harder to help our client group understand the concept and reflect on how it maybe used to add value to our work in making our communities better places to live and work.

My bet is that Michael Porters ideas might just outlive the neat little 2×2 that NCVO suggest should be used to replace it.  I will certainly be a little more circumspect before I hop on a train to London to receive the wisdom of NCVO.

Not that the day was bad!

I met some wonderful people.  We were all reminded of the importance of the unforeseen benefits of our work as well as the hard outcomes that we were paid to achieve.

Action Yearning

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‘Santiago taught me about turning dreams into reality – he taught me how yearning has a dynamic to it that is incredibly powerful.  It is important, simply to be open and alive to possibility, to encourage people rather than to be suspicous of them, and to see the potential for success rather than the potential for failure.  This is where true knowledge and learning can be found…’

The Social Entepreneur – Andrew Mawson 

Much wisdom in this piece – whether you are a manager trying to get the best from a team or whether you are supporting entrepreneurs.

The book is a great read too!

Something for Nothing in Halifax

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Would you like to learn a management tool that is guaranteed to:

  • Save you time
  • Increase levels of trust in your team
  • Improve communication
  • Make you a noticeably better manager
  • Get more done – more quickly
  • Accelerate the professional development of your team, and
  • Reduce the pain of performance reviews?

Then come along to a free introductory session of the Progressive Managers’ Network at the Elsie Whiteley Innovation Centre on March 26th from 13.30 to 16.30.

At the event you will get a free gift to help improve your management worth more than £25.

Places are strictly limited so please book your place online here. Or call me for more information on 0113 2167782.
If you know of a manager who might be interested please forward them a link to this page.

Why Should We Learn with the Third Sector?

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We try to attract managers to PMN events from a wide range of organisations and sectors. I am often asked by managers from ‘for profit’ organisations ‘Why should we ask our managers to learn alongside managers from the third sector?’ The implication is that it might ‘set them back’ or ‘slow them down’, or ‘develop skills and knowledge that are not relevant to ‘for profit’ managers’.

Some facts

  • The total turnover of social enterprises is estimated at £27 billion, or 1.3% of the total turnover of all businesses with employees. Their contribution to GDP is estimated to be £8.4 billion.
  • There are around 55,000 social enterprises, and numbers are rising.
  • Since 2004, the Government has invested more than £350 million in the capacity of the third sector.
  • Over £18 million has been allocated to support and develop the social enterprise sector over the next few years.
  • Total public funding (from local and central government) reported by the voluntary and community sector has doubled from less than £5 billion in 1996/97 to more than £10 billion in 2004/05.
  • It is a growing sector.
  • It has cash to spend and demands high quality professional services.
  • It will choose to work wherever possible with partners that share its values and vision. With people that it knows, likes and trusts.
  • It delivers work of great social value. The best staff  demand more than just a good pay packet. They find the sector challenging and rewarding to work with. They meet remarkable people and organisations.
  • Working effectively with the ‘third sector’ – as well as with the ‘for profit’ and ‘public sector’ should be a key part of your strategic thinking.

Jim Collins (of ‘Good to Great’ and ‘Built to Last’ fame) urged the third sector not to ape the practices of the ‘for profits’. Instead he urged the ‘for profits’ to learn lessons from the third sector – about managing people with passion for real social purpose. If you do that well, then profits follow. Both ‘first sector’ and ‘third’ then have to decide the level at which surpluses should be re-invested to pursue the aims of the business and what should be distributed to stakeholders.

Managers face similar challenges whether they are managing in the ‘for profit’, ‘not for profit’ or ‘public’ sectors. Learning alongside colleagues from other sectors enriches the experience and the increases the possibility of doing good business for all.

First, second and third sectors – the unrealised opportunities

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The Progressive Managers Network exists to radically improve the quality of management.

It is designed for managers from:

  • the business private sector – which is ‘privately’ owned and profit motivated;
  • the public sector – owned by the state;
  • the social economy, or third sector, including a wide range of community, voluntary and not-for-profit activities.

Historically each of these sectors has formed its own ‘ghettoes’ of professional practice, development and learning.  This has led to stereotypes taking hold and low levels of trust and respect between the sectors.  Crudely speaking the stereotypes are:

  1. Private sector = cigar chomping ‘Thatcherite’ entrepreneurs who would sell their own granny and destroy the planet if the ‘return on capital’ is adequate – values and ethics subordinated in pursuit of profit.  Actively seek opportunities for exploitation (workers, environment, customers – but preferably all three) – in order to generate cash.
  2. Public sector = cardigan wearing bureaucrats pushing papers across desks until  they can collect their pensions.  Dull and uninspiring  at work they often have exciting outlets for their passions outside of office hours – such as bell-ringing or volunteering.
  3. Third sector = unreconstructed class war heroes, sandal wearing entrepreneurs, communitarian do-gooders with myopic spheres of interest, bicycles and brown rice.

The Network allows managers from all three sectors to learn together allows for ideas to be transferred from sector to sector and provides the opportunity for collaborations and partnerships to develop.

This matters because because increasingly large parts of a modern developed economy are driven by partnerships between public, private and third sectors.  Organisations that succeed will be those who learn best how to use these partnership to get things done.

So step out of your ghetto, set aside the stereotypes and get involved.