The nation's 1.5 million nonprofits are a highly diverse group, yet they share many of the same operational challenges: how to raise money, build a sustainable revenue model, grow to the next level, provide talent development and leadership succession, or develop a top-notch board.
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Nonprofits typically address these issues by seeking one-on-one advice, an inefficient use of scarce resources. Rather than reinvent the wheel thousands of times a year as one of these core issues comes up, there's a huge opportunity for a service provider to create very low cost repeatable processes and supports with broad application to the nonprofit sector. I've seen a similar approach work in the for-profit arena. There's no question in my mind that it can work to elevate performance across the whole nonprofit sector.
This approach reflects the path to transformative scale that pursues field building by improving the performance of many existing players. In this instance, a service provider would deliver the advice and tools nonprofits need to up their game. A host of consulting and technical advisory firms already provide advice on a one-shot basis. Nonprofits, in effect, sign up to buy a solution to a problem. The process I'm talking about doesn't end with delivery of a report. It involves a long-term performance-improvement partnership that combines best practice, insights, implementation support and leadership, and management skill development. That's an entirely different model from traditional advisory services, but one the nonprofit sector could benefit from.
This is the strategy that has powered growth at the Advisory Board Company, a $500 million global research and consulting firm where I served as CEO and Chairman for more than a decade. (I stepped down in 2011 to become CEO of Evolent Health, a company that helps hospitals and physicians deliver a new integrated care model.)
The Advisory Board launched in 1979 as a small research shop. Companies could call and ask any question and get tailored research reports. But that model wasn't scalable. Custom work is too labor intensive. Many of the team members had worked in management consulting firms and were struck by how often the work for one client was highly relevant to others in the field. Credit David Bradley, the Advisory Board's founder, with the solution to this problem. He had the breakthrough idea to identify common problems across an industry and provide research-based solutions broadly applicable to many players. This new model would allow them to provide highly relevant insights at a fraction of the cost of traditional consulting. The firm first applied this approach to banking and health care, and more recently to higher education.
Today, more than 3,800 hospitals and health care organizations "subscribe" to the Advisory Board's suite of services. The membership model ensures an ongoing relationship focused on continuous improvement via provision of proven best practices, technology products, hands-on training, and ongoing support from staff. The membership model also ensures that the Advisory Board stays on top of the most pressing issues facing members, and that it is continuously adding value. Otherwise people simply would stop being members.
Implementing this new strategy well means getting four things right:
1. Building a world-class team to generate and share proven insights and ideas. Focus research on identifying real best practices. That means looking for people and organizations that have already solved a problem, learning from their experience, and applying it to many others. A small research team can put all this together and bring enormous value to thousands of organizations, rather than serving a single client as in most consulting engagements. And expert presenters and facilitators ensure that peers learn from each other and insights stick.
2. Commit to supporting implementation. Some organizations are able to take a best practice study and run with it to implement needed changes. But many lack the skills to apply best practices to their own situation. They need more support. So we developed step-by-step "manuals" to guide organizations through the implementation process. Take, for example, capital campaigns for nonprofits. It might be helpful to see exactly how an organization segmented its donor base, how it communicated with each segment, and what follow-up strategy it used to maximize yield. That level of detail can help an organization execute successfully on best practices.
3. Measure results to support ongoing improvement. All of this work is difficult to "hard wire" so that an organization embraces change and constantly improves. Measurement is essential, but most organizations don't do a good job of it. So the Advisory Board developed an analytics business that used a business intelligence platform to automate data gathering, benchmarking, and performance assessment process. This platform pushed the feedback loop to the desktop and more effectively embedded measurement into workflow.
4. Help organizations with change management techniques. We also found that a lot of companies don't know how to drive change in their organizations. They may be very good at what they do technically, but when it comes to change management, they are lost. Improving a complex process requires project management skills, analytics capabilities to assess performance, sometimes knowledge of basic budgeting and finance, and vision and leadership to get various people on board with difficult changes. To address this lack of change management skills, we launched our academies offerings, which provide leadership and management development programs. We conduct performance assessments to identify key gaps in skills and then offer classroom-based and on-line learning to help people develop critical competencies.
Taken together, these steps chart the Advisory Board's roadmap for elevating performance on an industry-wide scale versus one organization at a time. It takes powerful, applied knowledge about what works and how to implement it.
As you can see, this isn't light-touch training. Participants learn how to transform the way they do business. Difficult as it is, they highly value the experience and the learning they gain. It's a model that would serve the nonprofit community well.
Imagine a service provider with a suite of capabilities aimed to helping nonprofits in a particular sector—say, child welfare, youth unemployment, or charter schools—identify and implement best solutions to their operational and programmatic problems. Such a provider could help elevate the work of an entire field at a very low cost on a per organization basis, and yet have a tremendous impact because the problem set is shared across the sector. It's an approach that has proven its transformative worth in the for-profit world, including healthcare and education sectors, as well as for major corporations. It's time to see what it can do for the nonprofit sector as well.
Frank Williams is CEO of Evolent Health and Vice Chairman of The Advisory Board Company.See more transformative scale blogs
Thanks, Frank, for sharing the story of the Advisory Board Company. I have been impressed for a long time by the quality and impact of ABC's work in health care, and by the quality of the people I meet from the company. I agree that it is a model that is highly relevant to those wanting to pursue widespread change in the social sector. While customized consulting is sometimes the right answer, there are so many more situations where a platform that captures and shares the best research, best practice, and best innovations—and supports implementation—would be much more leveraged for achieving field-level change.
But it would be easy to overlook what it has taken for ABC to achieve its scale and impact: the four elements you highlight in the piece. It requires a substantial investment in people, processes, and technology. This isn't analogous to almost anything I have seen in the social sector; it isn't just another technical assistance provider or article on best practices or conference or a vaguely defined and supported learning community. It is a platform for real, rapid performance improvement—what so many of us talk about as potentially catalytic in the social sector, but find so few powerful examples of. Imagine an ABC-like platform for child welfare agencies, community colleges, or large global development nonprofits. The impact would be extraordinary. I hope that investors and philanthropists read this piece and see the opportunity that exists here, and the opportunity for outsized impact it may provide.
Thanks again for sharing.