Last week’s merger of Buckelew Programs and Family Service Agency of Marin (featured in local media here and here) highlights the continuation of a trend toward greater integration of services among mental health providers. La Piana Consulting was privileged to work with Buckelew and Family Services in the development of this relationship. Their decision to merge in order to better serve the community is one that we’re seeing made across the country with greater frequency, especially in light of the implementation of the Affordable Care Act. These organizations determined that there is a need for the development of more integrated services – including mental health, primary care, job training, housing, and various forms of counseling – to broaden the platform of services. The wave of the future is pointing to the creation of more integrated services allowing for one organization to provide all needed services in a wrap-around philosophy for clients and their families.

Current federal and state and county health care planning is moving rapidly in this direction. Public agencies are seeking to consolidate the purchasing of services, and are merging their own agencies as well (e.g., the California Department of Mental Health and the California Department of Alcohol and Drug Programs are in the process of being consolidated into a single Department of Health Care Services). The consolidation of nonprofit services and the increased purchasing of integrated services are considered to be both a greater value and a better practice for the provision of services to clients. One of the goals within the integration of mental health, substance abuse, counseling, job training, housing, and primary care is to help reduce hospitalization and emergency department use. The reduction in the utilization of hospital and emergency room care is a primary goal for health care reform, with the resulting reduction of costs.

The merger of Buckelew and Family Services will result in a more holistic approach within one organization with a complete array of services that treat as many of the needs of clients as possible, enabling more coordinated transitions between the various services to clients as their needs either increase or decrease. From an operational and administrative perspective, Buckelew Programs and Family Service Agency of Marin are working to develop a staffing infrastructure with clear lines of communication and the efficient and effective integration of finance, billing, personnel, resource development, and executive management.

This partnership was supported by county agencies contracting with both organizations, as well as by regional funders recognizing the potential to create a model of integrative services.

Together, these organizations desire to be identified as the “go to” organization by primary care providers, from initial crisis to ongoing care, with the reduction in complexity for patients – and one place to call for seamless services. Until now, there has not been a single agency that could provide the community with this level and continuum of care, integrating services to the seriously mentally ill together with supports for their families.

The nonprofit sector is being rocked by all sorts of changes including, and to a large extent driven by, the financial pressures of a weak economy. Seeking ways to survive and thrive in this complex and dynamic environment, more organizations are embracing innovation and thinking about how to work differently. I recently read an interview on the Innovation Excellence blog where Susan Harman of Intuit talked about her company’s use of three innovation strategies: build, buy (or acquire), and partner. This got me thinking about how these important strategies can be translated to the social sector.

Build. Harman described how the build strategy plays out in the for-profit context as creating new products or services that strengthen the company’s competitive advantage. For nonprofits, developing new programs or services can serve a similar function. Good examples of build abound in the sector, and with the upsurge of social entrepreneurial activity, there are many new programs and services being successfully developed and brought to scale. This often requires that the organization build its capacity and make a substantial investment of human, financial, and perhaps technological resources to develop, test, and implement the new concept.

Acquire. A different approach to adding capacity is to acquire it from another organization. This occurs frequently in the for-profit world, and mergers are acquisitions are becoming more common in the nonprofit sector. Using this strategy, a nonprofit seeking to expand its services or reach would pursue a merger or similar alliance with another program or organization that has already proven its success in that particular area. This is usually only a feasible strategy when both organizations see mutual advantages or complementary capabilities. Successful mergers and acquisitions can also take significant time and effort.

Partner. Like acquisitions, partnerships offer a powerful value add, in that the collective efforts of the partner organizations lead to greater impact than what each could have achieved on their own. But partnerships are more fluid and flexible than acquisitions. Successful partnerships can also include organizations from multiple sectors – government, corporate, and academic – and may range from small collaborative projects (e.g., hosting a joint event) to much more integrated endeavors (e.g., submitting a joint proposal to a funder to develop a new project). Partnerships also vary in the level of effort and investment that they demand.

Nonprofit executives with their eye on economic and competitive pressures are looking for ways to make their organizations stronger and more sustainable. Some are building capacity from within, strengthening key programs or diversifying services to be more responsive to client needs. Others are looking at acquiring programs and assets through merger or building strategic partnerships.

This is an essential moment to think strategically and innovatively, considering all the options available to your nonprofit. The strategies of build, acquire, and partner offer three possible responses to the opportunities and challenges you face. It may be that more than one of these strategies can be useful in meeting different goals (after all, they are not mutually exclusive), or perhaps none of them is appropriate for your organization at this time.

How might each of these innovation strategies help make your organization stronger, more sustainable, and more impactful?