Moving with the Pace of Change

In Convergence: How Five Trends Will Reshape the Social Sector, we challenged nonprofits to consider how they would keep pace with the speed of change. Given the accelerated rate at which shifts in the social, technological, and economic environment are now occurring, it is critical that organizations be attuned to these trends, continually evaluate the opportunities and challenges that they present, and develop adaptive responses and strategies.

Two ways your organization can enhance its ability to do this are: scanning and screening.

1. Scanning

Across the social and business sectors, there is growing recognition that traditional strategic planning is poorly suited to today’s pace of change. This is what inspired us to develop Real-Time Strategic Planning, an accelerated approach to strategy development for nonprofits. Whereas traditional strategic planning often calls for exhaustive research to justify a particular action, Real-Time Strategic Planning encourages organizations to continually scan their environment to gather information and identify relevant trends. Rather than a one-time market research effort that only offers a snapshot view, your nonprofit can use continual scanning to get a surprisingly accurate and more immediate read on what you need to know.

Some tips for scanning include:

• Follow trusted resources and thought leaders on blogs and social media to see what they are saying and what is trending in the field in which you work.
• Look across sectors, not just at other nonprofits, but at for-profit or public sector actors doing similar work, serving the same populations, or grappling with comparable challenges.
• Ask clients and other stakeholders what changes they are seeing and experiencing, giving them an opportunity to co-create with you.

2. Screening

Once and organization has gathered information through scanning, how does it choose from among the options and opportunities it uncovers? Creating a decision-making screen, or set of criteria, helps make your organization’s priorities explicit so that when weighing potential strategies, you can be objective about their relative merit and fit with organizational goals, needs, and capacity. An important tool in Real-Time Strategic Planning, the screen clearly establishes decision-making criteria so that your organization can move nimbly to respond to challenges and opportunities as they arise.

Some tips for screening include:

• Develop the screen early in the scanning process, or even before you start scanning, so that the criteria focus on organizational needs and not external influences.
• Include the criteria that the strategy must serve your mission and leverage your organization’s unique strengths.
• Consider other common criteria such as having adequate organizational capacity and identified sources of funding to support the strategy. Other criteria will be unique to your organization.

Succeeding in a Rapid-Response World

Together, scanning and screening form a rapid-response sensing/acting cycle that can help organizations be more agile and adaptive in keeping up with today’s pace of change.

Yesterday brought some exciting news for California – Governor Brown signed into law what was Assembly Bill 361, putting into place a new form of corporate entity: the Benefit Corporation.

Traditional corporations are legally bound to put profit maximization ahead of other goals. If they don’t, shareholders may sue. Benefit corporations operate under a broader definition of success – one that includes material positive impact on society and the environment. Specifically, benefit corporations must: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) redefine fiduciary duty to require consideration of the interests of employees, community and the environment when making decision; and 3) publicly report annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.

Vermont and Maryland were the first states to enact benefit corporation legislation, in 2010. New Jersey, Virginia and Hawaii followed earlier this year. New York is poised to become the seventh state to join the movement, and similar legislation has been introduced in Colorado, Michigan, Pennsylvania, and North Carolina.

Entrepreneurs with a desire to advance a social or environmental mission while generating value for shareholders now have another concrete tool for doing so. It isn’t the only tool – B Corp status is another way for a for-profit corporation to signal its intention to prioritize social and environmental benefit along with the creation of shareholder value. B Lab, the nonprofit organization that certifies B Corporations, was one of the sponsors of the California’s benefit corporation legislation.

Like many, we’re still following the evolution of the L3C (low-profit limited liability company), a corporate form just a little over three years old. Over the course of those three years nine states and two federal jurisdictions have enacted L3C laws, and according to a recent tally by interSector Partners, there are now 488 L3Cs organized across the country. The L3c movement has not progressed without controversy, but much of that has focused on the usefulness (or not) of the L3C in paving the way for foundations to fund for-profit entities via program-related investments (PRIs). A 2010 research study indicated that the ability to pursue PRI’s wasn’t, in fact, the primary motivator for most early L3C founders – that the appeal lay more in the ability to create “a for profit with a nonprofit soul.”

Time will tell which corporate form – or forms – will truly take off. For now, I’m just excited that there are an increasing number of options. May the momentum continue.