The “Operations Management in the Third Sector” Conference, on Wednesday 20th March 2013, covered a range of topics relating to the third sector. After the conference was formally opened and the delegates and speakers welcomed by Leeds University Business School Professor Nigel Lockett, Professor Stephen Osborne of University of Edinburgh kicked off the presentations with a discussion of the impact of the recession on the third sector and public services in Scotland. Against a background of cuts, reduced working hours, redundancies and reduced back office support, Prof Osborne questioned whether the sector was getting leaner and fitter or whether it was actually on a starvation diet. And would this affect growth once the recession is over? There is a trend for more partnerships and enterprising and entrepreneurial responses to help with survival and growth in difficult times, but this could lead to mission drift and would not be a path that all could follow. Third sector organisations are reviewing their missions, structures and activities and some are merging. He had also found that Boards are taking a more proactive and hands-on approach, but this could lead to conflict with staff at times. He urged the government to think beyond the recession and plan for sustainability and growth. For the third sector, there is a need to try to balance short term survival strategies against long term resilience and sustainability. And where there are casualties, how can we ensure that the skills, knowledge and capabilities are not completely lost?
Graham Manville of the University of Southampton presented the results of his research into the implementation of a Balanced Scorecard (BSC) in a third sector Housing Association. Housing Associations need to report their performance to various bodies and had introduced the BSC to help them do this better. Some of the key learning was to ensure ownership for the Key Performance Indicators (KPIs) and make sure these are aligned to strategy. Alongside implementation of the performance framework, the Housing Association had needed to invest in training and development and had needed to promote a ‘can-do’ culture, which encouraged innovation from staff and service users. The more consistent approach to measuring performance had meant that some tough decisions have had to be taken. Graham saw some Big Challenges ahead for Housing Associations including having to turn to bond markets because banks are not lending, housing benefit being paid direct to the claimant in future, the bedroom tax, localism and the postcode lottery, deregulation leading to more reliance on the leader to plan, and the danger of mission drift. Performance Management has been a part of the corporate sector, but was increasingly being used by third sector organisations in general and Housing Associations in particular.
Dr Claire Moxham of the University of Liverpool then discussed whether third sector performance management is about closing the loop or simply ticking the box. A systematic literature review of measuring voluntary sector performance has shown a peak of publications in 2010/2011, but revealed a fairly fragmented and nascent research field. Voluntary and Community Organisations (VCOs) are increasingly having to conform to public sector accountability and show ‘value for money’, effectiveness and improvement. Using an Organisational Learning lens, she had found that this research focused on the corporate sector and little had been done on organisational learning within VCOs or on linking that to performance management. Claire’s exploratory study and interviews with 6 VCOs showed that they were upwardly accountable for how they were spending (compliance focused) with limited downwards or internal accountability (limited learning), the public sector stipulated the measurement criteria and the VCOs collected the data. Accountability requirements differed and there was no standard practice. The purpose of measuring performance was control and not the promotion of learning – or ticking the box, rather than closing the loop.
Max Moullin of the Centre for Quality and Performance and Sheffield Hallam University showed how third sector quality and performance could be improved by applying a Public Sector Scorecard (PSS). He highlighted the importance of measuring performance across organisational boundaries, integrating risk management and taking account of the cost of measurement. He stressed that it was important to develop a performance management culture focussed on improvement, accountability and change and not a top-down blame culture. He has successfully implemented the PSS through interactive workshops with, for example, the Ethnic Minority Employment Task Force and the Sheffield Let’s Change4Life programme. These case studies showed the importance of focusing on outcomes, processes and capabilities and basing the performance measures around these. A culture of continuous improvement was important. Other lessons included joint development of measures with all organisations that are being held to account, only have measures that relate directly to outcomes, and allow public and third sector organisations to develop their own integrated service improvement and performance measurement frameworks.
Omar Al-Tabbaa of the University of Leeds presented on the impact of nonprofit-business collaboration from the non-profit organisation’s (NPO) perspective, which is relatively under-researched. His research had established several factors underpinning the development of a collaboration strategy from the NPO perspective including the purpose of the collaboration, stakeholder expectations, cultural barriers, strategic position, power imbalance, communication channels and transaction costs. Using interviews and website content analysis, 26 NPOs were studied. The findings indicated that those organisations actively pursuing collaboration with business partners were strategically stronger and able to create tripartite (society, business and NPO) value from the relationship.
After lunch, Fiona Lettice of University of East Anglia presented on Social Innovation, based on the two previous blog posts here on Secrets of Social Innovation Success: Changing the Lens, Building Missing Links, Engaging a New ‘Customer’ Base and Leveraging Peer Support and Can Diversity Management Thinking Help Social Enterprises to be More Innovative.
Katherine William-Powlett, ex-National Council for Voluntary Organisations (NCVO), discussed trustees and innovation and her study had looked at internal and external drivers of innovation for trustees within the voluntary sector. External drivers included politics and cuts, changing demographics and climate change and required trustees to be able to scan the periphery and act as antennae for their organisations. Internal drivers for innovation come from the trustees and their diversity and include their passion and belief in the cause or mission, their desire to make a mark on the organisation, providing direction and strategy (although this is often done poorly, if at all), co-creating innovation with service users and beneficiaries, and having an openness to ideas wherever they may come from. Katherine highlighted that good trustees can act like grit in the oyster to make a pearl and that trustees should be challenging and helping to create the right environment, strategy and governance for innovation, but without interfering too much with operations. These conditions can allow some risk and freedom to innovate.
Dr Nabeel Al Ramadhani, President of the Human Relief Foundation, in his talk on Ethos and Valued in the Third Sector, posed that doing good deeds is not enough, they must also be done well. He stressed the importance of understanding the local context and climate, keeping individuals’ specific and particular needs in mind. Understanding local cultural factors, such as the food tastes of the beneficiaries and cultural and religious differences is vital. Field workers need to be properly trained to meet international standards and imported workers need to understand the local standards. It is important to understand the beneficiaries’ specialities and skills and enable them to contribute to the redevelopment of the community. At all times, respect and dignity should be maintained and the values and needs of the community should be central in all relief work.
Alison Lowe, CEO of Touchstone Mental Health Charity, talked about how having clear vision (Inspiring Communities Transforming Lives) and being BME specialists had given the organisation clear direction and helped them grow. She explained how they had used strategic business planning tools to help them make key decisions and focus their efforts. They had used SWOT (Strengths, Weaknesses, Opportunities and Threats), STEEPLE (Social, Technological, Environmental, Economic, Political, Legal and Ethical) analysis, stakeholder analysis and Kotler’s Fit Model to understand the Strategic Fit between their environment, objectives and resources. They had used an adaptation of Porter’s Five Forces Framework to identify competitors and understand how easy it would be to enter new markets and create barriers to entry by others. In addition, they had found Ansoff’s matrix useful to identify market development, product development and diversification opportunities. They had also looked carefully at their quality and governance processes and on the role of leaders in the organisation to deliver their services.
Dr Rob Wilson of Newcastle University closed the conference with a presentation on quality in the third sector. He discussed the complex relationships between Funder-Commissioners, the Charity/VCS organisation, Government, other Service Providers and the General Public. Using a case study of Person-Centred Information in the eMarketplace as an example of an emerging new configuration for organisations in the third sector, he concluded that we are in an increasingly diverse and unstable environment with relation to sources and assumptions around resourcing, different parties may have significant assumptions and conflicts of interest, some evidence that relying on outcomes and payment by results is seriously flawed, and quality should be thought of increasingly as a mechanism for supporting judgements and not as process and measurement (#kittensareevil).