Change is Happening and it’s Happening Fast
Reading the Financial Times each day you learn of old and established multinationals fighting for their commercial life. It is full of stories of new CEOs, or incumbents fighting for their job, who are embarking on another round of cost-cutting and job slashing. Just as once mighty firms flounder and are sold off will 2016 see the first extinction of a major environmental NGO (ENGO)?
The changes often appear sudden, and all too often are forced upon the companies by activist shareholders. New leaders introduce new organisation charts, new strategies, and new people in key positions. The company goes into internal gazing for a year or so and when it comes out, or if it comes out, it finds out often that they haven’t listened to the marketplace and the changes have not worked. New leadership is imported and new cuts introduced. Product innovation falters and customers move away to new suppliers who are quick to listen and respond.
NGOs Face Same Pressures
These stark commercial realities have as much place in the multinational ENGO as they do in the multinational corporation. ENGOs have a lot to learn from the firms that they track and campaign against, and whose work you can see via sigwatch. Many leading ENGOs are, less publically, going through very similar commercial challenges.
ENGO leaders should feel as comfortable reading Clayton Christensen’s the “The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail” as a company CEO. ENGOs are facing the same challenge for survival. For ENGOs, there is market place where new incumbents, often bringing a better and cheaper product or service to the marketplace, are targeting high end donors to solve complex and challenging environmental and conservation problems. Until quite recently philanthropists were limited in who they could support by a limited amount of ENGOs. Today, a lot of a lot more ENGOs have entered the marketplace, often providing a seemingly better, cheaper, and more effective product or service than established incumbents. New players are proving nimble on their feet and delivering solutions were WWF and Greenpeace used to dominate the field.
When will a large ENGO close up shop?
And, whilst to date no major ENGO has yet folded or merged with another, a number are going through job and budget cuts no-less savage than that happening today at Dupont or Dow.
Firms that do not adapt to what the market wants will sooner rather than later become extinct. It seems that companies today have a very short shelf life. The life span of a US Fortune 500 company is 40-50 years. WWF and Greenpeace are over 40 years old.
As Christensen observes few companies are prepared to make the often audacious changes needed to survive and prosper. Intel the US tech company, has had to reinvent itself throughout its history. When it left the chip making business and shifted to the microprocessor business, due to to intense competition from Japanese producers, their customers asked ask them why it had taken them so long to do so. It was too obvious to their customers that this is what they needed to do. But companies, and in my view NGOs, leadership have become wedded to a static ideal, a perception of the world that is often slipping away in front of them, but they cannot see.
What Could Be Done Better
it’s impossible to do everything very well. Many large ENGOs seek to battle every challenge every environmental challenge and tackle it from all angles. Trying to do everything entails a huge amount of resources to be spent, even if the staff and resources are not doing much. Smart organisations will focus, often ruthlessly, but the long-term viability of the organisation is strengthened.
- Respond to your Customers
It has been interesting for me to see how objective the marketplace is. If a company does not provide a service or product to a client to the standard and the price they expected they will move on. There is always an alternative supplier. The same for budgets, if the spending of budgets is not totally transparent for clients, they will move. Indeed, even if what s delivered is on time and to budget a customer will face competitors knocking on the door offering a better product or service for less , and they will likely move their custom. This is all for the good. It forces constant innovation and improvement, and a virtuous circle of improvements at lower prices, although, it certainly does not feel like as a supplier of those goods and services!
These rules of ordinary business life are not particular to profit-making firms. ENGOs need to become more responsive to what their donors are asking for, whether it is small donations from the mass membership or from generous donations from philanthropists, the craving for more for less is always there. Listening to the commercial lifeblood of the organisation, rather than the internal pressures on how to disperse often earmarked funds, is basic common sense, all too often which is ignored.
- Innovate or Get Out
ENGO leaders should read the ‘Innovator’s Dilemma’, and act on it. If the area they are working in is not viable, or they are facing too much competition from new entrants, their real expertise does not lie there, they should get out of it. The exiting can be painful. But companies that don’t leave will usually find themselves in the same position as British Leyland, namely broke and extinct.
- Cloning Is Not Smart
A lot of companies fail to innovate and make the changes they need is because the shareholders replace one set of leaders with another group of men and women who are similar, if not identical, in their thinking and background to their predecessors. The same prognosis to the problems facing an organisation are given, the same actions taken, and the problems not solved.
Cloning rather than diversity is often as common in large ENGOs as it is in firms, exacerbated by a hierarchal leadership which is more in common with an aged civil service than a market innovator. This preponderance is exacerbated by a senior cadre of company or ENGO bureaucrats working to ensure their positions and influence are preserved.
- Solve the Problem
An ENGO, rather than a firm, is set up to solve a conservation or environmental problem. When I worked for WWF, I always thought of the job like a human rights lawyer. The job is to solve the problem as quickly and effectively as possible, and make themselves voluntarily redundant. When I made this observation at work, it was met with disbelief. Conservation and environmental problems can be difficult, but they are solvable. Continuing with programmes of work because it is something an organisation has always done is no excuse. Individual members and philanthropists support NGOs to solve these problems. I believe many NGOs could be more ruthless in culling programs that have not delivered, and informing their donors why they have not. Not every program will succeed, but continuing work that has little to no chance of success, is foolhardy.
The writer if the former head of WWF’s European Marine Programme and Campaigner for IFAW. All comments are personal.