Saturday, January 31, 2009

Not-for-profits, strategy and finance: what they do teach you in Harvard Business Review

Almost anyone who has done a course related to business will have come across some fancy matrix for distinguishing different products in terms of market share, growth and/or profitability. Sadly many of those boxes don’t appear that helpful for the chief execs and boards of charities and others whose business is not-for-profit.

Last month’s Harvard Business Review had an article on Delivering on the Promise of Nonprofits by Jeffrey L Bradach, Thomas J Tierney and Nan Stone. It included the matrix above for developing financial and strategic clarity. It’s not rocket science but it does conceptualise the issues for organisations thinking about new developments as well as existing portfolios.

Friday, January 30, 2009

Three million homes – or not?

On this blog I encouraged people to sign up to the epetition on the Downing Street website urging a re-statement of the three million homes by 2020 target. Does the response do this? I don’t think so. Look at it here.

It’s a pity that the epetition only clocked up just over 2000 signatures. Building affordable homes in sustainable communities and sustaining the flagging construction industry (with new home starts halving last year) are now more important than ever.

Thursday, January 22, 2009

Welcome to short notice inspection?

This year lots of providers of social housing (as we will soon be calling housing associations, ALMOs and council housing departments) will be getting a call from the inspectors. With the completion of the Short Notice Inspection pilots, its time for the real thing.

As SNI involve only a couple of inspectors on site for about three days, inspectors go a lot further. However, the good news from those that have been inspected is that SNI appear to be a step forward. For a start, there isn’t the months of inspection preparation (and distraction). The short, sharp shock of SNI would certainly appear to reduce compliance costs.

Perhaps there might be some more good examples of regulatory reform in 2009. I certainly hope so.

Friday, January 09, 2009

Decisions, risks and Chief Executives

McKinsey have just published the results of a survey of over 2000 executives into decision-making - and what practices are associated with good results.

The survey conformed the value of:

1) Performing sensitivity analysis and creating financial-risk models
2) Including comparable situations from one’s own or the firm’s experience
3) Examining the risks of a project combined with the risks of other projects in the firm’s portfolio
4) Creating a detailed financial model of the decision

This accords with my experience. Far too often I have seen risk analyses that look at each risk in isolation or are hurriedly undertaken as little more than a ritual. (I also think that exit strategies and other contingency planning is even more neglected.)

Interestingly it appears that Chief Executives play a large role in instigating both the most and the least successful decisions. The report suggests that Chief Execs may be more likely than others to gamble on bets with big upsides and downsides - or may be better able to secure approval for such bets. It certainly demonstrates the need for boards to act as an effective challenge to Chief Execs.

Thursday, January 08, 2009

Public libraries as “recession sanctuaries”

As someone with pessimistic tendencies, I do try to look for a bright side. In the case of the credit crunch and recession, it is more challenging. One interesting possibility may be public libraries.

I read on the Freakonomics website that there are signs of a startling revival in the fortunes of libraries in America. Libraries are becoming “recession sanctuaries”. Will we see the same here?

My understanding is that libraries in the UK have been showing a declining trend (in books at least) in recent times. (And tightening public finances will pose a threat to their survival in the near future.)

As public space promoting knowledge and understanding as well as building civil society, any revival of public libraries would be welcome good news.