This is very complicated Sam. As you get bigger, with a stronger brand and a greater scale you kind of earn your right to have a bigger say on how money gets spent. But it’s still a challenge. From my knowledge, Save the Children will usually try to pitch donors on specific projects (usually tailored to the donor area focus – such as education – and sometimes geography – such as Southern Africa – and iterate from there to get to the final scope. But still, the risk of chasing funds in itself exists and is a huge debate. That’s another great reason why you need revenue diversification so that you can allow yourself to turn a grant down, for instance, if it’s not aligned with what you think the social priorities are.
Impact measurement is definitely one the hottest trends in non-profit. Actually, it’s a key trend across the social spectrum, from social enterprises to non-profit organizations. In the case of NGOs, such as Save the Children, the issue can be simplified as two-fold: quantifying the “impact” of the organization and calculating the “returns” on donations (donor investments). Both are extremely hard due to the nature of the work (as you pointed out) as well as the scale of the organization. In terms of “impact”, it’s easier to explain with one example: how do you quantify the impact of an education program in Ethiopia? You can be more aware of your health and try to, therefore living healthier, longer and having a higher economical contribution to society. To measure that, you need studies to prove this happens, which are very hard to conduct. Or you can achieve higher education, get better jobs, be more productive and therefore create value for society. Then, what is the timeframe for that impact? How much of it is due to you vs everything else around? You see, in a simple paragraph the level of operational and intelectual complexity is already huge and you need a lot of resources to develop and implement this. Save the Children is definitely on the same boat as everyone else which is trying to understand what exactly donors want and how it can find “simple” suitable solutions to address that.
Alex, this is very interesting. I am with Annie that I finally understand what is behind this magic music playing box in my cell phone. You did a great job in explaining how the unusual organizational structure functions, the trade-offs when compared to other potential models and how it benefits from a business stand point. It was also very interesting to learn more about how the royalty payment system works. I was very curious about the magic “30%” revenue pool ratio. Do you know anything about why it’s 30% and how is the process of agreeing that ratio with content owners? Anyhow, great, great post! Well written, simple ideas, very tightly connected. Loved it.
Very interesting Terrance, specially the part where you explain Whole Food’s sort of “vertical integration” into the food certification step of the chain to differentiate itself and its products establishing a premium positioning to attract its customers. I was always very intrigued by this “unusual” brands sitting at whole food’s shelves which I guess makes sense given the sourcing strategy you explained in the article. I wonder how much Whole Foods business model is superior or comparable to, let’s say, Trader Joe’s with much more of a private label, cyclical and limited assortment strategy that still manages to be somewhat positioned as “health conscious”.
Thanks for the post Ellen! This is one of the things I love about HBS: here I was happy with GrubHub and now, bam!, a brand new option I wasn’t familiar at all with! Comments above are great and my two cents revolve around the inherent overlap between today’s segregated shared-economy tech companies. In essence, as you articulated perfectly, the one key asset is the individual who is willing to become a carrier. Whether he/she delivers food, an amazon package (Amazon Flex), your grocery shopping (Instacart), yourself! (Uber), etc, is really up to him / her. I am curious to understand, as this model scales up, when overlaps begin to materialize and when if/ there are true opportunities, as Vez pointed out, for horizontal consolidation and more of a winner(s?) takes all business model.
This is very interesting Sam. I am particularly a huge fan of MOOCs and their potential to scale up education access worldwide (unfortunately connectivity remains an issue here). It was very insightful to learn how the three main stakeholders are benefited, how monetization conceptually works and how Coursera is being creative to work around differentiation challenges and provide some value-add to the same stakeholders. I am not very familiarized with educational gaming theory and other approaches, but I am interested to know if you have any views on how this interactive and iterative learning model will evolve to replicate more of a classroom dynamic experience (vs. the current blogging / assignments / video teaching models). Great post!