Wednesday, March 05, 2008

Issues that Matter

(Adapted from Plenary Presentation, MicroEdge Users Conference, November 2007.)

This post is about nine issues that matter to you - whether you work in a nonprofit public benefit organization, are a philanthropic funder, or happen to be a commercial technology company that serves those markets. Now, even if I do say so myself, "issues that matter” is a pretty gutsy title. Matter to whom? When? Why?

These trends matter to other people as well, but for other reasons. I’m not here to talk about them. I’m here to talk to you. My goal is to raise up some questions you might not know you’ve been harboring, shift some of the ways you think about issues so that you consider a new side to them, and - most important - point out some patterns between issues and ways that they are dynamically linked that may just explain why you feel like time is too short, information too plentiful, and decisions require too many variables.

Here are the issues that matter:
  • Demographics
  • Groups
  • Ownership
  • Mobility
  • Markets
  • Price
  • Forms
  • Time Frames
  • Alignment
And here is why these things matter:

Demographics Matter
I’m going to start here because people matter. According to the 2000 Census, the US is older, larger, and more diverse than it has been at any other point in time.

How many people reading this are caring for your kids and worrying about, or actually caring for, your parents?

Age matters. An increasing old population affects jobs, taxes, social needs, volunteering rates, and philanthropy

Youth matters. The young population affects jobs, taxes, social needs, volunteering rates, and philanthropy.

These trends shape who works, who votes, who needs what, who pays taxes, who draws benefits, who supports whom. They will have strong affects on the much-tauted Intergenerational Transfer of Wealth – which is actually a three-generation phenomenon not just two.

Think about the demographics where you live and work. What does your community look like now? What will it look like in 20 years? How will you benefit from the changes?

Groups Matter
At first, this seems a derivative of the demographics issue. The first one is about people, the second one is about what people do together.

But Groups Matter is also about how people do things together, and with whom, and when, and why, and for how long.

Think about this – from a technological perspective on groups – lets call it social networking – we’ve gone from an arcane academic term to Friendster to MySpace to Facebook to OpenSocial in about two years. Groups are driving users of technology, driving audiences for innovation, and driving forces in our economy.

And people are members of many groups. For different reasons. At different times. No single nonprofit organization or philanthropic effort is going to meet a person’s lifetime of needs. Go back to the question I asked you in the beginning, about kids and parents. Those of you who answered that question with a nod or a moan are members of different groups that fit your identities as (and I’m drawing some generalizations here, feel free to challenge me later) – individuals, parents, children, professionals, men, women, religious, volunteers, and ethnic and racial. You use different resources for different goals, drop out of groups when they no longer serve your purpose, create new groups for new reasons (I just received an email from a group of neighbors volunteering to clean up the beaches around San Francisco Bay. The group is also raising money to help clean shorebirds). The group didn’t exist one week ago.

We also know that groups are good at decision making (you’ve heard of the wisdom of crowds) and that diverse groups are even better at decision making.

Groups matter. They matter to us as people, they shape the way we work, give and volunteer, and they matter to us as technology innovators, they matter to us as nonprofit managers and philanthropists. Groups matter.

Ownership matters
This seems a little bit further away from people and groups, but its connected, trust me. For example, groups own things – like the sky, the oceans, and the freedom to create. Entire economic revolutions have occurred in my son’s lifetimes by companies that built enormously powerful tools – specifically Google and eBay – and own none of the things those tools are used for.

Ownership matters in our digital age. It is changing in our digital age. New versions of copyright and patent law, new expectations for the value of sharing,

Do you know what these little icons on the bottom are?
Social tags – They let you post and click and tag and save content from one place to another. We may “own” something, but in the digital world, it is very hard to control it.

Most of the discussion about this in today’s press is set up as a battle between record companies and musicians, or television networks and user-generated video or, in the case of writers and distributors, its set up as a strike. For the rest of us, however, I prefer to think of it as a choice – for your foundation, your nonprofit, your technology company. It’s a choice between business models and the choice is this:

“Will you be more successful (you define success) building something that is protected and proprietary and then factoring in the costs of defending it – OR – will you be more successful building something that gains value as it is shared and letting it loose?”

Mobility Matters
Part of the reason ownership matters is because not only can digital content live anywhere, it can go anywhere. Think of where you do your work today – at a desk? With a PC wired into the wall? On a wireless laptop?

How about the millions of people who use only their cell phone to make purchases, find out prices, sell their wares, or notify local emergency officials of danger?

What about the foundation executive who says to his CTO, “I’m not lugging my laptop with me anymore – I want everything fed to my blackberry via a RSS feed.”

Oh, yeah, I almost forgot, its not just data that move so easily. People move. Jobs move. Skill sets move. Groups move. Ownership moves.

Markets Matter
Markets matter to social good in so many ways I could focus this whole post on this issue. I won’t – I’ll just send you to my blog, – where I’ve been writing about this literally since I published a book on it in 2004.

For the sake of this discussion, let me say that “markets matter” is shorthand for the changing ways that social goods are produced, distributed and financed, the changing roles of public agencies, and the blurring of revenue sources for public benefit work.

There are three large ways of thinking about how markets matter:

1. President Clinton reminds us in his foundation work and in his book giving, that the capital markets for social good are “underfunded and under –organized.”
2. Capital for social good is now as likely to come from fees for service, government contracts, private investors, social venture funds, or socially responsible investment funds as it is from philanthropic gifts.
3. We are increasingly surrounded by market approaches to social goods – from private companies that manage public libraries to commercial restaurants that focus on job training to double bottom line investment funds.

Markets matter in general. They really matter when considered in the context of changes in the public sector and the independent sector – one reason markets matter is that they remind us to never try to predict changes in one sector – say commerce – without also considering changes in the public and independent sectors.

Price Matters
There is a book out called “Strategy of Giving.” It has nothing to do with either philanthropic planning or preparing for the holiday gift giving season. It is about the value that is created and attained when products – ideas – designs – music – information are exchanged for free – they are given away.

A decade ago this would have seemed like heresy. A decade or so ago the closest example I could think of was the razor blade business – sell the razor for cheap, make a fortune on the blades. But that’s cheap. Not free.

Then came Google. And FireFox. And MySpace. And Ubuntu. And YouTube. Everything they provide to the user is free.

This takes us back to our point about ownership and markets and that basic business model choice – will what you are doing or selling be more valuable if it is free? Is there a business model that’s about location, ads, or transaction services that you’ve never considered that might be worth a look?

Or are there other assets – information, networks, and human resources come to mind – that you are hording rather than sharing, and in so doing, limiting your effectiveness rather than strengthening it.

By the way, the book “The Strategy of Giving” is available for purchase. The price? Its free. You might also check out Chris Anderson's new article in Wired - it is all about "Free as the new price." Oddly enough, the magazine is not free.

Forms Matter
So we’ve looked at individuals and groups. We’ve considered the meaning of ownership, mobility, markets and price.

What about form? If everything so far is really changing – who we are, how we congregate, what we own, where we use it and how we exchange it with others, its falls to reason that the structures we use to organize ourselves are also changing.

Some of the changes have to do with technological innovation – remote workplaces, telecommuting, pda’s and airplanes that get you across the world in a day. Organizations are more global, flatter, more dispersed, and more creatively chaotic.

Other changes are arriving in the form of regulatory and structural innovation – think of hybrid nonprofits and social enterprises and corporate social responsibility officers. But also be aware of totally new structures – such as Limited profit Liability Companies (or L3C s) and B Corporations – which are public benefit corporations supported by commercial sales.

Keep your eyes out for continuing new forms of social organization – where the movement meets the flash mob for example. Or where giving circles, social networks, and financial innovation around charitable vehicles come into play. Keep your eyes out for new forms of giving, new organizations in philanthropy, and new structures for social good.

Time Frames Matter
Ah. Not a minute too soon. Each of these forces works at different speeds –

Technology changes quickly. Organizations….not so much.

Markets can shift suddenly or steadily survive bump after bump after bump.

Groups can last for 100 years. And then fall apart.

Some of us change jobs and cities frequently, mobility is part of our identity. Others will stay put for as long as possible.

Time frames matter. They are not synchronous across these trends – some move quickly, some are slow. Make sure you know which one you are dealing with, as well as what kinds of forces can accelerate or decelerate the pace you’ve calibrated.

This is not just about work, or giving, or volunteering. This one – time frames – is about everything. Some things you can and should do quickly – assess the role of new competitors, take advantage of a political window, or jump on a opportunity to be with your loved ones.

Other things will need more time and should be given it – strategic mergers, the pursuit of social justice, and the time spent reading with your children.

Make sure your time frame makes sense. That’s what really matters.

Alignment Matters
New forms of action. New prices and markets. New ways of moving and owning and sharing information, innovation, and ideas.

Just make sure there is some alignment across them, OK?

With so many choices in form, groups, markets, platforms and pricing, nonprofits, foundations and technology companies should be constantly adjusting their strategies to make sure their efforts are aligned.

We’re seeing this in the attention to mission related investing as foundations seek alignment across financial assets as well as their intellectual and human resources.

We’re seeing this in the way savvy nonprofits are using their volunteers, social networks, fundraisers, and blogs.

We’re seeing this as individuals try to align their full financial portfolio with their values – that means their philanthropy, their political giving, and their investing.

Without alignment, really, the rest of this will be chaos. Consider your choices. Play to your strengths. But power behind all of the oars in your boat and make sure they are all pulling in the same direction.

Take them all together –
1. demographics,
2. groups,
3. ownership,
4. mobility,
5. markets,
6. price,
7. form,
8. time frames and
9. alignment. (If I were Julie Andrews I’d burst into song right now)

Somewhere in that mix is the cause of and the answer to your big organizational questions, your time and information challenges, and, perhaps, even something for yourself. There you have it. Nine issues that matter, and why.

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