NGOs rethink business models to adapt and thrive

In early November, members of Bond’s Futures and Innovation Working Group met with senior leaders from the Big Issue Invest group and Veolia to explore how organisations can challenge their existing business models to thrive in a changing world.

Due to unstable external environments, both organisations innovated their business models, transformed their organisational structures, and realigned their missions.

Partnering with the private sector

Big Issue Invest is known to the public as a magazine run by and for homeless people, despite their wider remit on addressing UK poverty. In order to pursue their mission, the NGO changed their strategy to build new business models and create innovative new partnerships. They recruited a leadership team with specialist knowledge of the social sector and a greater business sense.

Their new strategy yielded several big partnerships, including one with credit giant Experian. By using rental data in the same way that mortgage data is used to create credit ratings, the Experian/Big Issue partnership helps people living in poverty to gain a credit file – and the model is financially sustainable.

From monetary value to social impact

Veolia, a leading UK organisation in environmental solutions, faced similar challenges. The 2008 recession meant local councils, their biggest customers, had to reduce their expenditure by 15%. Veolia had to completely change their business model in order to survive. While previously just a service-based business, Veolia entered the circular economy and began re-using and selling waste products that would normally be dispose of in a landfill site.

Both Veolia’s and Big Issue Invest’s new business models are built upon the idea that sustainable income must be balanced with positive social or environmental impact. For both organisations, the strongest partnerships are built upon a similar idea which goes beyond a focus solely on monetary value.

Veolia and Big Issue Invest have partnerships where funds are exchanged, but both organisations also need an exchange of values, upon which a stronger foundation can be built. Both partnerships are mutually beneficial and sustainable beyond the cash transfer.

Lessons from rethinking business models

Asked what they had learnt from successfully rethinking their business models, our speakers at the event highlighted:

• Constant internal communication is important, particularly informing staff of the changes taking place and the new values and mission of the organisation.
• Change on this scale in an organisation can lead to a loss of direction, meaning that strong leadership and belief in the values and mission is vital.

Learn more about business model innovation

Senior leaders from 26 Bond member organisations learnt this on our recent Business Model Innovation course, a modular programme which took them through a range of tools and approaches to disrupt and diversify their own business models. Through engaging with experts and practitioners who shared their own experiences of innovating, participants came away with a set of practical tools and plenty of new ideas to take forward in their organisations.

Check out our new business models resource for 50 more examples of innovative business models, and how to use them to start a conversation in your organisation. The resource was compiled by James Whitehead, Oxfam’s Global Innovation Adviser and Chair of Bond’s Futures and Innovation Working Group.

Find out more about joining the Bond Futures and Innovation Working Group and their upcoming meetings. Bond will be running its Business Model Innovation course again in spring 2017. For more information, contact Liz Lowther, head of innovation and learning.