A new world order… …Strategic Dimensions, Strategic Considerations A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd Contents u Industry/Sector Dimensions & Considerations u Board/Governance Dimensions & Considerations u Organisational/Service Dimensions & Considerations u Customer, Carer & Family Dimensions & Considerations u Mission Criticals... For Transitioning Your NFP To The New World Order u Further Information A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 2 Industry/Sector Dimensions & Considerations A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 3 NFPs, Australia & NZ, Vital Statistics AUSTRALIA (figures are estimated) NEW ZEALAND (figures are estimated) u Number of NFPs * 6 00,0001–700,0002 (“58, 779 economically significant”3) * 97,0004 u $ Contributed * 4.1% GDP5 * 4.9% GDP6 u Categories/Sectors * 35–37 industries/sectors 1 2 3 4 P roductivity Commission 2010 Dr Mark Lyons ABS Satellite Account 2006–2007 Statistics New Zealand 2005 A New World Order…Strategic Dimensions, Strategic Considerations Status: Master 5 6 7 Version: Two * 11 industries/sectors7 A BS Satellite Account 2006–2007 S tatistics New Zealand 2005 S tatistics New Zealand 2005 Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 4 NFPs, Australia & NZ, Vital Statistics AUSTRALIA (figures are estimated) NEW ZEALAND (figures are estimated) u Employees * 889,9008 * 105,3409 u Volunteers * 4 .6 million volunteers (317,200 full time equivalent)10 * 436,506 volunteers 8 9 (8.5% of total employment) ABS Satellite Account 2006–2007 Statistics New Zealand 2005 A New World Order…Strategic Dimensions, Strategic Considerations Status: Master 10 Version: Two A BS Satellite Account 2006–2007 Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 5 NFPs, Australia & NZ, Vital Statistics AUSTRALIA (figures are estimated) u Legal Types of NFPs * 7 4% unincorporated associations * 6 1% unincorporated societies * 2 3% incorporated associations * 22% incorporated societies * 2 % companies limited by guarantee * 1% other organisations A New World Order…Strategic Dimensions, Strategic Considerations NEW ZEALAND (figures are estimated) Status: Master Version: Two Date: 7 July 2015 * 15% charitable trusts * 2 % non-charitable trusts and charitable companies Software: InDesign © 2015 Australian Strategic Services Pty Ltd 6 So Who’s Who…In The Oz & NZ NFP Zoo? Family Services Hobby Associations & Clubs Community Development Services Agricultural Services Residential Aged Care Services Emergency Services Tertiary & Vocational Education Services Palliative Care Services Peak Bodies & Industry Associations Foundations, Charities & Trusts Mental Health Services Migrant, Refugee Services Labourmarket/ Employment Services Community Services Museum Services Private Health Insurance Services Research Services Unions Education & Training Services Regional Economic Services Churches Cooperative Research Centres Status: Master Credit Unions Sporting & Recreational Services Animal Welfare Services A New World Order…Strategic Dimensions, Strategic Considerations Health Care & Medical Services Home Care Services Children’s Services Disability Services Community Co-operatives Industry Superannuation Funds Correctional Services Youth Services Library Services Friendly Societies Private School Services Version: Two © ASSPL Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 7 The Changing Paradigms For NFPs 2025 /2015 2012 950s 1 s 1800 s 1970 2000 s 1900 Religious Paradigm 1800 –90s Welfare Paradigm Charitable Paradigm Economic, Social & Environmental Paradigm Marketplace Paradigm 1900 s 1950 s 1970 –90s 2000 2012 /2015 © ASSPL 2025 A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 8 The Changing Paradigms For NFPs 2025 /2015 2012 950s 1 s 1800 s 1970 2000 Marketplace Paradigm s 1900 Religious Paradigm 1800 –90s Economic, Social & Environmental Paradigm esses, Private Busin lutions eg: Work So Community Businesses, NFPs, eg: Oak Tasmania Welfare Paradigm Charitable Paradigm Public Busine sses, eg: BUPA 1900 s 1950 s 1970 –90s Marketplace Paradigm 2000 2012 /2015 Economic, Social & Environmental Paradigm © ASSPL 2025 A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 9 Government Reports…Creating New Paradigms u It is not by coincidence that in the Commonwealth Government/Productivity Commission reports have all/will all come together at the same time, creating: * new paradigm/s of service delivery * new environment/s in which NFP organisations will need to adapt and operate Australian Reform Model Aged Care: Caring for Older Australians Not for Profit: Contribution of the Not-for-Profit Sector New Paradigm/s, New Environment/s Allied Health: Building a 21st Century Primary Health Care System Hospital & Health: A Healthier Future for all Australians Disability: Disability Care & Support Mental Health: National Mental Health Report 2010 © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 10 Government Reports In Summary u In a nutshell, all Commonwealth Government/Productivity Commission reports come down to: * National Strategies: to reinvent services, eg: NFPs, aged care, hospital and health, allied health, disability, natural resource management * New Structures: are being established and used, eg: Primary Health Networks, Local Health Networks * New Systems: the development and use of new systems, eg: e-Health system, Regional Assessment/Aged Care Gateway * New/Redeveloped Services: an opportunity for your organisation to redevelop its existing services and research and develop new customer focused services A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 11 Changing Government Roles, Cause NFP Growth e& isla t Le g e nc Monitor & Review ina Monitor & Review Private Businesses Service Delivery State & Commonwealth (Australia) & National (NZ) Governments &F © ASSPL nd Fund & Finance State & Commonwealth (Australia) & National (NZ) Governments Fu Re gu lat e Legislate & Regulate Public Businesses Community Businesses (NFPs) © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 12 Changing Government Roles, Cause NFP Growth u In the past, State and Commonwealth governments legislated and regulated, funded and financed, monitored and reviewed and undertook service planning and service delivery u O ver recent years, State and Commonwealth governments have moved, or are moving, to legislate and regulate, fund and finance and monitor and review, leaving service delivery to public businesses, private business and community businesses (NFPs) u In so doing, State and Commonwealth governments focus on their core roles and responsibilities and aim to reduce their risk, costs, liabilities and political exposure A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 13 The Big Get Bigger, The Small Go Niche Specialist Organic Grow A m a lg a m a ti o n s Mergers Organic Growth 2012 Mergers International Providers A m a lg a m a ti o n s National Providers A m a lg a m a ti o n s Multi State Providers/ Emerging National th A m a lg a m a ti o n s Statewide Providers Regional/ Multi Regional Providers Small Providers © ASSPL Mergers Amalgamations Amalgamations 2015–2020 Organic Growth Few International Providers More National Providers A New World Order…Strategic Dimensions, Strategic Considerations Amalgamations Fewer Emerging National, Multi State Providers Status: Master Amalgamations Version: Two More Statewide Providers Date: 7 July 2015 Organic Growth Less Regional/ Less Multi Regional Providers Software: InDesign Few Specialists/ Niche Rural & Remote Providers © ASSPL © 2015 Australian Strategic Services Pty Ltd 14 Board/Governance Dimensions & Considerations A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 15 NFPs Past, Present & Future ELEMENT PAST PRESENT FUTURE NFP Paradigm Shifts Charitable to welfare paradigm Welfare to market paradigm Market to social, economic & environmental paradigm NFP Legal Entities Unincorporated or incorporated associations, few companies Incorporated associations, more companies Predominantly companies ltd, fewer incorporated associations NFP Members, Staff & Volunteers Many members, few staff, more volunteers Declining membership & volunteers, increasing staff Few members are directors or directors are members. Many staff, more volunteers A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 16 NFPs Past, Present & Future ELEMENT NFP Revenue, Resources Reserves NFP Service/ Business Models & Mentality NFP Branding & Awareness PAST PRESENT FUTURE Revenue limited Resource poor Reserve poor Revenue growing Resources growing Reserves building Revenue Secure Resource Secure Reserve Secure Service mentality & approach We’re a service, we’re a business, or we’re a community business Community business mentality & approach Brand management, increasing brand recognition Strong, well known & reliable brands Limited branding Low brand awareness A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 17 NFPs Past, Present & Future ELEMENT PAST Geographic Spread Mainly local. Few regional, fewer national PRESENT Few national, increasing multi-state & multi-regional FUTURE National, multi-state or multi-regional Few local/regional Service/ Product Diversity 1–2 services/ product types Multi service/ product types Integrated services/ products. Service depth, Service breadth Performance & Benchmarks Very limited performance management or benchmarking Increasing performance Benchmarking Performance management Benchmarking is widespread A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 18 New Industry Dimension…Tiers 1, 2 & 3, eg: Home Care Eg: Eg: National or multi-state, multi-sites, multi-service, multi-revenue Tier One Feros Care, streams, integrated systems, demonstrated strategic growth, Extra Large – Very Large integratedliving, strong balance sheets, organisational capacity & capability Organisations Care Connect, Kincare, Silver Chain, RDNS, Calvary Home Care Tier Two Large – Medium Organisations Eg: Villa Maria/Catholic Homes, ADSSI Home Living, Suncare Tier Three Small, Stand Alone Organisations Eg: All the small organisations Eg: Statewide, muti-regional, regional, variety of services, multi-revenue streams, balance sheets, service mix & profile Eg: Local, regional, one–two services, few revenue streams, one–two sites, limited/challenged balance sheets © ASSPL © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 19 New Industry Dimension…Tiers 1, 2 & 3 continued u A ll human service industries/sectors can be divided into Tier 1 providers, Tier 2 providers and Tier 3 providers, eg home care, refer to page 19 u In summary, Tier 1 providers are characterised by such elements as: dominant market share, increasing economies of scale, strong brand recognition, geographical spread, multi-revenue streams and multi-services u Tier 2 providers are usually mid sized, town or regionally based, growing or wishing to grow, considering amalgamations or mergers, have several revenue and service streams u Tier 3 providers represent the majority of providers and are typically small, locally focused, increasingly concerned about their future, amalgamating into Tier 1 or Tier 2 organisations A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 20 NFP Boards’ Mentality & Approach Is Changing u The majority of Australian NFPs are now: * n ot walking backwards into the future, looking back at their glorious past * n ot in love with their shadow, only to find their shadow doesn’t reflect their true form * operating with their heads and hearts connected * r ecognising that they must govern the organisation whilst management must manage the organisation * f ocusing on making a profit/surplus in order to develop and deliver their vision, mission and/or core business A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 21 NFP Board Trends u Small boards, 5–7 board positions, length of service 5–7 years• u Average age of boards 51–60 years• u Five males, two female directors• u 12–14% of NFPs remunerate board members, $10,000–$30,000• u Professionalised boards, directors fill board positions based on agreed competencies, skills, knowledge, qualifications and experience u Boards are moving from paper to e-boardrooms u A continued move to bi-monthly – quarterly board meetings and committee meetings in between board meetings • Better Boards Remuneration Survey 2012 A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 22 NFP CEO, Executive & SMT Trends u S maller NFPs moving from service coordinator/manager to chief executive officer from within industry/sector u Medium–large NFPs Career Pathway & appointing: Positions * commercial chief executive officers from external industry/ies * commercial, executives and senior managers from external industry/ies, eg: Prescare, Community Solutions A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Personality Type Appointment Considerations Qualifications Skills, Competencies & Knowledge © ASSPL Software: InDesign © 2015 Australian Strategic Services Pty Ltd 23 Establishment of NFP Leadership Teams Board of Diectors on Vis ssi ion Mi u A n increasing number of NFP boards are establishing and operating leadership teams: * board of directors * chief executive officer * executive and/or senior management team u Leadership teams focus on the strategic Chief challenges and strategic Executive opportunities Officer Strategic Challenges & Strategic Opportunities Senior Management Team Values © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 24 Membership Is Moving In Different Directions Membership Increasing Environmental Groups Va M lu em e Pr ber op sh os ip iti on D M ise em ng be ag rs ing hi p g in ip lin rsh ec e D mb e M Low Membership Value & Benefit, Actual or Perceived ng ip wi sh ro er G mb e M Sporting Organisations Clubs High Membership Value & Benefit, Actual or Perceived Home Care Group Training Unions CWA Employment Services Health Care Private Health Insurance Private Schools Social Causes Advocacy Groups Credit Unions Prestige Sport Rotary Aged Care Freemasons Membership Decreasing A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Rural Youth Lions Churches Apex © ASSPL Software: InDesign © 2015 Australian Strategic Services Pty Ltd 25 Incorporated Associations To Companies Limited A Few Are Staying As Incorporated Associations State Associations, Incorporation Acts Unincorporated or Incorporated Associations Many Are Changing To Companies Limited By Guarantee Corporations Act © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 26 Increasing Use Of External Expertise Medium to Large Organisations Small to Medium Organisations Advisors Legal, Financial & Insurance Advisors We Operate With Limited External Advice Brokers Legal, Financial & Insurance Advisors Consultants & Contractors Other Service Providers We Focus On What We Do Well & Seek External Advice Tender Writers Strategic Alliances Partnerships © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 27 u D eveloping a greater understanding and practical engagement/contribution to regional, economic and community development processes and projects will become a defining characteristic of leading NFPs A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Economic Development Y Regional Development Your NFP Organisation n issio rM ou u N FPs make an important contribution to regional, economic and community development processes Your Vis ion NFPs & Regional, Economic & Community Development Community Development Your Strategies Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 28 t en s s pm elo ucce S ev s l D lity & ice na i erv gio nab al S Re ta i dic s Su Me alt He Ec on Inn omi cD ova ev t io e n Ag & C lopm ed rea en Ca t t i vity re Se rvic es Trade In A Wider Framework h& Aged Care/ Disabled; Chronic Health/ Complex Health; High Care – Sub-acute; Transitional Care – Palliative Care Allied Health, Primary Services Entrepreneurship & Business Development Community Development A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © ASSPL © 2015 Australian Strategic Services Pty Ltd 29 Trade In A Wider Framework continued u It is important for the leadership groups (Boards, Chief Executive Officers & Senior Management Teams) of aged care organisations to understand and recognise that they operate in a wider framework than just care and accommodation u A s aged care organisations grow and develop, particularly as they move into becoming multi-service, multi-regional organisations, their contribution to and engagement in towns, A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two communities and regions can be categorised into: * regional development * economic development * community development u Innovation and creativity, entrepreneurship and business development and sustainability and success are some of the key processes and mechanisms that drive and deliver economic, regional and service/community development Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 30 Organisational/Service Dimensions & Considerations A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 31 Tendering Approved Provider, Preferred Providers Increasing Legislation & Regulation Today A Constrained Market Place… eg: Residential Care Home Care Disability Services Natural Resource Management Sport & Recreation Funding Approved Provider Legislation & Regulation Standards & Quality Systems A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Tomorrow Transitioning To A “Free” Managed Market Place eg: Residential Care Home Care Disability Services Natural Resource Management Sport & Recreation © ASSPL Customers Funded – Tenders/Contracts A More Rigorous Framework, A “Free/Managed” Market Beyond Standards, Business Excellence Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 32 Market Forces & Competition Will Prevail ic Partnershi g e t a ps Str Joint Ventures Private & Public Businesses Compete Against Each Other NFPs Compete Against Private & Public Businesses Private & Public Businesses Compete Against NFPs Stra tegic Alliances A New World Order…Strategic Dimensions, Strategic Considerations tracts & Network s Con NFPs Compete Against NFPs Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 33 Transitioning From A Service To An Organisation Stage I Stage II Stage III u ‘We Are A Service’ u ‘Are We A Business, Are We A Service?’ u ‘We Are A Community Business’ u S trong Operationally u Stronger Operationally u Strongest Operationally uW eak Organisationally u Fitter Organisationally u Strong Organisationally u F ew Services/Products u S everal Services/ Products u Integrated Services/ Products uA Manager Of A Service uM anager Transitioning To Manager/Leader u Leader & Developer Of An Organisation © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 34 From A Solid Cube To A Rubik’s Cube ial c sta ina ty ial tic Jus c So bil ity Su sta ina bili ty bil ity ity ity u Eq u Eq Multi-Service NFP… from “a service” to an organisation Specialist Niche NFP… one–two services A New World Order…Strategic Dimensions, Strategic Considerations Via Efficiency Su e bili Efficiency Effectiveness So Via Effectiveness e tic Jus Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 35 Many NFPs Are Focused On A Quality Journey in t on sI u uo ro p m en m ve Business Excellence, Best Practice, Best Value etc. t Assessment Accreditation & Certification Registration C Standards, Elements & Indicators n ga r O Codes of Practice, Customer Guarantees, Service Guidelines al n o ati ve e D nt e pm lo is © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 36 If You’re Into Care…Care Is On The Move u If your NFP provides any form of care services, eg: * Disability Services * Day Services * Health Care * Mental Health * Child Care * Drug/Alcohol * Massage Services Se l f Care Low C a r e H i g h Ca r e Sub - a c u t e Acute Care Status: Master Hig h re Ca re Ca Hi gh Intensive Care D y ep endenc Acu t e C a re Su b - a c u t e C a re consider the adjacent model and the following model A New World Order…Strategic Dimensions, Strategic Considerations pendency De H i g h C a re L o w C a re S e l f C a re Version: Two Date: 7 July 2015 Software: InDesign L SSP ©A © 2015 Australian Strategic Services Pty Ltd 37 As Care Levels Increase…Everything Else Increases Recurrent Costs Increase Capital Costs Increase Labour Costs Increase Clinical & Organisational Risks Increase Skills, Knowledge & Qualification Requirements Increase Level of Care Increases p e nde n c y Acu Su are De C Hi g h Intensive Care t e C a re b - a c u t e C a re H i g h C a re L o w C a re Self Care A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two S ©A Date: 7 July 2015 SP L Software: InDesign © 2015 Australian Strategic Services Pty Ltd 38 Preferred Providers Will Rule The New World u W here services have been privatised and private businesses, public businesses and community businesses (NFPs) compete for market share, service delivery and customers, the principles and practices of the “Market Bell Curve” prevails A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 39 Provider Numbers Preferred Providers Will Rule The New World Software: InDesign Outputs/Outcome Performance KPIs Date: 7 July 2015 Standards Version: Two Outputs/Outcome Status: Master Performance KPIs Standards Licence/Contract Past Performance Entry Criteria A New World Order…Strategic Dimensions, Strategic Considerations Preferred Provider Phase Qualifying Phase Entry Phase Time © ASSPL 2012 © 2015 Australian Strategic Services Pty Ltd 40 The Rise Of Preferred Providers…The Evidence Industry Examples 1980s Employment Services Providers 700+ Disability Employment Providers 1990s 2000s 2012/14 2015/2020 (only 70 of original 700, 230 new entrants) 200 101/81/61 50–100 (est) 13+ 240 260 151 50–100 (est) Pathology Providers 340 300 120 30 20–25 (est) Private Health Insurance Companies N/A 48 44 37 20–30 (est) Credit Unions 841 350 200 100 67–72 (est) Bush Nursing Hospitals/ Centres 69 30–50 25–30 22 10–15 (est) Residential Aged Care Providers 2,200 2,900 1,600 1,200 400–500 (est) Home Care Providers 500–3,000 3,000–4,000 4,000–4,500 4,500–5,500 500–1,000 (est) 300 (1935) A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © ASSPL © 2015 Australian Strategic Services Pty Ltd 41 Where Price Is Constrained…Watch Out Service Volume Service Margin Business Risk Low Volume High Margin Low Risk Low Volume Low Margin High Risk High Volume Low Margin High Risk High Volume High Margin Low Risk A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 42 Where Price Is Constrained…Watch Out u In the new world of NFPs: * Volume …customer numbers * Margin …knowing the true cost, margin and price of a unit of service delivery or product * Business Risk …that is a result of the two aforementioned elements u P ractically, NFPs which are price constrained, have small customer numbers and long distances to travel will struggle to survive financially in the new paradigms/new environments, unless they are “block/contract” funded, or have alternative revenue streams A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 43 Go Market Breadth Or Market Depth Or Both Horizontal Markets Home Care Residential Care Fee-for-Service Outreach Residential Care Sub-acute Care Transitional Care Dementia Care Palliative Care Vertical Markets Independent Living © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 44 Go Market Breadth Or Market Depth Or Both u Many Australian NFPs, no matter what industry/sector they are in, are: * g rowing and developing their horizontal market/s and their vertical market/s, organically or via amalgamations or mergers, or * just gaining depth and breadth in their existing vertical market/s, or horizontal markets, or * r esearching and/or developing new horizontal or vertical markets * determining if they are a “market taker” or a “market maker” u An example of horizontal and/or vertical market development can be seen on the next page: eg: an aged care organisation A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 45 Remember Policies/Services/Funding Comes & Goes u For those boards, chief executive officers or senior managers who have been operating one or more of the NFP industries or sectors you may have noticed: * government policies come and go * government services come and go * government funding comes and goes u One of the best examples of this phenomenon is mainstream employment services and disability employment services A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 46 Robustly Apply The ‘Four S’ Model ent Structu Excell re Excellent Services nt Excelle Strategy Vision, Mission & Values PL ©ASS Exce llent Systems A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 47 Strategic Plans–Strategies Must Be Linked Strategic Intent & Activity Alcheringa “Lifestyle Options For Individuals, Aged Care For Our Community” Strategic Plan June 2007 – Dec 2010 Version: Final, Date: 19 April 2007, © Australian Strategic Services Time June 2006 A New World Order…Strategic Dimensions, Strategic Considerations June 2008 Status: Master June 2010 Version: Two Date: 7 July 2015 June 2012 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 48 From A Service To A Systems Mentality/Approach Service Framework Systems Framework We are a service Community business Allocated places, funding & customers Customer choice determines their own & your organisation’s future We primarily deliver services We operate within a system We meet service standards We exceed service standards A service framework A systems framework Primarily 1–2 “bankers” Wide variety of revenue streams Welfare paradigm Market paradigm None – few competitors Private, public & community business competitors A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 49 Corporate Services to Services Ratio he ratio/percentage of your organisation’s corporate services T costs to service offering…raises the question of economies of scale and critical mass. Model One Model Two Corporate Services Corporate Services Service Offering Service Offering L imited corporate services to services, eg: no Business Development Unit, no full time Quality Manager. A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two ull suite of corporate services, F eg: Business Development Unit, Marketing Team, etc. Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 50 Determine The Future Service/Business Model * w hat will make it different in the future * w hat will keep it winning in the future True Cost/Margin & Price Strategic Financial Management Plan Industry Scenario/s Organisational Scenario/s What Will Keep Us Winning? Business/Service Model What Will Make Us Different? u Designing and developing a truly innovative and unique business/service model will set the scene for your organisation to determine: Strategies/Strategic Objectives Projects A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 51 Service/Business Example continued Res ide n Tele car e he g in g As ive sist ma Liv es r e nt h Te ch alt Pri yC rvic E ein Sup In d e p o rte d pen Livin g d e nt U n it s Tele a re Se g a rly A ies e C u F o r-S sto e rvic m er e s lo g Fe A l li e d C Aged Care/ Disabled; Chronic Health/ Complex Health; High Care – Sub-acute; Transitional Care – Palliative Care Customer s Insured Mental Health Age d g ent Livin pend Inde Units d able Dis es rvic Se Asse ssm ent ,C lini it al Un c i d e &M no g rsin u N cal Medica l Palliative Care are lC tia In H om e cation th Edu l a e H m ire t e R are Tran si tio n al Home C Care are © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 52 New Revenue Streams Equals New Services & Customers cts $ Proje Local, Stat e& Co Car mm e& Privat e He alth Ins ura re & Ca nce ents m n r e Gov h t al we cts $ n o oje Pr Aged, Disabled; Chronic Health/ Complex Health; High Care – Sub-acute; eC are &P are vic &P S er roje For- cts $ Fee- Transitional Care – Palliative Care roje c t$ Com pen le sab C © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 53 New Revenue Streams Equals New Services & Customers continued u T he majority of NFP organisations are “locked into” a government funding mentality and approach u T here are many other funding categories and therein many sub-categories: * private health insurance care and projects dollars * compensable care and projects dollars * fee-for-service care dollars * Local, State and Commonwealth governments’ project dollars u A ll NFP organisations should explore and engage new organisations/markets that create new revenue streams A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 54 The Really Big Challenge… Funding The Unfundable Compensable Care & Project $ ding The Fundable n u F Government Care & Project $ Fu Social Enterprise Private Health Insurance Care & Project $ Your Organisation’s Vision, Mission & Values Foundation Government Fee-For-Service Care & Project $ ndi n g T he U nfu ndab Donations le Sponsorship Bequests Trusts Fundraising © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 55 The Really Big Challenge… Funding The Unfundable continued u F unding the fundable customers will be a challenge in itself, given that customers will be assessed, funded against that assessment and a care plan; in essence, services will be designed for and delivered to each individual: * within an agreed price * to a predetermined timeframe * to a defined standard u However, for either unfunded customers or funded customers, who do not have all the services they require, the really big challenge will be how organisations fund the unfundable u Donations, sponsorships, bequests, fundraising, trusts, social enterprises, government and foundations will need to be considered and actioned A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 56 Customer, Carer & Family Dimensions & Considerations A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 57 Customer Demand & Expectations Will Increase u For the majority of NFPs, customer requirements and expectations, together with demand, will continue to increase u Customers will be increasingly aware of: * t heir rights and responsibilities * t heir financial/service entitlements * price and performance A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 58 Customer Profile Of 2020 u A ttuned to choice, options and decision making processes u Low–nil brand loyalty u High expectations and needs u Rights and responsibilities oriented u World views, world travel and a multi cultural attitude u Independent, self managing u Accumulating wealth versus significantly disadvantaged u More people with tertiary/VET qualifications and careers A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 59 Customer Funding, Choice & Mobility u With the introduction of new funding models such as Individual Support Programs (ISP) in Disability and Consumer Directed Care (CDC) in Home Care, * customer funding * customer choice * customer mobility are set to become the norm u These policies are just the start of putting the power into the hands of customers. Similar models of funding will spread to other human service organisations A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 60 Existing, Transitionary & New Customers Existing Customers ry a n sitio mers n a Tr usto C A ttr a Tra Cu nsitio sto na me ry rs ct & R etain e w C u sto m er N ct & R etain e w C u sto m er N Transitionary Customers A ttr a Transitionary Customers Transitionary Customers N ct & Retain ew Customers a r t t A s nary sitio ers Tranustom C Tran Cus sition tom ary ers N ct & Retain ew Customers a r t t A s © ASSPL A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 61 Existing, Transitionary & New Customers continued u A ll human service providers will need to be acutely aware of the three customer types: * existing customers * transitioning customers * new customers u hese three customer types will create T * customers flow rates * customers mixes * customers cashflows u C hief executive officers and managers will become extremely aware of the interplay of customer flow rates, customer mixes and customer cashflows A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 62 NBN, The Conduit to Customers, Data & Information nal Broadband Network Natio Clinica l, GP & Specialis t Ser vice s Da ta M e alt d i c a hP l& ro j e ct s Assessment & Monitoring care Services Tele Ot her rg i n /E m e m S e r e rg i n g O t h e r / E e s vic e s c S ervi N a ti A New World Order…Strategic Dimensions, Strategic Considerations Client & Clinical Medical Services n nal Broadband Network Natio n atio orm Inf ces rvi Se H Mo ealth nit ori ng & n Customers, Residents, Carers & Families health Services Tele io at r m ti o Info duca &E nal Broadband Network o i t a N istive Ass gies nolo h c Te Status: Master © ASSPL o n al Br o ad b a n d N et w Version: Two g He ork Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 63 NBN, The Conduit to Customers, Data & Information continued u T he NBN will provide a national technology platform upon which an innovative range of telecare and telehealth products and services can be delivered. u A t this point in time there are only a small number of aged and health care providers throughout Australia that are seriously utilising the NBN to deliver products or services. u W ithin the ICT strategies or ICT Plan of each organisation there should be a major focus on the use of the NBN and related products and services; whether they are developed and delivered by the organisation or leased/rented from ICT providers. A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 64 Mission Criticals... For Transitioning Your NFP To The New World Order A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 65 Mission Critical One: Adopt A Robust Leadership Position u Boards will increasingly need to adopt a more robust leadership position and undertake even more robust: * strategic discussions * strategic thinking * strategic decisions u These activities will enable the development, implemetation and monitoring of robust strategies, strategic plans u Weak, laid back, comfortable or lazy boards will have no future A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 66 Mission Critical Two: Excellent Board, Excellent CEO, Excellent SMT u An excellent board will recruit and retain an excellent chief executive officer; an excellent chief executive officer will recruit and retain an excellent senior management team u Remember…recruit for excellence, only train for incremental change A New World Order…Strategic Dimensions, Strategic Considerations Excellent Chief Executive Officer Excellent Senior Management Team Excellent Board Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 67 Mission Critical Three: Get Out Of The Boardroom…Look, Listen, Learn Discover or Generate New Ideas, Concepts & Opportunities Strategically, Plan & Develop A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Identify & Build New Contacts & Networks Undertake Applied Research or Investigation Your Organisation’s Strategy Measure Performance & Benchmark Internally & Externally Version: Two Continuously Gather Business Intelligence Date: 7 July 2015 © ASSPL Software: InDesign © 2015 Australian Strategic Services Pty Ltd 68 Mission Critical Four: Understand The New Environment… Develop Robust & Realistic Scenarios u M any board’s strategic plans are in essence either ‘operational’, ‘motherhood’ or lack any robust strategies to ‘shift and lift’ their organisations to the next step or stage of development u G iven all the previous considerations and evidence provided about the changing world of NFPs, boards will need to develop and drive robust and realistic scenarios and strategies if their organisations are to remain relevant A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Strategic Plan Strictly Private & Commercially Confidential Commercial in Confidence July 2011 – June 2014 Date: 7 July Status: 2015 Final Software: InDesign Version: Final © 2015Date: Australian Strategic Pty Ltd As Adopted 22 MarchServices 2011 ©201169 ASSPL ns Transition, Reinvent & Grow On Our Own Majority ec ion da t oli © AS SP L ion Version: Two t da oli Status: Master Selling or Closing; Increasing Co ns ns Co A New World Order…Strategic Dimensions, Strategic Considerations Human Services Organisations ns Co nn Partnership, Alliance, Network; Few But Increasing tio Amalgamations & Mergers; Increasing ec nn Co tio th ow Gr u In the boardrooms of NFPs throughout Australia strategic discussions and strategic decisions are increasingly being made, have been made or need to be made now…to either: * reinvent and grow * form partnerships, alliances and networks * amalgamate or merge * sell or close Gr ow th Mission Critical Five: Boardroom Decisions, Organisational Directions Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 70 Mission Critical Six: Determine The True Cost, Margin & Price u The majority of NFP boards today operate against an annual budget u Very few boards operate using a 3–5 year Strategic Financial Management Plan aligned to their Strategic Plan u Boards will seriously need to: * d etermine the true cost, margin and price of a ‘unit of service’ * u se, robust industry financial key performance indicators and benchmarks A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 71 Mission Critical Seven: Adopt Community Business Principles & Practices u Understanding and utilising community business principles and practices will enable your board/chief executive officer to: * c ompete in the new paradigm and marketplace A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two TH RU * t ransition your people from a government funded/ welfare mentality and approach K EA BR P SOEO LU PL TI E O NS Enriching the Community Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 72 Mission Critical Eight: Drive Organisational Change…People Change u Organisational change can be either: * proactive or reactive * evolutionary over time, or * revolutionary in a short time Proactive Approach Evolutionary u New paradigm/s will require taking all your people on a journey of change A New World Order…Strategic Dimensions, Strategic Considerations Mode Revolutionary Status: Master Version: Two Reactive • • • • • lanned P Engaging Sequential Over time Successful results • • • • • nplanned U On the back foot Spasmodic Adequate Limited Results • • • • • lanned P Holistic Focus mentality Short time frame Good results • • • • • L imited planning Ad hoc Crisis mentality Poor timeframes Poor results Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 73 Mission Critical Nine: Technological Advantage Will Be Vital u If boards are to adapt to the new world of NFPs they need to adopt and use technology u If this is to occur, board members need a key desire to improve their governance system, structure, processes and tools A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 74 Mission Critical Ten: Performance Will Be Paramount, Measure What Matters Contracts & Customer/Carer Service Agreements, etc Targets, Ratios, Outcomes, KPIs etc Internal & External Benchmarks © ASSPL Performance Management System, Board Reports A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 75 “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success than to take the lead in the introduction of a new order of things because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new”… Machiavelli A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 76 NFPs… Your Future Is In Your Hands A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 77 Further Information For further information, a copy of this presentation, other presentations, or to discuss your board’s/organisation’s requirements contact: Michael Goldsworthy Principal Consultant Australian Strategic Services 03 5429 6331 0418 130 581 [email protected] www.asspl.com.au A New World Order…Strategic Dimensions, Strategic Considerations Status: Master Version: Two Date: 7 July 2015 Software: InDesign © 2015 Australian Strategic Services Pty Ltd 78
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