This third podcast in our continuing series on nonprofit business model development features the CEOs of two very different nonprofit corporations that have gone through a searching process of re-thinking critical elements of their organizations’ business models: Rick Homans, President & CEO of the Tampa Bay Partnership; and Jeffrey Thomson, President & CEO of the Institute of Management Accountants. With the two earlier podcasts describing the far-reaching business model update initiative of the Canadian Society of Association Executives that CSAE Board Chair Guy Legault and President & CEO Michael Anderson spearheaded, our Extraordinary CEO blog now has a rich reservoir of information on nonprofit business models that leaders can draw on.
Six major points about business model updating loom large in the first four podcasts:
- Business model updating is as critical to the success of nonprofit enterprises as it is to for-profit businesses.
- A full-fledged business model defines the fundamental nature of a nonprofit or for-profit corporation, in terms of its values and vision, strategic directions, products/services, customers, and structure (including the board, staff organization, and management systems).
- Three preeminent factors drive business model development: capitalizing on the challenges and opportunities emerging from a rapidly changing environment; ensuring that customers/members/ stakeholders are provided with substantial value; and focusing on growing the nonprofit or for-profit corporation in terms of revenues, impact, capability, clout, etc.
- Volunteers, including board members, must be intensively and creatively involved in business model updating, both to capitalize on their experience and expertise and to ensure that they feel enough ownership of proposed changes in the business model to serve as influential “change champions.”
- The CEO must play a visible, hands-on role in updating the business model and implementing the changes in the model in order to mobilize staff support and to minimize the inevitable resistance to change.
- And in light of our rapidly changing world, a business model cannot safely be cast in bronze; it must, in Jeff Thomson’s words, be “agile” in the sense that it can easily be tweaked as circumstances evolve.