Businesses play a vital road in dealing with uncertainties during a crisis and they must recognise how the situation has changed due to the crisis. There is a need for inclusivity and companies should take into account the social impact and outcomes. Existing approaches may not be sufficient to meet this challenge. Non-profit businesses can be a good source for fresh ideas as they deal with stakeholders and customers facing economic distress regularly and their methods can be unorthodox but inspiring.
A typical non-profit face three typical constraints and how they succeed in their business despite these could provide some fresh ideas to businesses. Non-profits face regularly
- a complex process of inclusivity with high levels of economic, gender inequality
- a balance between providing high-quality service vs affordability
- severe resource constraints.
Three interrelated ideas are relevant to companies seeking to balance social obligations, especially during a crisis. CMC, Vellore is a typical case provide sterling care to the society and it can serve as a role model for other organisations to adapt. The discussions that follow are based on CMC experience but the learnings can be applied to any business including for-profit businesses.
Pursue intermediate goals
A key lesson is that it may be necessary to have an intermediate goal to achieve the ultimate goal, this approach is called the ubiquity model by John Kay, a British economist. In the CMC context, to get the community to participate in health initiatives, it was felt that the need for their earnings had to be satisfied first. So they initiated a jobs program as well as a skill development program to develop their skill sets and become better employed and hence improve their earnings. Once the socioeconomic needs were met it was easier to implement healthcare initiatives like immunisation and maternal care programs.
Embrace contradictory demands
When offering solutions, companies must reconcile between economic and technical considerations they should not compromise on and the economic capabilities of their customers. Adopting "both/and leadership" can help companies navigate this challenge.
For CMC the choice was between high standards of service and affordability of the poor. This dual imperative of "dedication to excellence and commitment to service" was managed by charging the wealthier customers(patients) enough to subsidise the poor.
For companies, embracing tensions might mean focussing less on defeating your competitors and focussing on promoting brand values, promoting high-quality services. This objective could lead to rivals collaborating to provide services for the benefit of the community.
Decide on what's essential and focus resources on that
The major challenge is, operating is a resource-constrained environment, make the available resource go far. It is essential to ascertain what adds value and what doesn't.
Companies can explore how to offer parallel lines of low-cost variants or simplify offerings to enhance affordability for market segments hard hit economically. Offering lesser frills without sacrificing the core benefits may require some ingenuity, can ensure that the cash strapped consumers can participate in the marketplace.
The strategies pf embracing obliquity, frugality and paradoxicality are not novel but when applied in a mutually enforcing way, can be delivered to economically challenged segment also.
Companies can draw inspiration from non-profits on how to be compassionate and emerge stronger and more focussed.
When Business, as Usual, Isn’t Working, Look to Nonprofits for Inspiration
by Shameen Prashantham HBR 2020/09
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