In our last post, we looked at using business architecture for startups and small businesses. In the generous spirit of the holidays, StraightTalk Post No. 18 looks at using business architecture within the context of non-profit organizations.
Does business architecture apply to non-profit organizations?
As you remember from Post No. 17, business architecture is beneficial to any size of organization—from a sole proprietor to a large global organization. It is also beneficial to any type of organization—including for-profit, non-profit and governmental organizations.
No matter what an organization’s type or size, it has the best chance of success with:
- A viable and competitive business model
- An intentionally designed organization
- A way to set and execute direction
Business architecture is a star at helping with all of these.
How exactly does it apply then?
Non-profit organizations care about things like:
- Achieving their missions to the greatest extent possible – There is nothing more important than carrying out the organization’s mission to serve its beneficiaries.
- Being a good steward of resources – All organizations aim to be efficient and reduce costs, but non-profits have specific pressures to keep operating costs low so that the majority of funding can go towards carrying out the mission. (And there are important metrics that people look at to evaluate this.)
- Creating a common language and context to operate effectively – Some non-profits, especially larger ones, work in a very large ecosystem with many different regions, countries and partners, so having a common language and a way to get one’s head around it all is important.
So how does business architecture help with all of that?
- Business architecture translates ideas into action by:
- Comprehensively cataloging all potential impacts of strategic direction
- Creating a shared vision for the future
- Defining the most important initiatives to achieve that vision
- Supporting the strategic planning process to ensure that only the most important investments are made
- Making sure that any initiatives and work occurring is aligned with the organization’s mission and top priorities
- Business architecture helps simplify complex environments
- Business architecture creates a common language and a high-level picture of what the organization does
P.S. You can brush up on the overall value of business architecture with Post No. 2.
Here are just a few:
- A non-profit organization that focuses on vulnerable children in a developing country shifted how it achieves this mission from delivering goods to helping communities build sustainable businesses – Consider how business architecture could help to redesign the organization’s non-profit business model and also to identify, architect, plan and communicate a coordinated set of changes necessary to accomplish this major shift.
- A cross-sector initiative involving a government ministry, a university, non-profit organizations and private businesses (from multiple countries) was created to transform K-12 education in a developing country – Consider how business architecture could help to align these diverse partners around a common language, vision of the future and roadmap to achieve it—as well as to help them communicate with others to obtain advocacy, investment and partnership for the initiative.
- As a non-profit organization grew, there was not a common understanding of how gifts were handled in different situations, including decision-making criteria for gift acceptance – Consider how one business architecture value stream could be created to communicate and streamline gift receiving, and ensure that common decision-logic and capabilities are leveraged in all situations (along with the corresponding people, processes and technology).
How is architecting the same and different for non-profit and for-profit organizations?
Here’s what’s the same. The scope and principles of business architecture always apply, regardless of organization type or size. In other words, those business architecture domains like capabilities, value streams, organization, information, products, stakeholders, etc. all still apply. As do the principles behind how we create them. Of course, the content of the architecture is different for every organization.
But here’s what’s different for non-profits versus for-profit organizations:
- One. Motivations to do business architecture – As mentioned above, non-profits seek to achieve their missions and steward their resources as well as possible.
- Two. Terminology used in business architecture – For example, non-profits have beneficiaries and donors versus customers and investors.
- Three. Practicality of business architecture investment – At this point in time there could be more hesitation for a non-profit to invest in dedicated business architects due to the desire to keep operating costs low. (More on this shortly.)
BTW, a smaller non-profit organization shares dynamics reflected in both Post No. 17 (small versus large businesses) and Post No. 18 (non-profits versus for-profits).
And here’s a handy diagram to summarize all of that and draw a few comparison points between business architecture in non-profit organizations versus for-profit ones.
Business Architecture: Non-Profit vs. For-Profit Organizations
Motivations to Use Business Architecture
- Achieve mission to the greatest extent possible
- Be a good steward of resources
- Create a common language and context to operate effectively
Motivations to Use Business Architecture
- Successfully execute strategies
- Maximize shareholder value and profit
- Create a common language and context to operate effectively
Common Areas to Apply Business Architecture for Value
- Starting: Designing a new organization and telling the story to attract donors/investors and partners
- Scaling and Transforming: Assessing impact, architecting changes to the organization and defining the initiatives necessary to achieve them (e.g. expanding or redefining products/services provided, expanding to new regions, etc.)
- Operating Effectively: Simplifying and increasing the efficiency of the business and technology operating environments
Areas of Differentiation
- Motivations to do business architecture (see above)
- Terminology used in business architecture (e.g. non-profits have beneficiaries and donors versus customers and investors)
- Practicality of business architecture investment (e.g. at this point in time there could be more hesitation for a non-profit to invest in dedicated business architects due to the desire to keep operating costs low—however considering the bigger picture, business architecture can reduce the overall operating costs and enable mission achievement)
So why doesn’t every non-profit use business architecture today?
First, while business architecture is now really starting to take off globally, it is not widely used within non-profit organizations just yet—though there are some that do. This one is just a matter of time for adoption of the discipline to spread.
But we believe there is a second key reason, which is a bit trickier. This one has to do with the careful investment in operations and “overhead” versus those things that are directly related to achieving the mission (and rightfully so). However, while business architecture may be an additional internal cost, if we look at the bigger picture, it greatly increases an organization’s ability to achieve its mission and it can actually help to reduce the overall operating costs (e.g. by preventing a misaligned investment, by identifying opportunities to share resources, by saving time due to misunderstandings, etc.). Considering this perspective, we could even ask, is it responsible to run a non-profit organization without business architecture?
Here’s where we can ask ourselves, what if?
What if we could apply more of the rigor used in for-profit businesses, like business architecture, to non-profit organizations? How much more successful could they be in achieving their missions at scale?
But on the flip side, how much more successful could for-profit businesses be if they infused more social mission and responsibility into various aspects of their organizations?
What if donors and investors had a broader perspective on the big picture relationship between solid operational investments and an organization’s ability to achieve its mission faster and better?
What if we as architects could help to shift the paradigm?
Architecting For Good: Take Two.
Just in case you missed the last StraightTalk post, we would like to introduce the concept of “architecting for good.” At this point in time, most non-profit organizations (especially smaller ones) do not necessarily have the resources or expertise to do their own architecting. However, we know architects to be some of the most passionate people on the planet, who love to architect, solve problems, and make a difference to their organizations and the world.
If sharing your architecture (or other) talents to help a startup, small business, non-profit, social enterprise or other social initiative is of interest to you, we’d love to hear from you! Here is a short 2-minute survey to help us understand more about you—what talents you possess, what you’re passionate about contributing, and what aspirations you have to get involved.
This is a wrap for the last StraightTalk of the year. It has been a true pleasure to share this journey with you and we wish you the happiest of holidays this season!
More Good Stuff
The Paradox of Generosity (Book by Christian Smith and Hilary Davidson): Just in time for the holiday season. A fascinating little book that links acts of generosity with improved health and happiness. In giving we receive, in grasping we lose.
Solving the World’s Biggest Problems: Better Philanthropy Through Systems Change (Stanford Social Innovation Review): How non-profits and philanthropists are embracing the principles of systems change as an effective way to solve the world’s biggest problems. Consider what a tremendous enabler business architecture could be to facilitate this type of big-picture thinking and collaboration.
TED Talks On Generosity: A collection of great talks on the hows, whys and whats of generosity. Make sure to check out the one by Dan Pallotta on The Way We Think About Charity Is Dead Wrong, as he makes a good case for applying some business thinking to the non-profit world for maximum impact.