FEDERAL
SECTOR REPORT
October 1997
(c) P2C2 Group,
Inc.
INTER-SECTOR PARTNERSHIPS ARE THE AMERICAN WAY
There
is
a tendency to view businesses, nonprofits, universities, and
governments as separate worlds--each with distinct stakeholders and
markets. Lately, I have been reminding my clients that these worlds are
intertwined. Some of the most important revenue opportunities are
accessed through inter-sector partnerships.
Many
of
America's early public works projects, such as toll roads and
canals, were public-private ventures. The country's military might is
based on defense employees, industry, and university research centers.
Ross Perot achieved much of his early success by automating State
Medicaid and welfare systems. The health industry today has achieved
enormous economic growth through the stimulus of Medicare, Medicaid,
and subsidies to colleges that train health professionals. Television
stations have just gained billions of dollars of assets, free, by the
FCC's giving each a second frequency for digital broadcasting.
For
nonprofits
and institutions of higher education, efforts to increase
revenues traditionally lead to a focus on grantsmanship and fundraising
campaigns. For businesses, the emphasis is on sales and winning
contracts. But there are other options. So read on. When you look at
the list of the 100 largest defense contractors, you will find not only
IBM and Computer Sciences Corporation but Johns Hopkins University as
well. When you look at the corporate strategies of businesses like
Sylvan Learning Systems, you will find not only entrepreneurs but also
alliances with universities and major school systems. The Support
Center of San Francisco, which helps strengthen the management and
effectiveness of nonprofits, relies extensively on consultants to
provide training, computer systems assistance, and other professional
services.
It
is
not surprising to find that major donors of money or products to the
United Negro College Fund include IBM and Microsoft. Or that the
AT&T Foundation is providing financial assistance to launch an
educational technology center at a college in Baltimore.
INCREASE
YOUR
REVENUES
Inter-sector
partnerships
can open new opportunities to your organization. You
simply need to:
- Open your eyes to the
emerging opportunities
- Reach beyond "business as
usual"
- Assess the risks and
rewards of each option
- Take action
- Make a commitment to
follow-through and refinement.
The
specifics
are unique to each organization, depending on your capabilities,
leadership, accessible partners, and markets. As a consultant, of
course, I am available to assist with the strategic planning and
implementation process.
HERE
ARE
SOME THOUGHT-STARTERS
While
I
cannot prescribe a plan of action for your specific situation,
anymore than a physician can diagnose an unseen patient, here are some
examples that may stimulate your thinking:
For-Profit
Government
Contractors:
- Do you ever participate as a
subcontractor to universities, state/local governments, or nonprofits
in their grant proposals? This is particularly relevant to medical
research, engineering, training, and computer systems firms.
- Do you ever use national or
regional trade/professional associations as distribution channels for
software, seminars, or services?
- Do you ever establish
alliances with university faculty and research centers that could
enhance your competitiveness in your existing markets?
- Are there changes in public
policies that could generate new markets for you?
- Do you have certain
publications, seminars, and services that would generate more money if
marketed through private-sector distribution channels?
- Do you have expertise that
would be attractive to contractors and commercial firms for competitive
proposals? If so, can you negotiate a deal that will produce extra
revenues for your nonprofit?
- Do you provide services that
would be of interest to employers or governments ... where you could
charge a fee for service, increase your revenues, and distribute your
overhead expense over a larger revenue base?
- Are there commercial
seminars, information products, and services that you can legitimately
promote ... and generate revenues?
For
Institutions of Higher Education:
- Do you market continuing
education services on a contract basis to employers at their
- workplace (or other
convenient locations)?
- Do you offer research and
other services on a contract basis?
- Do you have unique
curriculum or educational services that could be packaged and
"franchised" for geographic areas that you are not now serving?
- Is your institution ever
proposed as a subcontractor on competitive bids for government
contracts?
- Are you winning contracts
from your State and local governments?
WHERE
THE
MONEY IS
Here
is a
subjective list of several "growth markets" for revenues, based on my
own experience and observation:
EDUCATION. Mike
Milken, the
former "bad boy" genius from Wall Street, has said that education is
one of the very best business opportunities. I believe him. This is a
ripe area for public-private partnerships that generate revenues for
all savvy partners.
WELFARE
SYSTEMS. Welfare reform
created a billion-dollar market to overhaul State computer systems that
manage welfare and social services. The big systems companies need the
expertise of universities and nonprofits in devising complex systems
that really work.
INTERNET
CONTENT. With Internet
access becoming a War of the Titans, some of the best 'net
opportunities deal with contents. Obviously, there are some real
privacy concerns that must be addressed, but: Do universities have
"knowledge assets" that could be marketed, for a fee, through the 'net?
Could universities automate their school transcript records ...
enabling graduates to authorize the faxing of these overnight to a
prospective employer (for a fee)?
SCHOOL-TO-WORK
TRANSITION.
Corporate leaders and public policy makers are very interested in
improving the transition between school and work, and this provides
opportunities for nonprofits, universities, school systems, and firms
that provide relevant services.
CONTINGENT
LABOR FORCE. The
trend toward relying on contract employees, part-timers, and home-based
workers continues. Can colleges transform this into a source of
financial assistance for students? Can nonprofits create a means for
placing clients who need work? Can they apply a small mark-up to cover
operating costs of the program? Could a nonprofit enter into a
partnership with a for-profit temporary employment agency?
SHIFTS IN
PARADIGMS. Many
industries--including education and health--are in need of a major
shift in paradigms. Like the way young Bill Gates and Steve Jobs pulled
the plug on IBM's mainframe paradigm ... or Circuit City revolutionized
the retailing of things like electronics and used cars:
- Many educational
institutions are fat, arrogant and complacent like IBM in the 1970s.
There will be a consumer rebellion against their bloated prices,
slowness to respond to what the community really needs, and their
mediocre success rate with their customers.
- The American way of dying is
cruel and wildly expensive. No, this isn't a commercial for assisted
suicide, but it is a prediction that there will be service solutions
that fill the gap between beleaguered-but-loving family members and
hospitals/nursing homes.
- Social service and human
service agencies at the community and State levels waste perhaps 25% of
their personnel resources by having an army of caseworkers who are
redundant, duplicating each other's intake, assessment, and case
management functions. Most can be replaced by one-stop, automated
intake centers for multiple agencies. After all, how many agencies and
caseworkers does it take to make a valid income, need or residency
determination?
GO
FOR
IT
Take
a
fresh look at nearby corporations, universities, nonprofits, and
governments. Some may be your future partners.