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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?

For Nonprofits:

  • 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.

CONSULTING SERVICES

We provide enterprise-level management consulting services for federal agencies and the contractors who support them. Our areas of specialization are Capital Planning and Investment Control, Enterprise Architecture, strategic planning, performance evaluation, and acquisition support including work statements. Our consulting specialty includes experience in many related areas such as CIO program support, earned value management, risk management, the C&A process for security, and customer satisfaction surveys.


Best wishes,

Jim Kendrick
Management Consultant
4101 Denfeld Avenue
Kensington, MD 20895
301-942-7985

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The P2C2 Group, Inc.
4101 Denfeld Avenue | Kensington, MD 20895
Point of Contact: Jim Kendrick, President
e-mail: kendrick@p2c2group.com
phone: 301-942-7985

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