Strategic planning and your ecosystem

I received this question from a potential client recently:

“I am in the process of developing a network of artists, organizations, and corporations where the exchanges will benefit each other.  How do I start creating an ecosystem along these lines?”

 I like the way this leader is thinking. Rather than just thinking about what his own nonprofit should do, he is also thinking about what the entire ecosystem should be like. Ecosystem thinking is critical: it factors in the relationships, dependencies, conflicts, and other key dynamics that affect everyone.  Taken together, these relationships comprise the ocean in which everyone swims. 
And you can save a lot more whales by saving the ocean – versus concentrating on just individual whales.
I also like the question because it also gives me an excuse to go on about a pet topic of mine: namely, ecosystem mapping.
This is an absolutely critical step in the change process the questioner hopes to initiate. 
Before you start trying to create or even change an ecosystem, the first step is always to map the existing ecosystem.  And you may discover in the mapping process that the most important creature isn’t the whale. 
Let me mash into the aquatic metaphor yet another one drawn from sports. 
One of my favorite basketball players of the recent era is relatively little known: he is Shane Battier (now retired) who played many years for the Houston Rockets. For the casual fan, this would seem like an odd selection. Measured by the most widely used stats to gauge player performance – points, rebounds, and assists – Battier isn’t found on any leader list.
Even on his own team. 
Compared to Battier, many other Rockets players have scored more points, grabbed more rebounds, and garnered more assists.
Yet, according to a fascinating article in the New York Times by Michael Lewis, the Houston Rockets demonstrated statistically that, at his prime, Shane Battier was one of the most valuable players in the whole league.
This is because the Rockets are fanatical about conceiving of their team as one ecosystem, not as a collection of individual talent. They were early adopters in the NBA in the move to capture a whole set of data that map the different roles a player has in contributing to overall team success, and not just to their own individual stats. 
It turns out that although Battier didn't score many points himself, he routinely guarded the opposing team’s best scorer (like Kobe Bryant) and disrupted that player’s scoring efficiency almost more than anyone else did. He didn't grab many rebounds but he led the team in strategically blocking out opponents so his teammates could do so. He didn't get assists because he’s regularly set effective screens so Rockets guards could find the open man. All told, the Rockets believed that Shane Battier impacted the outcomes of games more than all but a handful of NBA players.
These conclusions aren’t just artful and subjective judgments. The Rockets front office measures and records objectively how well each of their players occupy such team oriented roles. The players are graded, reported on, and financially rewarded accordingly. 
Different measurements will favor different types of players, highlighting some realities but also overlooking others. In the philanthropy world, as we evolve towards greater measurement, what we especially must guard against is overlooking the “Shane Battier” type of nonprofits. These are nonprofits that play an indispensable role in the ecosystem, even if their individual stats are pedestrian.
Suppose a funder is evaluating two nonprofits in San Jose (my hometown) that work with the unemployed in the low income population:
  • Kobe Agency serves 15,000 clients annually at a cost of $9,000 per client and a return of 60% employment achieved.
  • Shane Agency serves 5,000 clients annually at a cost of $13,000 per client and a return of 30% employment achieved.
Is Kobe Agency the better investment? By conventional metrics, it would seem so.
But, what if we collected the following ecosystem data?
  • number of referrals from other agencies
  • nonprofit concentration within the area
  • types of funding sources
 And suppose we discover that Kobe Agency gets hardly any clients via other agency referrals. But Shane Agency gets referrals from five different other employment agencies, including Kobe Agency. This is because Shane is the only agency in the entire region that has expertise in working with Vietnamese immigrants, and other agencies send such cases their way.
In a related fashion, we find that while Kobe Agency is better known (having a larger geographical reach covering downtown and the east side) there are nevertheless three other lesser known “competitive” agencies in its area. In contrast, Shane Agency is the only employment agency present in the south. In fact, there are very few nonprofits per capita in the Shane's area compared to Kobe’s area.
Finally, Kobe Agency gets 75% of its budget from government contracts, while Shane Agency gets only 20%, meaning it is much more dependent on private giving.
So, where will a philanthropic dollar have greatest impact? 
It is of course not clear, even with the new data, that Shane is a better investment.  And it certainly doesn't mean the money shouldn’t go to the Kobe Agency. 
But the new data does make Shane Agency and those like it a much more plausible candidate than before. Even though it serves less clients with less favorable dollar/client ratios, the agency is nevertheless critical to the whole ecosystem. Take it out of the picture, and suddenly its absence impairs the operations of five other agencies which rely on it as a key referring destination. And the neighborhood also loses a community pillar.
Indeed, when looking at the whole ecosystem, one might even conclude that Kobe Agency is actually more replaceable, given the other agencies present in its geography.
Ultimately, though, it’s not an either-or between all stars or role players, between saving whales or saving the plankton in the ocean.  On every social need, we’ll need both types for overall success. It really is a team effort. But if it is truly a team effort, we can’t just measure individual performance. We have to map the entire ecosystem.

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