Normally, I facilitate development and growth. This week I facilitated the death of an organisation. It was a deflating experience as I truly believed in what they were trying to do. However, the failure was clearly one of leadership; not nasty or in any way unseemly, just lack of thought.
The organisation in question was a charity with a mission to provide a complementary medical service to cancer patients that would support effective treatment, faster recovery and improved wellbeing. Their ultimate goal was to persuade UK health commissioners to purchase the service as a cost-effective support for a range of medical treatments.
When the founders started the charity eight years ago, they had been working with a successful and well-connected fundraiser who had obtained enough money to establish a clinic in a well-known hospital. They assumed that when they were ready to expand into other hospitals on a charitable basis, funds would be available and the benefits of the service would become too obvious for the NHS to ignore.
The problem was that after a lot of initial hard work by all trustees, the fundraiser moved on leaving the trustees with the assumption that this model would enable them to continue going forwards. However, seven years later, as the money ran out, it became clear that further funding was beyond them and that their ultimate goal needed a different approach to be successful – a realisation that came too late.
The leadership task that was not addressed early enough was close interrogation of the goal. For many business organisations, a major challenge is establishing a unifying purpose beyond making the owners rich. For third sector organisations, this is usually easier as there is a societal reason for their existence. The problem here was being clear about the real purpose: charitable service provider, knowledge development, or campaigning, and how these related to each other.
With hindsight, the model adopted rested on one simple assumption: funding would be easy to obtain, and this was never properly articulated or challenged. For leadership, then, there is always a need to:
- Interrogate the business purpose
- Test the business model
The parallels with commercial organisations are clear – early success leading to complacency. So, when did you last asses the implications of your purpose and the validity of your business model?