VA
Insights

Building “infrastructure” has become a buzz word in the nonprofit sector. The leading foundations including Dunhe, Narada, Sany and Leping have put forward this concept one after another in the past year, which is undoubtedly a good thing for the future of China’s nonprofit sector. After all, compared with the developed countries in Europe, the United States, and even our neighbor, South Korea, where the infrastructure is well-built, the nonprofit sector presents the common characteristics of scale and high efficiency. If not a sufficiency, infrastructure is a necessity for the development of any industry. China is best qualified to speak on this question.

Talking about necessity, here is an example: Post-90s and post-00s are becoming an increasingly mainstream force in the nonprofit sector, and the characteristics of their participation in the nonprofit sector, such as their dependence on digitization and the Internet, and their emphasis on individual value, constitute the sector’s common needs for the development of online fundraising platforms.

So, how should all relevant parties participate in the infrastructure building in China’s nonprofit sector? At the 2019 Foundation Forum, we put forward “three responsibilities” as follows: 

• People with resources in their hands should be more responsible for identifying the common needs of the industry in the future. 
• “Infrastructure institutions should be more responsible for the quality of delivery. 
• Front-line NGOs should be more responsible for paying for the use of infrastructure services.

Today we will only address the second responsibility: Are China’s current infrastructure institutions really aware of their responsibility in terms of delivery quality? How far are we from the mission of “professional services to create philanthropic effectiveness”?

1. On-time delivery and quality delivery are the two major responsibilities of infrastructure institutions.

I’d better face this problem honestly first. Venture Avenue has completed more than 300 strategic planning and independent evaluation projects in the past decade. To make a self-evaluation from the two dimensions of on-time delivery and quality delivery, I give the former a score of 99, but only a score of 70 for the latter. 

Delivery on time requires the establishment of two systems: “delivery” and “supervision”. 

We did a really good job in terms of on-time deliver – 99% projects were delivered on-time (1% failed, that is, 3 projects, which I will mention later, just to entertain readers’ curiosity). After all, “deadline driven” has become a habit in business consulting over the years. With effective process management, on-time delivery is relatively easy. By setting up key milestones, proactively and clearly communicating with customers, and establishing two parallel systems of “delivery” and “supervision”, basically all deliveries can be on time. 

What are the two parallel systems of “delivery” and “supervision”? In easy words, project leaders and project managers should be separated. Project leaders are responsible for making plans and delivering results on time, while project managers stay outside the project team, using an “internal third-party” perspective to evaluate the plan, project progress, to “push” a little bit if necessary, and to ask for customers’ feedback. At least from the experience of Venture Avenue over the past decade, this is an effective method of on-time delivery. 

Some people may ask: most of China’s infrastructure organizations are still in their infancy, many even have only two or three people, is it too “extravagant” or unrealistic to have an independent “supervisor”? In such case, consider mobilizing external resources and letting outsiders take the important “whipping” role.

Quality delivery requires deep-dive into the real needs of customers, being “explainable and understandable” and follow-up evaluation for the service. 

“Quality delivery” is a challenging work. It must be admitted that this is why Venture Avenue used to have three suspended projects in the past decade. We have a few struggling issues here. 

First of all, quality delivery entails strict “assessment of underlying needs “. In many cases, the infrastructure service provider thinks it understands the customer’s needs, but actually not. In our recent strategic planning project for an enterprise foundation, the need appeared to be assessing the demand of various philanthropic areas in order to help the board reach consensus, but as the research went further, the real need turned out to be discovering the shared values of different stakeholders and use that to filter potential strategic areas. During the four-month project period, we spent almost half of the time on value discovery through one-on-one interviews and focus group and it was totally worth it! 

It must be clarified that the “customer” mentioned here is not necessarily the payer, but the ultimate user of the service. In the nonprofit sector, the payer is not necessarily the user. It is certainly important to make the payer satisfied, but satisfying the “consumer” is the ultimate resolution to win the market! 

Second, make the strategy crystal clear. What we sometimes do is not ideal. Accustomed to making business strategies for large international companies, we often tend to write “big” words such as “Resource complementarity” and “strategic fit” on PPT. As a result, although our customers nod frequently and praise us for being “so professional”, they don’t really understand it. This is most deadly. In the next five years, we will take making strategy “explainable and understandable” as our primary goal. Hopefully even people with only primary school education understand and agree with the “big truth” we are talking about. 

Strategic consulting is only one of the many infrastructure services, and for colleagues engaged in other services such as branding or digitalization, the above can be summarized as “trying to tell the story (what, why, and how) in a way that can be well understood and applied.”

Finally, there should be follow-up assessment after the service. Professional service is not a one-off deal, but needs follow-ups after the completion of the first service to see whether the delivered results really meet customers’ most important “pain points”, whether they can really be implemented, and whether the changes in the external environment are in line with the original expectations so as to examine whether their target system still stand valid.

2. Two elements of infrastructure success: excellent people and institutionalized knowledge reservoir.  

Whether they are researchers, third-party evaluators, consultants, or operators of digital platforms, infrastructure service providers should first of all have “good brains”, which is not difficult, because there are too many “smart people” in the country. But “to clearly communicate” requires structured thinking which is professionally trained, and excellent communication skills to turn the big truth into simple words. This is in fact quite challenging. To think clearly and speak clearly is the real wisdom. 

At the same time, infrastructure service providers should seriously consider knowledge management, not limited to accumulating past reports or deliverables, but also reflecting on whether their own working approaches, toolkits can be transferred to the entire industry. Although a lot of knowledge accumulated in the project process is not used in the final outputs, it is still valuable to document, classify, and label with “key words”. Only by doing this can we constantly reflect how well we are practicing and enhance our competitiveness. Take the field of management consulting as example, what makes McKinsey, Boston and Bain outstanding? One is the high-quality talents, and the other is a “knowledge base” that is constantly strengthened over time!

After all, the infrastructure service providers should retain excellent talents. To achieve this, there must be a good salary mechanism and strong organizational culture support, so that the talents can be engaged in works that make them feel good while living a decent and quality life, and be able to see both their own career and personal skills rising. Unfortunately for organizations in Chinese philanthropic sector, regardless of whether they are infrastructure service providers or not, salary and culture are the two biggest obstacles, which is beyond the scope of this article. There are issues of institutional constraints and leadership style, as well as the responsibility of infrastructure users to pay for services. The former is the internal problem of the infrastructure organizations, while the latter belongs to the whole ecosystem. 

In the end, I can’t help offending the customer (the payer or user of the infrastructure). Making good use of infrastructure is not just a matter of the infrastructure service provider’s expertise, but customers also need to reflect on whether they understand the value of infrastructure and how to use it. From the infrastructure service provider’s point of view, we should not be “seduced” by potential contract, but should have the courage to conduct a “counter assessment” and calmly examine whether the customer’s needs are really suitable for us.

Venture Avenue once provided strategic planning for a state public foundation. When it requested to deliver the report in accordance with the style of government report, we were confident to develop the report by learning. However, the underlining fact is that the customer didn’t know what strategy consulting is, together with the hidden value proposition of “bureaucracy”. This made it very hard to complete final deliverables. Take another family foundation as an example, the rough need was to “spend money well”, but in fact, the real need was to “make money”. A commercial strategy was more appropriate. Such demand mismatching revealed the incompatible values, which should be clarified and avoided at the very beginning of the project. It would be very risky when being kidnapped by a service contract or being overconfident that an infrastructure service provider could solve any problem and serve any organization well.

Perhaps, infrastructure organizations also need to reconsider how to build our own infrastructure:

• Where do talents come from?
• Can we share a knowledge base like Wikipedia for the philanthropic sector?
• How to construct a two-way transparent assessment system between customers and infrastructure service providers?