Andrew Hamilton On Key Opportunities For Not-For-Profits & Social Enterprises
Andrew Hamilton is the Principal Consultant at Hamilton Consulting and Social Scaffolding.
Andrew has supported organisations nationally to become NDIS ready and worked with the NDS nationally to support their members in their NDIS readiness journey. Andrew specialises in NFP and corporate partnerships, including developing and assessing new business models across ‘for profit’, social enterprise and ‘profit for purpose’ opportunities. Having created a career in sales and marketing, Andrew is passionate about the role of sales in the growth and development of all business – and how the success of business means more jobs and opportunity for all people seeking employment.
Andrew discusses consistent gaps where non profits could commonly improve and provides insights into impact investing, effective boards and implementing ideas.
Highlights from the interview (listen to the podcast for full details)
[Tom Allen] - Could you please share a bit about your background and what led to working in the not-for-profit and social enterprise sectors?
[Andrew Hamilton] - Sure, so I was in sales and marketing roles in IT and financial services for many years and then I actually sold a superannuation system to Forester's Superannuation at the time and I could see there was an opportunity to contribute to their marketing, they just paid a lot of money for a system and they needed to expand their membership base. So I was a volunteer board member at Forester's ANA Superannuation Fund, it was called at the time for three years. And I could see that I could use my business skills and I had recently finished my MBA and wasn't really using it in my sales and marketing roles and I could see an opportunity to influence and bring some skills to the sector at that time. So whilst I was on the board, I started looking around and that's when Social Ventures Australia was growing its presence. They were quite strong in Sydney and they wanted to expand into Queensland.
So after essentially waiting for about a year for that role to become available, I joined in and I was with SVA for six years and that was life changing as for insurance most people move from the full profit business sector into the not for profit business sector.
So yeah, that was my transition, and I often talk about my passion for sales and marketing.
If you can't sell something then a business is not going to succeed whether it's for profit or not for profit.
And that's the sort of, I guess influence that I like to have over organisations I work with.
I think because people in the not for profit space haven't necessarily worked in sales and marketing roles. That's definitely a consistent gap that I see.
Lots of people have got management experience or people experience or social outcomes experience but not necessarily sales and marketing because most people don't like it. Most people associate with your insurance salesperson, which is fine by me, I've got broad shoulders, but yeah, that's definitely a consistent gap that I see and something that I like to try and influence.
Fantastic. So in your consulting roles then at Hamilton Consulting and Social Scaffolding, can you please tell us a little bit about some of the work that you're doing in the space and have some projects you'd like to share?
Yes. I was at open minds for a period of time and I could see them struggle with NDIS readiness at Queensland was the last to sign the bilateral agreement. You could see what was happening nationally, working in an organisation, seeing those challenges, I thought I would be more influential externally and consulting to these organisations to get NDIS ready. So that's when I started Hamilton Consulting and I got subcontracted by National Disability Services in Queensland, and then Australia and did lots of work with the Queensland Alliance of Mental Health and a lot of that was around using NDIS readiness toolkit, which talks about governance and finance and HR, and a key one was the sales and marketing piece. So I'd really stick my neck out and push the sales and marketing need within these organisations to become NDIS ready because a person now gets a package and you need to sell to that person. If you're not going to sell to that person, you're not going to succeed as an organisation.
A lot of organisations didn't like that. Lots of individuals didn't like that, but it was again, still something that's needed and there's more and more organisations participating in those sorts of sales and marketing activities. I still do quite a bit of that. And then I started Social Scaffolding with a colleague about three years ago, and that was very much around organisations wanting to partner with corporates and do more of that shared value type work. So we signed up to the Shared Value Project out of Melbourne and done quite a bit of work in that space and run workshops and individual consulting projects with not for profits and corporates wanting to work together.
We did a lot of work in social impact investment space, of which that's a growing part of the business. Did a lot of work with not for profits, wanting to release new products and services into the market, be it NDIS, or Aged Care, Consumer Directed Care, lots of organisations, lots of not for profits wanting to release new products and services. And again, that's a skill that a lot of organisations haven't needed to have. So they've engaged organisations like Social Scaffolding to do that.
It's certainly changed the landscapes in that sector, hasn't it?
It's a huge opportunity as well for the organisations themselves and for people like yourself who can help them.
Yeah. So organisations, some of them need to embed those skills for the longterm and some of them just need project based work to support them get over a particular hump or a particular skill set. I guess part of my mantra when I talk to these organisations, these, I feel they would have made the shift in terms of sales and marketing, once I've appointed a business development manager or a sales director that reports directly, that's part of the executive team, then that mind shift has made it. They've made that cultural shift to go, ‘yep, we are in the market of transactions and we're selling something.’ So again, I think that's a transition organisations need to make, and they'll engage us to help make that transition. And then when it comes to new products and services, that's not necessarily a skill that needs to be embedded in an organisation if they're only going to release a small number that can benefit from external expertise, help them make that shift and then the organisation’s ready to grow from there.
But yeah, there's a massive demand. Then around all of that work is pieces of work, for instance, influencing the board, influencing organisations, how they retain their earnings.
Lots of organisations have grown large corpuses with the mentality of ‘oh, let's sort of save for rainy day,’ and the NDIS is an absolute storm. But now they've made that shift, there's an opportunity for organisations to invest that money socially for a good return.
There's an opportunity for them to invest internally in the business to grow. Organisations haven't really thought about investing their capital for the growth of the business. They’ve often thought about, what's the next tender coming up, what's the next contracts, how do we influence government to spend more in our particular service or our space rather than thinking let's invest back into our business and grow our business. Which is fundamentals of business, and the NDIS has forced organisations to shift into that space.
You’ve got a lot of broad experience in the building and management of relationships at these senior levels. So from your experience, what are these central skills and traits that you believe are required to manage relationships successfully?
The challenge with corporates and not for profits working together, or someone from a corporate background wanting to work for not for profits, and influence the not for profit space is that whole approach around trust. So a lot of organisations I've seen where they've been burnt, I guess, in respects by that corporate influence, where the corporate person hasn't understood the barriers, and the cultural shift that the not for profit has to go through and has to think about, and that it will take time. So if you're not there for the long ride and being on a seat at the table for a long period of time, then those relationships, that trust, just doesn't work. It's not something where you can come in quickly and shift the dial and expect to make a change. These organisations, some of them have been around for a really long period of time and they've been delivering fantastic work; you're not expecting to try and shift that. You're trying to shift the way they conduct business and that's a significant change for organisations.
So absolutely trust, you need to…
If you're coming in with the business hat on, you still need to understand where the organisations come from, where the sectors come from, how it's changing, how government funding is changing, how the consumer's changing. So all of that state of flux, you need to understand it.
You can't just come in with a business hat on and expect that the client, the not for profit, is going to suddenly absorb everything that you're recommending. Implement everything that you're recommending.
Exactly. And take ownership over that.
Yeah. That's right.
So really, it's trust, and that trust comes about from long term relationships and being there for the longer journey.
A big challenge that I see with organisations in terms of that longer term engagement is organisations will, and let's say for the consultant or the person with the business hat on, will come in for a period of time and develop a strategy and an implementation plan and everyone's on board; the executives, the staff, and then it's up to the organisation to implement. And again, if the organisation is changing their culture and there's a new approach to conducting business, there's two new things.
A third thing is implementation. Organisations are extremely good at implementing according to a tender and implementing according to projects. But trying to implement something so fundamental, a lot of organisations aren't good at that. So we see organisations succeed in the shift is where they either have internal skills around implementation or they get help to implement it. Because you see lots of organisations that get consulted up to their eyeballs with new strategy and new products, but then they struggle to implement it, and that's not beneficial for anyone. So again, if I was to talk about my experience and what works and what doesn't, is that implementation piece.
Lots of entrepreneurs have great ideas, lots of people have great ideas, but the ones that succeed are the ones that implement it.
Some organisations are good at it and some aren't.
So when it comes to mapping and measuring that implementation, how do you go about it and what tips and advice would you give to our listeners?
Sure. So it's absolutely a skill. It's project planning, it's communication, it's mapping those milestones and keeping everyone up to date on that project management, implementation teams, I'm not a project manager… but there are special tools and it's absolutely a special skillset and you can't expect someone in your organisation who's been awesome at delivering a service, or someone in your organisation who's been awesome at HR, who, you can't expect them to suddenly have fantastic project implementation skills. It's a skill. So either up skill them, spend the time to up skill them or get someone in to help sit beside them and up skill them or get someone else to actually implement the project. I used to work for an IT company and we would have project managers who specialised in implementation. It's absolutely a fundamental skill set and if businesses and government spend millions of dollars on implementation on implementing projects, but why should the not for profit space be any different?
If you don't have the skills to implement a project, get the skills or pay for someone to come and do it.
Yeah, those are some really interesting points and probably highlights where some of these nonprofits and social enterprises go wrong as well. So what do you see as some of the most important traits then of a social entrepreneur, and are there any common reasons that you believe that they may fail? Is it in that implementation for example?
I've now spent more time with social entrepreneurs than entrepreneurs, but I do have a network of friends and business people that I’ve worked with that are entrepreneurs. So I guess my judgment's clouded now with 15 years of working with social entrepreneurs. My experience is, their expectation that they can do everything, you can't be an expert in everything. It's simply impossible. And I say when people ask me what a Social Scaffolding do, I say, ‘I employ people smarter than me,’ because I'm not good at project implementation. I'm not good at new business development, launching new products and services, but my team are, my team are much better at it than me.
So I think it's really important for a social entrepreneur to understand what their skills are. Clearly their skills are rallying around support around an idea and understanding how that idea can create a social shift, shift the dial on a social issue and then commencing network. But then after, getting it to scale, expanding it nationally, adhering to quality assurance and NDIS requirements, all of those are specific skills, and not everyone can do everything.
And I think a social entrepreneur understanding when to relinquish control around certain things, I think that's really important.
When I was at SVA, SVA was very much around supporting the social entrepreneur. It wasn't about a lot of the other things that I do now. It was very much around the social entrepreneur. So we saw first-hand across many entrepreneurs, a consistent theme around things like terminal uniqueness. They felt that the organisation was so unique that they couldn't get other people to help the social entrepreneur had to do, lead everything and be responsible for all decisions, and that was detrimental to the organisation. So you might see some of these organisations that have grown and had a significant impact, but over many years, if they're happy to be patient, that's fine.
The challenge is, these social issues are getting worse and a lot of them aren't getting any better, so we need to accelerate and expand that impact.
If I was just to digress a little bit around how a social entrepreneur could, can increase their impact, is the challenge for most organisations working with a board.
I have a real personal opinion around the effectiveness of boards, and you see a very small number of high impact boards and you see a lot of boards that are simply wasting the time of the social entrepreneur.
I can speak openly on this. I'm not on a board at the moment. I do lots of work with boards. I've reported directly to boards. I've been on boards and I think board members and the social entrepreneurs and the CEOs really need to be more direct and have a greater expectation on working together. And if that work relationship's not working, get a new board member. Some of them are just massive wastes of time, I think, which is a really unfortunate.
Instead of the social entrepreneur being able to get on with business, deliver according to the strategy, and the boards there responsible for setting up the strategy and being a part of those initial strategy development components, activities, but once the strategy is in place, help monitor it, and assist the CEO to deliver where necessary but don't get involved in operations and that's just a massive waste of time for the entrepreneur.
And have the expectation that the entrepreneur has the skills in their team around delivering according to budget, delivering according to the implementation plan, maintaining relationships in the sector. All of those things that a business needs to be good at and if they don't, then help the CEO get the right team on board, get the right people on the bus and then deliver away, but don't get actively involved in operations. It's not what a board is supposed to do.
Interesting. Shifting the conversation to finance and getting finance. You spoke a little bit before about the investment of the corpus. How do you see this big shift and interest in impact investing in Australia? How have you seen it shift and where do you see it heading into the future?
It's obviously shifting and growing, which is really exciting. We're years behind what's happening in Canada and the US; I'm familiar with those two markets. I'm sure we're behind in other markets as well. The opportunity is where mainstream investors can see the investment opportunity in a social business. A social business that has the right legal structure to either service debt or service equity, irrespective if, I think if the mainstream investors become more aware of that, it'll make the market a lot bigger. I think part of the restriction at the moment is people see, or mainstream investors don't hear about it firstly, and when new products, bonds, investment, managed funds are released to the market, there's a small number of people that know about it, that are well cashed up and they get into it very early and then we got to wait for the next product to come on board.
So the market is evolving slower than the demand. And we speak to philanthropists all the time, we speak to not for profits that have got funds available to invest. Why park it in a two percent cash term deposit when you could invest it in a business and over a longer term, you could get three, four, five, seven percent? I think there's the mentality that they might be riskier and there's the mentality that they might be slower, but surely it's better than just leaving it parked in the cash term deposit. So yes, the market's I think really at a tipping point where more people will demand more products and then the market will start servicing that. There's a range of, for instance, social enterprise accelerators, and at the end of it there's an opportunity to invest in these businesses.
I think there'll be more and more of those businesses coming through that are investment ready, that are clear on their pitch, clear on how they'll service that investment. And then the mainstream investors will start coming to the table and going, ‘this makes sense.’ They're servicing a market that's not crowded, it's not competitive that's growing. I think it's really exciting. If you think about philanthropists that have got money sitting there, you've got self managed super funds that have got money sitting there, I can invest that money in whatever I want, why not invested socially and get a financial return?
That can be completely different interview.
So what about some really interesting organisations or projects that you've seen, or worked with recently, or just observed that you believe have created some excellent positive social impact?
So there's lots of new products and services coming through in the consumer directed care space where a person has a package, they can spend it on a range of different things and there's lots of new businesses and new products and services that are entering into that space which is really exciting. There's lots of, sole traders that are up skilling to service that market as well. And I think that's really exciting. And then there's businesses helping those sole traders get ready. There's new technologies to helping enable people to live independently. There's training and up skilling organisations to help individuals navigate the system and not just live more independently but live better connected to community which has all sorts of fantastic social outcomes as well.
So we've worked with a range of different businesses that are growing in that space. We're working with some organisations that are state based in terms of their service delivery and that want to go national. I think that's a really important evolution because there's lots of national and multinational for-profit businesses that are listed, that are really just waiting for the NDIS to become less complicated and then they'll enter the market and they'll take what we call sort of the low hanging fruit. I think while that's happening, and while that’s sort of waiting, there's a need for good products and services that are either locality based or state based to grow and become national. And if they don't (I'm talking about social businesses), then it's a market opportunity that's they're going to miss. And I guess you've then got that conundrum and the culture within an organisation that goes, well, we're doing fine in our state, what do we need to go national? So I can definitely accept that and I talk to organisations often that aren’t prepared to take on that risk and that extra work, that's fine.
My shift in that is, if you feel that you're changing people's lives from your product or service and you could change more people's lives, why not grow the business? Why not employ more people? Why not take on debt from a social impact investor and why not go national? That's my mentality, rightly or wrongly. And I think that's a demand. That's a market opportunity that I think if we can influence and support more social businesses to do that, I think that's really exciting. So when the social businesses are coming through incubators and accelerators early, or they've grown their business to a certain point in time and then they're ready to expand and go national for instance. I think if we can get the right support and the right money to them at the right point in time, that's really opportunistic.
Otherwise, all of these better funded, listed, for-profit entities are just going to eat the market up really quickly. Just on that social impact investment piece, the issue that we see often is the time from when the businesses, the social business is ready for funding to grow and they've gone, ‘okay, yep, I want to go national, here is my business plan, here's all my due diligence,’ the lag between, from then to when they get the money in the bank is too long, way too long. So that's what we're trying to work on.
Closing that gap a little.
Closing that gap a little. If you're ready to build a house, buy a car, any of those sorts of debt in your life, you can actually, unfortunately you can get it really quickly. Whereas if a social business wants to grow and they've taken quite a bit of time to grow the business and then taken some time to make that mind shift to go, ‘yep, we're prepared to take on debt, we're prepared to grow,’ the social entrepreneurs are prepared to let some of that responsibility, rest with the senior executives.
Then the timeline between when they get that money to deliver on that plan is just way too long and that's a big difference I see between entrepreneurs and social entrepreneurs and part of it might be because the entrepreneur is better at selling themselves and the business plan and the vision, and return on investment, whereas social entrepreneurs are far more reluctant to promote themselves and to put themselves forward because that's what you have to do to raise capital.
If the social entrepreneur can raise capital faster, I think we'll have a massive change in the social impact investment market and we will see much greater success with social businesses.
Interesting insight. So to finish off then [Andrew 00:25:25], are there any books that you like to share with our audience?
Yes. I've got this book that I’ve borrowed from Steve Williams and it's a massive read, but it's well worth it.
It would take a whole year to read it!
It took me quite some time and I've got notes all the way through. I've got sitting here waiting for, to capture some of the notes, but yes, Naomi Klein's 'This Changes Everything.' It's a bit dated now, but yeah, it's a fantastic read, I read a couple of her other books, but yes, here I am talking about the concept of growing nationally and corporate influence and becoming a corporate. Naomi's picture is very much around, well a lot of the corporates have been doing bad, and their influence on, for instance, global warming, if that market was to shift, then it's bad for the corporates that have been capitalising on it for so long. So, that's a probably interesting insight where the social sector sees the corporate sector as doing bad and hence don't want to be a part of it.
So hence they go, I just want to stay local. I don't want to grow. I don't want to become corporate. Whilst it's not entrenched, there's still barriers at board level and executive level to think that shift into running the business better is bad. And so from my perspective, it's not taking a social idea and making a corporatised. It's simply running the business, as a business. And CSIA have exactly that mantra as part of their service delivery. It's about the business of running the business, not for profits are running a business. And if you get the right skills around the table, you can run that business more efficiently. You can have better outcomes. You can attract social impact investment. I should draw a diagram…