The real lessons from Scope’s change in strategy…
Scope created a fresh wave of headlines in the Third Sector press recently following an NPC essay, written by their CEO, explaining their change in strategy. In case you weren’t aware, their new strategy, launched back in April, involves selling off all their regulated and day services, reducing income by 40% and personnel by 60%, in order to shift their focus from delivering services to bringing about social change.
Commentators have described the change as radical, brave and as clearly demonstrating a fundamental difference between charity and corporate sectors where, apparently, “bigger is always better”. None of those are true, and they miss the critical reasons why Scope’s move should be an example for us all.
The strategy is neither radical nor brave – it’s eminently sensible and arguably should have been done a decade ago. In their pioneering days 60 years ago, Scope were scaling up services that nobody else could offer, but times move on. Needs and expectations have changed dramatically since then, as has the number of organisations that provide services to meet them. By 2008, when austerity arrived, Scope were still selling places in expensive, institution-style residential homes, that few people wanted any more, to a commoditised Local Authority market that was about to have its budgets slashed. And they knew it. Scope’s previous strategy already included the exit of “eleven of our largest and most outdated homes”. From both mission and financial perspectives, the writing had been on the wall for years.
There are obvious commercial parallels. For decades Whitbread was one of the biggest consolidators in the beer and pub market, but in May 2000, they brought to an end their 250-year history in brewing, by selling their entire beer portfolio to Interbrew. Over the next twelve months they also sold off their estate of over 3,000 pubs, and the proceeds of all those disposals went into their Premier Inn and Costa operations, both of which could then rapidly expand across the UK.
Like Scope, Whitbread could see that their products and services were no longer what customers really wanted, and they were dangerously exposed to a commoditised and contracting market. Whitbread’s over-riding mission was, and remains, shareholder returns, while Scope’s was, and remains, for disabled people to have the same opportunities as everyone else. Both recognised that the biggest part of their business had contributed to their goals in the past, but was no longer doing so, hadn’t been for some time, and would drag them down in the future.
Growth, scale, service delivery, customer experience, innovation, are all short-term means to a longer-term end. And they’re only relevant as long as they are contributing to that end. The real lesson from Scope’s shift is not that big is bad, or that social change is a higher purpose than service delivery. It is that organisations of all sectors, shapes and sizes, should regularly and ruthlessly run the slide rule over everything that they do, to decide whether they are the best, fastest, most direct way of achieving their mission. And above all, that they should act on those decisions.
History is gone; past; done. In the same way that you can’t drive a car by only looking at the rear-view mirror, your organisation should never let itself be defined solely by the things you did yesterday. Could parts of what you do be done just as well by someone else? Can you can envisage better, faster, more direct ways to achieve your mission? Could strategic exits enable you to refocus your resources on things that will have far more impact?
In short, is it time that you did a Scope?