Session 5: Michael Porter

Michael Porter
Session 5

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How do you do well at doing Good? [i.e. how can you be effective in helping society]
Churches tend to do a lot of things for others and to help those in need, but tend to do a lot of different things that are fairly disparate.
You [the Church] need to change your mindset

We tend to think of it as giving, charity, philanthropy
Instead, think of it as a social service. How are we adding value to our customer?
When he read through church web sites, got the feeling that the service was really about them, not the people they are serving

Giving is not the end in itself, it is the results. (e.g. good intentions are not enough)
At best we can be ineffective. At worst, we can do harm.

Ex: There are lots of people working on urban poverty, but if you look at it the wrong way you can make the problem worse.

Ex: What is the goal of a homeless shelter? House people for a day? A long time? Get them to be self-sufficient?
Define value as "social benefit per dollar expended". You are effective if you do more benefit/$ than other organizations. Otherwise you should just give money to someone else.
We have an obligation to society to do it well. And if you are taking a tax deduction, society is bearing part of the burden.
The worthiness of the cause is not the way we should decide to allocate resources. They are all important. Don't choose based on what is worthy.

The decision should be where you can add the most value.
What are the most important social problems in your congregation? In the communities you care about? What are the set of needs for us?

If there's a great organization doing that well, maybe the best thing to do is just support them.

What resources, skill sets, relationships, talkents, access, etc. do we have? Where can we do more than just give money? Or unskilled labor?

Ex: Is it the best use of a Ph.D. finance professor's [e.g. Dr. Porter's] time to build a house? He can be much more effective working with city leaders on poverty.
Where can we be more than unskilled labor?

The essence of strategy is how to create the most value.
One mistake is to confuse strategy with goals. Strategy is not "serving families". Strategy is how you're going to create value.
First: pick your goals. There are lots of good goals, need to pick the one you want
Second: solution model. Are you solving the problem?

Ex: Urban poverty. Most poverty programs are about addressing needs: housing, drug councelling, etc. This improves the quality of life in the short term. To reduce poverty, you need to address the issue of lack of viable jobs, etc.

Interestingly, you need to identify the strengths of the community (ironically), because businesses don't want to come somewhere without strengths. Might need to identify what is holding back the strengths.
Businesses assumed that the retail market in urban poor areas was not good. But because of the dense population, there is more purchasing power per sq. mi. than in rich suburbs!

Ex: HIV drugs. The problem is not handing out drugs. There is a $100/yr cocktail that works. But you need to take it religiously twice a day. If not, you develop drug resistance and need $1500/yr drugs. The problem is compliance, not distribution

The best HIV programs have people who go around the community and watch the person take the drug. This turns out to be cost-effective.
Also, HIV programs need to address ancillary infections (e.g. TB)