Scaling up in the Social Sector
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Gil Bonwitt is the CEO and co-founder of Gazelles Social Initiatives. He has run and grown several Inc. 500 companies using Scaling Up tools and now works to integrate Scaling Up in the social sector. Gazelles Social Initiatives’ BHAG is to impact over 500 social sector organizations by the year 2020, through the use of best practices from the Scaling Up book.
Today Gil and I will be discussing Scaling Up in the social sector.
We begin the show by talking about cash flow. As many of these social companies are not-for-profit companies, money is often not their main focus.
Since social companies are so mission-based, they often forget the importance of cash flow. The way social organizations increase their cash flow is very different compared to a for-profit organization.
Usually as social organizations begin to scale up, they begin to see the constraints of their insufficient cash flow. At this point, it is often too late to make enough capital for their mission and their operations start to break.
Gil and his team try to remind social entrepreneurs that it’s really about cash flow and sustainability. You can’t call up a donor and ask them for $10,000 on the spot or else you will not meet payroll. It simply doesn’t work that way!
So, how does Gil help social sectors with their cash flow? Gazelles has multiple tools that Gil and his team use to determine gross margins, cash balance, receivables, and more. Gil shares an example of when he really used these tools to their full potential at his children’s school, who were having serious cash flow problems during the financial crisis of 2007-2008.
How did the school implement these new tools? Despite a financial crisis happening, the school board was resistant at first. It was not only a learning process, but a change in culture, too.
Find out what happened by listening in.
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Scaling Up is the best-selling book, by Verne Harnish and the team at Gazelles, on how the fastest growing companies succeed where so many others fail. My name is Bill Gallagher with Humanisteq Coaching and I’m one of the Gazelles business coaches. We help leadership teams to get the 4 Decisions around People, Strategy, Execution, and Cash right so that they can Scale Up successfully and beat the odds of business growth success. Our 4 Decisions are all part of the Rockefeller Habits 2.0 (from the original best-selling business book, Mastering the Rockefeller Habits).