Co-creation in non-profit organisations: definition, visions and strategies for effective implementation

In 2006 Don Tapscott and Anthony D. Wiliams published Wikinomics. In that book, as part of the collaborative boom driven by web 2.0, they already gave some examples of companies that opened up their processes and needs to the public to provide solutions to their problems.

This would be followed by wide-ranging debates on what open enterprise was, the intelligent crowds that Howard Rheingold would champion, and many other approaches in the shadow of technological possibilities.

This wave of optimism, as immature as it was necessary, was followed by approaches that sought to be viable, realistic and long-lasting. And that has led us to the subject we are talking about today, where we are going to reflect on co-creation between non-profit organisations (NPOs) and companies.

What is co-creation in the context of NPOs?

Co-creation of value refers to the active and continuous collaboration between different actors to generate mutual benefits. In the context of NPOs, this implies collaboration between NPOs and private companies to achieve common goals, such as improving the sustainability, efficiency and social impact of their activities.

Co-creation is defined as a process in which NPOs and companies work together to make decisions, develop projects and implement actions that benefit both parties. According to psychological contract theory, relational norms such as integrity, flexibility, trust and information sharing are key to facilitating co-creation. These norms foster a long-term relationship and mutual commitment, which are crucial for successful co-creation.

Relationship norms are principles and behaviours that guide the interaction between NPOs and companies. Integrity ensures that both parties act in an honest and transparent manner. Flexibility allows for adaptation to changes and needs of the other party. Trust is built through consistency and reliability in the fulfilment of commitments. Finally, information sharing ensures that both parties are well informed and can make decisions based on accurate and up-to-date data.

This approach emphasises that value co-creation must be understood in the context of relationships between a complex network of actors, including customers, employees, suppliers and other stakeholders. Companies seek to engage these actors in the co-creation of products, services and experiences that create value for all involved.

From the perspective of NPOs, co-creation involves collaboration with businesses to address social problems, improve operational efficiency and increase social impact. NPOs are increasingly adopting business practices, such as market orientation, venture philanthropy, corporate governance structure and entrepreneurial behaviour, to enhance their co-creation capabilities.

 Strategies for Implementing Co-creation Effectively

For co-creation to be effective, NPOs need to adopt certain strategies that foster strong and beneficial collaboration with businesses.

 1. Promoting market orientation

NPOs must develop a market orientation that enables them to understand and meet the needs of their beneficiaries and donors, as well as to respond to the dynamics of the environment in which they operate. This involves several key steps:

– Market intelligence generation: Systematically collecting relevant data on beneficiaries, donors and the sector in which they operate is essential. This collection can include surveys, market research, trend analysis and continuous feedback from stakeholders. The information gathered provides a solid basis for making informed decisions and adapting the organisation’s strategies according to market needs and expectations.

– Intelligence dissemination: Once information has been gathered, it is crucial to share and distribute this data within the organisation. This can be achieved through regular meetings, internal reports, newsletters and digital collaboration platforms. Effective dissemination of market intelligence ensures that all departments and levels of the organisation are aligned and can work in synergy towards common goals.

– Responsiveness: Using the information gathered to develop programmes and projects that fit the needs and expectations of the market is the final step. This involves being flexible and adaptive, adjusting initiatives according to feedback received and changing conditions in the environment. Responsiveness also includes continually evaluating the performance of programmes and making necessary adjustments to improve their effectiveness.

 2. Adopt venture philanthropy practices

Venture philanthropy involves a high degree of engagement between NPOs and philanthropists, as well as organisational capacity building. NPOs can implement the following practices to effectively embrace venture philanthropy:

– Long-term commitment: Establishing long-term relationships with donors that include financial and non-financial support is essential. This long-term engagement fosters deeper and more meaningful collaboration, allowing NPOs to plan and implement projects with greater certainty and continuity. Multi-year agreements can include ongoing funding, strategic advice and other non-financial support.

– Impact Measurement: Continuously assessing the impact of funded projects and adjusting strategies according to results is a key practice. Impact measurement involves establishing clear metrics and specific objectives from the outset of the project, and using analytical tools to monitor and evaluate progress. This practice not only demonstrates the effectiveness of initiatives to donors, but also provides valuable information to improve future projects.

– Networking: Engaging in networks that allow for complementary resources and skills is another key aspect. Participating in philanthropy and collaboration networks can open doors to new funding opportunities, strategic partnerships and access to experts in a variety of areas. These networks can include partnerships with other NPOs, businesses, academic institutions and social innovation platforms.

 3. Implement corporate governance structures

NPOs can benefit from adopting corporate governance structures that promote accountability and participation in management. This includes several key elements:

– Small and Agile Boards: Creating small but effective boards that can make decisions quickly is crucial. A lean and well-structured board allows for greater efficiency in decision-making and quicker response to opportunities and challenges facing the organisation. In addition, a small board can facilitate more direct and effective communication among members.

– Active Participation: Involving day-to-day management in strategic decisions is critical to ensure that the organisation’s strategies and policies are aligned with operational realities. This can be achieved by including representatives of operational management on the board of directors or by creating advisory committees that include key members of the management team.

– Decentralisation: Enabling decentralised decision-making to foster innovation and flexibility is a key strategy. Decentralisation empowers teams and departments to make informed and rapid decisions within their scope of responsibility. This not only improves operational efficiency, but also fosters a culture of innovation and adaptability within the organisation.

 4. Encouraging entrepreneurial behaviour

Entrepreneurial behaviour in NPOs can promote innovation, proactivity and risk-taking, which is crucial for co-creation. Strategies include:

– New Programme Development: Constantly looking for new ways to address problems and develop innovative programmes is critical to staying relevant and effective. This may include implementing user-centred design methods, conducting pilots and proofs of concept, and seeking inspiration from other industries or sectors.

– Continuous Improvement: Fostering a culture of continuous improvement in all operations is key to long-term success. Continuous improvement involves regularly reviewing and optimising processes, services and programmes, and being open to feedback and constructive criticism. Tools such as the Deming cycle (Plan-Do-Check-Act) can be useful in structuring continuous improvement efforts.

– Risk-taking: Being willing to take calculated risks to seize new opportunities is a hallmark of entrepreneurial behaviour. NPOs should develop a tolerance for failure and view mistakes as learning opportunities. This may include implementing pilot initiatives, exploring new sources of funding, and adopting emerging technologies.

5. Professionalisation of NPOs

The professionalisation of human resources in NPOs can significantly improve their capacity for co-creation. This involves several key steps:

– Training and Education: Providing employees and volunteers with the necessary skills and knowledge is essential to ensure effective performance. Training can include ongoing training programmes, workshops, seminars and online learning opportunities. In addition, fostering a culture of continuous learning can help employees stay up-to-date with the latest trends and best practices.

– Professionalised Management Structures: Implementing management practices that align with professional standards is key to organisational efficiency and effectiveness. This may include the adoption of quality management systems, the implementation of project management practices and the use of human resource management tools.

– Increasing the number of paid staff: Increasing the number of paid staff to ensure more efficient and professional management is an important strategy. While volunteers are critical to many NPOs, having a team of paid staff can provide stability and continuity to the organisation’s operations. In addition, a paid staff can attract professionals with specialised skills and relevant experience.

Conclusion

Co-creation of value between non-profit organisations and business is a powerful strategy to address social problems and improve operational efficiency. Based on Yolanda Díaz-Perdomo’s study, we have found that relational norms (integrity, flexibility, trust and information sharing) are essential for successful co-creation. Moreover, adopting an entrepreneurial approach and professionalising NPOs can significantly enhance their co-creation capabilities.

By implementing strategies such as market orientation, venture philanthropy, corporate governance structures and entrepreneurial behaviour, NPOs can strengthen their relationships with companies and maximise the impact of their collaborations. The professionalisation of NPOs also plays a crucial role in providing a solid foundation for the effective management and implementation of these strategies.

In short, co-creation is a valuable tool for NPOs seeking to improve their social impact and sustainability. By fostering relational norms and adopting business practices, NPOs can build strong and mutually beneficial relationships with businesses, thus achieving their social and operational goals more effectively.