When Business as Usual Isn’t Working, Look to Nonprofits for Inspiration

In the Covid-19 era, businesses must— and will— play an essential role in how countries respond to the hardships created by the pandemic. But to do so, they must also recognize how the ground has shifted under them: Inclusivity is more important than ever; there’s pressure on leaders to weigh social outcomes, as well as economic ones; and resources for achieving all of this are scarcer than usual. Existing approaches may not be sufficient to meet the challenge.

The business world should look to nonprofits for fresh ideas. As Peter Drucker, the management legend, noted, nonprofits can be an unorthodox but powerful source of inspiration for business. This seems especially true in the wake of Covid-19, as key stakeholders and customers face economic distress—a situation that many nonprofits routinely deal with.

I was reminded of this during the early days of the pandemic, when travel restrictions prevented me from returning to China and I found myself stuck in my hometown of Vellore, India. The city also happens to be the headquarters for the Christian Medical College, or CMC, Hospital, whose pioneering medical work over several decades has greatly improved local citizens’ well- being, with a focus on high- quality care in poor communities.

Founded in 1900 by Dr. Ida S. Scudder to compassionately serve local women and children in need, it has grown into a large multispecialty hospital with a top- ranked medical college, and has spawned and inspired an ecosystem of nonprofits in Vellore covering areas as diverse as leprosy treatment, counseling and community education. Along the way, CMC has become a pioneer in community health.

What makes the institution’s work particularly relevant to business leaders, though, is how it has succeeded within the constraints of dealing with:

■ the complex process of inclusivity in a society with high levels of gender, caste and economic inequality;

■ the tension between maintaining a high quality of service and affordability;

■ the severe resource constraints of a nonprofit organization.

After interviewing various current and retired leaders, faculty and associates of CMC— in particular, at its Community Health and Development, or CHAD, department — I identified three interrelated strategies that are relevant to businesses seeking to add societal value in the Covid-19 era. The key to CMC’S community health success lies in the interconnectedness of these strategies, rather than on any single factor in isolation.

1. Pursue intermediate goals to achieve the ultimate agenda

A key lesson from CMC’S experience is that it may be necessary to pursue an intermediate goal in order to address your ultimate one. Specifically, in order to get villagers to engage in health interventions, the felt need of the village communities for jobs and paychecks had to be addressed first. This required skillful engagement with stakeholders.

Dr. Abraham Joseph, who spearheaded CHAD’S development for three decades, had to convince his parent hospital and medical college that a jobs program served the hospital’s goals, and get the buy- in of external stakeholders, such as village elders and the local government, without which the interventions would have failed. With stakeholder buyin, CHAD introduced skill- development programs (e.g., in masonry, welding and weaving), and economic opportunities improved.

2. Embrace contradictory demands

When seeking to offer inclusive solutions, organizations must inevitably deal with the tension between technical considerations and the reality that constituents’ affordability is limited. Embracing the paradox of a “both/and leadership”— as opposed to an “either/ or” mindset— can help organizations navigate the challenge.

For CMC, the tension was between the need to be effective through high standards of rigor and affordable to the poor. C.K. Prahalad, a University of Michigan professor who studied CMC in the early 1970s, noted that the dual imperative of “dedication to excellence and commitment to service” actually offered a solution: The high quality of care allowed CMC to charge wealthier patients enough to subsidize those who couldn’t pay.

For businesses in a post- Covid-19 world, embracing tensions might involve being less obsessed with beating rivals and more focused on brand values, high quality and greater inclusivity of services. This could take on forms such as rivals collaborating to accelerate the discovery of health care cures, or offering affordable business services and tools so that small business can continue to operate.

3. Decide what’s essential, and focus resources on that

Inevitably, a major challenge associated with offering inclusive solutions is that of operating in a resource-constrained environment. To excel in such an environment, it’s essential to discern what adds value prudently and what doesn’t.

The ability to do more with less enabled CMC’S CHAD to provide high- quality service in communities with severe constraints on affordability. Indeed, a principle of austerity permeates the entire organization. This emphasis on frugality can lead to enterprising efforts to tap external resources. In CHAD’S case it meant turning to nonprofits like Christian Aid, an organization based in the UK that supported CMC’S socio- economic development activities, thus alleviating its financial burden.

Frugality can also be a trigger for creativity, leading to new ways to overcome resource constraints. One of CHAD’S early innovations was the identification and training of semiliterate rural women as part-time community health workers.

While not all managers in for- profits will share the mindset of nonprofit professionals who are willing to work for modest salaries, they could explore how to offer parallel lines of low- cost variants or simplify their core offerings to enhance affordability for market segments that have been hit particularly hard by the economic fallout of Covid-19. Opting for fewer frills without sacrificing too much of an offering’s core efficacy can ensure that cash- strapped buyers aren’t excluded from the marketplace and businesses retain customers.

The strategies above are not novel in and of themselves, but when applied in a mutually reinforcing way, as CMC’S CHAD has done, they allow organizations to deliver inclusive services to the economically challenged. A common thread relates to building and leveraging network relationships— in particular, stakeholder collaboration. In CHAD’S case, women who participated in the socio- economic activities became a “bridge” with a credible voice that helped increase the appeal of the health program to the rural community, and strengthened the work of the existing part- time community of health workers. For- profit businesses can draw inspiration from CMC, and emerge stronger and more focused from the pandemic.