Friday, August 22, 2008

Why Consortia Are Nearly Always a Bad Idea

One of the test-questions of whether you are a good third sector organisation or not seems to be `Do you like working in partnership with other organisations?'

Say `No' or `We're rather not if avoidable' gets you Anne Robinson treatment. You are the Weakest Link - Goodbye.

Being jolly-up for `partnerships' and `consortia' therefore is all part of what being a good charity or social enterprise is all about.

But is this actually sensible? I think not. Partnerships, for me are simply a tool, a means to an end. In my book, they're a bit like SAGE accounting or Investors in People.

But for some reason they are become an end in themselves.

Sadly, this is dangerous territory, encouraging collaboration where none is needed and over-complicated, bureaucratic arrangements leading to inefficiency and failure in delivery.

Don't get me wrong - there is a place for partnerships. You need them if putting together something where you don't have everything you need in your own organisation. Or if the whole created by collaboration is somehow a lot more than the individual parts.

Yet somehow partnerships and consortia have become a religion. In my own sector - advocacy - consortia are increasingly seen as the answer in an environment where lots of tiny organisations struggle among themselves - and against the bigger players - to get the one big contract.

Rather than merge or subcontract, these very small organisations - which are essentially identical - set up big consortia which put them all together to compete for contracts.

Sensible right? Well, no, actually. Because consortia are always, always dogged by high transactions costs (needing five managements to agree things rather than one), uneven delivery (leading one or more partner to be loathed by the rest), accountability mechanisms. In short, all the energy goes on the partnership, not on the delivery and not a lot gets done.

The really smart commissioners of services know this and avoid consortia like the plague. But others, falling in behind the guff emanating from the Office of the Third Sector, duly try to commission consortia.

The cannier of these dump all the risk of dealing with a messy consortium to a lead provider. The less aware ones end up playing referee and tying themselves in knots trying to hold the ring so that the consortium actually delivers something.

How do I know all this? Simple. Numerous consortia, numerous utterly disastrous, wasteful, demoralising experiences that deliver bugger-all for anybody.

What I don't like most of all about the shotgun weddings represented by most consortia is that organisational self-interest lies at the heart of it. Its not about the users at all. Its about my little republic.

The truth that a lot of third sector organisations need to understand (and the recession will teach this to many of them) is that it isn't smart to hold on to your identity and organisational ego forever.

Often its better just to merge or close. But I don't need to worry. If you're not effective, this next couple of years will put paid to you. Consortia or no consortia.

Its the same for business, let it be the same for us.

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