Book review: The Hedgehog and the Beetle

On the recommendation of a colleague, I read The Hedgehog and the Beetle by Burkhard Gnärig, the former head of Save the Children and longtime development professional. Published in 2015 by the International Civil Society Centre, the book is obviously pre-Trump and concerned with the future of international non-governmental organizations (INGOs, which Gnärig calls ICSOs. Between INGO v ICSO not sure which is better, but INGO more familiar to me).

cover of “The Hedgehog and the Beetle”

The book has three main contributions, first describing and helping to identify the destructive disruption challenges facing INGOs, second a bit of a survey of the horrors of the unsustainable global condition and a strong endorsement of Kate Raworth’s doughnut concept, lastly a lot of observations and recommendations on how INGOs, managers and leaders should take action.

The first contains some useful and novel ideas. The second is a bit tiresome and a re-tread of material that I’m both familiar with and bored of. The last has the feel of someone a bit too steeped in management retreats, but has some real insight from a practitioner and a useful clarion calls about the need to move beyond incrementalism to address the threats.

I’ve been interested — and concerned — about the concept of disruption as it applies to the NGO sector for some time. So it was great to see how Gnärig treated the topic and I agree with a lot of what he identifies. The two distinct disruptions that he sees are 1 to the intermediation role that NGOs play between donors and beneficiaries and 2 the leadership and guidance role that NGOs play for advocacy campaigning.

On intermediation, Gnärig feels that INGOs will inevitably lose this market, which is the biggest business to cheaper competitors. He estimates that INGOs take a 20–30 percent cut of resources while the upstarts take 5–10% and that this price differential can’t be sustained. The upstarts are NGOs closer to the beneficiaries or, more importantly, virtual/digital platforms. Over time, INGO costs must come down and the quality of the upstarts, increasingly accessible directly through the internet, etc. will improve to be fully competitive.

At a fundamental level, I agree, although I see some dimensions that he doesn’t as well as some obstacles to the disruption taht may slow or even prevent full displacement (unlike the Kodak Company film v. digital photography example he uses). But Gnärig does a good job running through the arguments and driving home the idea that incumbent industries (like Kodak or INGOs) are often intellectually and culturally incapable of seeing the threat until it’s too late. And even when some do see it, management and leadership weakness is a huge obstacle to addressing the challenge. An organizational conservatism prevails and is deadly. Most INGOs are pursuing, at best, a “conservative survivor” strategy.

One dimensions he doesn’t mention, but which I think is really important in this disruption scenarios is that younger donors/philanthropists are less invested in the institutions of INGOs. If anything, the Oxfams, CAREs, and Save the Childrens are alienating to them. Small donors — and especially all the newer philanthropists emerging from the tech sector are highly outcome-oriented with little interest — even antipathy — to institutions. That’s another challenge that INGOs face in their intermediation business. Demographically, donors are older, white, baby-boomers. That, in itself, is unsustainable.

Gnärig is not as deep into the advocacy and campaigning space, but he believes that that the virtual campaigners — Change and Avaaz are threatening that business for the incumbent INGOs. That organic, autonomous and digital insurgents will kill the incumbents.

But one mediating factor is that Gnärig seems to view the market as static and philanthropy as being a question of market distribution. A different view is that the market for donations and activism actually must be constantly re-created and enlarged through various channels, but especially by media, campaigning, story-telling, partnerships, and paid outreach. In this function, the insurgents have yet to demonstrate much power. They may turn up in a google search or when a donor goes to platform — but they don’t, won’t, or can’t spend the money to do the marketing to find the donors in the first place. They can steal donors or activists. But they aren’t as good at creating new donors or activists motivated to taking action. It costs money. If they want to get better at it, they will need to spend money, which will raise their cost and reduce their prices advantage. If they don’t, they will disrupt some parts of the market. But they can’t or won’t regenerate the public interest that creates the market and so the market overall will shrink. Or the incumbents will need to get better at market creation to stay alive. Hard to predict, and it would be interesting to see whether the upstarts are mostly stealing market from incumbents or are generating new participants.

On the challenge for INGOs in responding to the disruptive threat, Gnarig knows from experience who difficult it is to get them to respond quick, decisively, and proportionately to the risk. He contrasts INGOs to global corporations which has, comparatively, much stronger governance and management and are able to take action with resources and balancing various levels and interests: global, national, local, etc. Whereas INGOs are usually full of historical artifacts and quirks, generally weighted much more heavily toward national autonomy even when they have international structures. They have too many stakeholders, authority is too difuse, and risk aversion too high. He makes an interesting observation that INGO are very heavy on governance but have very little good management.

“Today, there are literally millions of local and national CSOs working in practically every location worldwide, but there is only a handful of ICSOs with global reach.”

Gnärig’s discussion of the challenge of unsustainability is jarring and contrasts to his deep knowledge of INGOs and his discussion of the disruption challenge. After a somewhat tedious rendition of how bad the world is coming, he posits this must be INGO’s new mission and, seemingly, the future out of disruption. He seems to believe that INGOs are desperately needed to tackle the challenges of unsustainability — particularly Northern consumption — but fails to show how this responds to the business challenges. How is this a new business for INGOs when their traditional business of intermediation and campaigning are dying out? No answer on this. Personally, I simply discount this discussion. It is heart-felt and reasonably well informed and, more or less, irrelevant.

ENDS///

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gawain

I'm a human person, working in policy & advocacy in international development, gender rights, economic justice.