What is a hybrid organization?

April 23, 2009 § 30 Comments

When I first met Mitchell last year, she talked alot about Mozilla as a hybrid organization. I didn’t know exactly what she meant. But it felt right. Personally, I’ve been mashing up mission-based orgs, products, services, philanthropy and the web for well over a decade. It’s what I love most, and something the world needs alot more of. It is also one of the most powerful forces that drew me to Mozilla.

Hybrid Org

Over the last six months, I’ve found ‘hybrid org’ rolling off my tongue more and more. It’s as good a moniker as any for the organizational mashup that is Mozilla (and Miro, and Kiva, and so on). But every time the hybrid term drops, it begs (or I get asked) the question: hybrid of what? I figured the time has come to push on this question a little with a series of posts about hybrid orgs and why they matter. This is the first one.

So, what is a hybrid org? In the case of Mozilla — and an increasing number of other orgs — it’s a mix of social mission, disruptive market strategies and web-like scale and collaboration. Or, at least, that’s the definition I see emerging.

img_7179

If we take ‘social mission’ as the first element, then a hybrid organization looks alot like a traditional charity or not-for-profit. Public benefit is the core reason that these organizations exist. For Mozilla, the mission is to promote and protect the open nature of the internet. This means ensuring that the internet remains a public commons where anyone can innovate, experiment or express themselves without asking for somebody else’s permission. On our increasingly digital planet, we clearly need public benefit organizations that care about such things.

... now let's add the market ...

When we move on to ‘disruptive market strategies’ hybrid orgs start to look a little different. These organizations use products, services and consumer choice to promote the ideas and move the issues that they believe in. Think about this in the context of Mozilla’s mission: the internet is shaped far more by the choices of people who build and use it than by regulation or high minded ideals. By creating products that a) many millions of internet users love and b) have open standards, security and innovation from the edge baked into their core, Mozilla leverages consumer choice to make the internet more open. With Firefox, this approach not only shifted the browser landscape from near monopoly into a more diverse ecosystem but also helped build the foundations for an era of standards-based web applications. Mozilla jumped into the market with a great product not to make money, but as a way to grow and protect the internet as public commons.

Of course, there are thousands of organizations that use the market and consumer choice to pursue their mission. Social enterprises like Jamie Oliver’s 15. Market-standards organizations like the Forest Stewardship Council. And, in some ways, even traditional charities like Goodwill. All advance their cause (and sometimes to sustain themselves) through the market in one way or another.

... and the scale of the web.

The thing that makes these hybrid orgs unique is mixing mission and market with the scale and collaborative nature of the web. The culture and technology of the web make it possible to grow a global community of passionate people who can pitch in to build stuff. The things they can — and want to — build are often quite complex: software that makes the web more open; an encyclopedia that offers free access to knowledge; a system of cheaper and better credit for the poor. With the web and collaboration, they can not only build these things, but they also have the potential for impact at a scale that only governments or huge corporations could have imagined in the past. From the programmers who contribute code to the localizers who make Firefox available in 70+ languages to the thousands of people who funded the first Firefox ad in the New York Times, Mozilla is filled with examples of web scale and collaboration.

Does this mix of mission, market and the collaborative nature of the web really represent a new kind of organization? Some days, I wonder about this. But there is no question that there are an increasing number of organizations that combine these elements. Mozilla. Kiva. Participatory Culture Foundation. Donors Choose. Wikipedia. All of these organizations are trying to ‘move the market’ on the web in a way that both engages and benefits a broad public. As they do so, they are charting new territory.

Hybrid Org Overview

Over the next couple of weeks, I want to ask a few questions about this new territory. Why do these hybrid organizations matter? What challenges do they face? And what role does optimism and the desire to create play in hybrid orgs? I’d love to get people’s comments, blogs or tweets about these questions, and will definitely be posting more myself. Hopefully, there is an interesting conversation in all of this.

§ 30 Responses to What is a hybrid organization?

  • Mark, this is a great piece and a really solid overview of the type of mash-up organization that the Mozilla (both the Foundation and the Coproration) strives to be. My feeling is that both of those organizations are also struggling to figure out how to emulate or modify various successful models to their new, hybrid structure, and that will make up a lot of the conversation: not just defining what it means to be such an organization, but what that implies for how those organizations should operate.

  • David Bolter says:

    Mark. Great post, and it really frames what draws a lot of us to Mozilla. You have an important role in how this hybrid moves forward, and I look forward to future posts!

  • brdy t says:

    Interesting Mark and thanks. Your business architecture of a hybrid org talks at the high/top levels of strategic control models (vision, mission, etc.) but I get unclear when I try to determine the ‘final valued output’ – think you should drill down then work back on the business analysis. The FVO of a hybrid org can’t be a ‘mission’ for sure. Conceivably it could be an enhanced ‘value network’ of some sort I suppose. Sure, Diversity as a value is important too but again that’s way up on the strategic control model along with vision and mission. With a business architect hat on let me suggest you ask of the hybrid organization then work backward to help define what the hybrid org is: 1. who are the target groups that will get the outcomes and impacts of the service outputs produced by the hybrid org?; 2. what are the outputs and how do you measure them?; 3. what is the anti-model (aka, the ‘anti-pattern’) to this hybrid org? – would it be more or less effective? What are the advantages and drawbacks? If the hybrid is there to promote values, openness, network effect, it’s own mission, diversity – then great and get me on board but with a big ‘but…’ – you still have to articulate what the final valued outputs are and to whom they accrue, how you measure them. I think getting the definitions down then working back to alternative and potential hybrid/non-hybrid models might help you out in your thinking. Me I like the concept of a ‘chimera’ organization because it’s kind of fun. Kind of like Chrysler/Fiat products might be (image: Dodge Dynasty and a Fiat 500 mashup). Hey it just occurred to me that one of the most difficult things in the world to develop would be a Capability Maturity Model (CMM) for a ‘hybrid’ organization. I’m not huge on CMMs but it does help rectify one’s thinking if they’re done early on don’t you think. Best of luck and keep up the good work – b.

  • Glad you kicked this off, Mark.

    In many ways it seems “hybrid” is nothing new: it’s about taking an interdisciplinary approach: public benefit using market tools, market folks leveraging policy, policy interests organizing communities to illustrate a point, etc. Adding web scale and capabilities sure makes for some interesting new cases though.

    One can approach this hybrid space with varying intent. In your/my case public benefit is central and necessary. In other cases the claim of public benefit is great marketing, but the actual public benefit is secondary or worse.

    If that’s the case then there’s an interesting question for those seeking to drive public benefit: how do you ensure the public benefit remains core to the hybrid model? For example, there are several hybrid models emerging that are borrowing innovation from public benefit innovators and using them to drive commercial value creation. See, for example, 1BOG.org and Virgance.com. 1BOG.org is definitely using web scale tactics and community organizing techniques, but it’s not a .org the way you might assume — it’s a for profit effort driven by a company called Virgance. I’m not throwing stones at the commercial pursuit — in fact, I think it’s very clever — just pointing out that examples like this complicate the public benefit orientation.

    Is there a fundamental question about alignment between public benefit and hybrid strategy? I think so. If not, these models will go sideways eventually — at least from a public benefit perspective. Mozilla is on point in this regard, by the way.

    PS – Love the coffee rings.

  • Stephan says:

    Great post. It is good to think about new forms of organizing to overcome the problems many people are facing in their 9-5 jobs.

    I find it easier to think about these organizations as a hybrid between a classical (hierarchical) organization and a social movement (or network).

    It is the mix of the two that requires both a market perspective (the classic organization needs to make money to function) and a social mission (need that to create passion for the product or service among your the movement or network).

    The internet happens to be one of the most effective ways to weave and coordinate a network. I wonder if there are hybrids that have managed to grow without the help of the web.

  • sethb says:

    It’s good to read more about Mozilla thinking about hybrid organizations.

    This seems pretty accurate to me: “It’s a mix of social mission, disruptive market strategies and web-like scale and collaboration. Or, at least, that’s the definition I see emerging.”

    I probably have a bit of bias since I worked there, but I’ve always thought that Ashoka has been the leader in the way we think about hybrid organizations. Since the early 1980s, their belief is pretty simple:

    “Nothing is more powerful or has the highest potential for impact that a completely ‘new idea’ in the hands of a social entrepreneur who is working to close a gap that is causing a critical problem in society.”

    In fact, some of the earliest hybrid organizations probably became Ashoka fellows. Here are a few I am fond of:

    David Green and Project Impact: http://www.ashoka.org/node/3146

    Paul Rice and Transfair USA:
    http://www.ashoka.org/fellow/3166

    Rodrigo Baggio and CDI:
    http://www.ashoka.org/node/3396

    Sunil Abraham and Mahiti:
    http://www.ashoka.org/node/2641

    Don Shalvey and Aspire Public Schools:
    http://www.ashoka.org/node/3150

    I know that Don, David and Paul have raised equity and debt capital inside their nonprofit structures (in David’s case, he spun off a for-profit subsidiary to raise equity.) These folks have market investors who want ROI, but they are also making great social change.

    The “Measuring Effectiveness” work by Ashoka shows some of the impact and how they have been tracking progress. http://www.ashoka.org/impact/effectiveness

  • [...] 23, 2009 Mark Surman just posted on the topic of hybrid organizations, which he defines as organizations characterized by a mix of social mission, disruptive market [...]

  • Great post Mark. What immediately jumps to mind for me (of course) is non-profit publishers like New Internationalist.

    They are similarly a hybrid organization: both driven by mandate to document “The people, the ideas, and the action in the fight for global justice,” and constrained by the need to finance that mission through earned income (in the form of subscriptions, book orders, and product sales via New Internationalist’s ethical and fair trade shops.

    The person who is responsible for the catalog and online shops operation often exclaims in disgust “How did I end up working in retail!”

    … but the reality is that all of NI’s staff are part of a non-profit, democratic, flat-pay workers’ co-operative. A model for how organizations can be both democratic and sustainable.

    But the dynamic is there: Hybrid organizations must play in both worlds, the mission-based world, and the market-based world, and those two worlds are often struggling for ultimate control of the organization’s direction.

    So here’s the question I often ask…

    What’s more important for your organization? Delivering on your mission, or sustaining the organization? And what does each mean. Because, often, it’s not possible to do both.

    Three cents,

    Phillip.

  • David Crow says:

    Mark,

    I’m curious at the legal structures for a hybrid organization. Are they corporations? Are they not-for-profit corporations? Are they charities?

    How do you fund these organizations? Mozilla is an interest case versus Wikipedia? How are these organizations are funded?

    • sethb says:

      David Crow: from what I have seen, hybrid organizations often have dual structures with a parent and a subsidiary.

      In some cases a non-profit parent organization spins off a for-profit subsidiary that is then able to raise equity capital. It makes sense because there is not a lot of equity to be shared in an organization that has “no profit” and isn’t taxed by the government. The trick here is often that the for-profit subsidiary has to have clear separation from the nonprofit parent to prevent abuse of this type of structure (i.e. passing profits back to the non-taxable parent). I mentioned Project Impact above and they tried something like this in 2002. The for profit sub will act on the revenue generating side of the business (selling a service or whatever it is) and the nonprofit uses that for-profit to carry out its social mission. (The service being sold might be a social good, like blindness prevention surgery at hospitals…or whatever.)

      Nonprofit organizations can also raise program related investments that are more traditional debt obligations like bonds. If a nonprofit has assets on its balance sheet (or the likelihood of a return on assets to be created from debt raised), it can carry debt against the value of those assets to expand. With that new debt capital, a nonprofit is free to expand its business to generate income that will pay its debt obligation, just like any corporation does when it floats bonds.

      I’ve always thought Social Edge was a good online community for discussions like this.

      http://www.socialedge.org/

    • As for legal structures, there are several ‘hybrid’ structures emerging (Community Interest Companies in the UK and L3C’s in the US). Canada is exploring their own approaches. Legal structures are tools to facilitate bringing capital and people together and there are at least 7 options in any jurisdiction. Often the use of both a non-profit and for-profit model is effective to appeal to different capital sources and set a different culture/focus. An overview of what’s currently possible in Ontario is here: http://socialfinance.ca/blog/2008/11/legal-structures-understanding-the-options-for-hybrid-organizations-in-ontario/

      The role of hybrids in establishing cultures and attracting collaborators interested in a more blended sense of social/economic return is where this is particularly interesting… and exploring this in the area of the social web/open-source holds the most potential for new ways of organizing to establish.

  • Jaap Aap says:

    Yes, wonderful. Now please go back to work and build a better browser, Mozilla!

    • chofmann says:

      Hi Jaap,

      The thing that most people don’t quite get is that the structure of mozilla is a key element for how we have created a better browser. Some times it was in the face of Microsoft having 98% monopoly and the pervasive conventional wisdom being that “browsers are a commodity.” Dispite these challeged our core beliefs and way that we organized the activities and work on the project help to sustain the work and make progress. Hope this makes sense.

      There is a diagram/model I’ve been working on that shows how some key elements of organization structure helps organizations to survive and thrive.

      http://people.mozilla.com/~chofmann/books/open-organizations/chofmann-curve2.png

      Mozilla is diffent from say companies in the auto industry, or even things that are closer to other hybrid organizations because we are pushing on all the levers to open communication about what we are doing, engage as many people in product planning, have our product used as a platform as in firefox addons, produce a public assess that can live on beyond the life of a product as mozilla has lived on beyond the original netscape participation, ensure peer view and checks and balances are in place to keep the project from going to far off course, *and* try to create *hot* product like Firefox. ;-)

      -chofmann

      • Jaap Aap says:

        Yes, it’s a great community effort. Now please go back to work and make a better browser ;-)

        But seriously: I check planet mozilla to see the tech progress of FF. I am seeing more and more ‘hybrid organizations’-like vagueness and less and less tech updates. Which makes me less of an unconditional FF fan than I used to be unfortunately.

  • isura says:

    hi Mark, awesome post.Here are my answers basing Sarvodaya-Fusion

    1) Why do these hybrid organizations matter?
    Simply because the solutions cannot be found from the conventional ways of doing business/charity etc.Increasingly we need innovation, as we tread uncharted territory in an alarming rate.

    2) What challenges do they face?
    For a social enterprise like Fusion, making social change and making money to sustain it requires principles of humanity and ethical mission driven business thinking. See the challenge? Spreading humanity and been ethical about doing business, and avoiding mission drift. The teams should come with larger number of ideas, and decide, ” do it” or ” dont do it” . there is no trying in this era.

    3)what role does optimism and the desire to create play in hybrid orgs?
    optimism is the only choice. There’s no alternative in this chaos. As with leadership it is your choice that brings about passion.
    The best advice: Lead new innovations from the front, but never loose touch of base (customers)

  • [...] week, Mark Surman wrote a fantastic post about the Mozilla Foundation and how it is a hybrid organization. Before listening to this episode of the podcast, go and read the post on his [...]

  • Sameer Vasta says:

    Your post inspired our most recent episode of Of Public Interest. Apologies in advance if we’ve butchered your thinking. =)

    http://www.ofpublicinterest.com/2009/04/opi9-hybrid-organizations/

  • [...] of these organizations are foundations, they are hybrid organizations, like the Mozilla Foundation which is very different than a traditional for profit corporation. [...]

  • [...] What is a hybrid organization? [...]

  • [...] been thinking lately about Mark’s posts on hybrid organizations (see one, two, three).  Many of the things he’s talking about in these posts overlap with ideas I [...]

  • [...] probably clear by now that I’m a keener for orgs mashup public benefit mission + market disruption + the [...]

  • [...] challenges do hybrid orgs face? May 20, 2009 It’s probably clear by now that I’m a keener for orgs mashup public benefit mission + market disruption + the [...]

  • [...] Surman, executive director of the Mozilla Foundation, has started a conversation about hybrid organizations. “Every time the hybrid term drops, it begs (or I get asked) the [...]

  • [...] opinion on the role of small, entrepreneurial organizations in the Jewish world is the concept of a hybrid organization.  This type of organization, most succinctly defined by Mark Surman, the executive director of the [...]

  • [...] opinion on the role of small, entrepreneurial organizations in the Jewish world is the concept of a hybrid organization. This type of organization, most succinctly defined by Mark Surman, the executive director of the [...]

  • [...] la sintesi migliore la fa in questo blog Mark Surman prendendo come esempio Mozilla. Una Università è naturalmente una organizzazione [...]

  • Ohana Media says:

    Yes, it is people that drive internet primarily, not businesses. So engaging people in an interesting way is essential for any business or enterprise online. This is a good initiative.

  • [...] “If we take ‘social mission’ as the first element, then a hybrid organization looks a lot like a traditional charity or not-for-profit. Public benefit is the core reason that these organizations exist… On our increasingly digital planet, we clearly need public benefit organizations that care about such things.” Source: commonspace by Mark Surman [...]

  • I get pleasure from, lead to I discovered exactly what I used to be having a look for.
    You’ve ended my four day long hunt! God Bless you man.

    Have a nice day. Bye

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