July 4, 2023

The Natural Owner concept

Why you should hand over to another entity that is in a better position to maximise your impact.

When I talk to social entrepreneurs and ask them their ultimate goal for their company, overwhelmingly they tell me they want to solve the problem once and for all so they can stop doing what they are doing and make themselves obsolete.

But is this really what they should aim for?

I would argue that instead of fixing the problem, impact enterprises should aim to get started, learn, make a difference and then hand over to another entity that is in a better position to take the organisation forward and maximise the impact even faster. We call this organisation the “natural owner”.

As an impact enterprise your aim is to fix the problem sustainably in the fastest way possible. That last bit “in the fastest possible way” is crucial. In many cases there will be a tipping point where another entity in the market is better placed to take what you have been doing, do it faster and achieve a greater impact.

Consider this. The way you have structured your organisation, the people that work within it and the way you use this structure as a vehicle to solve the problem might not be the best approach to deliver on the outcomes in the future. Another organisation might be better placed to maximise impact. This new entity is referred to as the “natural owner” of the solution.

The idea of natural ownership, and the term “natural owner,” is not new. It was introduced by John Stuckey and Rob McLean of McKinsey in the late 1980s. In the corporate world the natural owner concept is used to understand which business units belong in a company’s portfolio, and which should be divested. The company is the natural owner of a business unit if the business has a higher valuation under its ownership than it would under any other owner. For social enterprises and impact enterprises the natural owner is an entity that is better able to ‘fix the problem faster’.

See it as a relay, where it is time to hand the baton over to another person, in this case not because you are running out of steam but because the other person is better equipped for the next phase of the race ahead.

So how do you find the natural owner to maximise the impact of the solution you are creating?

You can find the next relay runner, or “natural owner,” by analysing the road ahead through the eyes of your beneficiary. Ask yourself the question: what maximises value to them, both in terms of impact and reach? Do thorough research to understand who is doing the best job of fulfilling these requirements. As hard as it might be, if it is not your organisation, it might be time to make some tough decisions and hand the baton over.

Solving the problem once and for all may just rest in the hands of a well selected teammate.

Subscribe to The Newsletter


Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.