Are you planning to improve your organization this year? or are you gearing up to do the same-old, same-old?
A lot of organizations these days tend to do the latter. They think that by cruising along and being more busy (than means doubling up on the amount of programs and activities), they are being strategic and effective. Effectiveness here means in my vocabulary the ability to achieve the outcomes and results they wish to seek through their efforts.
Businesses, nonprofits, and governments cruising along and wishfully thinking that they can copy past success by doing the same thing are totally misled. If there is no effort to improve and surpass past year's performance, status can keeps mean sweeping the problem under the rug delaying the resolution of some of the issues pestering the organization that will actually help the organization move forward.
Are you stalling to discuss the next direction of your organization for fear of catching more problems than anticipated? What about the changing environment where complacency doesn't do you any good?
Get out of your comfort bubble and tackle the obstacles in building a new and secure strategic direction before an overwhelming situation compels it at your own expense.
These and some other important questions will be discussed in my Strategy Development Workshop in Red Deer, Alberta this week.
80% of plans do not get implemented because of many reasons. Here I enumerate the top 5 obstacles to effective implementation.
•Management needs to ‘own’ the plan
A lot of organizations invest in planning but forget that the strategy is implementation. Management needs to own the plan, create contingencies when there is a major shift in external environment making the plans unworkable, and instill performance measurement at all points of the implementation. Management should consult the stakeholders concerned but the end of the day, it rests on management that knows the business from inside-out and are not afraid to take responsibility for its success or failures.
•Confused planning with strategy
When management started planning, they confuse it with strategy. Planning is done at the lower end of the organization, while setting strategy is primarily a management function. It cannot be delegated to staff or mere customers dictating how the company should be run. A decisive, informed, and well-represented management team should undertake their biggest function- which is to set the general strategic direction of the company. This biggest function is what creates the impetus for the company in the next 3-5 years aligning all resources, assets, culture, and processes to meet the goals, and forsaking other fruitless pursuits.
•INERTIA, ATROPHY, & FALL-BACK ON PAST PERFORMANCE
Organizations who are undergoing maturity or who are the in peak of their organizational or product success would have the mentality that they are invincible and unassailable. When in fact, past performance does not lead to future success. The market volatility and disruptive nature of businesses and megabrands call for adaptability and nimbleness that can prevent massive investment on futile and unproductive projects. Inertia is what prevents innovation from happening. When there is ego or greed or plain stupid management that does not listen to customers, clients, or stakeholders, it is on its way to its own demise. Take the case of Sears.
When companies become too comfortable with their success or good fortunes and don't have the predilection to move to the next level or raise the bar notch higher, the writing on the wall will be there pretty soon. If they are not afflicted enough to move to plan and manage risks, competitors that have faster sprint and stronger kick will rush in and eat their market share. Competition is not just the next vendor like your business, it is also the changing trends, mores, norms, and behaviors of society that may have a profound impact in your business.
(more on this, next time!)
The new Saskatchewan bridge has fallen.
There was something completely wrong here when a newly constructed bridge collapsed a few hours after it just opened. The construction tendering system is completely perverse. They low-ball anything to the point that quality suffers in the name of the price. And who cares about safety and quality when the best friend of the mayor or the councilor or the favored contractor gets the project.
And of course, rural politicians are not the best judge of construction work, more so competent and professional enough to decide on the award. The local politics get in the way of competent service to the community.
Well, the human race has built the tallest buildings in the world, the largest submarines, and the biggest and baddest airplane without a major construction defect. A small rural functioning bridge is not impossible to have.
Incompetency has to be stamped out. The reason why there are bad contracts and bad work in a public agency is that management failed to act based on integrity, due diligence, and utmost professionalism in these cases. And this patronage system festers for years until something major like this happens.
Firing somebody is palliative. An overhaul of the bidding system is required.
Voters, are you there?
A few years ago, I learned about Open Book Management and its wonderful benefits to organizations no matter the size, industry, and complexity.
If you google it, Wikipedia will say that the basis of open-book management is that the information received by employees should not only help them do their jobs effectively, but help them understand how the company is doing as a whole.
According to Case, "a company performs best when its people see themselves as partners in the business rather than as hired hands" (Case,1998 as cited in Pascarella, 1998). The technique is to give employees all relevant financial information about the company so they can make better decisions as workers. This information includes, but is not limited to, revenue, profit, cost of goods, cash flow and expenses.
In July, I had the pleasure of interviewing Shawn Plummer, the President/CEO of Food for the Hungry Canada based out of the Fraser Valley in British Columbia. FH Canada is one of the rare nonprofits that had tried and successfully benefited from the open book approach. It drove accountability, clarity, strategic focus, and innovation into their organization.
The transcript below is from Shawn’s own words describing their journey.
About FH Canada
FH Canada is a part of the global organization where the Canadian office is one of the affiliates. FH Canada operates in 8 countries: Cambodia, Bangladesh, Haiti, Guatemala, Ethiopia, Uganda, Burundi, and Rwanda.
FH Canada aims to graduate communities out of poverty one community at a time. We operate with an asset-based management approach, exploring what assets exist in the community and together, with local community leaders and families, determine where the gaps are. 95% are national staff with very few expats.
As for our strategy, community-owned development plans are set by local leaders. As for our exit strategy, within 10 years, if we collectively feel that the vision and targets have been reached and a sustainable plan is in place, we will exit from the community and celebrate together at the time of “graduation”. There is a commitment to mutual transformation between the communities being served and the Canadian partners (whether churches, investors, business partners, and other supporting partners).
I was hired in 2010 to work on partnership development, for 8 years in fundraising, donor relations, and child sponsor acquisition. I became the President/CEO in late 2017.
There were some issues in the organization back in 2010 that needed to be addressed.
We lacked a strong brand so the whole practice of evaluating who we are, who is our audience, who is our market in Canada was stemming from that weakness. Ben Hoogendorn, the former President thought of hiring an executive coach to help our senior leadership team implement the Rockefeller Habits and then his successor, Bernie Willock, initiated the open book management process. This was sold to the Board and then changes slowly happened.
Origins of Open Book Management for FH Canada
Before, our strategic plan was for 3 years and 15 pages long that no one read. The coach guided us through a process that proved to be beneficial. There were two books that provided the inspiration: 1) Scaling up: practicing the Rockefeller Habits by Vernie Harnish, and 2) The Great Game of Business by Jack Stack. Scaling Up provided the 4 strategic elements: people, strategy, execution, and cash.
The result was a one-page Strategic Plan. It has driven clarity, focus and being able to say No! to a lot of things that do not align with the plan.
Bernie took on and implemented the open data management process because he had been doing that in his company before joining FH Canada. Before, only a few people were looking at the numbers. The rest of our leadership team weren’t always clear as to our annual targets, how to effectively monitor/track them, and that included cash management.
Our meeting rhythms have changed too. At the start of each month we set monthly projections for revenue and expenses. Each member of our team has a budget and expense line to watch. We analyze our Profit & Loss (P&L) weekly so we have a good idea where our cash is at when we look at our month end actuals.
The cultural shift was having a staff name beside each revenue and expense line and adding a layer of accountability. Being responsible for monitoring the numbers and knowing why those numbers rise or fall is another thing so we look at trends. Now, staff have a voice at the table and can challenge the expenses or challenge the return on investment when we’re considering new opportunities.
We started having fun keeping score and we’ve made huge progress as a team over the past 3 years.!
Results /impact in the field and your partners/stakeholders
the results are clear: One of our big goals is to always increase the % that we can get to the field in the 8 countries that we partner with.
There is a huge improvement in knowing where our cash is going and watching the number closely, anticipating needs and planning for contingencies.
This involves greater clarity, focus, and has improved our communication and service to our partners. Our partners are very involved in the process. There are more frank discussions about monitoring and evaluation because we know where we are at.
I thought we could roll out open book management much quicker than we did but we needed training in the beginning and it took us over a year to get things integrated.
It was a big cultural shift-having your name with a revenue target + expense line and it was daunting in the beginning. First, it felt like a competition but later one, it drove us to be better teammates. It made us look to where the growth opportunities are.
FH Canada have brought more partnerships-more accountability, greater clarity and focus and a clear BHAG (Big, Hairy, Audacious Goal) of graduating 150 communities out of poverty by 2029.
How can you encourage other nonprofits to be more open and accountable?
I would encourage them to read the two books that influenced our current business practices.
Consider using an executive coach to help build a strategic plan for your organization.
They need to operate as a business - people, strategy, execution, cash. There is reason enough to do this because of the distrust between nonprofits and business.
It was painful in the beginning but it reaped many dividends. Once employees understood, they can make predictions and they can bring questions and answers to the management team. Other nonprofits can see this as an investment worth their time and energy.
Nonprofits have to have a motivated CEO and management team plus a supportive board that encourages this type of intentional strategic planning. There has to be a deep desire for change within the organization and a willingness to do the hard work to get to a place of sustainability.
There is more to say that just creating criteria a for the CEO successor. It is not just about tabbing an heir apparent that has similar skills set, knowledge base, and leadership style as the predecessor.
A few thoughts on this matter.
Don't get a carbon copy. Carbon copies are weak and it rarely works according to Peter Drucker. I would say that carbon copies are bad copies. They seldom really capture the essence of the original.
For the Selection Committee, it is important to keep mind that same profiles could be counterproductive given that the business environment is constantly changing. What works before with that CEO may not work for the new CEO with the same survival skills and traits.
Where is the company going in the next 10 years, what skills set, knowledge base and leadership style would work? One that can leverage past achievements and successes to work for the next growth level of the company is crucial.
That person should have a clear and demonstrated track record of innovation-orientation. Amidst the overrated appeal of disruption innovation, an innovation-orientation is much needed, in all types of industries, sectors, and markets.
The global marketplace is evolving at such a rapid pace, leaving losers on the trail. That person should have an advanced knowledge of global trends and movements in the marketplace-refined understanding of key moves in the industry /sector where they belong.
A person that can command the right resources for the organization and attracts the required social capital at various levels of the organization. Charisma and people skills are important. But the CEO is not there to please people. He/She is there to advance the interests of the company.
When a disaster or crisis strikes, an able CEO knows how to drive the situation from impending annihilation to securing confidence in the eyes of stockholders, consumers, and the public.
The CEO position is very important and complex. But it is more important to expand the role of the CEO for the right person rather than to “box” the person into the limits of the role.
A few years ago, when I assumed a role in a municipal government, it was a new role. I was able to carve my own way into the position, expanded it based on my range of skills and interests, and win it.
When the CEO position has been entrenched, there is a perception that the CEO has to be this and that. Well, at the end of the day, the person should rise above the limits imposed by the position, whether real or imagined, to become successful.
The term of office is very short if you have a very able leader and it is too long for a lousy one.
Ben Hoogendorn, a tireless humanitarian of many decades based in British Columbia Canada, a former Executive Director of China Concern and a former Executive Director of Food for the Hungry, Canada talked about his experience and insights in successful exit strategies for organizations with development relationships with communities.
1. What do you think are successful exits require?
Successful entry and exits require a high level of trust that comes from strong and loving relationships.
It is not possible to have a successful exit unless the community has understood from the very beginning (before any programming or funds were introduced) that there is a timeline for the agency to exit. If that is not well understood the community leaders will not see the necessity of engaging everyone in the process of being able to identify and solve their own problems.
Many communities fail to understand this and the result is ongoing chronic poverty, or a best-case scenario of lingering in a state of dependency on outside resources, but never reaching their potential. Giving back the dignity that has often been stripped from marginalized groups and empowering the leaders are key to being able to exit successfully.
Community leaders must understand and be able to communicate the message of developing their own assets in order to become self-sustaining. People need to know they are not victims but part of the solution to a better life.
2. How to prepare?
Besides the common problems of marginalization, injustice, and oppression that result in many communities stuck in a cycle of poverty there is often a lot of chaos, disorganization, and lack of structured leadership.
Even if the issues of marginalization, injustice and oppression have been identified and overcome but there isn't strong gender-balanced leadership within a practical and functioning structure, communities will soon fall back into a state of disorganized chaos.
Everyone in the community needs to understand their value and worth and that their skills, time and talents are valuable to the rest of the community. Dependency is believing you "can't", but a healthy community working together "can."
3.What pitfalls to avoid?
It is very easy for an agency to become part of the problem by remaining in a relief mode far too long before moving into a rehabilitation and development mode. So when beginning to work with any community that is in a relief situation you must respond with the mindset of moving out of this type of aid and introduce programs that will bring sustainability in the early stages.
Be sure to fulfill all of the commitments made and just as careful not to "give" more that you had originally communicated.
Be very careful not to align yourself with any one particular group that may not represent everyone in the community. Doing that can isolate some members of the community resulting in disputes and jealousies that will hinder progress at almost every level. When beginning any program it is important to involve everyone to participate in the discussions. Because many cultures do not recognize women in leadership you need to be intentional to include women in the discussions and decision making.
(To be continued...)