Mission-based organizations should think twice about creating more mission work without the full support and wisdom from a business sustainability standpoint.
Most of the time, they wrestle with the fact that since they have the work of helping, they should be able to marshal resources, support, and other important resources to fully realize their objectives. This is never automatic.
It takes a lot of courage and guts to realize that mission is not enough and will not be sufficient to carry the organization through its many stages of development.
If there is no evolution in management and business understanding, the mission becomes unproductive-"hence, give me because I give this back" will later on become subject to more critical and demanding requirements from society. This is painful to see as many organizations languish in near obsolescence without realizing their fullest potential.
There is only one way- to review their business model and ask the most important question: if this is not working for us, can we be flexible in getting to our objectives through an alternative model of doing and being?
Let's approach this with an open mind and an open heart.
I was on a phone call last week talking to a major trade association staff. I inquired about the program I thought was still running and getting a lot of engagement from their membership based from the website page I viewed.
It turned out that that program did not exist anymore. It was terminated in 2015 after a few years running it due to many reasons. I inquired about other programs that they may have.
The staff, very knowledgeable about their association told me that based on their strategy, they would like to provide thought leadership through resources, information, knowledge products they produced on a regular basis. Because of this, they cannot be doing something else that might distract them or be contrary to this organizational goal.
Very well said.
I wish that a lot of organizations have effectively articulated and communicated where their organization is going and how to get there to all the vital organs of the organization, including the staff, volunteers, and key clients/customers.
As I was told, then I become more aware of their work and the kind of business strategies they have to operate effectively in this challenging environment.
The best strategies do not stay on the shelf, gathering dust. It is lived and experienced and harnessed by all the people and stakeholders that take time to develop and nurture them to shepherd its successful implementation.
I am a customer that is now more informed.
A lot of organizations want to “wing” it all the time. Okay, for the first few years, it seems like the need to produce or demonstrate action is very important, but disorganized action leaves much to be desired. The disorganization becomes the bane of the organization. When things plateaued, then the conversation becomes “how can we make it better?”
There is a lot of romanticism regarding being ‘grounded up’ but what does it mean:
- Being participatory and democratic
- Being consultative and egalitarian
- Being able to pluck the low hanging fruit
- Being able to be flexible and nimble
- Being able to wing it!
While these are grand and noble things to pursue, they can be used as avoidance measures to accomplish the following, for example:
-Stretch the organization systems to focus on strategic rather than popular;
-Plan for long-term than short-term, including delaying short-term pleasures and gains for long-term stability and growth;
-Increase the commitment of Board, staff, or Steering Committee to aspire for the systems-wide thinking and deliberate attempt to take a stab on things, not just to wander from one initiative to another;
-Increase uncertainty but decrease the level of politics that is blocking any meaningful organizational change to happen;
-destabilize conservative views, offer new thinking, and increase executive leadership from that of being an administrative manager to a leader;
Innovation rarely occurs in the everyday problem-solving. Putting out fires increases your level of adrenalin but rarely gets you to your ultimate destination. Strategic focus is more needed when the times are tough, the money is low, friends have left, and there is a room for mistakes.
But I guess, it's not common sense.
Let me know what you think.
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.
I was bumped off from the list of speakers today.
Apparently, I was playing catch with the coordinator who is running the planning for the program. She was away for the while somebody had taken over and finalized all the details without me being aware of these changes.
Nevertheless, they want me to come and attend.
I am not going if I’m not dancing and just made to sit, listen, and act smart.
There are some things you cannot do if it means not participating in a way that works for you.
I have more things to do than that.
Succession is such a difficult process. Non-profits, churches, hospitals, boys scout councils, businesses – all encounter the familiar--how to succeed the founder and continue the mission of the organization.
Too many times, the founder has overstayed its welcome. Unless by death and violent overthrow, the founder who has created the organization and put all his life and efforts to building it, refuse to step down and allow new blood to come into the organization. For a lot of founders who poured their whole life into it, they do not see it as a given. They are either in denial and ego had its way.
Regardless, the organization is suffering while the founder is still alive and able to create more havoc and instability by being present, running the show, but not necessarily present mentally, physically, strategically, and socially/charisma to function effectively with its role as a CEO and spokesperson for the organization. The second-in-line cannot function with its duties and responsibilities and will always be obstructed in its aim to make reforms and set things straight.
I have seen organizations suffer because of lack of ability to force down the issue on an aging founder who refused to vacate his position despite and in spite of the Board or the people in the organization telling him to retire and go fishing. The Board at that point were either inutile or bunch of friends, colleagues, and people who have been co-dependent on the founder and also refuse to vacate their posts or provide a public opposition. Those that resisted the founder were all gone. The rest of the staff were very demoralized and confused, and it showed in all aspects of the organization.
It was good in the beginning. The founder has brought an enormous amount of goodwill, social capital, and networks with its great charisma and ability to command a following. The organization for many years enjoyed successful funding and financial support from people who admired the founder and its expanded networks.
This wasn't the case anymore. For some time, the founders’ health, mental faculties, and charisma have deteriorated. The issue is no longer when is he going to retire but what can be done now to prevent a very sad ending both for the founder and the organization.
An immediate, short-term and long-term succession plan should be drawn and agreed by all important parties including the founder. A person who has been known and respected by the founder can be asked to facilitate this process. He will be recognized and celebrated as a founder for many years. This is not a good succession planning. This is crisis management. Some organizations have sacrificed tomorrow’s organizational health for today’s convenience. They refuse to deal with the elephant in the room.
With stakeholders, staff, funding from donors, the non-profit organization is not a property of the founder but a public entity and as such, it is a public trust. Peter Drucker said that "what decides whether a non-profit institution succeeds or fails is its ability to attract and to hold committed people. Once its loses its capacity, it’s downhill for the institution, and this is terribly hard to reverse."