Abraham Maslow said "if all you have is a hammer, everything that you see is a nail."
Very true. We have a cognitive bias for that one skill, method, approach, thinking, acting, doing. We think that it will solve all the problems in the world or perhaps in our household.
If organizations are one-trick ponies, not capable to adapting and innovating to the changing times, the hammer that they will be using will become obsolete (including the nail) one day and that is the end of their utility.
Learn to adapt to the new needs, ride on the wave of new needs. or create the need itself, then think about how your organization can service them.
Have you heard lately that Payless is closing all of its stores in Canada, some in US and Puerto Rico? According to the news, the reason for the closure is that the prior reorganization was ill-equipped to account for the current retail realities -which means that the management made a big mistake by not accounting for the growing online shopping in Northern America.
It is quite revolutionary that the buying patterns of the public has led to massive reorientation and bankruptcies of major retail players, Sears, ToysRUs, Macy’s, to name the recent ones that have folded or beginning to fold up.
While Payless caters to the lower segment of the market where price is a sensitive issue, it wasn’t immune to the competition that is happening online when buyers shifted the way marketing, merchandizing, branding and promotions, distribution, delivery, payment systems, and customer services are done with retail. Big box companies are beginning to see the follies of the mantra, “big is big.”
What should be obvious is the Walmart remains the number 1 competitor in industry. Walmart is trying to succeed in the online shopping space where Amazon remains the industry leader with selling things online. Amazon and Walmart is up to the races to the future of the marketplace. Let's see who will win but at present, these two companies have shown that it pays to be adaptable and to listen to your customers!
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 married a farmer. I have no idea about farming three years ago, but now, I can apply almost most of the farming lessons to management solutions and techniques that so-called gurus out there would envy!
1. You can’t hurry farming.
It has its seasons of planting, harvesting and in between all other supports that you do to ensure that the crops are growing healthy, not prone to diseases, pests, and other hazards.
You can’t hurry success, love, and business deals. They have their cycles and seasonality. To this end, you have to look at the long-term viability and ask yourself, will this give me a return of investment in the next 5, 10, 15 years.
2. There is no substitute for great weather.
While there are hail, storm, floods, pests, and other weather disasters that befall farming, with enough sunshine, wind, rain, harvesting is a delightful experience! My grandma has sat in a combine with my grandpa for more than 50 years until they can’t farm anymore! This is a tradition in farming communities. Young and old alike cherish this moment once a year.
You have to bring in the right amount of discipline, focus, persistence, and opportunism to every business opportunity. The batting average is 10% or less. The rest is part of growing up and being resilient to failures and momentary setbacks. Celebrate all the milestones and happy events dutifully.
3. Negative self-talk doesn’t work.
There is too much on the line when they have not completed harvest yet. Any delay could mean a rotting unproductive, unsellable yield. Farmers are stressed out to the core. Negative self-talk in a pressure cooker environment will only yield to more negativity to the already volatile and stressful situation. It drains away those precious energies you need to tackle problems with level-headedness.
Instead of negative self-talk, be positive about the situation. Leave your rose-colored glasses, be realistic, and get to Plan B, C, or D. The moment you build contingencies to your decision-making, understand the risks factors, you will feel more confident to take the next action.
4. Farming is all about inputs, not anymore!
For the last 100 years, we saw great revolutions in the agricultural sector. In the last 20 years, there are more technologies and innovation in the industry that you can imagine. Newer editions of expensive tractors, rising price of arable land, and the stringent policies on quota system have discouraged a lot of people from farming. The cost of fuel, fertilizers, and other support inputs have become cost-prohibitive. More and more farmers are grouping their farms to the community to benefit from scale and leverage pooled resources.
What are you doing in your business to adapt to a changing environment? You didn’t need horses when the tractors came along. So this is true for other industries where changing practices, technology, and priorities have shifted consumer demand to other services, products, and techniques. Is your industry being driven away by cut-throat competition, stiffer regulations, or dying consumer attention? It is time to know what is hitting you before it is too late.
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.
Cheap airlines are getting better and better.
Newer offerings in new routes. More options to choose from such as print your own tickets, online check-in, are getting better as well.
This is very good for fliers whose budget cannot afford the amenities and the frills of the regular airlines.
The key here is providing value to the point that customers are eager to try on without sacrificing a lot of dollars for the whole experience. The safety, comfort, and overall no-frills experience are what counts at the end of the day. Beware, if you do not read the fine print, you get charge for every little thing. Little thing that we take for granted but adds costs to the operations.
When did you start to think about your organization's value addition to your customers? Is it the price, comfort, peace of mind, guarantees, "the relationship," or the expertise your provide? or how about the lethal combination of these musts.
In these days, standing out in the market is not being the loudest or the most noisy product or service. It is about the filling the gaps, combining the best value for your offer, and ensuring a follow-through of a great experience.