5 Ways To Get Your Organization Moving At The Speed Of Change

Trouble with most discussions about ‘flattening’ and ‘empowering’ organizations is that the case studies are often high-tech histories:  Fairchild Semiconductor, Intel, Google,  W.H. Gore.  This makes it easy to dismiss as irrelevant to the leadership issues of today’s nonprofit….”this doesn’t apply to me”.  The sense is that innovation is taking place in some far off locale with little relevance to the day-to-day challenges of a nonprofit endeavoring to do the pedestrian such as feeding the hungry as opposed to the glamorous work of developing the next killer app.

A nonprofit is an affair of the heart.  Ninety-nine percent of the time when we inquire of an individual why they work for their specific organization, the explanation involves some passion connected to the mission. We want to make a difference and have an impact. 

Today's nonprofit leaders face a difficult and unprecedented challenge. The world is changing much faster than our organizations.  Thus examining our organizational design is imperative.  For our success is now more dependent upon the quality of the organization than in the effectiveness of our program.   A “B”-level organization with an ‘A’-level program will produce ‘D’ level results.

Here are a few thoughts about what sharp executives need to concentrate upon in redesigning the organization structure of our nonprofits.

1)      Laser focus on What Does Our Customer Value?  These are the people that we serve relevant to our mission.  What will make their life better?    Nothing more demoralizing than an organization which serves its staff, funders and donors well, but its customers poorly.  Create value and then trust that the money will follow.

2)      Establish What Does Success Look Like? Develop a narrow set of metrics which measure if we’re delivering customer value.  These outcomes provide guidance to every board member, staff, volunteer in prioritizing their activities and guiding their choices.   Accept nothing less than value added activities.

3)      Unleash our native collective intelligence.  Most innovations in organizations come from mid-level and entry level staff, NOT from elaborate strategic planning processes at the executive level.  Great ideas die because of laborious approval processes.   No one should have the authority to kill a good idea.  Lack of ready resources to exploit opportunities is also a problem.  We also need to be establish an off-budget pool of ‘risk capital’, so that when a promising innovation arises we can move fast to take advantage.

4)      Make accountability a collective responsibility.  In a hierarchy, a staff member is generally accountable to their immediate supervisor.   Thus an employee need only satisfy one person.  Evidence shows performance improves when a staff member is accountable to a team rather than to a single individual.   When we remove ourselves from the need to supervise, teams develop their own norms…if you have good people, they develop good accountability norms.

5)      Create a culture which values Speed, Innovation and Collaboration.   As Peter Drucker quipped, ‘Culture eats strategy for breakfast”.    The leader sets the culture.  Be quick, be creative and be in partnership.

 With all the buzz about social entrepreneurship and the emerging economy, it’s imperative we move at the pace of change.  It’s vital to understand that we already have what we need and that our success requires us to redesign our enterprises for this new environment.  By doing so, we let loose the talent which surrounds us to create new ways of doing business which ensure that we continue to add value to the lives of the people we serve.

What's Killing Your Career?

Look, I've been doing this for 30 years.  I've coached people to unparalleled success as well as help them rebuild after spectacular failure.   There are a lot....a lot, a lot, a lot of people out there who are capable of rising much higher than what they have.   There are five critical barriers which keep them from moving from good to great.

Lack Of Integrity:    Trust matters.  Trust matters a lot.   Being open and honest with those on your team is critical to success of the organization as well as your own personal advancement.   Now leadership does require some tough calls and some decisions that hurt others.    But key to making such calls is being open and transparent.  Let the team know why you had to make such a decision and what criteria you used in making such choices.   And always do what you said you were going to do.   And if for some reason you have to break a promise or miss a commitment, then own up and offer something in compensation.

Crappy People Skills:   Knowing your stuff matters, but it isn’t the whole ball game.  The technically competent loner may find a slot in the organization, but will not move up into a position of leadership.  Too much of our work these days is done in teams.   Arrogance, insensitivity, aloofness is a ticket to getting stuck in a lower level career.

Inability to Prioritize High Value Work:    You can’t do it all.  So stick to the things that bring the highest return to the organization.  Be ruthless with this decision-making.  There is far too much ‘busyness’ in our day-to-day work.  This is a failure to focus upon the things which matter most and produce the biggest bang. 

Rigidity.  Change is the only constant in the world and the pace of change is accelerating.  We now no longer measure careers in decades, but in much shorter time frames.  For a person stepping out into the world of work, they are likely to have 4-5 careers by the time they retire.  This will not be by their choice.  Job creation/destruction will explode and those who fail to adapt are in for some pain. Actually, a lot of pain.  Workers who fail to adapt will become obsolete and fail.

Lack of Strategic Thinking:   Too many of us get bogged down in day-to-day operations and thus miss the endless opportunities presented to us on a platter.   Success in the future demands that one keep an eye for what’s coming over the horizon.  Short term goals are important, but these matter little unless achieved within long-term thinking.   Strategic thinking helps one foresee problems, recognize new opportunities, and position the organization for ready response.

Keeping Boards Focused

Signal-to-noise ratio is a measure used in science and engineering to quantify how much a signal has been corrupted by noise. You experience it when the level of static drowns out the music on you car radio.

 This week I visited a friend for dinner at her house. Sitting on the table by the door was the monthly Board packet....my guess somewhere in the vicinity of 80 pages. She sighed, "Have to read that before tomorrow's meeting". Why do we inundate Boards with piles of information.. it's mental clutter that detracts from the critical issues they need to focus upon. It just creates too much noise for the signal to get through.

Here's an open ended invitation to send us your Board packet so we can discuss if you're providing more Noise than Signal.

One Word: Debt

Be it their homes or their government,  Americans are running out of time to deal with debt and thus risking a sudden crisis.  If ‘Debt Is Slavery’, then in our homes and legislatures Americans are giving up liberty of action and soon will be at the mercy of events rather than in control.

Former Vice President Dick Cheney was roundly mocked for his claim that ‘deficits don’t matter’.   But he later found support in President Obama, who tells us the deficit is a small issue.   Such bi-partisanship is normally reserved for issues such as drone strikes, kill lists, domestic spying.  So when these two men stand shoulder-to-shoulder on debts and deficits it should generate unease.

Government debt transfers wealth from people living in the future to people living in the present. Politically this works because future people don't vote in current elections.  Thus politicians wave away debt concerns by asserting we will ‘grow our way out of it’.  But we can only grow our way out of it if we actually grow. When debt is a drag upon the economy then we don’t grow. And if we don’t grow, the crisis is inevitable.

Federal debt exceeds $17 Trillion, over 100% of GDP, a level not experienced since WWII.  It appears the official strategy to deal with this overhang is “Default By Inflation”, printing endless dollars and paying back debt with increasingly worthless currency.  However, inflation is toxic to the economy. Think America in the 1970s.

Another solution is one put forth by those such as international investment expert Doug Casey who recommends the government default “in an honest way” by paying current debt holders less than promised which he sees as preferable to, “saddling the next two generations with indentured servitude.”  Bond holders will howl, but Casey  wonders, “how a creditor can cry foul when the government to which he is lending has implicitly said that the value of the money he lent will shrink?”

This debt also has more than just economic effects, but national security implications as well. Because more than half the federal debt is held by foreigners, other countries are gaining increased leverage over American politics and the US economy. 

In his book on the financial crisis, Too Big To Fail, Andrew Ross Sorkin details a disturbing moment from the summer of 2008 when Russia made a high level approach to China proposing they jointly dump their US debt holdings, resulting in a even bigger collapse of the US economy.  This Russian proposal coincided with their launch of war upon Georgia, an American ally. While China declined Moscow’s offer the after effects did resonate in Washington.  In his memoirs, Treasury Secretary Hank Paulson admitted astonishment that the Russians were doing a lot of strategic thinking about US debt.

Debt holders have power over debtors.  In 1956 President Eisenhower sought to block the British from occupying Suez he didn’t need Marines. Instead Eisenhower merely threatened to dump the vast American holdings of British debt thus collapsing the English economy. In that case, a bond was more effective than a bullet.

Debt can beneficial when used to invest, but ultimately a country only gets richer is when production exceeds consumption.  In the past 40 years American households have been consuming more than they produce, hence creating trade imbalances and massive private debt.

 In 1970, US household debt was 40% of GDP and the national savings rate hovered around 10%.  Over the next four decades household debt exploded to 100% of GDP while the savings rate plunged to 1%.  Thus we have replaced vaults of wealth with bags of debt.  The credit reporting agency TransUnion reports 46% of all Americans carry a credit card balance from month to month.  Nearly 40% of new car loans in 2012 were made to those with credit scores below 619, by definition sub-prime.  Then there is the other major sub-prime  calamity, student loan debt, which now exceeds $1Trillion.  The net result of all this baggage is a society driven by the never ending need to finance personal debt and hence leaving Americans economically enslaved.

Debt plagues both the public and private sphere, but the solutions are what they’ve always been: earn more or spend less. Unfortunately family incomes remain stagnant, so households must tighten their belts.  In addition, with no growth in personal incomes there is no growth in income tax receipts. Thus we must resist any economic fear mongering and demand a real shrinkage in the size and expense of government.  We can chose austerity today, or have it forced upon us tomorrow.

In our home and our legislatures debt constrains our options. We can choose to pay now or try to pay later. But the longer we wait the steeper the bill.  Any solution will bring pain, but that is a good thing.  Being a debtor should hurt.  In the direction we’re headed, it’s going to hurt a lot.

Why Wal-Mart Is A Great Place To Work (and your workplace should be too!)

This is not a pro/anti post about Wal-Mart.   You are free to shop there or not.  But one cannot question the impact Sam Walton continues to have on the American landscape.  Twenty years after his death, Wal-Mart remains the largest corporation in the world. 

Amidst all the noise from Talking Head  Pundits caterwauling about the human resource practices of this corporation, Wal-Mart remains a pretty good place to work.  In fact, the hordes of applicants desiring to work there allows the company to be selective in their hiring. 

A very empowering tool

One of the reasons Wal-Mart is such a desirous place of employment is the emphasis upon decentralizing decision-making authority. Next time you see an associate on the floor with one of those hand held scanners, do know what they're doing at that moment is determining how much product they should order from the warehouse.   They factor in what is selling, what day of the week it is, and even consider their knowledge of weather forecasts - "We sold three umbrellas today, but the weekend report is for heavy rains.  I best order 10 in the next shipment."

A crowning moment for the company came in September 2005.  In the aftermath of Hurricane Katrina while the government was dysfunctional and nonprofit relief agencies like the American Red Cross were barely functional, Wal-Mart was supplying refugees, first responders and even government officials with supplies needed to address the crisis.

Why did Wal-Mart work so well when other organizations were so lumbering?   Culture....an empowerment culture which trusted its employees to do the right thing.  It all began days before the storm.  As Katrina bore down on the gulf coast, CEO Lee Scott established the basic guiding principle and made sure it was communicated  down the line to even the floor associates:

“A lot of you are going to have to make decisions above your level. Make the best decision that you can with the information that’s available to you at the time."

In many communities, the Store Manager essentially turned Wal-Mart into a open warehouse of relief supplies.   In Mississippi, one employee manger plowed a bulldozer thru a back wall so that medical personnel could enter and raid the pharmacy for use in a makeshift clinic in town.

We need to bring that ethic into other organizations.

Last week I had a discussion with a woman in my church.  She expressed frustration with her child's school in a way illustrates why Wal-Mart has a preferable work culture.   Meeting after meeting with teachers inevitably ends with the parent, teacher and sometimes child understanding what needs to be done.....but first it must be sent up the chain of command for approval.   The delays are lengthy.  The end result often some impenetrable explanation as to why it can't be done. 

We prattle on about 'employee empowerment', yet research suggests 2/3rds of Americans feel little control over their work environment.  We would do well to consider Wal-Mart culture.

Stale Cookies: Girl Scouts Dump Aged Staff In Attempt To "Youthanize"

Plummeting membership, onerous liabilities, fraught collaborations, and rebellious

chapters continue to plague the Girl Scouts Of America (GSUSA) and their latest CEO Anna Maria Chávez. Having just celebrated their 100th anniversary, the organization grapples with a tangled set of financial and image problems leading to accelerating decay to an iconic American institution.

The fiscal picture has become so dire that the national headquarters slashed 85 positions....over 25% of their 326 employees. Factors in the move were not only to reduce head count, but also to modernize the organization by offering buyouts to 45 employees aged 55 and older.

Girl Scouts of America has struggled in past decade to remain relevant in the face of societal changes. But some attempts to modernize have backfired,  such as its partnership with Planned Parenthood in order to provide sex education materials to Girl Scout chapters. While GSUSA has tried to downplay such allegations, critics point to a 2004 video of former CEO Kathy Cloninger admitting on the Today Show saying: “We partner with many organizations. We have relationships with our church communities, with YWCAs, and with Planned Parenthood organizations across the country, to bring information-based sex education programs to girls.” Shortly thereafter came the precipitous decline in Girl Scout membership, now down over 20% in the past decade.

The decay in membership has exacerbated an already shaky pension system. Much like public school districts, generous promises coupled with declining revenues have forced GSUSA to raise pension contributions of local districts by 200-300%. The pushback by local chapters has moved to the courts where the Middle Tennessee chapter accused the national office of various breaches of fiduciary duty and financial mismanagement.

Such high profile actions have drawn the attention of Congress. One congressman called for an inquiry by the House Ways and Means Committee into the pension liabilities and the sale of camps. "I am worried that America's Girl Scouts are now selling cookies to fund pension plans instead of camping," wrote Rep. Bruce Braley, (D-Iowa), in a letter to the committee chairman.

Indeed, the shaky fiscal picture of national headquarters is resulting in greater pressure upon local chapters to bring in the revenue. This is generating dissent among parents. As one parent put it

Speaking as former Troop Leader, parents were frustrated by the high percentage of proceeds the Girl Scout franchise took from the Troops total cookie sales. In addition, the Troop had to buy the cookies in advance and got stuck with dozens of cases of cookies that did not sell during the allotted time. So for many Troops the cookie sale became a never ending fundraising campaign for busy working parents.

Despite the controversy, Girl Scouts retain a loyalty from parents.

"I care so much about this organization, and that's why I hate to see it pulled down," said Suellen Nelles, CEO of a local council based in Fairbanks, Alaska. "We have leadership at the top who are toxic to this organization and need to go."

This Is Why America's Future Will Be Awesome

In his epic volume, Democracy In America, Alexis de Tocqueville described the American character as one of creating a civil society via individual intuitive as opposed to awaiting the blessing of a church, a monarch or any other 'authority'.   The primacy of the individual remains the cornerstone of American identity.  Most dynamic nonprofits were born by the idea and sweat of an individual (who eventually drew others into their orbit).

So as we contemplate the future and the likelihood of decaying government finances, let us remember we still have an abundance of resources to maintain a civil society....and the chief resource is the brainpower and sweat of individuals.  It is they who will be creating the future.

Detroit, as is well documented, has transformed into an urban desert with enough abandoned homes to house all the homeless in Michigan...with enough left over for Ohio, Indiana and Illinois.   Street lights are out, firehouses abandoned, parks left to go to seed.  Into the void has stepped The Mower Gang, best described as just a group of ordinary people who decided to take it upon themselves to maintain 10 abandoned city parks (Detroit has over 340, most abandoned).  They didn't ask permission, they didn't petition the government, they didn't call the media....they just went ahead and did it.  This is Reason TV's coverage of what happens when people are left to their own devices and forced to come up with creative ways to pick up the pieces and find solutions in a city they once loved.

The 5 Talents Of Great Nonprofit Organizations

The data backs up what I've observed over all these years.  Great nonprofits (and great leaders) posses these five characteristics.

1. Gift For Articulating Easily Understood Mission, Goals and Objectives

Not sure I even need to comment on this one.   Remember how you were taught the 'elevator speech' in your professional development course?  Great organizations have that ability , and it's not just the Director.  Staff and volunteers easily rattle off their reason for being, where they are going and how they will get there. 

2. Capacity To Honestly Evaluate Effectiveness

Call this the Anti-Lake Woebegone Effect (where all the children are above average).  Illusory superiority causes many nonprofits to overestimate their positive qualities and abilities and to underestimate their negative qualities.  Great organizations have cold, objective eyes with which to view program outcomes as well as effectiveness of individual members within the organization

3. Knack For Locating and Recruiting 'A' List Talent

With a corollary of having zero tolerance for underperformance.  Correlates with Hire Slow, Fire Fast.  Jim Collins in Good To Great emphasizes getting the right people on the bus...and getting the wrong people off the bus.  I'd add to that the importance of getting people in the right seat.

4. Competence For Efficiently Coordinating Tasks Among Various Board, Staff, Volunteers

Moving everyone in the same direction with a minimum of friction.  Nothing kills morale like having people work at cross-purposes.  Tania Bogatova and Joyce Miller in their book on Lean Operations for service organizations document the chief wasteful activities which eat up resources and degrade the talents of your people. 

5. Ability To Draw Resources From Surrounding Environment

This is not just money, but the subtler things such as knowledge, materials, networks.

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The Best Idea For Fixing Public Schools

Always been a big Tom Peters fan.  While he's drifted off the 'A' list of management authors, there's one line of his which has stuck with me all these years:
 
"It is easier to replace than reform"
 
One of my current favorite writers on K-12 education is Jay Greene, who today posted an provocative piece; “Fix Schools by Not Fixing Schools.”   While the title may be at first perplexing, the thrust of his argument meshes with Peters' theorem of it being easier to replace than reform.
 
For Greene, we must first understand the forces defending the Status Quo:

The main reason we should stop focusing on fixing traditional public schools is that, for the most part, they don’t want to be fixed.  The people who make their living off of those schools have reasons for wanting schools to be as they are and have enormous political resources to fend off efforts to fundamentally change things.  Trying to impose reforms...is largely a futile exercise.

Greene's solution is to embrace diversity by the process of creating alternatives:

We can fix schools...by going around them.  We can expand access to other educational options, including charter schools, voucher schools, tax-credit schools. ESAs, digital schooling, home-schooling, and hybrid schools.  Reformers should concentrate their energy on all of these non-traditional-school efforts and stop trying so hard to fix traditional public schools.

Like water, we should be seeking the path of least resistance.  After decades of encountering entrenched interests willing to go to war to defend an ossified system, let us take our energies to work around them, to offer true alternatives, and to empower parents to decide which ones work best for their children

Customer Service Doesn't Have To Be Hard. Read These 5 Tips

Customer Service.  Your call is very important to us.  Blah, blah, blah, blah, blah.

The bulk of my work is with small/medium sized nonprofits.  In the vast majority their customer service is.....let's call it lacking.  In many cases this is because of the monopoly nature of the nonprofit.  If you need housing assistance, it's not like you can take your request to a different organization.  Nope, you either deal with bad customer service or go homeless.   Not optimal choices.

Seth Godin has a great post about customer service. 

• Spend more money on this (and give it higher priority).
• Collect data about the nature of the calls...then fix the problems creating the calls.
• If it's going to take a while and you have to put someone on hold for lengthy,  offer a simple way to be called back, and then make sure it works.
• If you're closed, give us the hours you are open.
• If someone leaves a message, ensure they get a call back within 24 hours

Rationing By The Queue is a strategy far too many nonprofits use in order to handle a heavy case load.  In essence, it's making the process of receiving service so cumbersome that only the most dedicated will endure the labyrinth of procedure required to get the needed service.  Bad customer service is just one aspect of this type of rationing.

We can change that....and the phone is a great place to start.

What It Takes To Get A Lake Named After You

Say the name Foster Sayers around here and most people will

reference the lake encompassed by Bald Eagle State Park.

Sayers was just a country kid from Centre County, Pennsylvania. Some called him a bit of a roustabout...a ruffian. Feeling a bit aimless he volunteered for the US Army in the middle of WWII.  Then, in November of 1944 he moved forward on his own initiative to engage two German machine gun emplacements and drawing their fire so the rest of his company could move across an open field and outflank the enemy position. While his mates wiped out the Germans, Sayers was hit multiple times and died that day from his wounds.

Foster Sayers was posthumously awarded our nation's highest honor, the Congressional Medal Of Honor

From his citation:

He displayed conspicuous gallantry above and beyond the call of duty in combat on 12 November 1944, near Thionville, France. During an attack on strong hostile forces entrenched on a hill he fearlessly ran up the steep approach toward his objective and set up his machinegun 20 yards from the enemy. Realizing it would be necessary to attract full attention of the dug-in Germans while his company crossed an open area and flanked the enemy, he picked up his gun, charged through withering machinegun and rifle fire to the very edge of the emplacement, and there killed 12 German soldiers with devastating close-range fire. He took up a position behind a log and engaged the hostile infantry from the flank in an heroic attempt to distract their attention while his comrades attained their objective at the crest of the hill. He was killed by the very heavy concentration of return fire; but his fearless assault enabled his company to sweep the hill with minimum of casualties, killing or capturing every enemy soldier on it. Pfc. Sayers' indomitable fighting spirit, aggressiveness, and supreme devotion to duty live on as an example of the highest traditions of the military service.

 
He was just 20 years old. 

The Damage When Everyone Is Just 'Doing Their Job'

Every now and then one is confronted with something so absurd that it makes one want to

run off and sit in the meadow for a mass dandelion break.

In this case it was last week’s briefing by President Obama’s spokesperson Jay Carney stepped in front of reporters to explain the White House’s role in the IRS playing political favorites and the Department of Justice secretly obtaining the call logs of the Associated Press.  This is not a Red Team/Blue Team commentary….forget the partisan talking points for a moment. What continually depresses most Americans is that this press conference was just another accepted routine bit of Theater Of The Absurd. 

Jay Carney is a smart man.  Has to be in order to get that high up the food chain.  But everyone knows he didn’t believe half of what he was saying that day.  He was Just Doing His Job.   And the journalists sitting in the crowd that day.  Also very smart people at the top of their industry.  Not one willing to stand up and say “Oh this is just BS”.  Instead they reported in dry terms the typical He Said/She Said “balanced” reporting.  They were Just Doing Their Job.

In that context I came across Seth Godin’s recent post concerning Thomas Midgley, the man famous of his invention of CFCs and the idea of putting lead into gasoline in order to reduce engine knock...both environmentally destructive innovations.  However, the patents on those ideas were worth billions.

Of course the introduction of lead immediately had serious health consequences for refinery workers. Yet Midgely and others quick downplayed the effects.  As Godin notes:

An entrenched industry needs the public and its governments to ignore what they're doing so they can defend their status quo and extract the maximum value from their assets.

I would add this also applies doubly so to entrenched government bureaucracies, media outlets, and even third sector advocacy organizations.

Godin continues:

And we give them a pass. Because it's their job, or because it's our job, or because our culture has created a dividing line between individuals who create negative impacts and organizations that do.

People who just might, in other circumstances, stand up and speak up, decide to quietly stand by, or worse, actively lie as they engage in PR campaigns aimed at belittling or undermining those that are brave enough to point out just how damaging the status quo is.

In general, people just want to be left alone to live their lives with as minimal hassle from The Power as possible.   But that is increasingly hard in a world full of Midgleys who succeed in a society which rewards spin and obfuscation.  Godin concludes:

We might consider erecting a statue of him in every lobbyist's office (and college campus and public square and government bureau), a reminder to all of us that we're ultimately responsible for what we make, that spinning to defend the status quo hurts all of us, and most of all, that we have to balance the undeniable benefits of progress, innovation and industry with the costs to all concerned. I can't imagine a better person as the symbol for a day that's not about honoring or celebrating, but could be about vigilance, candor and outspokenness instead.

My suggestion: Use this post to contemplate not what they are doing, but to consider how you are defending the status quo.

Why do older Boards have such difficult time with younger Leaders?

Late night phone call from one Executive Director I'm coaching.  At 28, she falls squarely into that 'Millennial' demographic and thus encounters frequent frustrations with her Board who are significantly older than her (I'd say the youngest Board member is in their early 50's).

I won't go into detail about the nature of her relationship with the Board, but it does read like some stereotypical Generation Gap.   The Board, which actually showed itself willing to take a chance on a bright up-and-comer, has since fallen back into a "What's wrong with these kids?" attitude as the Director implemented needed changes to bring fresh air into a nonprofit that had become stale.

Since I was an advisor to the Board during their executive search, I'm familiar with both sides of this story.    As they neared the end of the hiring process, I alerted the Board that the new ED would bring a large cultural shift to operations and that they'd probably see large turnover in staff in addition to a whole different presence in the community.    This has come to pass.

To help prepare the Board for this cultural shift, I shared with them the following perspective of a young Polish writer about how the expectations of young people have been conditioned by their experiences of the Internet.   They bring a vastly different set of skills as well as needs to the job.   If you have young people on your staff and want them to excel, then read on.

NOTE: I've edited out the introduction so as to get directly to the meat of the piece.   

Piotr Czerski - We, the Web Kids

1. We grew up with the Internet and on the Internet. This is what makes us different; this

Piotr Czerski

is what makes the crucial, although surprising from your point of view, difference: we do not ‘surf’ and the internet to us is not a ‘place’ or ‘virtual space’. The Internet to us is not something external to reality but a part of it: an invisible yet constantly present layer intertwined with the physical environment. We do not use the Internet, we live on the Internet and along it. If we were to tell our bildnungsroman to you, the analog, we could say there was a natural Internet aspect to every single experience that has shaped us. We made friends and enemies online, we prepared cribs for tests online, we planned parties and studying sessions online, we fell in love and broke up online.

The Web to us is not a technology which we had to learn and which we managed to get a grip of. The Web is a process, happening continuously and continuously transforming before our eyes; with us and through us. Technologies appear and then dissolve in the peripheries, websites are built, they bloom and then pass away, but the Web continues, because we are the Web; we, communicating with one another in a way that comes naturally to us, more intense and more efficient than ever before in the history of mankind.

Which Comes First, The Money Or The Outcomes?

By the latest IRS figures, there are 1.7 million nonprofits in the U.S. Of that number, 100,000 (6%) take in over 90% of the revenue …with just 3,000 getting 6 out of every 10 dollars. Of the $1.5 Trillion in annual revenues pouring into the nonprofit sector, nearly 70% comes from government and the rest from philanthropy.

Five decades ago, education organizations received just 5% of the philanthropy pie while  religion received 60% with the rest dispersed to a grab bag of other charities. Today, human service charities receive less than 10% of private giving, and education with 15% is now second only to religion at 35%. Of course, much voluntary action and charitable giving in America takes place ‘off the books’ and out of sight. We don’t have a good handle on the size of it all as these tend to be private matters of the American heart.

In his recent book, Charity Case, Dan Pallotta points out that charitable giving in the US has remained virtually flat for four decades amounting to 2% of GDP per annum. Despite the explosion in the number of nonprofits, the emergence of sophisticated fund development offices within these organizations and the endless series of high profile ‘causes’ endlessly flogged by popular culture, we’re still stuck at 2%.

As has been noted by many in the current debate, increasing giving to 2.5% or even 3% would result in a great expansion in the revenue of nonprofit organizations. The question remains if that new money would produce better outcomes. For despite a tidal wave of taxpayer money flooding into human services since the days of LBJ, we’re still stuck with a poverty rate in the 12-15% range. 

So I understand the need to discuss $$$, but let's not lose sight that for the people we serve, it's outcomes.

Nonprofits Should Lower Education Requirements For Some Jobs From "College Degree" to "High School Diploma"?

Guess which line represents student loan debt

America is in the midst of a debt super-cycle.  Whether  we muddle though to a period of expanded economic growth or descend into a disastrous run of debt-deflation coupled with hyper-inflation remains to be seen.   Possibly, as some economists suggest, we're in for two or more decades of anemic economic growth all the while burdened with expanding promises we've made to the retiring Baby Boomers.

But what we know right now is that many nonprofits (as well as certain local government agencies and small businesses) are having an increasing difficult time retaining entry level staff for certain entry level positions.  While some point to low salaries, the primary driver is the enormous debt burdens of young people entering the workforce.

Student Loan debt continues to skyrocket.  In just seven short years from 2005-2012, the average student debt load ballooned 58 percent -- from $17,233 to $27,253.   This is the only category of consumer debt which did not shrink/slow as a result of the financial meltdown of 2008.  The net result is that young adults are starting their careers with a $400 monthly payment or $4800/yr. In rural regions of Pennsylvania, starting salaries can be as low as $24,000, which after taxes means up to 1/4th of take home pay can be consumed by student loan payments.  It won't take a bright young mind long to figure out the need for a different career or even grad school. 

They won't pay off their balance on the salary you can afford

One way for nonprofits to deal with the problem is to reconsider the educational requirements for certain positions.  We know right now about 1/3rd of college grads are working in jobs which do not require a college degree.   What we need to be thinking about is if a lot of the jobs we have even need to require a college degree.   Think of it.  A high school grad with zero debt will be a lot more satisfied with a $24,000/yr salary than a college grad weighted down with massive debt coupled with an inflated sense of their value to your organization.

Integrity....such a quaint concept

As many know, I love to include thinking quizzes in my seminars/workshops.  One format I often use is providing participants with a list of options on a particular subject (i.e.: Most Valuable Brand Names) and have participants try to pick the top three.

One frequently used is 'Personal Qualities Employers Want From Employees'  which includes a selection such as 'Teachability', 'Curiosity', 'Dependability', etc.  Also on this list of choices is 'Integrity', and here is where I'm seeing a large generational divide.

Most research puts Integrity as #1 or #2 among the personal qualities employers want from staff.  When I play this game with Baby Boomers and Generation X, the vast majority put this quality in their top 3.  However, among Millennials 'Integrity' hardly gets a second look.   It happened again yesterday with a group of college students/recent grads.    They split up into teams of 2 and amongst the eight pairings, only two even mentioned Integrity anywhere among their top three.

The explanations went something along this line:  "Employers want to see results and don't particularly care how you get them".  I don't know if this is true of employers or not, but note that this is the way the next generation views the world.  Their deep cynicism about the workplace contains serious implications for the US economy in the coming decades.

The Four Critical Rights Of Board Members

In the past decade I've witnessed at least a dozen nonprofits where the Chairperson or a small cabal are running roughshod over the rest of the Board.  What's more puzzling is that the rest of the Board sits passively and lets this abuse continue.  Not only is that legally problematic, but it wastes the talents of the smart people sitting in the Board room.

Oftentimes I encounter Board members who do not understand they have legal rights and do not have to accept bad behavior.  Among the four critical rights are:

• You have a right to all relevant information needed to perform your duties.  This includes access to all staff and all documents necessary required to make sound judgments  in pursuit of the organization’s mission.

• You have a right to call special meetings.  If need be, file the request in writing.  The Board then has 60 days to hold the special meeting.

• You have the right to bring court action to challenge any behavior which affects your rights.

• You have the right to dissent.  You have the right to have your dissent officially registered in the meeting minutes.  Furthermore, you have the right to submit a written dissent to be attached to the regular meeting minutes or otherwise registered with the Secretary of the Board. (NOTE: You cannot vote in favor of an action then register a dissent.  Also, if you fail to register dissent you may be judged to have concurred in the decision of the Board)  

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What The Next Generation Leader Will Look Like

We're walking into uncertain times

What type of talent should The Next Generation Executive Director cultivate in current staff?  What should they look for in new hires? The answer is critical to understanding the changes taking place in our current expectation of the Executive Director’s role and what tomorrow's leader should posses.  If you are running a nonprofit, this will impact your  effectiveness, the effectiveness of your organization and ultimately your career. The qualities that an ED values most in their team sets a standard that affects everything from program development, fundraising, collaboration and the long-term success of nonprofit.

Employer surveys over the past four decades document the growing emphasis upon those “soft” skills: communication, dependability, tenacity.  In fact, the transformation is now so complete that basic technical skills requirement no longer rank in the top five of what employers seek.  As one Director explains, “I can teach them what they need to do a good job, but they need those soft skills like persistence in order to do a great job and add real value to this organization.”

There is also data suggesting that priorities in rudimentary job skill requirements are changing in important ways.  In the public, private and nonprofit sectors it is creativity and teachability which dominate over the basic technical competencies in determining success on the job.

Note it doesn’t say administrative skill, passion or even commitment to mission. In the Age of Austerity, this is an interesting shift.  Thus as the economic environment changes, the threat to traditional nonprofit leaders is titanic.  Retrenchment of government budgets, private household debt burdens, the expansion of venture philanthropy, an emerging legal framework for public benefit corporations all represent fundamental core challenges to traditional nonprofits.  Uncertainty is confronting today’s ED, many of who sense a wave of change coming at them and thus generating a concern about the ability of their staff to deal with it.

This is why The Next Generation Executive Director views creativity and teachability as the essential leadership asset that must saturate a nonprofit.

Might As Well Break Your Business Model Before The World Does It For You

The Great Recession has shaken many of the assumptions held by those in charge. Since half of the EDs in America are 55 and older, this means the majority of our leaders cut their management teeth back in the 70s and early 80s, an age which valued basic administrative skill and virtually ignored creative leadership.  When you consider that 40% of human service nonprofits still conduct client intake via pen and paper, you get a sense that even before the recession we were a few decades behind the curve.

It’s not the technical hardware we’re talking about, but the interconnected mindset.  Most nonprofits just use technology to digitize existing systems, sometimes described by management author Tom Peters as ‘paving the cowpaths’. Today the world is massively interconnected — economically, socially, and politically — and operating as a system of systems. For too many Executive Directors, the answer is that their stakeholders are plugged into their individual social networks, but not to the nonprofit. So what does this look like for The New Nonprofit?  

In a networked age of connection and complexity, emerging nonprofit leaders are stressing fresh thinking and continuous innovation at all levels of the organization. The Next Generation Executive Directors are seizing upon innovation as the necessary element for nonprofits get nimble, reinvent themselves and thus remain significant players in the funding and service community.

Kill Your Sacred Cows

So you’re looking for creative talent and innovative thinking.  What does this do for the nonprofit?

• Question your status quo. Most nonprofits have legacy programs that are sacred cows. Often the need to perpetuate the ‘success’ of these efforts stifles creativity within the organization and thus leaving exciting new options open for other nonprofits to advance competing innovations.  The Next Generation Executive Director understands that new revenues will have to come from new sources, and thus be open to disrupt current programs to create mental space for new thinking.

• Rethink your business model. Directors who prioritize creativity as a need in their staff are more likely to pursue innovation by changing their business model. In an age of change, they surround themselves with talent that can think on their feet and move tactically rather than await direction from the laborious traditional strategy/planning sessions so beloved these past few decades.  Strategic Thinking matters more than Strategic Planning.  The Next Generation Executive Director builds staff capacity to favor continuous, rapid-fire shifts and adjustments to their business models.

• Destroy your institutional lethargy. The Next Generation Executive Director will not await certainty…nor near certainty. Nor will they tolerate it in their staff.  Creative leaders will develop a team that fights the bult-in status quo which urges going slow in the name of ‘considering all options’ or ‘waiting for more information’ before making decisions.  Staff must have strong analytical skills to sift through mountains of data and decide what is relevant. These talents drive decision making that is faster, more precise, and even more predictable.  Creating this type of staff environment takes a combination of vision, strategic awareness and intuitive confidence.  It also requires a certain tolerance of failure as innovation brings risk.  However, in an era of rapid change innovation brings far less risk than maintaining the status quo.  

Any questions?

The Next Generation Executive Director must create a culture which is far more transparent and entrepreneurial. The people in the organization must believe that the changing economy is an opportunity, not a threat. The New Nonprofit understands that risk is to be managed, not avoided. The Next Generation Executive Director is one who can build a fluid business model which gives staff the space to innovate and create.

Something significant is happening to the American economy and to the nonprofit sector. In response to powerful external pressures and the opportunities that accompany them, The Next Generation Executive Directors are redefining the job. They are leading the sector in showing to the rest of us that in an age of uncertainty that there is a creative path forward.  There is a new generation emerging. Is that you?