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.