Monday, April 25, 2011

Organizational Strength through Diversification

By Virgil R. Carter

With the emerging indications of economic strengthening, it may be time for CEOs, staff and volunteer leaders to do a quick check on the strength of their organizations. Is your organization economically strong? Do you have the protection and advantage of economic diversification?

A recent Strategy+Business article, “A Continuous Quest for Economic Balance”, by Richard Shediac, Chadi N. Moujaes and Mazen Ramsay Najjar, focuses on the important economic diversification of countries. Much of what they write has equal application to the strength and well-being of many of our non-profit organizations.

For example, the authors write “Countries can be over-concentrated in any number of ways—for example, relying too heavily on large companies, exports, or foreign investment—and even countries that appear extremely diversified may still be vulnerable to unexpected events.” How applicable is this to your organization?

A quick check of your annual budget will reveal the sources of your revenues. If your major source of revenue accounts for more than about 35% of total revenues, you may question whether or not there is sufficient diversification (and protection) for your organization’s well-being. If a single source of revenue counts for the majority of your revenue flow (over 50%) your organization may be at severe risk in the event of some disruption to the source of revenue. Risk may be reduced and economic strength will be gained through economic diversification.

How to achieve strength through improved economic balance? Certainly, continuing to support the elements that are at the center of an organization’s financial strength is obvious. The answer for successful diversification is not simple. And it is not achieved in a single step. Diversification is a continuous, never-ending journey. Perhaps the most successful journey is one that looks to increase the return of other key existing revenue sources, while also looking for new opportunities that are consistent with the mission of the organization. Innovation and entrepreneurial efforts are a key in this regard.

For many non-profit organizations, economic strength through diversification is not easy. No organization can be successful, however, without economic strength. And if a conscious effort for needed diversification isn’t made, economic strength will never be achieved. Is your economic balance where you’d like it to be?

For the full Strategy+Business article:

Monday, April 18, 2011

Make Your Organization’s Culture Work for You

by Virgil R. Carter

There’s a saying in non-profit organizational leadership that says “culture eats strategy for lunch”! Experienced volunteer and staff leaders of non-profit organizations quickly learn that their organization’s culture is a formidable force. It is so powerful that it can stop logical and needed improvements in their tracks. Culture can perpetuate outmoded and ineffective programs for years. How does a leader deal with organizational culture?

Organizational culture can be defined as those mind-sets, beliefs, values and behaviors that determine “how we see things around here”. Organizational culture is an unspoken, but shared, understanding of the way the organization functions, how individuals fit into the organization, the characteristics of their organizational roles, and how their roles are valued. Culture is a major determinant of roles and performance—individual and organizational.

In an article, “Stop Blaming Your Culture”, in Strategy + Business, authors Jon Katzenbach and Ashley Harshak write, “When a new leader’s strategy puts the culture of a company at risk, the culture will trump the strategy, almost every time”. They point out that when your strategy and culture clash visibly, more likely than not, the culture is trying to tell you something about your own leadership philosophy.

What to do? The authors suggest that there is an effective way to face cultural challenges. Instead of blaming one’s culture, it can be used positively. “View culture as an asset: a source of energy, pride and motivation…Figure out which of the old behaviors embedded in your culture can be applied to accelerate the needed changes”. Look for ways to counterbalance and diminish other elements of the culture that hinder change. Using culture as a positive force will help “initiate, accelerate and sustain truly beneficial change”, with much less conflict, and with positive results, than one might expect.

For the entire S+A article, see

Monday, April 11, 2011

Creating and Utilizing Effective Senior Management Teams

by Steven H. Davis, CAE, Society of Exploration Geophysicists

Evolving a group of predominantly Type-A personalities into a fully effective team can be a challenging proposition. Through the years, I have garnered my own sense of how that can best be achieved …which I have labeled (for myself) three-part harmony.

Part one is understanding the players. To be sure, the playing field that is the Senior Management Team’s meeting room presents a great opportunity to assess individual team members and group dynamics in general. Then, the chief staff executive needs to proactively act on those assessments.

And when interventions of the mentoring and arbitrational sort prove ineffective, changes in the composition of the Senior Management Team should be considered. The alternative is to sacrifice group synergy and creativity for the sake of maintaining a superior talent who cannot play the team game. That said, my step one in evolving an outstanding Senior Management Team is composing it of the right people.

Part two is putting adequate resources (time and potentially money) into place to grow the group as a team. I have never witnessed a perfect team in action, nor will I ever. Teamwork comes naturally for some, but not for all; this kind of synergy only comes from a constant effort to experience it and replicate it. And, I am convinced, this only happens when the learning process is embraced as an ongoing and forever pursuit.

Carving out time in Senior Management Team meeting agendas to discuss “How Can we be More Effective?” can help. Hiring a consultant to periodically facilitate a team retreat for the purpose of working together and getting everyone on the same strategic page can help. Scheduling team-building programs and activities can help. The key for me has always been to maintain this focus continuously …toward finding new and effective ways in which to strengthen the sense of team. Investing in the team will yield a better team.

Part three is utilizing the Senior Management Team effectively. Meeting weekly for the purpose of getting updates from everyone is certainly helpful, but it is not at all strategic. Using this weekly meeting to get issues and opportunities on the table and explored can be very strategic. And, this level of participating in routine puzzle-solving discussions can be a stimulating and gratifying experience …of the sort that opens creative doors and therefore allows creative needs to be met. This is when teams grow together, and this is when their impact reaches next levels …when they know they can make a greater difference together.

So, my formula for growing a better Senior Management Team is to ensure the right people are on the bus, continually investing in team growth, and utilizing that team effectively.

Monday, April 4, 2011

Three Processes to Align Mission & Money

by Virgil R. Carter

Does your organization have an annual process to align mission and money? There are at least three interlinked processes that are required. Here’s a brief look at each.

1. Innovation: An annual innovation program, with staff and budget, is a good approach for encouraging and rewarding ideas for new programs, products and services. One approach is to organize the process as an on-going annual grants program, where written proposals are reviewed and approved, if deemed worthy. Care must be taken to carefully spell out program objectives so that it’s clear the program is for new ideas, and not to perpetuate the status quo. Review of proposals must also be carefully based on the program objectives, so as not to simply fund continuation of existing activities.

2. Existing Program Annual Review: Most non-profit organizations allocate all of their available resources (financial and human) in support of annual operations. Thus, without the reduction and/or “sunset” of some annual programs, products and services, there is no capability to add new activities through innovation or any other means. One approach for annual program review is to implement a customer satisfaction review process, using the “voice of the customer” as a basis for gathering and evaluating data as to which programs, products and services are valued by your customers. Goods and services not valued by customers each year are prime candidates for reduction and /or replacement.

3. Annual Program Planning/Budgeting: Finally, with information from the previous two activities, an organization may conduct a rational annual process for the planning and budgeting of activities for the following 1, 2 or 3 year periods. Instead of the annual budgeting cycle leading the process, it logically is the final phase of review and planning for the future. This also helps to reduce status-quo program competition for a larger and larger share of the financial pie every year.

Aligning mission and money is important for a number of reasons. Here are two:

- Non-profit organizations need to keep pace with their critical changing markets;
- In most cases, there are never enough resources for everything, and thus some priorities have to be established.

Thus the old adage is true for many non-profits, “If something new is to be added to the wagon, then something old must be removed.” Are your mission and money aligned?