Better Performance through Data

By Virgil Carter

Unfortunately, many non-profit organizations are not known for their data-based research and decision-making. Instead, it seems, volunteer leaders may often arise in a quarterly meeting of the Board of Directors, make a motion, second and vote favorably for a decision to commit sizable amounts of staff time and money for an unstudied “good idea”! This may not be the best way forward for improved organizational performance. So what about the idea of better organizational performance through data?

“The ABCs of Analytics”, a recent Strategy+Business article by David Meer argues that “big data” can drive competitive advantage if companies follow a few timeless principles. Meer writes that “any analysis of data that stops after asking “what”, which is already a big undertaking, isn’t analytics. You have to ask “why” and “what next?”
According to Meer, there are three pragmatic lessons that have always been at the core of a strong analytics program, guiding data analysis initiatives:

• Rely on theory-based approaches, rather than blind data mining: The starting point should be an explicit hypothesis about customer needs and how your organization creates value for them.

• Strive for a holistic view of customers and markets: Smart companies look holistically at their markets and customers, using at both traditional and new sources of data about both markets and customers.

• Learn by doing: As an organization gains new insights from their data gathering and analysis, it will be important to be open to new approaches and to challenge sacred cows. Start data gathering slowly, with a few pilots; learn to walk before attempting to run!

“Data gathering and analysis, properly done, can be a major investment”, the author writes. It takes finding, assembling and harmonizing the data by specialists trained to do the more advanced work, find the hidden patterns, interpret them and turn them into insights the organization can put to use.
The process can be a manageable one, Meer concludes, “in fact, it’s been my experience that once organizations start investing in analytics, and they almost never stop”. “The things they learn drive improvements in the business that more than pay for the effort!”

For the full article, go to: http://www.strategy-business.com/article/00150?pg=all

Brilliant Business Quotes

Virgil Carter
As we look to a new business year and the many challenges ahead, it may be good to listen to the experienced business advice of the world’s richest investor, Warren Buffet.  As reported in the Herald Sun, here are some of Mr. Buffet’s most common quotes and some lessons to be learned from them.

1. “Rule No. 1:  Never lose money.  Rule No. 2:  Never forget rule No. 1.”:  While even Buffet has lost money on his investments, over the long term he has benefited by being conservative with his investment and avoiding fads.
2. “It is better to hang out with people better than you…you’ll drift in that direction”:  Never be afraid to ask successful people what they did and how they did it!
3. “I don’t look to jump over 7-foot bars:  I look around for 1-foot bars that I can step over”:  Too often investors (and leaders) go for a single big win rather than do the many small things that are already available such as having a strategy, reviewing regularly and diversifying.
4. “I buy on the assumption that they could close the market the next day and not reopen it for five years”:  The quote is about one’s mindset and decision-making, with the ability to think long term.
5. “Someone’s sitting in the shade today because someone planted a tree a long time ago”:  A favorite Buffet quote illustrates why taking a long-term view is important.  Many of today’s luxuries are because someone else had a long-term vision and was prepared to invest for the future.
6. “Price is what you pay.  Value is what you get”:  The price of an investment can mask its true value because of factors such as emotion, market booms or busts, and even tax consequences.
7. “We simply attempt to be fearful when others are greedy and to be greedy when others are fearful”:  Perhaps Buffet’s most famous quote, which is at the heart of his belief in avoiding the herd mentality.
8. “The investor of today does not profit from yesterday’s growth”:  Many investors like to jump on an investment that’s already doing well—that’s why we have booms and busts—but they really should look to the future.
9. “Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down”:  Waiting for the right time to buy can be an opportunity within itself.
10. “If a business does well, the stock eventually follows”:  The key for sharemarket investing is to find good-quality businesses that will grow over time.

For the full article, go to:  http://www.heraldsun.com.au/money/investing/warren-buffetts-wise-words/story-e6frfh66-1226496064311

Better Performance Through Data

Virgil Carter

Unfortunately, many non-profit organizations are not known for their data-based research and decision-making.  Instead, it seems, volunteer leaders may often arise in a quarterly meeting of the Board of Directors, make a motion, second and vote favorably for a decision to commit sizable amounts of staff time and money for an unstudied “good idea”!  This may not be the best way forward for improved organizational performance.  So what about the idea of better organizational performance through data?

“The ABCs of Analytics”, a recent Strategy+Business article by David Meer argues that “big data” can drive competitive advantage if companies follow a few timeless principles.  Meer writes that “any analysis of data that stops after asking “what”, which is already a big undertaking, isn’t analytics.  You have to ask “why” and “what next?”

According to Meer, there are three pragmatic lessons that have always been at the core of a strong analytics program, guiding data analysis initiatives:

·         Rely on theory-based approaches, rather than blind data mining:  The starting point should be an explicit hypothesis about customer needs and how your organization creates value for them. 

·         Strive for a holistic view of customers and markets:  Smart companies look holistically at their markets and customers, using at both traditional and new sources of data about both markets and customers. 

·         Learn by doing:  As an organization gains new insights from their data gathering and analysis, it will be important to be open to new approaches and to challenge sacred cows.  Start data gathering slowly, with a few pilots; learn to walk before attempting to run!

“Data gathering and analysis, properly done, can be a major investment”, the author writes.  It takes finding, assembling and harmonizing the data by specialists trained to do the more advanced work, find the hidden patterns, interpret them and turn them into insights the organization can put to use.

The process can be a manageable one, Meer concludes, “in fact, it’s been my experience that once organizations start investing in analytics, and they almost never stop”.  “The things they learn drive improvements in the business that more than pay for the effort!”

For the full article, go to:  http://www.strategy-business.com/article/00150?pg=all

Enduring Ideas: Understanding Your Organization

By Virgil R. Carter

What makes organizations what they are?  Why are some organizations radically different than other organizations?  As a CEO or senior staff executive, it’s up to you to understand and help lead your organization—but how do you do it?  Are you responsible for a specific outcome in your organization, for example, innovation and constructive change?  Are you thinking of a career change?  Perhaps you’re considering an organizational change, and are thinking about how to find an organization aligned with your own experience and values. 

If you fit any of these situations, a McKinsey Quarterly article may be interesting.  “A Watershed in Thinking About Organizations” is an April 2008 McKinsey article that revisits their 7-S Framework, introduced in the 1970s.  The interactive article, the first in a series, “reflects on 7-S…introduced…to address the critical role of coordination, rather than structure, in organizational effectiveness.”  Readers can click on any of the seven elements in the framework and listen to McKinsey’s description of the element.

 

The article can be found here: 

http://www.mckinseyquarterly.com/Strategy/Strategic_Thinking/Enduring_ideas_The_7-S_Framework_2123_abstract

The article goes on to note “While an increasingly complex business environment has rendered some (organizational) models obsolete, others have endured.”  McKinsey says the series presents “frameworks that are as relevant today as they were when first created.”

The 7-S framework “maps seven interrelated factors that influence an organization’s ability to change—shared values, skills, staff, strategy, style and systems—and shows how these forces interact”.  The framework suggests that achieving progress in any one part of the framework “will be hard to achieve without progress in the others.”

The 7-S framework provides an excellent model for evaluating and understanding an organization.  And it provides a useful method for analysis of one’s preferred individual leadership traits.

Here’s an illustration of the 7-S framework:

Trust and be patient…..

By Steven M. Worth

Sound familiar?  If any of you are like me, these wise words are often difficult to heed.  Whether you are a parent, supervisor, partner, or teammate it may be hard not to have anxiety about how others will perform.  Will they be on time?  Will they meet expectations?  In effect, can I trust them?

 

As a part of our interview process through which we created the case studies of successful partnerships that were used in The Power of Partnership—Principles and Practices for Creating Strategic Relationships Among Nonprofit Groups, For-Profit Organizations, and Governmental Entities (Plexus Consulting Group, ASAE and the Center for Association Leadership and the US Chamber of Commerce, 2008) I sometimes provocatively asked what a partner would do if their counterpart in the partnership were to try to take advantage of them in some way.  The response I got was invariably the same.  After thoughtful reflection, each one of them concluded with words like “they wouldn’t do that—or that is not something they would do.”  They trusted because they had done their due diligence prior to forming the partnership and because they had seen proof of good faith in the day-to-day performance of duties small and large. 

The public servants and business and association leaders I respect most have that same quality of equanimity when waiting upon a decision from their board of directors, the electorate, or a potential client or business partner.  We all know the type—the diligent and thoughtful worker who will spare no pains in preparing a report or presenting a case and then who can sleep soundly the night before a decision, knowing they have done all they could.  Whether consciously or not, they have taken Reinhold Niebuhr’s prayer to heart:  God grant me the serenity to accept the things I cannot change; courage to change the things I can; and wisdom to know the difference.

The curious thing about the lack of trust is that it tends to bring on that which we fear most.  I recall a famous experiment a number of years ago in which students taking tests were monitored for cheating by cameras that they did not know were there.  The experiment found that those classrooms that were most severely monitored by proctors walking through the rows of desks regularly had more incidents of cheating than classrooms in which the teacher had left the room or in one instance where the monitoring teacher was literally blind.  In these instances, we could see that students rose to or sank to the levels that were expected of them.        

Perhaps we should contemplate these thoughts and see if they bring us peace during this holiday season.   

Wrestling with Burnout

By Virgil R. Carter

As a CEO, and the top leadership interface between your organization’s members, customers and staff, have you experienced burnout?  Do you know CEOs who have gone through burnout?  The role of the CEO is one that consists of constant visibility and pressure for successful performance, successful communications and successful relationships.  And top leadership is a lonely position; there’s no one in the organization to share the natural challenges and tensions that are part of the job of CEO.  Thus, it’s no surprise that executive leaders, with the challenge of being responsible for planning and performance of their organizations, can become victims of burnout.  The continuous, never-ending burden of top leadership can wear anyone down.

Are there some ways to reduce or avoid burnout? 

A recent Internet article from LeaderPoint notes that while the weight of being in charge can overcome the most successful leaders, burnout is often a function of not delegating and working through others effectively.  Harvard Business Review blogger John Baldoni is quoted as stating that the “best way to overcome the drive than made (CEOs) successful in the first place—the relentless pursuit of perfection—is to shift focus from one’s own success to the success of the executive team.”

Here are some suggestions from the article to help avoid burnout:

--Leading through others:  Being a CEO widens the scope and increases the magnitude of the results to be achieved.  Assign others the significant outcomes so that the CEO is not the bottleneck, consumed with personal problem-solving.

--Knowing everything:  No CEO can do everything well.  Accepting that no one can possibly know everything allows one to ask more questions, learn more and allows the work to remain with those show should be doing it.

--Enabling others:  Motivating others is a challenge.  Sometimes it works and sometimes it doesn’t.  Instead, focus on the work to be done, the desired outcome and assign these to key staff.  Big jobs with significant outcomes tend to motivate people.

The bottom line is about getting results, consistently over time.  It’s hard to do that without the support and assistance from others. One of the best ways for CEOs to achieve success is to drop their invincibility posture.  Successful leadership and successful organizations are not a solo act.

To read the article “Avoid Burnout by Focusing on Your Team”, by John Baldoni, go here:  http://blogs.hbr.org/cs/2010/11/avoid_burnout_by_focusing_on_y.html#

Three Steps to a Better Executive Team

By Virgil R. Carter

Many non-profit organizations and their CEOs depend on a staff executive team to help lead the non-profit to be a consistently successful organization.  The day of a “one person” leadership team, in most organizations, is long gone.  Are there ways for the executive team to function better?  According to an article in McKinsey Quarterly, authored by Michiel Knuyt, Judy Malan and Rachel Tuffield, “few teams function as well as they could”.  The authors write that there are three important steps that can be taken for more effective executive teams.  Consider the following:

--Get the right people on the team…and the wrong ones off:  Remember the advice to “get the right people on the bus”?  The matching critical ingredient is to help the “wrong” people find a new and different opportunity that more closely fits their capabilities. CEOs are responsible for selecting the staff executive team.  The authors note that this responsibility “…typically requires conscious attention and courage from the CEO, otherwise, the top team can under deliver for an extended period of time.”  Without the right people, the executive team’s performance will be limited.

--Ensure the team works on only what it can do:  The purpose and focus of the top staff team is critical.  It’s up to the CEO to communicate the purpose and focus of the executive team, and to closely monitor the team’s adherence to the purpose and focus.  Like committees everywhere, left alone the team will look for things to do that seem interesting and that justify the team’s existence. Thus, purpose and focus must be carefully drawn and matched to the unique needs of the nonprofit organization.  Often, projects with critical cross-functional or cross regional programs provide valuable work for the top team.

--Keep team dynamics and processes positive and productive:  CEOs must give “unrelenting attention” to the productive collaboration of the top staff executive team.  It is all too common for executive teams to become dysfunctional over opposing priorities, entrenched thinking, competitive views, and the like.  CEOs must lead their executive teams, setting the example and addressing the dynamics of their team, while dealing with concrete business issues.

With a staff executive team that is willing and able to effectively do its work, a non-profit organization can achieve a major performance improvement.  For the full article, see https://www.mckinseyquarterly.com/Organization/Talent/Three_steps_to_building_a_better_top_team_2743

Six Questions for Globalization: Part Two

By Virgil R. Carter

Is your non-profit organization considering globalization?  Or have you already begun efforts towards becoming a global organization, and are wondering what’s next?  Last week we looked at three important initial questions about non-profit organizations and globalization.  Here’s the second part of six key questions which may help guide your organization’s discussions and decisions about going global.

1. Are your globally available goods and services:  a) timely; b) affordable; c) culturally and regionally relevant; d) available in the host country language?

The importance of this question is probably self-explanatory, but many nonprofits haven’t made the necessary important investments in their goods and services to ensure that they offer global value in a global market.  It is all too common for U. S. nonprofits to believe that because they offer goods and services, there is interest and demand outside the U.S.  Goods and services that are accessible in a timely manner, that have regional content, and have opportunity for host country language are among those that clearly bring highest value to the host country markets and customers.

2. Does your association work with, for, against or ignore similar host country associations?

Sooner or later each association must have a policy and a business plan that provides consistent guidance in situations when there are similar associations, providing similar goods and services, elsewhere in the world.  Cooperation and mutual respect is always a good goal, but it can be challenging to achieve. An effective approach for building good relations among similar global organizations is to launch annual exchange visits, followed by low-risk, low-threat joint activities.   An early atmosphere of camaraderie and mutual purpose goes a long way towards building good long-term working relationships.  Once established, these relationships will be immeasurable in maintaining cooperation and mutual respect.

3. Are you patient?

Globalization is a challenge.  It’s usually a substantial investment, and it’s generally not a quick return on investment.  It’s a challenge to prepare a suitable business plan and to use resources wisely.  It’s a challenge to show measurable results.  Patience is required (along with sound business planning and processes).  Be prepared and prepare your volunteer leaders.  You will be tested.

For those who have successful answers to these questions, you will find globalization to be a rewarding way for your association to continue to do business and to provide the leadership that is the basis for your mission.  Good luck!

Transparency

By Steven Worth

Transparency is the equivalent of Salk’s polio vaccine of the 1950s.  It is the miracle cure for many serious and aggravating problems faced by managers of nonprofit and public service organizations. 

Having problems getting your volunteer leaders to meet their deadlines and in general to focus on what they promised to deliver?  Develop publicly accessible dashboards showing progress against goals as identified by those who originally took responsibility for accomplishing them.  Public recognition is the greatest reward you can give your volunteer leaders—it is also the most effective goad to getting them to do what they promised within the timeframe that they originally set!

Are the ethics of a situation problematic and hard to understand for the leaders it concerns?  Make the issue public and see if the ambiguities of the situation don’t start to sort themselves out!

I always liked the British Parliament’s way to deal with any perceived conflicts of interest for their elected representatives.  For them there is no such thing as a conflict of interest as long as the elected representatives publicly list the origin and reason for of all the money they have received in any given year. 

During the infamous witch hunts of the 1950s McCarthy hearings, it was the beginning of the end of Senator McCarthy’s demagoguery when Maine’s Senator Margaret Chase Smith called him out on the Senate floor with the resounding words, “Finally sir, have you no sense of decency?”

Transparency works in organizations that are dedicated, or which should be dedicated, to the public good because it appeals to all people’s fundamental sense of what is right.

Six Questions for Globalization: Part One

By Virgil R. Carter

Six Questions for Globalization

Is your non-profit organization considering globalization?  Or have you already begun efforts towards becoming a global organization, and are wondering what’s next?  Here’s the first part of six key questions which may help guide your organization’s discussions and decisions about going global.

1. What does success look like?

Has your organization reached agreement on what constitutes success?   Establishing and communicating clear, measurable benchmarks for success—strategic and operational--may be one of the single greatest ways of realizing success in globalization, and avoiding the criticism inherent in attempting worldwide leadership.  Identifying success measures also supports continuing assessment of whether or not your association has the proper business model and business plans needed for successfully achieving the measures.  Success measures and business models go hand in hand.  It’s hard to have one without the other.

2. Does your organization offer open and equal leadership opportunities for members, regardless of geography?

Members and customers, regardless of geography, want to have something to say about (and participate in) the direction of the organization they support, and the quality and timeliness of your goods and services.  Otherwise, they let their feet do the talking, and walk to another association that is more open and responsive.  Global organizations have to find ways to share in leadership opportunities, regardless of geography.  When was the last time your board’s chairman was from an emerging market country, or you held a board meeting in an emerging market country? 

3. Should dues differ and reflect the annual salaries and earnings of members in emerging market and other nations?

Airline tickets and hotel reservations are no longer are priced at a single rate for all users.  World-wide air travelers know that air fares purchased outside the U.S. tend to be cheaper than those of U.S. carriers (thanks to host government subsidies in many cases).  Why should association dues be any different, especially when your annual dues in U.S. dollars may represent a host country amount equal to perhaps 20-25% of the annual salary of a potential member?  The opposite side of this issue, however, is that expenses to support a new or renewing non-U.S. member generally exceed those of a U.S. member (at least for associations whose major business units reside totally in the U.S, and whose service must originate from the U.S.). What to do?  Successful global organizations are likely to be those whose dues recognize the differential abilities to pay, and who can provide needed services and value outside the domestic U.S.

Next week we will cover the last three of the key questions towards going global.

Planning Better Communications

By Virgil R. Carter

How well do you, you senior staff executives and volunteer leaders communicate?  Are you all on the same page with the same communications messages?  Do your communications provide clarity about your organization’s values and priorities for the coming year?  Have you identified key internal and external audiences for whom effective communications are important for your organization? 

Communications are vitally important for effective organizations.   And for successful leadership.  A challenge for many non-profit organizations is that each individual leader may speak about different issues and seemingly unrelated priorities.  The result can often be mixed messages and confusing directions from the organization.  In addition, most non-profit organizations have a wide range of audience segments.  These segments are usually interested in some messages (and media) and not others.  Often, in the case of individual members, this is a case of “I want what I want when I want it (the way I want it).”  There is no simple, single solution for communications with diverse members and customers.  Audiences are not all a size 6, living in one geographical area, with a united sense of priorities!

What to do?  One useful proactive tool is creation of an annual communications plan.  Conceived at the outset of each fiscal year, and modified as may be necessary due to circumstances during the year, the plan contains a small number of high priority messages for the year.  For example, the messages might focus on new technical information, strategic priorities, and/or association achievements which improve the value proposition of the organization for its members and customers. 

A communications plan also includes a schedule of key events and appropriate media to reach desired audience segments during the year.  Your public relations staff can use the communications plan and schedule as the guide for creating key annual messages, presentations and articles throughout the year for volunteer and staff leaders.

For an annual communications plan to work, however, it must have the understanding and support of senior volunteer leaders, senior executives and communications staff.  These are the folks who will be doing most of the communications during the year.  Volunteer and staff leaders must understand that their individual, personal messages are secondary to the consistent presentation of the important messages from the organization each year.   This is what makes for clearer, more consistent and more effective communications, which reach more and more of your important members and customers.

Reaching your members and customers effectively is aided by repetition. Yes, I said repetition!  Repetition enables more audiences to become more aware of and understand important communications. Have you ever wondered why commercials are so repetitive?  One-time messages simply don’t have much lasting impact.

If you want to improve your association’s communications, try working with your volunteer and staff leaders to create an annual communications plan, and update it every year.  It’s one of the surest ways to reach members and customers—even the members who are challenging to reach. 

Non-profit Volunteers & Staff: An Essential Team

By Virgil R. Carter

Successful non-profit organizations are often those whose volunteers and professional staff work effectively together as an essential team for the organization’s success, year after year.  Yet, we often see examples of non-profit organizations in turmoil, with tenuous and/or tension-filled relationships between volunteers and staff.  What can we learn from these less-than-ideal relationships and how can non-profit organizations avoid adversarial relationships?

A good place to begin is to an understanding of volunteers and professional staff.  In professional societies and trade associations, volunteers usually care passionately about the organization and its mission.  Many volunteers are leading figures in their field and are subject-matter experts.  At the same time, many volunteers may have little leadership experience in the unique setting of nonprofit, volunteer-led organizations.  And volunteers, while knowledgeable in the setting of their personal interest, may have little knowledge or interest in the organization as a whole.

By comparison, many professional staff, particularly those at senior executive staff levels, spend years expanding their enterprise-wide knowledge of and leadership in nonprofit organizations. Many senior staff executives actively participate in the broader nonprofit world. Long-time staff also comprise the “corporate memory” of an organization, knowing what works and what doesn’t.  And staff are clearly accountable for organizational performance, whereas volunteers may place higher priority on collegiality than accountability for results.

Compounding this disparity of knowledge, experience and varied roles is the fact that job descriptions and responsibilities of volunteer leaders and professional staff often are highly ambiguous. Even where there are written policies, there may be many more unwritten policies actually determining who does what, when, and how.  Sound familiar?

How can successful volunteer-staff teams be organized and maintained in non-profits?  One approach is creating and maintaining a volunteer-staff partnership, with clear roles for both volunteers and staff, built on two categories of activity essential for many non-profit associations:

·         Mission-driven activities: These activities tend to represent the purpose of the organization. These activities motivate volunteers and are where most want to be active. These activities, which are rightly led and populated by volunteers, may produce few revenues and may be largely subsidized. This financial situation may even be coupled with volunteer assertions that association activities shouldn’t produce net revenues over expenses, to keep volunteer expenses to a minimum.  Mission-driven activities are critical. There is nothing wrong with subsidized activities, so long as revenues from other sources are available for the needed subsidies.

·         Business operations activities: These activities are where most of the positive revenue is created to subsidize mission-driven activities. Because they are profit-and-loss oriented, they must be staff led and managed, since volunteers simply have neither the access to timely information nor the available time to manage business affairs in the timely and agile manner required. A caution: business activities must be related to the mission, as much as subsidized activities.

Establishing clear roles and accountabilities for these two categories of association activity enables volunteer leaders and CEOs to play to their respective strengths. Such clarity, coupled with good communications, enables effective leadership, improved relationships, and strengthened organizational performance.

Leadership role clarity is an important step to transform tension between volunteer leaders and CEOs into essential teams--productive partnership. The results—more effective volunteers, stability in staff performance, and more successful, enjoyable teams—make the successful volunteer-staff partnership worth everyone’s effort.

How to Strengthen Your Organization

By Virgil R. Carter

The last quarter of the year is when many CEOs, staff and volunteer leaders make a quick check on the strength of their organizations.  For organizations whose fiscal year is also the calendar year, the last quarter is when the formal budgeting process takes place.  This is the time of year when an organization’s strategic plan and budgeting are linked together—how to use organizational resources to achieve the organization’s strategy.  So, how do you strengthen your organization for the coming year?  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:  http://www.strategy-business.com/article/00064?pg=0

Helping Your Board to Be More Effective: Five keys for high-level governance

By Virgil R. Carter

Despite the great diversity among non-profit organizations, we all seek effective governance by our boards. 

A critical starting point is to recognize what a vital resource time is. Recruiting new board members is challenging because volunteers are concerned about drains on their time. Governing well is critical because a board’s time together is limited. Thus, how you and your board use your time matters.

No one wants to be associated with a governing board that is unsure of its role, unproductive, boring, or contentious.  Effective (and enjoyable) governing boards tend to be forward-looking, and provide the maximum effective (and enjoyable) leadership, especially when time is limited.  Effective boards tend to focus on the one role that they, and no one else, can fulfill:  organizational strategy and priorities designed to fulfill the organization’s mission.  What are strategic boards?  Strategic boards spend the majority of their time identifying broadly important outcomes, setting priorities, ensuring needed resources and monitoring the way the staff and other volunteers implement major initiatives designed to achieve the desired strategic outcomes.

Here are five steps volunteers may take for an effective, productive, and rewarding governing board.

1.      Define success. Establish and practice a shared definition of organizational success. No matter how well an organization may perform in any 12-month period, if it can’t perform effectively year in and year out, it can’t really be called a successful organization. Thus, success has a lot to do with organizational consistency and continuity over time.

2.      Understand your core assets. Every organization has core assets.  Typically they include:  1) knowledge, 2) community, and 3) advocacy. These are the resources for an organization’s accomplishment of its mission.  Volunteers and staff must be strategically focused on the welfare of core assets that cause members and customers to value the organization.

3.      Think the unthinkable. Ours is a rapidly changing world in which we face unprecedented competition. To remain both up-to-date and competitive, focus on and prepare for the unthinkable—both opportunities and threats. Effective boards consider the one thing that would most revolutionize their organization and the one thing that would most jeopardize it. Thereafter, boards focus strategically to realize the opportunity and head off the threat.

4.      Set priorities and monitor them. Resources are always finite—there are never enough. So develop strategic priorities and communicate what is truly important. To maintain a strategic perspective, boards must think in terms of what is important, not how to achieve results. The staff and others of the organization’s operational side are the ones to be held responsible for executing the action. 

5.      Establish a respectful staff partnership. The professional staff of an organization offer important resources—so important that it may be impossible for a board to be truly strategic without them. For example, staff members may have access to knowledge, contacts, and resources that may be unknown to a board. The staff is uniquely positioned to help develop and implement a definition of organizational success that’s built upon consistent performance, year after year.

Effective boards are both enjoyable and productive where it matters most:  achieving the organization’s mission.

Innovative Thinking?

By Virgil R. Carter

 

Is innovation important in your field?  Is your organization considered innovative?  Just how do innovators think? In a recent article, Harvard Business Review contributing editor Bronwyn Fryer reported on an interview on innovative thinking.  Fryer conducted a question-and-answer session with Professors Jeff Dyer of Brigham Young University and Hal Gregersen of Insead to explore how the "Innovators' DNA works”.

 

Dyer and Gregersen conducted a six-year study surveying 3,000 creative executives and conducting an additional 500 individual interviews. The study found five "discovery skills" that distinguish the executives.

 

--Associating:  a cognitive skill that allows creative people to make connections across seemingly unrelated questions, problems, or ideas

 

--Questioning:  an ability to ask "what if", "why", and "why not" questions that challenge the  status  quo and open up the bigger picture

 

--Closely observe details:  particularly the details of people's behavior. –Experiment:  trying on new experiences and exploring new worlds

 

--Ability to experiment:  always trying on new experiences and exploring new worlds

 

--Networking:  connecting with smart people who have little in common with them, but from whom they can learn

 

“Overall, associating is the key skill because new ideas aren't created without connecting problems or ideas in ways that they haven't been connected before”, according to Dyer.

 

Dyer commented that one might summarize all of the skills they’ve noted in one word: "inquisitiveness." “I spent 20 years studying great global leaders, and that was the big common denominator. It's the same kind of inquisitiveness you see in small children”, he commented.

 

Dyer asked the executives in their study to tell them about how they came up with a strategic or innovative idea. That one was easy for the creative executives, but surprisingly difficult for the more traditional ones. Interestingly, all the innovative entrepreneurs also talked about being triggered, or having what one might call "eureka" moments. In describing how they came up with a product or business idea, they would use phrases like "I saw someone doing this, or I overheard someone say that, and that's when it hit me."

 

In conclusion, Dyer added, “We also believe that the most innovative entrepreneurs were very lucky to have been raised in an atmosphere where inquisitiveness was encouraged. We were stuck by the stories they told about being sustained by people who cared about experimentation and exploration.”

How to be a Truly Global Organization

By Virgil R. Carter

Before the 2008 downturn in the world’s economies, globalization of commerce developed at a faster pace than in any time in history.  With the slowing of our economy, one may wonder whether going global has any positive potential.  However, the experience of global organizations suggests that the global marketplace is still the place to be.  While growth may have slowed in the “developed” countries, growth and expansion is still taking place in China, India, Russia, Brazil and other emerging market countries, according to a recent article in Strategy + Business. 

According to authors C. K. Prahalad and Hrishi Bhattacharyya, the “problem is not globalization, but the way our current institutions are set up to respond to this new demand.  The prevailing corporate operating model does not work well with the structural changes that have taken place in the global economy”.

According to the authors, “most companies are still organized as they were when the market was largely concentrated in the triad of the old industrialized world:  the U.S., Europe and Japan”.  One of the “most prevalent and pernicious of these models” is the one where companies follow a centrally driven operating model, striving to integrate all products and services for economies of scale.  To achieve this, decision-making, intellectual power and innovation are concentrated in the home location.

Alternatively, similar companies who wish to achieve locally relevant distribution systems, strive to decentralize the company and run as loose federations.  This requires responsibilities for branding and product lineups to be shifted and for acceptance of trade-offs in cost structures, reduced economy of scale, more diverse product lines and varying standards of quality and pricing.

Are these the only models for going global?  The authors suggest “the time has come to embrace a new business model that encompasses both the established advantages of industrial markets and the opportunities of emerging economies.  The authors propose a “hub model”:  a global corporate structure with no headquarters.  Instead of a single center, companies would establish core office “hubs” in many or most of the 20 gateway countries in the world that house 70 percent of the world’s population and account for 80 percent of its income.

The authors explain their model, saying “A hub strategy enables a company to provide products and services everywhere.  But it will not in itself resolve the trade-offs of globalization…(this requires) a more comprehensive business model that 1) customizes their products and services in hubs around the world; 2)unites business units around a platform of proprietary knowledge and the building of competencies, and 3) arbitrages their operating models to gain cost-effectiveness, productivity and efficiency”.

 

For the complete article, go to http://www.strategy-business.com/article/11308

Three Tips for More Strategic Leadership

By Virgil R. Carter

Surprise—you don’t need a formal strategy role to help shape your organization’s strategic direction.  You can start by moving beyond frameworks and communicating in more engaging way.  “Becoming More Strategic:  Three Tips for Any Executive”, authored by Michael Birshan and Jayanti Kar and published in Strategy + Business, suggests any executive “can act to become more strategic” by following three deceptively simple tips.  “in our interviews and experience (these tips) represent foundational skills for any strategist and putting them into practice requires real work”.

Here’s the three tips:

·        Understand what strategy really means in your industry:  Because strategy is an on-going journey, leaders will need to focus on and think strategically in their particular industry context.

·        Become an expert at identifying potential disrupters:  Expanding the group of leaders engaged in strategic dialog helps boost the odds of identifying company or industry-disrupting changes that are just over the horizon.

·        Develop communications that can break through:  an adaptive strategy-development process places a premium on effective communications with all executives participating, supported by data that’s engaging and easy to manipulate.

The authors conclude by cautioning, “It’s not enough to increase the number and diversity of leaders engage in strategy.  Many of those leaders also must enhance their own strategic capabilities.  We hope these three tips help them get started.”

For the full article, go to https://www.mckinseyquarterly.com/Strategy/Strategy_in_Practice/Becoming_more_strategic_Three_tips_for_any_executive_2992

Leading Cultural Change

By Virgil R. Carter

Every nonprofit organization has its own special and unique culture, build from mission, vision, people and experiences of the organization, over time.  Facing challenging decisions and change, existing organizational culture will win almost every time.  So how do leaders successfully manage cultural change?

The answer in a nutshell is “start with what’s already working”, according to a recent article “Cultural Change That Sticks” in the Harvard Business Review.  Authors Katzenbach, Steffen and Knonley point out that when faced with opportunity or the need for change “you can’t trade your company’s culture in as if it were a used car”!

The authors note that cultural inclinations re well entrenched, for good or bad.  “But it’s possible to draw on the positive aspects of culture, turning them to your advantage, and offset some of the negative aspects as you go.  This approach makes change far easier to implement.”

Here are five principles that the authors suggest may help an organization achieve higher performance, better customer focus and a more coherent and ethical stance:

·         Match strategy and culture

·         Focus on a few critical shifts in behavior

·         Honor the strengths of your existing culture

·         Integrate formal and informal interventions

·         Measure and monitor cultural evolution (business performance, critical behaviors, milestones and underlying beliefs, feelings and mind-sets)

“All too often, leaders see cultural initiatives as a last resort, except for top-down exhortations to change”, the authors caution.  “But cultural intervention can and should be an early priority—a way to clarify what your company is capable of, even as you refine your strategy”, the authors advise. “Simply put, rather than attacking the heart of your company, (focusing on cultural intervention) will be making the most of its positive forces as your culture evolves the right way.”

For the full article, go to http://www.booz.com/media/uploads/HBR_Cultural-Change-That-Sticks.pdf

Communications for Leaders

By Virgil R. Carter

Successful leaders are those who can illuminate, persuade and encourage their colleagues and teams to be successful.  Successful leaders are good communicators!  It’s hard to find a long-term successful leader who simply sits in her/his office all day with the door closed.  Effective communications are essential for success!  Gretchen Rosswurm writes in SmartBlog on Leadership about some important communications habits for leaders.  Here are some of her tips:

·         Share an inspiring vision of the future:  A sense of shared purpose is important.  Leaders who do this paint a compelling picture of the future—where are we going, what does it look like, what are the benefits, what role do I play and how is it good for me?

·         Listen:  Real leadership requires listening and understanding what people think.  Leaders who do this ask questions and create opportunities for dialog.  Listening with patience and attention will win respect.

·         Commit to “no surprises”:  Leaders who are successful over the long haul are honest.  They demonstrate in word and deed that they are transparent about changes and vision.  Employees may not always like everything you have to say as a leader, but they will respect you and perform when you communicate openly, early and often. 

·         Widen the circle of involvement:  Strong leaders start with a small group and, bit by bit, widen the circle of people who are aware of and involved in the vision.  Leaders who continually engage and involve more people in the vision find that support and respect grows naturally.

·         Match your message with your audience:  Not everyone is motivated the same way.  A good leader uses a wide variety of approaches and messages which resonate with more people.  This shows respect for learning styles and diversity.  For example, consider communicating with visuals as well as data/text based materials, use of small groups, use of traditional media and newer social media.

Rosswurm points out that “in the end, there is no magic formula for great communications”, but suggests that leaders who communicate using these methods are “more effective than those who don’t”.  For the full article, go to http://smartblogs.com/leadership/2012/07/27/leaders-communicate-and-communicators-lead/

Innovative Thinking?

By Virgil R. Carter

Is innovation important in your field?  Is your organization considered innovative?  Just how do innovators think? In a recent article, Harvard Business Review contributing editor Bronwyn Fryer reported on an interview on innovative thinking.  Fryer conducted a question-and-answer session with Professors Jeff Dyer of Brigham Young University and Hal Gregersen of Insead to explore how the "Innovators' DNA works”.

Dyer and Gregersen conducted a six-year study surveying 3,000 creative executives and conducting an additional 500 individual interviews. The study found five "discovery skills" that distinguish the executives.

--Associating:  a cognitive skill that allows creative people to make connections across seemingly unrelated questions, problems, or ideas

--Questioning: an ability to ask "what if", "why", and "why not" questions that  
challenge the status quo and open up the bigger picture

--Closely observe details:  particularly the details of people's behavior. –   Experiment:  trying on new experiences and exploring new worlds

--Ability to experiment:  always trying on new experiences and exploring new worlds

--Networking:  connecting with smart people who have little in common with them, but from whom they can learn

“Overall, associating is the key skill because new ideas aren't created without connecting problems or ideas in ways that they haven't been connected before”, according to Dyer.

Dyer commented that one might summarize all of the skills they’ve noted in one word: "inquisitiveness." “I spent 20 years studying great global leaders, and that was the big common denominator. It's the same kind of inquisitiveness you see in small children”, he commented.

Dyer asked the executives in their study to tell them about how they came up with a strategic or innovative idea. That one was easy for the creative executives, but surprisingly difficult for the more traditional ones. Interestingly, all the innovative entrepreneurs also talked about being triggered, or having what one might call "eureka" moments. In describing how they came up with a product or business idea, they would use phrases like "I saw someone doing this, or I overheard someone say that, and that's when it hit me."

In conclusion, Dyer added, “We also believe that the most innovative entrepreneurs were very lucky to have been raised in an atmosphere where inquisitiveness was encouraged. We were stuck by the stories they told about being sustained by people who cared about experimentation and exploration.”