The Limits of Virtual

By Steven Worth, President, Plexus Consulting LLC

In the early years (1990-93) when we were laying the framework for the global firm that Deloitte, Touche, Tohmatsu would later become I recall seeing the eye-popping travel expenses we were incurring as well as the reaction of senior management. Were these costs really necessary? Couldn't we invest a fraction of these expenses into audio-visual technology that would enable us to meet with our colleagues around the world real-time without ever leaving our offices?

Apart from the expense of travel, those who spend a good deal of time on the road know there is also considerable hassle and inconvenience associated with building your frequent flyer miles—so why not rely on video teleconferencing instead and leave the jet lag and travel delays to others? The idea found traction and Deloitte did invest considerable sums of money in teleconferencing technology and we did get great use out of it—but we also discovered its limitations.

Management groups that relied primarily on video teleconferencing to coordinate their activities found that over time certain hard-to-define frustrations often built up and that they needed periodic face-to-face meetings to clear things up. Within minutes of meeting face-to-face, misunderstandings and tensions disappeared like a morning fog with the sun. We came to conclude that as the social animals that human beings are, communication is not limited to the written or spoken word. We need face time as well.

We came to appreciate the difference between “high context” and “low context” cultures. The US, Canada and North-Western Europe are mostly low context cultures—that is, we don’t need to know people very well to feel comfortable doing business with them. We can and do sign contracts with people we have literally just met. But most of the rest of the world doesn't work this way. They are high context cultures who would never undertake any serious engagement with anyone without first developing a solid understanding of the person. They rely less on lawyers and contracts and more on personal trust based on family ties and friendships—which in turn are based on frequent, face-to-face contact. So we came to understand that if we wanted to work effectively in these cultures, we needed purposefully to get out of our offices and meet our clients and business associates face-to-face on their home turf.

Technology is critical, but it does have its limitations—as every family who has had a teenager texting at the dinner table knows…..

Lobbyist Registration Requirements—A Brief Overview

By Steven Worth

Regulating private sector influence over the democratic policymaking process is a constantly shifting landscape in the US as policymakers and public interest advocates seek to maintain the integrity of the process and limit the influence of money while not infringing on the Constitutional rights of citizens to make their views known to policymakers.  Rules are constantly being made and revised as gaps or unintended consequences become exposed (usually by the news media)—so even veteran lobbyists need to periodically re-read these regulations in order to be in compliance.  Penalties can be severe with financial fines and even prison time as punishment for those who make mistakes or who purposely ignore the law.

Most organizations and their employees that depend directly or indirectly on the government are not allowed to lobby or make political contributions at all.  Employers have strict restrictions on soliciting their employees to make political contributions.  And until a controversial Supreme Court ruling last year, there were absolute limits to the amount of financial contributions wealthy individuals and businesses could give political candidates.   

Mark Twain once noted that “mankind is the only one of the animal kingdom that blushes—or needs to.”  To that point, the best constraint on undue political influence on the democratic process is simple transparency—a requirement for lobbyists to list themselves publically according to whom they represent, what their purpose is, and how much they are getting paid to do that work.  This is how the European Union got started in regulating their lobbyists and is how the United Kingdom regulates itself.  In fact with this level of transparency in the UK, they even allow Members of Parliament to be paid lobbyists as long as their payments are publically disclosed.

Here are the links below to the four entities in the US Government that share responsibility for monitoring and regulating lobbying in this country.  FARA is run by the Department of Justice to monitor foreign money being spent in the US to influence public policy.  This was a program started just before the Second World War and is still in force today.
  
http://www.fara.gov/
 
http://lobbyingdisclosure.house.gov/
 
http://www.senate.gov/
 
http://www.fec.gov/disclosure.shtml
 
These are not perfect regulations but they have made the policymaking process in the US more transparent and somewhat more honest than it used to be.  I recall hearing stories of dinner parties hosted by lobbyists a generation ago where Members of Congress could expect to find hundred dollar bills under their dinner plates.  That sort of activity does not happen anymore.  While money still plays a huge role in politics, at least the common citizen is more aware now of who is being paid what, by whom, and for what purpose—and that does make a difference in determining how people vote and perhaps why.

The biggest conflict of interest remaining for Congress that has not been addressed to-date is their ability to buy stock in companies that are affected by their legislation.  In the private sector this would be considered “insider trading” and is illegal, but not so for the US Congress.

The Keys to Effective Communication

By Steven Worth, President, Plexus Consulting LLC

More often than not, membership organizations find their stakeholder communications to be a source of frustration for all concerned. Stakeholders complain they are not “getting the messages” sent to them even while those poor souls responsible for communications can document that they are sending out clear messages at machine gun frequency. So what is going on?

It is an old lesson—saying something is not the same as being heard. Communications occurs best when there is an innate understanding between the sender and the receiver. Among other things, the sender knows whom the message is intended to reach, why it should be of interest to them, as well as how and when best to reach them. And therein lies the catch—just because you feel the urge to say something, doesn't mean the person or people you want to speak to is going to hear you—or if they do, that your message will have the desired effect.

Carpenters have a saying that communicators would do well to heed: measure twice, cut once. Too often communicators feel that frequency and volume can compensate for ill- conceived messages that do not seem to be having their intended impact.

Content of course is important. Are those you are trying to communicate with interested in the subject matter? Ever notice how in a noisy room of people you suddenly notice when someone has mentioned your name on the other side of the room?—or that in a noisy theater someone suddenly gasping the word “Fire!” is heard by all? Personal interest tends to filter out the noise and to focus sharply on matters related to self-survival or simple vanity.

But the means and timing of communicating are also important. Using the telephone works, but not at dinner time or at 1:00 am if you ever want that person to take your call again! The print media—newspapers and magazines—used to be a good general way to reach large numbers of people, but people under the age of 30 tend not to rely on the print media for their information as much as previous generations. If you want to reach members of that generation the social media might be the better approach to take.

So yes, you probably can prove your audience has received the newsletters or emails you are sending them, but you may be deceiving yourself if you think they are getting your message. Spending the time and resources first to understand what your audiences want as well as when and how they want to hear from you will save you in time, effort, expense and frustration later!

What to do About Silos?

By Virgil Carter

You know silos. According to Wikipedia:  “A silo is a structure for storing bulk materials. Silos are used in agriculture to store grain (see grain elevators) or fermented feed known as silage. Silos are more commonly used for bulk storage of grain, coal, cement, carbon black, woodchips, food products and sawdust.”
In non-profit organizations silos tend to result from “vertically” structured business functions where each major business function—membership, education, publications, meetings, etc.—is a separate, stand-alone, fully self-contained business operation.  Silos are often the way small and start-up organizations organize early in their organizational life—by individual function.  Silos can be an efficient way for the conduct of limited, similar business operations. 

As organizations grow, however, silos may grow to reflect an inward focus by an organization--to prioritize and do the things that those in the silo “like to do”.  The longer an organization functions with silos, the greater the importance of the individual silo becomes to those working within it.  Soon, the importance of the silo may outweigh the importance of the overall organization, at least to those dwelling in the silo.

When this perception of the importance of an individual silo takes hold, it frequently doesn’t matter (to those in the silo) if there is a market for their products, or if operations are profitable.  Further, it’s not uncommon for there to be strong competition among silos for organizational resources—financial and human.  The result?  The more silos that an organization has, the more that internal competition may inhibit organizational responsiveness, performance and viability.  Am I right on this?

Is there an alternative for improved organizational performance?  Here it is folks:  market focus!  That’s it:  market focus.

Market focus means identifying the markets critical to organizational success as the basis for the development and sales of all of an organization’s goods and services.  This involves “the voice of the customer”:  learning and understanding the customer’s expectations and requirements, delighting customers and building loyalty.  This is a far cry from “producing what we like to produce” and trying to get someone to buy it.

This perspective of market focus can be a cultural and functional shift for non-profits where volunteers and staff in silos “do what they like to do”.  Market focus is an “external view”, as opposed to silo’s “internal view”.  Implementing market focus, using the voice of the customer, involves an annual process to assess and guide an organization’s portfolio of goods and services.  This means encouraging and supporting innovation for new programs; it means sunsetting some existing programs, in a planned, orderly basis.

Market focus means new opportunities.  New opportunities mean new revenues and resources, which will benefit all organizational members and customers.  Want to trade your silos for new opportunities?  Become market focused!

Things No One Will Tell You 3: CEO Performance Planning and Evaluation Methodologies

By Virgil Carter

What’s the best method for CEO annual performance planning and evaluation?  I suppose the answer is, “it depends!”  This is because every non-profit organization has its own unique culture, strategic and operating situation and personalities, which evolve and change over time.  Thus, there is really no “one size fits all” methodology.  That said, there are several major approaches for CEO annual performance planning and evaluation that may help to put in place what will best fit and work best for every organization and CEO.

Purpose

There is (or should be) a common purpose for performance planning and evaluation:  help the organization to improve each year by helping the CEO to improve annually.  It’s important to recognize the connection between successful organizational performance and successful CEO performance.  One doesn’t often happen without the other!   It’s usually the CEO, who leads the staff, and is responsible for the organization’s annual program planning, budgeting and execution.   It’s often the CEO who helps identify the strategic directions and priorities of the organization.  Thus, the CEO is a very valuable person for the organization’s success.  Volunteer leaders should understand the direct connection between organizational performance and CEO performance and, thus, be committed to helping support and improve CEO performance each year in a constructive and positive manner.

Methodologies

Each non-profit organization has its own special culture, it’s “life-style” and value system.  Annual CEO performance planning and evaluation should fit the organization’s culture.  The following table illustrates a range of association cultures or “life-styles” and the characteristics of CEO planning and evaluation systems which fit each culture.

It’s worth pointing out that the “ambiguous” category is in recognition of the situation where some associations attempt to use either a “generic” style of performance planning and evaluation that may have been handed down over time from within the organization, borrowed from another organization and/or attempts to fashion a planning and evaluation process which will represent a broad range of priorities and ideas, i.e., a smorgasbord!

Categories of Association Culture or “Life-Style”	Organizational Success—Basis for CEO Performance Planning	Metrics & Evaluations	Organizational “Fit”
Performance-oriented	CEO objectives focus primarily on organizational performance, i.e., strategic objectives, business operations, etc.	Performance-oriented measurements for strategic and/or business operations; programs & products often seen as operational means to strategic ends	Appropriate where organization puts priority of implementing strategy & successful business operations; innovation & change may be common
Maintenance-oriented	Annual objectives focus primarily on continuity & maintenance of status quo programs and products	Metrics for how well CEO maintains existing key programs & products seen as ends in and of themselves	Appropriate where operational predictability and consistency have priority; strategy is secondary; change is infrequent
Relationship-oriented	Annual objectives focus on forming & maintaining key relationships w/other organizations & individuals according to organization’s purpose	Metrics may be very difficult to identify or measure; may focus on “soft” data, i.e., “activity summaries”,  “committee reports” & personal commentaries	Appropriate where external relationships are critical for organizational purpose, i.e., umbrella, coalition, clearinghouse, cooperative & similar
Critical competencies-oriented	Annual objectives focus on the competencies key to the success of the overall organization and/or its specialized membership	Metrics may be tangible but elastic; may identify target goals, documented activities; measurements of business operations in direct support of competencies	Appropriate where organizational success is tied to critical competencies, i.e., resource & donor development, advocacy, etc.
Ambiguous	Annual objectives may either be undefined, or a “smorgasbord that attempts to combine objectives from various association cultures and personal priorities across an organization	Metrics may often be based on generic template; taken from some other organization; may reflect “one size fits all” perspective	Eventually unsatisfactory; frequently leads to a frustrating experience; typically results from lack of focus or lack of conscious attention

The table illustrates a wide range of association cultures or “life-styles” and attempts to show how different they may be when it comes to CEO performance planning and evaluation.  While many organizations may have elements of some (or all) of these cultures, when it comes to CEO performance planning and evaluation it really is important for the volunteer leaders and the CEO to reach common agreement on what is truly most important—what matters most when it comes to organizational performance.  Remember, the purpose of planning and evaluation:  helping the organization improve through helping the CEO to improve!

Things No One Will Tell You: 5 Critical Elements for CEO Performance Planning and Review

By Virgil Carter

Annual performance planning and related annual performance review of association CEOs is often a mysterious “black box” process for which little is known and even less is written.  As a result, the planning process and the review process may be very different in every organization.  In fact, these two processes may often be very different year to year, in the same organization, unless some education and discipline is applied to make planning and review positive and helpful year in, year out, regardless of changing personalities.  Here’s five critical elements which may help performance planning and review to be the constructive learning experience they should be.

Purpose of CEO Planning & Review:  There are a variety of reasons for CEO planning and review, which should be reflected in the annual process, including 1) achieving a clear strategic plan and supportive annual operational plan; 2) strengthening the CEO as one means of achieving organizationsl progress; 3) making the processes a professional and constructive process for all involved; 4) matching the organization’s culture and characteristics (there’s no “one size fits all” process for CEO planning and review)

Formalize and Document the Full Annual Process:  This element should address 1) a written policy that formalizes the purpose, process, schedule for common understanding and consistent annual commitment of all parties for a successful process; 2) written annual performance objectives and metrics prepared by the CEO and approved formally by the governing board; 3) written documentation of the results of each annual process with copies to the CEO

Recognize and Foster a Clear, Open Process:  In most non-profits, the only employee of the board is the CEO.  Everyone else is an employee of the CEO.  Therefore, a  clear, open process is needed to support and aid the CEO in achieving the mission of the organization.  This should include:  1) the CEO being a full participant in the planning, execution and assessment of the performance planning and evaluation process; 2) direct CEO communication opportunities with the board at every board meeting, keeping communications channels open and working.

Provide for Lessons Learned and Annual Improvement:  Performance planning and evaluation are like every other association function:  subject to lessons learned and the need for continual improvement.  Thus the process should:  1) work to build trust, honesty and mutual respect—teamwork should be stressed; 2) incorporate lessons learned and improvement into the process annually as mutually agreed.

Compensation Principles:  CEO compensation varies by type, size and location of the non-profit organization, as well as by the level of knowledge, experience and duties of the CEO.  Annual compensation should consider:   1) reliable association-based compensation studies for similar organizations and CEO roles; 2) both fixed and variable compensation, with the variable compensation, in most cases, being discretionary bonus programs, rather than the higher paying incentive programs common in industry; 3) CEO and staff annual compensation are not comparable to the compensation levels of association volunteers in their personal line of work—CEO and staff compensation are only comparable to their peers in similar non-profit organizations.

A couple of closing thoughts:  A non-profit CEO is not a “manager”!  The CEO is really a leader, thus the executive performance and evaluation should reflect the characteristics of leaders, i.e., vision and initiative, accountabilities, delegation/monitoring, outcomes, communications and relationships.

A subsequent article will explore various methodologies for CEO planning and evaluation.

Things No One Tells You: 5 Things to Always Get In Writing in Your CEO Agreement!

By Virgil R. Carter

Want to be a CEO?  Already a CEO, but switching jobs?  Here are five components of your employment agreement that are important to consider and that no one else may tell you:

1. Duties:  Are the roles, duties, title and authority of the CEO clearly stated?  Is it clear the CEO is singularly responsible for staff, budgets, contracts, and other essential annual business operations?  Can these be changed, and if so, by whom and how?  Are changes (change of duties, change of role, title or authority, reorganization, merger, acquisition, cessation of operations, etc) considered as termination for good reason (see termination below)?
2. Compensation, benefits & annual review:  What is the base compensation?  What are the types of variable compensation, e.g., bonus, commission, deferred compensation, etc.?  Are other types of compensation appropriate, e.g., one-time (moving, relocation, etc.) and/or recurring (car, travel, business club, etc)?  Will compensation be established and maintained as “market rate” and how will market rate be determined annually?  Does the association’s standard benefits package apply to the CEO?  Who participates in these annual recurring decisions?    How is annual performance planning and evaluation conducted?  Who leads the annual review process?  Who participates in the process?  Is the CEO annually at the mercy of only a single volunteer or a balanced group of senior volunteer leaders? 
3. Term & renewal:  Is there a reasonable initial term of employment?  When and how will the initial term be extended or renewed?  Is there annual compensation if employment is terminated before the initial term of employment has expired?  Who participates in these decisions?  What if there is no formal action to renew the term of employment—does it renew automatically, or is it considered involuntary termination?
4. Termination:  How will unfavorable “termination for cause” be defined?  How will other types of favorable termination (voluntary, involuntary and for good reason) be identified and defined?  How are the termination definitions linked to annual compensation, benefits and any special termination pay-outs, e.g., termination in first year of employment, termination prior to expiration of initial term or subsequent term of employment, involuntary termination, for good reason, etc.
5. Restrictions:  Are there personal or professional restrictions on the CEO while employed, and/or upon termination?  For example, can the CEO teach, write, do research or other similar activities, while employed?  Upon termination, can the CEO immediately work for another association in the same geographical area?  Can the CEO immediately approach employees of her/his former organization about career changes?

Thinking about these key parts of your CEO employment agreement, and reaching mutually agreeable resolution with your volunteer leaders will help to establish your credibility as a senior executive.  It will also make your life a lot more enjoyable, so consider these points before hiring and contract negotiations.  Good luck!