Managing the Non-Profit Organization

Key Concepts

For nonprofits, everything starts from the mission

“The first thing to talk about is what missions work and what missions don’t work, and how to define the mission. For the ultimate test is not the beauty of the mission statement. The ultimate test is right action.” (p. 3)

“A mission statement has to be operational, otherwise it’s just good intentions. A mission statement has to focus on what the institution really tries to do and then do it so that everybody in the organization can say, This is my contribution to the goal.” (p. 4)

“One of our most common mistakes is to make the mission statement into a kind of hero sandwich of good intentions. It has to be simple and clear.” (p. 5)

“So, you need three things: opportunities; competence; and commitment. Every mission statement, believe me, has to reflect all three or it will fall down on what is its ultimate goal, its ultimate purpose and final test. It will not mobilize the human resources of the organization for getting the right things done.” (p. 8)

The leader needs to create a context for innovation

“The most important task of an organization’s leader is to anticipate crisis. Perhaps not to avert it, but to anticipate it. To wait until the crisis hits is already abdication. One has to make the organization capable of anticipating the storm, weathering it, and in fact, being ahead of it. That is called innovation, constant renewal.” (p. 9)

“The lesson is, Don’t wait. Organize yourself for systematic innovation. Build the search for opportunities, inside and outside, into your organization. Look for changes as indications of an opportunity for innovation.” (p. 12)

“First, organize yourself to see the opportunity. If you don’t look out the window, you won’t see it. What makes this particularly important is that most of our current reporting systems don’t reveal opportunities; they report problems. They report the past.” (p. 13)

“Then, to implement the innovation effectively, there are a few points you must be aware of. First, the most common mistake— the one that kills more innovations than anything else—is the attempt to build too much reinsurance into the change, to cover your flank, not to alienate yesterday.” (p. 13)

“Next, you have the problem of organizing the new. It must be organized separately. Babies don’t belong in the living room, they belong in the nursery.” (p. 13)

“One strategy is practically infallible: Refocus and change the organization when you are successful. When everything is going beautifully. When everybody says, ‘Don’t rock the boat. If it ain’t broke, don’t fix it.’ At that point, let’s hope, you have some character in the organization who is willing to be unpopular by saying, ‘Let’s improve it.’ If you don’t improve it, you go downhill pretty fast.” (p. 66)

“The responsibility for this rests at the top, as in everything that has to do with the spirit of an organization. And so the executives who run innovative organizations must train themselves to look out the window, to look for change. The funny thing is, it’s easier to learn to look out the window than to look inside, and that’s also a smart thing to do systematically.” (p. 67)

Nonprofits invest less in marketing and understanding their customers than they should

“Don’t put your scarce resources where you aren’t going to have results. This may be the first rule for effective marketing.” (p. 55)

“And then, the second rule, know your customers. Yes, I said customers. Practically everybody has more than one customer, if you define a customer as a person who can say no.” (p. 55)

Focusing on the mission is what aligns constituencies

“Non-profits fail to perform unless they start out with their mission. For the mission defines what results are in this particular non-profit institution. And then one asks: Who are our constituencies, and what are the results for each of them?” (p. 109)

“The first—but also the toughest—task of the non-profit executive is to get all of these constituencies to agree on what the long-term goals of the institution are. Building around the long term is the only way to integrate all these interests.” (p. 110)

“If you focus on short-term results, they will all jump in different directions. You’ll have a flea circus—as I discovered during my own dismal failure some forty years ago as an executive in an academic institution. My own thinking has always been long term. But I thought I’d win friends and influence people by giving them some short-term goodies. What I learned was that unless you integrate the vision of all constituencies into the long-range goal, you will soon lose support, lose credibility, and lose respect.” (p. 110)

Creating an information flow

“The most important do is to build the organization around information and communication instead of around hierarchy. Everybody in the non-profit institution—all the way up and down— should be expected to take information responsibility. Everyone needs to learn to ask two questions: What information do I need to do my job—from whom, when, how? And: What information do I owe others so that they can do their job, in what form, and when?” (p. 115)

“In the information-based institution, people must take responsibility for informing their bosses and their colleagues, and, above all, for educating them. And then all members of the non-profit institution—paid staff and volunteers—need to take the responsibility for making themselves understood. This requires that everyone think through and put down in writing what the organization should hold him or herself accountable for by way of contribution and results. Then, everybody has to make sure that this is understood from the bottom up, from the top down, and sideways.” (p. 116)

When developing people, focus on strengths not weaknesses

“First, one doesn’t try to build on people’s weaknesses.” (p. 147)

“But if you want people to perform in an organization, you have to use their strengths—not emphasize their weaknesses.” (p. 147)

“A second don’t is to take a narrow and shortsighted view of the development of people. One has to learn specific skills for a specific job. But development is more than that: it has to be for a career and for a life. The specific job must fit into this longer-term goal.” (p. 147)

A framework for board member roles from Dr. David Hubbard

“In fact, I might just tick off how I would see the functions of a board member and we can talk about each specifically. Board members are governors. When they sit around the table and vote their “I so move,” they govern the institution. Board members are sponsors, and here we get to their role in giving money and raising money. They are ambassadors— interpreting the mission of the institution, defending it when it’s under pressure, representing it in their constituencies and communities. Finally, they are consultants; almost every trustee will have some professional skill which would be expensive if you had to buy it. I can call certain trustees and ask a legal question or an administrative question or an educational question and get an almost instant reaction. Governor, sponsor, ambassador, and consultant would be the four major roles.” (p. 173)

Quotables

“Problems of success have ruined more organizations than has failure, partly because if things go wrong, everybody knows they have to go to work.” (p. 10)

“First, I would look at what the individuals have done, what their strengths are. Most selection committees I know are overly concerned with how poor the candidate is. Most of the questions I get are not: What is he or she good at, but we think this person is not too good at dealing with students, or what have you. The first thing to look for is strength— you can only perform with strength—and what they have done with it.” (p. 16)

“Far too many leaders believe that what they do and why they do it must be obvious to everyone in the organization. It never is.” (p. 25)

Max de Pree: “Yes, and I’m saying too that when you take the risk of developing people, the odds are very good that the organization will get what it needs.” (p. 38)

“Leadership is also example. The leader is visible; he stands for the organization. He may be totally anonymous the moment he leaves that office and steps into his car to drive home. But inside the organization, he or she is very visible, and this isn’t just true of the small and local one, it is just as true of the big, national, or worldwide one. Leaders set examples. The leaders have to live up to the expectations regarding their behavior. No matter that the rest of the organization doesn’t do it; the leader represents not only what we are, but, above all, what we know we should be.” (p. 48)

“To work systematically on the productivity of an institution, one needs a strategy for each of the factors of production. The first factor is always people. It’s not a matter of working harder; we learned that long ago. It’s a matter of working smarter, and above all, of placing people where they can really produce.” (p. 60)

“The least effective decision makers are the ones who constantly make decisions. The effective ones make very few. They concentrate on the important decisions. And even people who work hard on making decisions often misapply their time. They slight the important decisions and spend excessive time making easy—or irrelevant—decisions.” (p. 121)

“All the first-rate decision makers I’ve observed, beginning with Franklin D. Roosevelt, had a very simple rule: If you have consensus on an important matter, don’t make the decision.” (p. 124)

“No organization can do better than the people it has. It can’t reasonably hope to recruit and hold much better people than anybody else, unless it is a very small organization, let’s say a string quartet. Otherwise it can only hope to attract and hold the common run of humanity.” (p. 145)

“I have been working with organizations now for around fifty years and my experience is that the correlation between the high-promise people at age twenty-three and the performers at age forty-five is very poor.” (p. 148)

“The worst thing an organization can do is limit its development of people by importing society’s class system into its own operations, like organizations today that decide very early which are the comers, or that you are not going to get any place if you don’t have an MBA from the Harvard Business School. Performance is what counts.” (p. 149)

“The non-profit executive is always inclined to be reluctant to let a non-producer go. You feel he or she is a comrade-in-arms and make all kinds of excuses. So, let me repeat the simple rule once more: If they try, they deserve another chance. If they don’t try, make sure they leave.” (p. 150)

“You can only make yourself effective—not anyone else. Your first responsibility to the non-profit organization for which you work is to make sure you get the most out of yourself—for yourself. You can work only with what you have.” (p. 191)

“A wise person I worked with many years ago said to me, ‘For good performance, we give a raise. But we promote only those people who leave behind a bigger job than the one they initially took on.’” (p. 194)

“You can only be effective by working with your own set of strengths, a set of strengths that are as distinctive as your fingerprints. Your job is to make effective what you have—not what you don’t have.” (p. 198)