Mastering the Rockefeller Habits and the Social Sector - Adapting the Workshop Tools
In my previous blog I addressed some of the challenges of using the Four DecisionsTM One Page Planning Model with an NPO. I have had great success using the One Page Planning Model with a number of nonprofit organizations but the workshop tools need to be tweaked to fit an NPO context.
From Core Customer to Core Beneficiary
Where a business works hard to identify its core customer, a nonprofit must identify its core beneficiary - a real person with needs, wants, feelings, a story - who the organization is best suited to serve. Many NPO’s try to “be all things to all people” and to ask the Executive Leadership team to narrow the focus by identifying a core beneficiary in many cases involves a significant paradigm shift.
The three key relationships in a nonprofit are Board/Staff, Beneficiaries, and Funders/Volunteers. While most NPO’s would default to the people driver over the process/productivity driver, that doesn’t necessarily translate into an accurate evaluation and monitoring process. As I work with NPO Executive leadership teams and ask them the questions, “How do you know how you’re doing with each of these groups and on what basis would you measure that?” I get a glazed over look. The process of having them identify some metrics to help determine how they’re doing in these key relationships is a difficult but important exercise.
The Process driver is much easier for most nonprofits to measure. “Do we have money in the bank to pay the bills?” If the answer is yes, they assume they’re fine - today. The three key productivity drivers in a nonprofit are Funding, Programs, and Operations. Several challenges emerge in establishing metrics for these process drivers. In terms of funding, many nonprofits do not track their historic funding patterns nor do they track funding sources. I have a number of nonprofit clients who generate a significant amount of funding from government agencies. That has the potential to leave them vulnerable. A change in government, or government policy could have a dramatic impact on funding levels. An unusually high dependency on a handful of large benefactors can also leave an organization vulnerable.
In terms of programs, the biggest challenge I have experienced working with nonprofit organizations is the Start, Stop, Keep (SSK) exercise. What do we need to keep doing, start doing, or stop doing? The “STOP DOING” is the most difficult. I have a church client that runs over 60 different programs. When I had them do the SSK exercise, there was 100% unanimity identifying the top 20 programs to “keep doing” and there was a high degree of agreement on the “stop doing” list. The challenge has come in mustering the courage to act on the “stop doing” list. There is a sense that if they stop doing these programs they are in some way being unfaithful to their higher call.
Many nonprofits fail to do the hard work of evaluating operations with a view to maximizing efficiencies. Most often NPO’s resort to the tried and true “same old - same old” when it comes to operations. As I work with bankers whose core customers are nonprofit organizations, they confirm this reality. A good banker, and a good planning process can pay significant operational dividends in increased efficiencies, cost savings, resulting in more money to serve the core beneficiaries. Some even choose to compensate their executive staff at a level closer to what they might earn in the for profit world.
Another aspect of the One Page Planning Process that proves interesting for many nonprofits is identifying a critical number. I have had several NPO’s really nail the critical number.
One client I worked with recognized that their own resources were taxed to the limit and they intuitively knew that if they wanted to grow their impact, they would need to establish partnerships with other agencies, businesses and funders. I asked the Executive Director to remain silent as I went around the room to each of the department heads and asked them how many new partnerships they thought they could establish in the upcoming year. By the time I got around the room I had a total of 16 partnerships. Turning to the Executive Director I asked, “What was your number?” His response? Five! I dropped by the office of this NPO for another meeting recently and two of the department heads came running over to me. “Ken - Doug (ED) wants to see you.” When I went to his office he informed me of another partnership that had just been confirmed. “So how many is that now?” “Twenty-three!” was the response. They’re only 8 months into their year! The energy among the executive leadership team is palpable!! The Critical Number is serving as an incredible catalyst for action, celebration, and growth in this NPO.
Qualitative Vs Quantitative Metrics
Many NPO’s struggle to adequately and accurately identify appropriate metrics. Since much of the work of many NPO’s yields qualitative community impact, there’s a reticence to identify metrics in some the areas already noted. But qualitative impact can be measured just as much as quantitive outcomes. It’s not always as easy to identify but it’s every bit as important!
Based on personal experience, I know the Four DecisionsTM Planning Model works well with nonprofit organizations. It requires some tweaking and there are some anomalies working with NPO’s but when nonprofit organizations fully engage a planning process using this model, the results are incredible. Few experiences give me a greater sense of satisfaction and fulfillment than working with the Executive Leadership team of that kind of organization.