Nonprofit organization

Managing Through Change: Part II - How Do You Respond To Your Own Success?

An Interview with Richard McCarthy, Executive Director of Slow Food USA

Slow Food is a grassroots organization founded by Carlo Petrini in Italy in 1986 and has since spread to over 150 countries. Offering an alternative to fast food, it strives to preserve traditional and regional cuisine and encourages farming characteristic of the local ecosystem.

In recent years, Slow Food USA faced an enviable but daunting challenge. The organization’s priorities, once radical, had become increasingly mainstream. How could Slow Food USA continue to be vital and relevant? Additionally, Slow Food had historically been supported by a large grass-roots membership. But the attraction of membership was waning in the United States among members of all types of membership organizations. How could the organization adapt its revenue model in response?

Recently we spoke with Richard McCarthy, Slow Food USA’s Executive Director, about how the organization navigated these challenge to find a new path forward that focused on convening and inspiring their audiences.

Wellspring: How would you characterize the challenges that Slow Food USA Faced?

Richard McCarthy: “The context for Slow Food USA was what happens when you start to succeed. The ideas that Slow Food pioneered and our unique belief system have evolved into a complex ecosystem of competing organizations in part because of our success. Our ideas are no longer marginal and crazy. They are now main-stream. We are a brand, and a body of ideas. By recognizing that, we clarified that our role should be a nexus, not a club.”

Wellspring: Slow Food USA had historically been a membership-based organization. How would you describe the challenges Slow Food faced with its membership model?

Richard McCarthy: “With changes in technology and social media, individuals’ expectations of how they interact with groups have changed. Mobilizing civil society in America has become a real challenge because people have too little unstructured time left. We work too hard and travel too much. There isn’t enough economic security and time, so an old-school member organization based on strong social ties is really difficult to enact in the US. Now, people tend to move into and out of organizations, to touch them and occasionally engage. Getting people to make a deep commitment to strong social ties is asking a lot.”

Wellspring: You looked at other organizations’ models during strategic planning with us. What stood out as most useful or interesting?

Richard McCarthy: “The real a-ha moments for us were learning about Alcoholics Anonymous and Burning Man. Alcoholics Anonymous is an extraordinary organization—it’s global, very flat, and based on a set of values that are replicated all over the world with little assistance from a central body. We realized that’s how Slow Food functions—we’ve never had a centralized and fully capitalized mother ship. That gave us insight into considering the nature of our organization, which has strong values and loose structure. Regarding Burning Man, people don’t engage with their events for rational economic reasons— Burning Man’s crazy idea is a visible, tactile, authentic experience. Their example helped us to realize what people look for in Slow Food— a tactile, meaningful experiences where details matter. This pointed to the core of what our future could be.”

Wellspring: What was one of the most exciting moments during the strategic planning work?                   

Richard McCarthy: “Fairly early on in the process, we came out with an understanding that we inspire people. While measuring inspiration is not easy, it landed in our laps that, ‘oh my god, this is what we do.’ When people described why they came into our organization, inspiration always came up. That is different than most people’s interaction with social change—it’s often from fear or anger. Inspiration is not that typical. Realizing that we did this well was quite exciting. We found a strength that we had not valued previously and identified a path that was within our reach and allowed us to harness that strength.”

Wellspring: You decided to pursue a model of convening people and organizations nationally. Why?

Richard McCarthy: “Convening a vast array of other organizations and people relieves us from having to be active in every space. For instance, if one group is good on food and labor issues, we can rely on them as partners without having to have an answer for everything in that space. We can support others, and maybe even lead from behind. The business model for civil society is really vulnerable. It would be so much easier to let big organizations do their thing because their scale would help them perpetuate. But at the other end of the spectrum, there can be a balkanized society of organizations. You want a biodiversity of organizations, but not so much internal competition that we end up cannibalizing each other.”

Wellspring: What advice would you have for leaders facing similar challenges?

Richard McCarthy: “One of the under-recognized and underutilized fuels for organizations is passion. Passion is the glue that often keeps organizations going during difficult times. If there isn’t much passion, then no strategic plan can facilitate a shift. So in some ways, passion matters more than the soundness of the business model.”

Wellspring: What thoughts or advice do you have for organizations focused on issues like food, in these times where there are a number of politically charged issues taking precedence in the media and national conversation?

Richard McCarthy: At moments like this, where the conversation is not about excitement that a new garden is going in at the While House but rather building a wall around our country that keeps out people who grow, harvest, and serve food, it is easy to be distracted and feel like we have to join someone else’s conversation. I think it requires extraordinary discipline to ignore that white noise. In such times, it is important to revisit the mission to see if it is still relevant and still makes sense— and that the right outcomes are being measured. If things are not aligned, an organization can go astray.”

Wellspring: What would you want others to know about strategic planning and pursuing new paths forward?

Richard McCarthy: “It was an extraordinary process. It ate up a lot of time, but at moments it was fascinating. What was most difficult was maintaining a public face during the process— we were still open for business, but were questioning why we exist. Also, it took our historic network of members and chapters a long time to adjust because they weren’t living the strategic planning process every day. Making a culture shift and building the staff and skills for a new organization is a lot of heavy lifting.”

Four Ways to Address a Problem that Won’t Go Away

We are currently working with a client that provides services for victims of crimes, particularly victims of family violence such as domestic violence and child abuse.  Family violence is a persistent issue upon which it seems almost impossible to make a dent. And so, our client wanted to know how they can have greater impact.   To find possible approaches to answer this question, we looked at how other organizations strive to have impact in the face of an enduring, seemingly insurmountable, problem.

Four aces picture

We found four possible approaches employed by other organizations, which we coined, “go upstream,” “a banner to march behind, “expand the picture,” and “strength in numbers.” 

The National Audubon Society typifies what we called “go upstream.”  This organization began with the mission of protecting birds and their habitats.  But soon an important challenge became clear:  all habitats were increasingly impacted by climate change, leading to negative consequences for birds everywhere. The “go upstream” approach posits that one’s mission is served not only through intervention services aimed at solving certain issues, but also by working on the environmental factors which cause the issues to occur in the first place.  So, The National Audubon Society decided to “go upstream” from the bird territory and now has a more general focus on protecting the environment with the downstream goal of saving birds’ habitats.  What could this mean for our client?  Perhaps they address those things that contribute to family violence occurring in the first place, like poverty. Or, they work to prevent the perpetuation of the cycles of violence by helping abused children heal from their trauma, thereby reducing the likelihood that they will grow up to be re-victimized or will abuse others.

“A banner to march behind” is well exemplified by The March of Dimes.  The assumption behind this approach is that to make a greater difference, one must mobilize the public to develop awareness and a sense of outrage about the issue.  For The March of Dimes, the mission of decreasing birth defects and pre-term birth would not be accomplished with medical research alone, and thus The March took to the streets to get the public involved with fighting for this cause.  Mothers Against Drunk Driving (MADD) is also a good example of an organization which used “a banner” to realize impact, namely a significant reduction of alcohol-related traffic accidents.  Our client, therefore, could consider starting a movement to generate awareness and outrage to help combat family violence.

Terracyle is an example of “expand the picture,” which posits that to make more of a difference, one must engage all involved components of the problem to be part of the solution. Terracyle started out working to eliminate food waste by using it to create quality fertilizers.  The fertilizers reduced some waste, but landfills kept filling, and so TerraCycle sought to make a broader impact.  Today, Terracyle focuses on eliminating many kinds of waste by creating new product lines and mobilizing people to recycle.  For our client, expanding the picture could mean not just working with the primarily low-income, female population it currently serves, but adding services for batterers, wealthy victims, or victims who choose to stay in relationship with their abusers.

Finally, “strength in numbers” is typified by East Meets West (EMW).  The premise here is that one organization can’t make a significant difference on large issues by itself; working together with others with similar missions means that the impact is exponentially increased.  East Meets West started out providing grassroots humanitarian aid in Vietnam, but they soon realized the problems were too big for them to significantly affect on their ownEMW transitioned from offering humanitarian services to building a network of similar organizations that share back-office capacity and learn valuable skills from one another.  Our client could realize this approach through creating a network of similar organizations or employing a regional or national expansion strategy to have a greater impact.

The problem of a persistent societal struggle is one that many non-profits face. These four approaches show how some nonprofits have addressed such struggles in ways that can be applied by others.

Let Me Put On My New Hat

Being forced to step outside your comfort zone and take on a new perspective can help you think about something in a new way.  This isn't particularly earth-shattering news, of course, but there is an easy way to foster this kind of thinking and get staff to take a new stance.

Often, it seems like the same people in an organization consistently take on the same role; perhaps the COO’s practicality and financial mindset mean she is always concerned about funding and tends to nix ideas early on, while the Director of Strategy’s optimism translates to seeing a lot of potential in every new program idea. We all fall into patterns like this, where every new idea seems infeasible (or wonderful) and we can’t help but play devil’s advocate (or cheerleader) at every meeting.

To keep conversations fresh and staff engaged, it can be helpful to take on new roles. In Edward de Bono’s Six Thinking Hats, he suggests ways to provide different perspectives on a challenging topic. By assigning each person at a meeting (or each phase of a meeting) a different “hat”, it is possible to ensure deliberate discussion around the challenge – and how people are reacting emotionally, objectively, critically, or in other ways. Each hat has a different set of guiding questions to consider, from what information do we have or need, to how do I feel about this idea, and what could go wrong?

Based on these Six Hats, we recently facilitated a client meeting with our own adapted set of seven hats: the Analyst, Opposer, Advocate, Feeler, Connector, Questioner and Joker. Every attendee was assigned a role – and many were deliberately given roles outside their comfort zone. For example, the CEO, who admits she is often critical of new ideas, assigned herself as Advocate so she would be sure to focus on the positive side of things. We gave each attendee a little sign on a popsicle stick, with their role on one side and the questions for them to consider on the other, to continually prompt them and guide their thinking. Holding a physical sign also served as a safety blanket, allowing people to justify viewpoints that may have been out of character for them.

At the start of the meeting, some comments felt a bit canned as people tried to embody their roles (“This idea feels great”, “We don’t have the money!”), but soon, conversation became richer as attendees became comfortable with their hats. Additionally, while some people might have deferred to more senior staff at a typical meeting, the hats allowed everyone to take on a new voice and personality. There was no need to feel nervous about being critical (in the role of Analyst or Opposer), or to feel judged for supporting something simply because it felt right (as a Feeler). Ultimately, people moved around, in and out of their hats, and there was meaningful conversation with a balance of critical and positive feedback.

If you’re looking to shake up a meeting or make it more fun, try assigning your own hats to help foster interesting and creative conversation. Here are ours:

  • Analyst: Is this feasible? What does our data tell us about this idea? What does logical reasoning tell us?
  • Opposer: Why would this not work? What is wrong with this idea? What have we not considered?
  • Advocate: Why is this a good idea? How could this work?
  • Feeler: How does this idea feel? What is my gut reaction? How would it feel to our staff, Board, funders…?
  • Connector: How might these different ideas connect? Where are the places of consensus in our discussion? Where do we seem to be converging?
  • Questioner: What questions does this raise for me? What should we be asking ourselves?
  • Joker: How can humor be used to illustrate my thoughts? Can humor or sarcasm be useful to help evaluate these ideas?

The Messy Business of Social Movement Funding

I recently worked for a foundation that had admirable aspirations of creating large scale social change, potentially through a social movement. As we researched the business of social movement building, it proved to be a topic mired in caveats. In speaking with various funders throughout the country, we found that organizations’ timelines for shifting toward social movement building is a great unknown. Funders seeking to fuel this kind of change are in various stages along their journey, as shown by the graphic below. Some organizations have been on this trajectory for decades, while others are just beginning. But in every case, the tactical shift to building social movements as a means to fueling societal change certainly did not happen overnight.

Messy business picture v3 5Nov14
Messy business picture v3 5Nov14

One of the primary hesitations from these funders is their resistance to leading the social movement. The big question that these funders are grappling with is “how do we make a movement happen, without being the movement?” The funders understand that a social movement cannot be dependent on one organization, but to be successful, a movement must take on a life of its own, with the vision and energy coming from the community. Foundations can fuel the movement via funds, capacity building and strategic support during the ebbing periods, but cannot be the movement itself.

Funders’ apprehension to the term “social movement building” itself also stood out. The majority of funders with whom we talked noted that this language can be counter-productive. Even if they internally understand they are using the tactics of social movement building, they use language such as collaboration, networks and ecosystem to represent their approach, while avoiding the potentially stigmatized label.

It seems that a sizeable number of funders are more thoughtfully seeking long-term, deep social changes, requiring the tactics of social movement funding. An admirable goal, foundations should be prepared for a very long-term, difficult-to-define, ever-evolving journey.

We’re Growing... But Not Yet

Growth makes for an inspiring organizational story. Boards of Directors and staff can be mobilized around growth. But if work must be done in the near term in order to prepare for growth later, the story may be less than inspiring. People may ask, "If we can't make growth happen now, why expect it in several years?" I faced just this situation recently. One of our clients had just come off a highly successful run of completing innovative projects and raising a large amount of funding to support general operations. However, most of their major projects were nearly complete, and a campaign for unrestricted revenue was ending. These efforts seeded a huge potential for new, innovative program work and an increase in revenue, but that potential was unlikely to be realized until after several years of less outwardly visible initiatives—to plan and begin working on new educational projects, to align work internally and to improve their internal functioning. This organization therefore faced a major challenge: how to communicate with their Board about why growth wouldn't be realized right away, while still telling an inspiring story.

This nonprofit found a way to mobilize their Board members. Rather than avoiding a discussion about two years of flat budgets, the Executive Director explained exactly how the organization was preparing for growth in the future. She shared their new fundraising tactics. She described how increased coordination among staff groups would leading to higher organizational effectiveness.  She worked with her staff to develop a balanced scorecard for the organization, and committed to sharing the results regularly with the Board. And, she asked her Board to help realize the growth by forming committees around a new set of products; reaching out to bring their friends to events; and helping to find new trustees with expertise in needed areas.

As a result, Board members were galvanized and excited. Rather than being disappointed that growth would wait for several years, they were inspired to help realize future success. They understood how they could contribute, and could see clear links between the organization’s plans and the outcomes predicted.

From Magic to Manuals: a Hard but Worthwhile Transition for Social Innovators

In their early days of ground-breaking social innovation, many of the innovators I have known worked out of their proverbial garage, without much in the way of strategy or funding or staff. What they often did have was a gut-sense, growing day by day, that they were on to something big.

They may not have been able to name the critical elements of their approach – whatever those elements were had a kind of magic to them – but they saw the resulting breakthroughs (as did I, working and watching alongside of them)…

We saw street kids who society had given up on re-enrolling in high school. We saw parents reading for the first time with their young children. And we saw once-neglected seniors being well cared for by their neighbors and children.

In their early days, when they had some anecdotes but no data, I have seen social innovators do well to rely on intuition, opportunism, and adrenalin to hone their approach and advance their ideas.

But fast-forward a few years to a day when the social innovation had hard data behind it, demonstrating its transformative impact. At that point, the demands on the innovator looked very different.

Where agility and opportunism once served the innovator well, now commitment to a well-considered growth strategy was needed to win support and ensure impact.

Where the almost magical quality of the program was once a part of its appeal, now the innovator needed to treat any magic as a liability that must be codified or “manualized” so the program could be broadly replicated.

Where financial considerations may not have driven the work initially, now the innovator had to make them a significant part of the equation if the innovation was to realize its full potential for impact.

I have seen these transitions be challenging and sometimes even painful for social innovators to embrace. But if the opportunity for scaling the impact is real, these transitions can be worth the cost.

Is My Organization Creating Benefit? Four types of rationale

City_Harvest_Truck
City_Harvest_Truck

I expect it is important for you to know if your organization is creating social benefit. I think about this a lot, both with the clients we serve, and for our consulting firm. Donors, funders, constituents, and employees also want to know.

Here are four different types of rationale to ascertain the benefit created by an organization. While a higher level of proof may be more desirable, it is not feasible to fully prove benefit for all activities. Thus, all four rationale can be acceptable tools to inform leaders and decision-makers.

  1. An observable, causal relationship - When City Harvest collected 46 million pounds of food from the food industry and distributed them to hungry people, there was an observable, causal relationship: hungry people have been fed. City Harvest can declare the benefit it achieves based on such numbers.
  2. Evidence-based research indicating a causal relationship - The Parent Child Home Program conducted longitudinal research showing that children who had been through their program graduated from high school at higher rates than control groups. This demonstrated a high likelihood that other children going through the program would have their chance of graduating from high school  increased. The Parent Child Home Program can use this longitudinal research as convincing evidence of its benefits.
  3. A theory of change - When Garrison Institute brings together environmentalists, industrialists and government officials and uses meditation to help them find new solutions to environmental issues, Garrison Institute believes that this will help stem environmental degradation. Because this result is difficult to measure given the vast array of factors impacting the environment, Garrison Institute relies on its theory of change to guide its choices and verify the value of this work.
  4. A personal desire - Ethel Donaghue established the Donaghue Foundation with a vision of "continual improvement in people’s health as a result of research being converted to practical benefit." In doing so, she made a choice about where to focus her resources, based on a personal desire. Given that Ethel Donaghue passed away in 1989 leaving her foundation as a permanent legacy, at this point no proof is needed to determine if Ethel's vision is where the foundation should invest.

How Do Kids Build Character? See The Character Lab

Recently we had the opportunity to work with The Character Lab and their remarkable team: co-founders Dr. Angela Duckworth professor and researcher at the University of Pennsylvania, Dave Levin, co-founder of KIPP, and Dominic Randolph, Head of Riverdale Country School in New York City, along with Executive Director Brittany Butler. The organization's mission is to develop, disseminate, and support research-based approaches to building character that enable kids to learn and flourish. The organization's work is part of a growing trend to recognize character as one of the key factors for success in kid's learning and development. What then are the elements of character? In their Character Growth Card, The Character Lab posits that the following seven characteristics can be used to assess character in middle-school children, and help teachers provide students with formative and helpful feedback. Reading these also sparked my imagination and interest in how they apply to my own life, and to those around me.

GRIT

  • Finished whatever s/he began
  • Worked independently with focus
  • Tried very hard even after experiencing failure
  • Stayed committed to goals
  • Kept working hard even when s/he felt like quitting

OPTIMISM

  • Believed that effort would improve his/her future
  • When bad things happened, s/he thought about things s/he could do to avoid similar bad things in the future
  • Stayed motivated, even when things didn’t go well
  • Believed that s/he could improve on things they weren’t good at

SELF CONTROL (school work)

  • Came to class prepared
  • Remembered and followed directions
  • Got to work right away rather than procrastinating
  • Paid attention and resisted distractions

SELF CONTROL (interpersonal)

  • Remained calm even when criticized or otherwise provoked
  • Allowed others to speak without interrupting
  • Was polite to adults and peers
  • Kept temper in check

GRATITUDE

  • Recognized what other people did for them
  • Showed appreciation for opportunities
  • Expressed appreciation by saying thank you
  • Did something nice for someone else as a way of saying thank you

SOCIAL INTELLIGENCE

  • Was able to find solutions during conflicts with others
  • Demonstrated respect for the feelings of others
  • Adapted to different social situations

CURIOSITY

  • Was eager to explore new things
  • Asked questions to deepen understanding
  • Took an active interest in learning

ZEST

  • Actively participated
  • Showed enthusiasm
  • Approached new situations with excitement and energy

The Character Lab is working to develop evidence-based research results to further test the validity and usefulness of these character designations. They also plan to aggregate a set of effective practices from other research-validated approaches.

Capital is More than Money: Four Types of Capital

Recently, during a meeting  with the Hyams Foundation I learned about Matthew Wesley's idea of four types of capital: Human, Cultural, Social and Financial. Rather than considering financial capital alone, all four types of capital should be included when charting a successful future. Matthew Wesley applies the concept to families who have remained successful across many generations. At the Hyams Foundation we found the concepts to be applicable to organizations and philanthropic institutions as well.

Financial Capital refers to the financial assets an entity has to invest in its future. Capital is different from income. High revenues can be offset by higher expenses, eroding financial capital. It is financial capital in reserves, unspent, that bolster an organization.

Human Capital is the resources that individuals and groups have, such as education, emotional resilience, physical health, and self-esteem. This capital can be built over time, and can also be eroded through poverty, natural disasters or other misfortune.

Social Capital relates to the development and maintenance of social networks, helping us to attain our goals while we help others attain theirs. The pattern of social networks has been changing dramatically in recent years with the advent of the virtual world.

Cultural Capital relates to the mindsets, the ethos carried by a group as it moves along its path. Culture is commonly conveyed through stories which demonstrate "how we do things around here." Culture can be a powerful foundation for an organization's equilibrium, and if eroded can cause the organization to falter or even fail.

In thinking about your organization, consider all the forms of capital that influence its success.  Human, social and cultural capital can be as powerful as financial capital in securing the future.

Should We Merge?

Merging road sign 2
Merging road sign 2

Recently, mergers and acquisitions have been a hot topic among my clients.  This concept has come up any number of times – almost always suggested by a Board member and motivated by for-profit corporate thinking.  Mergers and acquisitions do serve a purpose, but they are complicated and challenging to execute well in the for-profit sector, and potentially even more so in the non-profit sector.

First – I bristle when the concept comes up as a direct and solitary question, “Should we pursue a merger or acquisition?”  It is my firm belief that this question should only be an execution question to fulfill a strategic direction.  Why do you want to merge?  What goal are you trying to achieve?  Most non-profits run so lean that simply achieving cost savings is not a likely outcome of a merger and, therefore, shouldn't be a primary objective.

Of course, there are many strategic directions where a merger or acquisition could potentially be helpful – if an organization is seeking to build out complementary services, enter a new market, gain access to clients or donors that it can’t reach right now, etc.  And sometimes, foundations or other funders look so favorably on consolidation that they will provide additional support to organizations that are merging.

Having said that – there are a number of challenges relating to mergers that come to mind:

  • Even if two organizations offer similar services to similar clientele, the two organizations may have different models for how to provide their services.
    • Generally organizations have strong beliefs about their models of service, so major differences can be hard to bridge.
    • Fundraising does not often follow a simple 1+1 = 2 equation.  If an individual, foundation, or corporation is giving to both organizations – it is unlikely that they will give the total amount to a combined entity.  (Conversely, mergers and acquisitions can be useful when there is a dominant funder like the government. Working with a larger, combined entity might benefit that funder and the combined entity might be in a better position to capture greater amounts of funding.)
    • Culture fit matters even more in non-profits than in for-profit combinations
      • The Boards need to see eye-to-eye, and feel comfortable and aligned.
      • The staffs must feel that their cultures will mesh.  Oftentimes a non-profit's major assets are its people, and losing those people might greatly reduce the value of the combination.

A straight acquisition might be easier than a merger, as the acquiring organization can define the culture and the service model.  Mergers of two similarly sized organizations can be very challenging and time-consuming to execute. In these cases, true strategic value needs to be clearly identified to make it all worthwhile.

Is Growth Always Good?

When I was an MBA student, I absorbed the message that growth is always good. And later at The Boston Consulting Group, working with corporate executives, I shared their assumption that a growing business is a successful business. "If you're not growing, you're dying," was an oft-cited phrase. But for nonprofit organizations it's not so simple. Of course, there are times for growth. Incubators like Blue Ridge Foundation New York, New Profit, and Bikkurim find and support nonprofits with high growth potential. And an organization like City Harvest that feeds the hungry of New York has a mandate for growth given all the unserved hungry people in the city. But an advocacy organization like the D.C. based Afterschool Alliance can fulfill its national role with a staff of around 25. Further growth is not required. And some organizations have found themselves over-sized for the funding available, or ungainly in their operations, and have chosen to downsize.

I have seen business executives on a nonprofit board confused when realizing that growth for the nonprofit will mean increased deficits. In business, growth in products sold or services delivered typically leads to increased profits, which can mean re-investment for more growth. It's a virtuous cycle. But for nonprofits, the equation is different. Given that most nonprofits require donations and grants to subsidize their work, growth in service delivery requires more fundraising to fill deficits.   And if the organization's funding is tapped out, growth may not be advisable even while the need served by the organization goes partly unfilled.

Based on our experience, it is an open question if a nonprofit should grow. An organization can be long-lasting and sustainable by finding the right business model, right-sizing operations to fit revenue potential, and delivering services with excellence. Growth is not always good.

What do you think? I'd love to hear from you. Please leave a comment.