Organization

A Good Case for an Endowment

Image: © Rfischia | Dreamstime.com

Image: © Rfischia | Dreamstime.com

I recently heard the story of a donor’s gift to his daughter’s private school. Not, as one might expect, a shiny new fitness center or maker space – but a new set of much-needed storm windows, which would pay dividends in the form of energy savings for years to come. The condition of his gift?  The windows had to bear his family name. 

The story of the “Smith Family Storm Windows” is a compelling statement on the challenges that non-profits face in covering unglamorous expenses – like storm windows – that are nonetheless necessary to keep an organization running. By having the windows bear his name, this donor hoped to highlight the importance of supporting the general operations of the school to other donors.

It’s a story – and issue – that resonates with many of the non-profit managers that I work with at Wellspring. Donors are much more apt to support programs or fund new buildings than to provide unrestricted funds that keep the lights on (or the heat in). Often, this means that organizations must raise operational support through annual campaigns, special events, memberships, and so forth. These income streams can be unpredictable and there is an ever-present anxiety of missing the year’s targets.

For this very common dilemma, a solution we’re often asked about is building an endowment fund, an investment that is set aside for the long-term support of an organization. Only the income, or a portion of the income, is spent each year. An endowment represents the promise of a reliable income stream to cover operating expenses, fill occasional shortfalls, or even seed new work. Many eminent cultural, educational, and healthcare institutions have accumulated massive endowments – if Harvard University is doing it, many wonder why shouldn’t we too? Putting aside the question of whether Harvard actually needs $20 billion for a rainy day, is raising an endowment fund in fact a good fit for smaller non-profits?

I recently found myself pondering these questions while working with a mid-sized regional science center on their five year strategic plan. The center has thrived and grown over its brief ten year history, and has a very active board that’s committed to ensuring the institution’s long-term viability. Its campus, including its LEED certified building, cutting edge exhibits and extensive outdoor attractions, are beyond what you’d expect from a regional institution, particularly one that happens to be located in a fairly remote location. Less surprising is that these programs don’t come cheap – the operational expenses associated with maintaining this impressive infrastructure are a big part of the center’s budget.

The center’s leadership reached out to Wellspring Consulting to help them assess the institution’s long-term financial sustainability. In particular, they had concerns that finding ongoing support for the less “glamorous” aspects of museum operations, namely the maintenance and refreshment of their facilities, was getting more difficult over time, as donor fatigue set in. Some members of the board felt that the answer was the creation of a large endowment fund—the bigger the better, since a larger principal would mean more investment income, and therefore less pressure to raise other funds on a yearly basis. This makes perfect sense, right?

Up to a point, yes – a bigger endowment may be better, all else being equal, but in the world of fundraising that’s rarely the case. There are reasons why smaller organizations might wish to be modest in their endowment ambitions, or even avoid endowment fundraising altogether. The answer to whether a given organization should pursue this strategy needs careful analysis of its current financial and programmatic position, trajectory and goals.

Much ink has been spilled on often underestimated complications that come with building an endowment. Some potential downsides of these funds include:

  • Needing to be big. When it comes to the value of an endowment, size really does matter. To provide meaningful income, an organization’s endowment needs to be substantial relative to their yearly expenses. For example, if an organization has an annual budget of $10 million and it manages to raise $2 million in endowment funds (no small feat for many organizations of this size), that would only give them $100 000 dollars toward their expenses each year (assuming annual earnings of 5%), covering only 1% of the budget.
  • Robbing Peter to pay Paul. Raising enough money to cover current annual expenses poses a challenge to many non-profits, let alone trying to build a fund to cover future expenses. Donors may only be willing to give to one funding stream. Raising that $2 million for the endowment may reduce giving in other areas, including support for core programs.
  • Creating a need to feed the beast. A recent conversation with development staff at a private university highlighted another, less often noted, issue with endowments. Because the size of an endowment is easily quantified, it can become a measure of organizational success in and of itself. This can result in a focus on growing the endowment (to achieve ever greater success) rather than viewing the endowment as means to an end: that is, the creation of an important rainy day fund, or important revenue stream to cover overhead costs.

However, along with these challenges, there are potential upsides to building an endowment, even for smaller organization. Non-profits are understandably drawn to endowment building because, among other benefits, they may:

  • Attract large gifts. Individuals often prefer to make major gifts (including bequests) to support features or efforts that will remain in place long after they are gone. For example, universities and hospitals often receive major gifts that support new buildings, wings, or endowments from individual donors. Contributing to an endowment ensures that the gift lives on beyond the donor. (A corollary of this is that many organizations now require funders to cover future operating costs of buildings or programs they donate.)
  • Signal strength. The existence of an endowment can serve as a signal to donors that an organization will be around for the long-term. This may draw further support from those who wish to invest in an institution that has longevity.
  • Support operations and innovation. Because it comes in as unrestricted dollars, the income from an endowment can be used as needed in any given year—for example, to smooth out financial shortfalls in lean times, and can also be used to cover ongoing overhead costs (paying for those storm windows!), or even fund projects that are more experimental in nature and may put an organization on the cutting edge of its field.

In order to determine whether our client, the regional science center, should build an endowment, the Wellspring team collected and analyzed data from a variety of sources. We made our final recommendation after having engaged in the following activities:

  • Analyzed the center’s current financial status and built ten-year financial projections that accounted for multiple funding and expense scenarios.
  • Conducted interviews with existing and prospective donors to assess their willingness to support the center in the future.
  • Conducted interviews with Board members to ascertain their willingness to give to an endowment campaign and to elicit funds from those in their social networks.
  • Held in-depth conversations with the center’s leadership and development staff to gain a greater understanding of their capacity and support for conducting an endowment campaign.

After intensive analysis of our data, we concluded that this is an appropriate time in its planning trajectory for this science center to move forward with building an endowment. This decision is grounded in a deep understanding of the organization’s capacity, programs, and goals for its future. Key factors that led us to this recommendation include:

  • The source of the center’s future deficit is the maintenance of its impressive infrastructure. Covering this cost requires a reliable stream of operating funds, which is well-suited to the nature of endowment income.
  • The amount of investment income required to cover the center’s shortfalls does not require that they build a Harvard-sized endowment. The endowment goal is aligned with realistic levels of giving for this institution.
  • The center’s existing donor base is willing to contribute large sums in the form of bequests to an endowment.
  • The Board is committed to building a restricted endowment and is willing to actively engage in fundraising for this purpose.
  • The staff leadership of the center understand and are committed to making the investment needed to launch and implement a successful endowment campaign.

While the Wellspring team recommended that the science center pursue an endowment campaign, this should not be interpreted as a global endorsement of non-profit endowment fundraising. If anything, our research and analysis reinforced our belief that strategic and financial planning is not a one-size fits all endeavor. For example, if we had found that most of the center’s individual donors would redirect their support from the annual campaign toward the endowment campaign, we would have reached very different conclusions.

To return to the story of the Smith Family Windows, the school was clearly lucky to have a forward-looking donor willing to “invest” in mundane day-to-day expenditures. For some (but not all) organizations, an endowment fund can serve the same purpose.

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?

Losses Loom Larger...

Do you care more about losing a dollar or gaining a dollar? If you are like most of us, losing that dollar will make you more upset than gaining that dollar will make you happy. So, you probably care more about losing a dollar. This phenomenon is known as loss aversion, or the tendency to strongly prefer avoiding losses to acquiring gains. In fact, research suggests that our emotional reaction to a loss is about twice as intense as our joy at a comparable gain.

I have seen this behavioral economic theory play out in many venues. Most recently, I found myself using it to explain why a nonprofit organization with whom Wellspring was working chose not to pursue what, by all practical measures, seemed to be an attractive merger. In this recent project, our client was looking at options for a merger with a specific partner, a much larger organization in the same field that could offer – amongst other things – financial stability.

We went through the necessary diligence process to test the attractiveness of the merger, and, after a series of meetings, both leadership teams decided that there was strong alignment and identified significant opportunities for programmatic synergies. It just seemed to work.

So why didn’t it?

In the last meeting, there was a clear sense that our client was struggling with a looming sense of loss. Though the leaders saw the benefits that a merger with this partner could bring to the field overall, as well as to this organization’s financial situation, our client could not get over the loss it would feel if its brand, programs, people and/or leadership position in the field were possibly lost, or, more likely, transformed by the merged organization.

So, despite the partner’s best efforts to assure our client that its legacy would continue, the merger did not happen.

Clearly, there were a variety of factors that led to this “no-go” outcome. However, I do believe that our client’s looming sense of loss was a key contributing factor. The potential gains were clear: financial stability and exciting program synergies that would lead to greater impact. However, those were outweighed in our client’s mind by the even more powerful potential losses, especially the brand as standalone.

Ultimately, the decision not to merge may have been the right one for a host of reasons. Having said this, it is not surprising that our client focused more of its attention on the potential losses as opposed to the potential gains. We should recognize that, while we are all subject to these behavioral biases, it may be helpful to work through them by approaching our decisions with analytic rigor and, when appropriate, an outside perspective.

What is the Right Organizational Structure for Us?

Org chart 24Mar14-001
Org chart 24Mar14-001

Over the years, I have worked with Chief Executives seeking to get their organization's structure right. They have grappled with questions such as: Should we have a COO to oversee operations? Do we need Regional Directors to run areas of the country? What control should the national office have over local offices? To whom should the Development Director report? One way to answer such questions is to use objective criteria. For instance, a span of control greater than 6 or 7 is a stretch. Or, work conducted by senior people should be delegated down to those more junior wherever possible.

However, objective criteria alone cannot specify an organization's structure. There is the human factor to consider -- we all come with our idiosyncrasies. Take the case of a brilliant Program Director who is expecting a promotion to the COO position, but isn't strong in management and delegation skills. Moving someone else into the COO role could cause the Program Director to leave, while the promotion might cause him to flounder. A third option of assigning an excellent Project Manager to work with the Program Director in his new role could lead to success. Consideration of human factors -- the specific capabilities of the people involved -- leads to an improved solution.

An organizational structure solution may also be temporal -- its value having a shelf life. Because a given structure tends to optimize for some factors while attenuating others, using one structure for too long may cause problems to arise. To address this, organizations may alternate between different structural approaches. For instance, in a national organization with affiliates and a central office, a period of tighter central-office control aimed at reining in quality infractions may be followed by a more laissez-faire approach from the central office to stimulate local innovation. Organizational structures may oscillate over five-to-ten-year periods, first optimizing for one thing, then another. 

Finally, it is useful to remember that a structural solution can only go so far in solving an organization's problems.  People may need to be replaced, or training may be in order. Conversely, when an organization's staff is excellent, one of several different organizational structures may work just fine.

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.

How to influence your field? Be shaped like a “T”

The Letter T
The Letter T

If your organization wants to have broad impact on its field, consider this: Success often comes when an organization can use direct program experience to inform its position of thought leadership.

Here’s a case in point. Consider the Brazelton Touchpoints Center that helps improve care for very young children. They had a question: Should they continue to deliver in-person training and consulting to health care workers and parents, or should they focus on disseminating their ideas broadly to influence such people all over the country?

As we worked with the Center, it became clear they needed both. The direct interaction with those engaged with young children provided concrete experiences and a fertile ground for testing new ideas, which in turn informed the organization’s disseminations to the field. Moreover, such experience added credibility to their message.

You can picture this combination of direct service with broad ideas dissemination as the letter “T.”  The stem of the T represents in-depth direct-service work conducted in specific locations, going narrow and deep. Here the organization provides direct service to people, delivers training, conducts programs, or provides coaching and consulting. The organization can use these “laboratories” to develop innovative approaches, and evaluate its results.

We have seen a number of organizations use this T-shaped structure to advantage, including Frank Porter Graham Child Development Institute, a university think tank bringing innovative approaches to early child care, Garrison Institute, bringing the wisdom of meditation to social change efforts, Glynwood Center, a land-use organization helping to preserve farmland, and the Child Health and Development Institute, an advocate for high-quality children’s health care. In each case, the organization engages in direct-service program work, training health care practitioners, running a grass-fed beef operation, or hosting meditation retreats. These in turn strengthen the organization’s ability to develop and disseminate really useful ideas that others can employ.The cap of the T is the dissemination that brings proven ideas to the field, going broad and wide through publications, social media, or public presentations.

So, if you want to influence your field through well-founded, practical ideas that others will use, one good way is to be shaped like a T.

Checklist for a Successful Leadership Transition

In our work, we've seen a number of top leaders move on to other jobs. The transition is not always smooth. If the Executive Director or CEO of your organization is planning to leave, use the following checklist to see if your organization is ready:

  • Shared identity. Does the Board and remaining senior staff share a clear and coherent understanding of the organization's identity and purpose?
  • Buy-in. Has the organization been sufficiently prepared for the transition, allowing it to develop buy-in for the leadership transition?
  • Mechanics. Are the mechanics and schedule of the transition well planned, including the timing of announcements to employees, Board, funders, and other stakeholders, and the process of hand-off from one leader to the next?
  • Bench strength. Are the staff just below the leader strong enough to carry the organization during the transition period until a new leader is solidly in place?
  • Institutional memory. Has the organization instituted a method to transfer knowledge and relationships held by the exiting leader to others in the organization?

For many organizations, it will take time to put these elements in place. To the extent possible, plan ahead for a successful leadership transition.

Do you have other points to add to this checklist? Please leave a comment. We'd love to hear your ideas.

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.

Did Your Strategic Plan Get Dirty, or Dusty?

Recently, I was in a meeting with a strategic planning team at the Village for Families and Children in Hartford, Connecticut. Gallo Rodriguez, the President of the Organization, said "Our strategic plan should get dirty, not dusty." He was calling upon the group to work towards a strategic plan that would lead to action, and change the way the organization works. We often hear people say, "We don't want our plan to just sit on a shelf and gather dust." Rather, they want the plan to guide their work and be actively used - in other words, to "get dirty." How can you assure that your strategic plan guides your work and "gets dirty?" We've found five elements that help this come true:

  1. Articulate your most important strategic questions, and focus your strategic planning process on providing answers to these questions.
  2. Collect the facts. Analyze them to generate insights about your environment, your competitors and collaborators, your revenue opportunities, and use these insights to arrive at well-founded decisions about the future.
  3. Assemble a planning team of your organization's key decision-makers and influencers. Engage this team to discuss fact-based insights and reach decisions about the organization's future. See that team members act as representatives of the various constituents of your organization -- staff departments, Board groups, external stakeholders -- and work towards a consensus that considers all views.
  4. Listen for what will work. Gather advice. Involve people. The naysayer, the visionary, and the pragmatist all have important contributions. Great outcomes emerge through careful listening and creative development of solutions that address what has been heard. And when people feel heard they are more likely to support the plan.
  5. Establish an unambiguous plan of action and use it to guide who does what, by when. Clearly describe each action step so anyone can tell when it has been accomplished, has one person ultimately responsible (not a group), and has a due date on the calendar.

By using these five elements, you will greatly increase the chances that your strategic plan will guide the work of your organization. You will have a plan that gets dirty, not dusty.