I am using the teachings of Michael Kaiser, author of the 2008 book The Art of the Turnaround, to reflect on my own career experiences and offer some advice to any reader of this web log about the art of non-profit management. There is some lamenting as I write this, however, since advice of any value comes from those who have made mistakes and lived to tell the tale. I have made more than my fair share of mistakes and am still here, which leaves me with this opportunity to have my say, whatever its value.
Last week we saw that Kaiser’s Rule Number 1in his list of ten rules for an effective turnaround is that some one individual must lead the effort. I agree, but would simply extend this to mean that one person must always hold the top leadership role in any organization, whether it is confronting something as drastic as a major turnaround or seeking to enhance an already stable position. On the desk of that one leader is where the proverbial buck stops long enough to get parsed into its most important uses. And this cannot be decided by committee with its many faceted claims to every dollar.
This week’s message concerns Kaiser’s Rule Number 2: The leader must have a plan.
Anyone moving into a leadership role of an existing organization will likely find that all of the requisite documents exist; mission, vision and value statements, strategic plans, annual plans and budgets. If yes, then two questions must be immediately answered. Are they being used? And, more importantly, are they worth using? In a turnaround situation the likely answer to both questions is no. Otherwise, a person of Kaiser’s caliber would not be needed. A decisive first step may therefore require a quick surgical strike to remove the dead tissue from a still thriving organism in order to assure its longevity. Otherwise you are simply there to collect a check for supervising the post mortem.
A good leader knows in advance what is needed for creating a healthy organization. He or she will arrive on the scene with the basics already in mind, a generic plan that will be fine-tuned over time. And in the case of a much needed turnaround, you can’t wait for the type of formalities to take place such as a formal strategic planning process. Implementing the much needed changes becomes a matter of doing a quick audit, matching one’s pre-existing checklist of desired behaviors to the actual performance of the entity. Step one, therefore, is to take an inventory of the organization’s resources; its human capital, financial structure, materials, location, operating systems and the external business environment.
This is a hands-on preliminary step that will assist in the strategic planning process, which will take place at a later date. Initially it is a leader/manager’s premiere tool for determining first-hand the organization’s capacity for performance and for change. It is an activity you must be seen doing in order to convey an unspoken message to all about the importance you place on them and the work they do to advance the mission. With this information, you can then proceed in designing or refining the program as needed.
For some management advisors the initial refinements must involve changes in personnel. This is Jim Collins’ “First Who” principle. In his 2001 book Good to Great he used the metaphor of getting the right people on the bus and the wrong people off before addressing any other aspect of business operations. For those of us in the non-profit arena, who have managed member-driven organizations, personnel changes are extremely difficult to make. Members form an elite group from which you, as paid staff, are forever excluded. And they thrive on self-preservation. It transforms “First Who” into “Eventually Who” if you can last long enough by winning their hearts and minds through other achievements. For me, this took the form of bringing in more money than they ever thought possible. My strategy for blatantly chasing such filthy lucre involved three steps: create diverse sources of revenue so that no one source accounted for more than 30% of the organization’s total annual income, make charitable contributions the largest of these sources since earned income is more costly to generate and is limited by an organization’s capacity in space and manpower, and focus your marketing on women. They control the purse strings.
All other aspects of a business’ operations are fair game for making changes. But the ancient axiom of first things first is important to your scheme of implementation, for while speed may seem to be a necessity from your point of view, you will find that expediency and diplomacy are often in conflict. Shock and awe tactics can lead to the early shock of being invited to leave the premises to the delighted awe of those intransigent souls adept at waving good-bye to you and any prospects for success.
Kaiser sums up his generic plan in four words: Good art, well marketed. His plan for creating the kind of excitement that leads to increased ticket sales and donations is in the production of quality programming. And this must be supplemented by intelligent marketing; campaigns which understand the best audience segment to target with its advertisements. His confidence, and proven track record, is in great ideas promoted early and often to the right people. Ironically this is antithetical to the general approach troubled organizations take, which tend to cut their marketing budgets and reduce programming options. The unintended result is that they also cut their ability to generate revenue.
For me, Kaiser’s mantra is supported by the sage wisdom of the late, great management guru Peter F. Drucker. His advice for creating a customer, which he termed the only true purpose of any business, was in two basic functions, innovation and marketing. Kaiser has simply applied the concept of innovation to his programming, the art of the organizations he led. Innovation is certainly important to all other aspects of business operations, but the product or service must take pride of place in a manager’s plans for leading any business to financial growth and stability.
“In the end,” Kaiser writes, “the plan must focus on creating a self-sustaining organization.” So here is my own final admonition for any leader of any organization. It might seem to be a bit premature when discussing the art of the turnaround, where all the focus is on resuscitation. But having a succession plan is an integral part of sustainability. Every leader, whether in a temporary turnaround role or one of long-term duration, must be viewed as expendable if only because he or she is mortal. Therefore no plan is complete without knowing how to make any future leadership transition as seamless as possible. What one must ask and honestly answer is happens when I, like Elvis, leave the building?
It is one thing to build a strong organization which thrives when you are there to superintend the operations. But that is still short-term thinking. Preparing the way for a specific someone to follow is paramount to an organization’s surviving the demise of an effective leader. A viable organization needs to be able to confidently attend the funeral and shed its tears for the deceased and not for itself.