For the last few weeks, we’ve been talking about the steps nonprofits need to take to make a greater social impact, including working directly with the community to help overcome their challenges (step 1) and building more effective partnerships through collective impact (step 2). But, we haven’t spent a lot of time talking about what happens day-to-day behind the scenes at high performing nonprofit organizations (step 3).
Early on in my career, I had the privilege of working for one of America’s Great Places to Work at a time of immense revenue growth, with a team of more than 30,000+ employees around the world. And since then, I’ve been reading about and evaluating great organizations in both the for and nonprofit space.
So, what does it take to run a world-class nonprofit organization? What did we learn? It’s damn hard (I know, of course it is!).
But, we’ll try to simplify the process and focus on a few core areas we believe will help you tidy up your house, build a high-performing organization, and increase the likelihood of delivering on your mission.
Step 3: Running a World-Class Organization
Clear Vision & Goals
We touched on this briefly as part of an effort to build strong alliances through collective impact, but now we’re talking about the vision and goals specifically for your organization. Do you know what your organization’s vision statement is without looking it up? For example, who do you think rallies around “a hunger-free America”?
I’m sure your organization has a vision, but is it short, positive, and “sticky”, so that everyone on the team knows why they go to work each day? Has your board bought-in? Do you have SMART goals for each of your team members that align with your vision, so people understand how their work ties into it and are accountable for achieving it? Do you have a story map to achieve it, so it doesn’t seem insurmountable?
Great organizations don’t create a vision, throw it on their website and hope they get there. They have a plan of attack, incorporate it into their processes, and hold their team accountable to it everyday. And, by the way, if you guessed Feeding America is working on a hunger-free America, you’d be right.
Culture of Innovation
Innovation is a loaded term, a buzzword, but hear me out. We aren’t talking about lightning strike moments. We believe it’s about giving employees, no matter their level, the opportunity to raise ideas for improvement, empowering them to take action, and using methodologies like Agile/Scrum to deliver on them.
The real magic happens when those ideas are turned into action and executed on a daily basis with clear accountability and deadlines. That’s when you start to see a cycle of continuous improvement.
And, to create that cycle it all starts at the top, requiring leadership that values feedback, encourages collaboration, divergent thinking, and is open to honest two-way communication.
This is another area we touched upon in collective impact that is imperative for success. First, you need to define success and the outcome data you’ll need to prove it. What data are you collecting? How are you leveraging data to make evidence-based decisions? How do you tie it into your team’s SMART goals and overall measures of success?
You’ll have to push past baseline metrics like numbers served and funding dollars raised to really dig into the results you are hoping for. At the very least you should be thinking about the outcomes you are looking for and how you can track progress on getting there. These results and data should be then be shared with your employees, board, funders, and community to show your impact, especially with the rise of impact investing and the decline in trust of nonprofits.
How are you leveraging data to tell your story of impact?
My partner Felicia wrote an excellent article on financial clarity, so I won’t delve too deep, but the basic premise is this: do you know where you stand financially, so you can make solid decisions on things like hiring new staff, investing in new space, and scaling up your impact?
Luckily, there are people like Felicia and affordable tools like Quickbooks that can help get you on the right track. And, with a basic understanding of your past financial performance, an up-to-date budget and forecasting, and key performance indicators (KPIs) that align with your long term organizational goals, it’s possible to reach true financial clarity.
Back in November I wrote a piece on marketplace “noise”, your customer journey, and “sticky” messaging as it relates to your marketing and communications efforts, so you can stand out in a crowd. The essence? Know thy customer and personalize the journey based on their needs.
Did you ever hear about the story of Target figuring out a teen girl was pregnant before her family? It’s been 7 years and I still think of that story for an organization that truly knows their customer (even though it may be a little creepy!).
For now, I’ll simply add that it’s also important to remember that your employees and volunteers are your audience too. Does your vision and communication inspire your own team to act? What’s the best way to reach them? Why do they keep showing up? If you can get this right, you’ll be laying the groundwork for inspiring the community to get more involved.
Time and again we find that some of the most sustainable, established organizations are great at incorporating earned income into their funding strategy. Whether that’s a membership model, selling goods like Girl Scout Cookies or providing services to those who can afford it for a small fee, the best are moving past donor fatigue and restricted grant funding into revenue streams that allow for reinvestment in their people, technology and innovation.
And though I made a case for earned revenue last year, I still believe it to be true today, with one major point of clarification. As you look to build an earned income strategy, work to leverage your core competency, whatever you’re good at, to drive that revenue or else you’ll be exhausting your resources trying to run two businesses with one team.
Have you ever been on a team where it seems like there is a revolving door of new hires?
Organizations of all shapes and sizes struggle with high employee turnover. Because of that, the field of employee engagement has been gaining momentum over the years to help organizations keep employees happy and engaged at work.
Some organizations run a yearly survey to benchmark engagement year-over-year and develop an action plan in coordination with HR to improve engagement. In that survey they ask questions like: would you refer a friend or family member to your organization and are you proud to work here? For other teams, it could be as simple as an after work happy hour or meal to show your appreciation.
So, what are you doing to keep your team engaged? If you’ve read this far, then you’ve got a solid start. At the end of the day, employees want to know that their work matters, that their voice is heard, that they are empowered to make change and that they are treated fairly. The end game is getting the best out of your team. And, with a lofty vision, do you think an unengaged team is going to get you there?
Are you running a world-class organization?
What do you think? Are we full of it? I know that was a lot to digest and I’m breaking all of the “sticky” messaging rules I advocate for, but chances are you are already doing some of these things.
But, to become world-class and drive real change, I challenge you to push it. The status quo is not enough. You need to push out of your comfort zone, because the work you do everyday impacts lives and people are counting on you. If you aren’t pushing for a world-class operation, then people suffer.
So, what are you going to do today to improve your organization? If you need a little help getting started, feel free to reach-out to me at loren(at)impaktfel.com and we’ll take you through our discovery process to help you build a story map and get there.
Checklist: Step 3. Run a World-Class Organization
- Clear Vision & Goals
- Culture of Innovation
- Outcome Driven
- Financial Clarity
- Inspired Messaging
- Sustainable Funding
- Engaged Employees