Saturday, December 20, 2008

Were taking a break

Its the festive season and we are taking a break for a couple of weeks. We are shutting up shop, leaving the laptop in the office and putting the phones on message bank while we spend time with friends and family and recharge the batteries. To all those that chose to follow this blog through 2008 we thank you and we feel humble you should choose to share the journey with us. We hope you all enjoy the festive season, however you celebrate, or otherwise, and we look forward to traveling with you in 2009.

John Coxon

Wednesday, December 10, 2008

How does your nfp fare in these economic times?

Glastonbury Child and Family Services was recently reported in local media.Glastonbury is reported to be experiencing financial difficulties due to the economic downturn. Many programs are funded from Glastonbury's reserves, according to CEO Judy Wookey; these programs are under threat and may result in workers being deployed.

How is your organisation faring in these difficult times? Have you invested reserves in non-bank organisations? Are those funds accessible or frozen?

It is to be expected non-profits will have in place a policy and framework to guide the board and management on investment decisions. Afterall we are trustees of those funds we hold. The problems can begin when economies go into freefall. Decisions made in the past, when stability reigned, can be inadequate in these changing times. Of course, the economic decline has been in place for a while and many organisations have felt the impact - yet there is likely to be more pain before stability returns. If your board hasn't looked at its policies and applied a risk management analysis to its funding and reserves then now might be the time to do so. Better late than never.

An investment policy should contain clear guidelines on objectives such as investment types, timeframes and even levels of return on investment, details on who is responsible for investment decisions and reporting processes and even costs. While it is clear the management team must take responsibility for any losses incurred, equally so must the board or committee. It is a responsibility of the governance team to have in place risk management process, which should include an analysis of risks associated with financial investments.

Government funding bodies have a responsibility to ensure adequate funding of programs delivered by social service agencies on behalf of the government. In the case of programs funded through non-government means the responsibility for fiscal conservatism falls squarely on the shoulders of the board and management team.

It is rare for financial calamity to occur overnight. When it does occur, hindsight, wonderful as it is, will almost always show that a series of 'key events' occured, which if they had been monitored and given appropriage analysis would have served as a flag to management that whatever was being done wasn't working and that it was time to do something new. Every non profit has the opportunity to avoid financial disaster. Does your organisation have the experience and skills amongst board members and managers to spot the trends, to analyse the data and to make proactive decision?

Let The Journey Continue
John Coxon
Taking You From Frontline Manager to CEO
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Tuesday, December 9, 2008

The environment is shifting

I am in one of my bold prediction moods. Actually I might not be that bold, it might just depend on your perspective on the future.

Noone likes change. Seth Godin once wrote, 'successful companies dont like change, people in successful jobs especially dont like change'.

David Kirk, ex-CEO, Fairfax Group, this week paid the price for an inability to adapt to a changing environment.

Interestingly, David Kirk, quoted one specific environmental factor contributing to the changing environment that Fairfax operates in. That factor is called the internet.

Now lets return momentarily to Seth Godin. He pointed out that the internet is not going to change the world (surprise, surprise). The internet enables the world to be connected in a way that could never have occured in the past. It is this connectivity that allows information to be accessed by everyone, allows information, both good and bad, to spread quickly throughout the world and enables decisions to be made quicker. The internet is the enabler.

David Kirk, along with the Board of Fairfax, did what every other company tries to do when under pressure. They looked to cut costs to maintain profitability. This is what is demanded of shareholders. The issue here, as I see it, is that changing environments demand different strategies, creative strategies, maybe even something different, rather than more of the same traditional strategies. Try telling that to shareholders (or stakeholders).

Will Fairfax survive? I don't know. It doesnt really matter, there will be someplace else for shareholders to move their investments into. The bigger question for you as a manager in the not for profit sector is to ask how the shifting environment might impact upon your organisation?

Do you believe your organisation could be replaced by a faster, more nimble, less expensive to operate alternative? If you are tempted to answer no to this question then I truely hope you are within a couple of years of retirement. At least then you will not have to pay the price for your short sightedness.

Informaton is no longer the sole domain of professionals. Look at how health information is becoming accessible to a wider group of people. When people become informed they become empowered to make their own decisions.

You might be aged 40+ and working with people aged 20+ at present. Those that will succeed you over the next 20 years are those from the ranks of Gen X and Gen Y. These people have been bought up in an online environment. As will many of those that will seek their help. They are not afraid of a changing environment, they will adapt and learn and continue to adapt. Their success will not be measured in terms of stability rather in terms of achievement.

So are you still thinking in the past or has your thinking shifted to the future? Do you plan to stay in the present and take whatever happens to you or do you plan to adapt, learn and continue to adapt? If you do not, others will, and you will be left behind sitting at your desk looking at a very antiquated desktop and wondering why there is noone there to talk to!

Let The Journey Continue
John Coxon
Taking You From Frontline Manager to CEO
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Tuesday, December 2, 2008

Using Social Media

We are new to this stuff. Well kinda new. And in speaking up we run the risk of 'having a little bit of knowledge and appearing dangerous' so please take our comments in context and treat them as part of our learning experience as much as yours.

This whole social media stuff can appear daunting and even somewhat irrelevant to anyone aged 50+. Believe me I've given myself a headache over the past few weeks as I've worked my way through it. You know I'm reasonably tech savvy, have been online since 1994, designed my first website in 1997, started blogging in 2005, used IRC to connect remote peoples back in 1998 and can recall ICQ - does anyone use that anymore? But this social media stuff is something different.

What is my take on it so far? It's not about me. It's about creating something called community. Oh that is so easy isn't it? We can all do that, we are all community builders, aren't we? Not!

What do I mean by community? I mean it is about people you may not know, may not even be aware off, likely cannot see, may never meet, from anywhere in the world. Why are these people important? Cause they communicate with each other. They share ideas and information. Now there is a new concept - sharing ideas! That will take the world by storm.

Increasingly people, in particular those aged under 35 use the online world to seek referrals, reassurance, familiarity etc. They are so familiar with locating information online it is the first place they turn to. Back in the good ol days when I was at primary school I used to see my Mum and all the other Mum's in our street standing outside one of our houses, sharing information - that is community.

What are the implications for ourselves, for those in the non profit sector? Don't even get me started, it will take more than this blog and I am not really qualified yet to answer that. Click on the link under 'Stuff worth viewing' to read Laura Papworths blog - it is humerous, it is enlightening, its in your face and yes to many of us old f*#ts, some of it will be confronting.

Does it work? Buggared if I know. Havent worked out how to measure it all yet.

Do I believe it is worth it? Yes, so far.

What do you need to help make it work? Panadol and lots of spare time, and we all have plenty of that - the time I mean, don't go near the Panadol!

Do you have to learn this stuff? Yes you do. Why? Because if you do not, others will, and they will establish how to benefit from it and you will be left wallowing in the dark ages.

Now here is a suggestion for you. You have been wondering how to engage those 20-somethings that want to work for you or volunteer for you. Gather them all in a room, give them broadband access and a couple of laptops, tell them what you want to achieve from this social media bandwagon, leave them ample food and water, lock the door and dont let them out till they have finished.

Let The Journey Continue
John Coxon
Taking You From Frontline Manager to CEO
Skype: john_coxon
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Are You Engaged In Your Workplace?

The Gallup Organisation created the following set of questions to determine the level of engagement of employees in their workplace. Through their survey they determined only 29% of people were engaged in their work. Authors Buckingham and Coffman, in their book First Break All The Rules discuss the significance of these questions.

Try answering the questions for yourself and then ask you own employees to answer them. What are the results for your organisation? View articles written by Renee Cormier on this issue.

1. Do I know what is expected of me at work?
2. Do I have the materials and equipment I need to do my work right?
3. At work, do I have the opportunity to do what I do best every day?
4. In the last seven days, have I received recognition or praise for doing good work?
5. Does my supervisor or someone at work seem to care about me as a person?
6. Is there someone at work who encourages my development?
7. At work, do my opinions seem to count?
8. Does the mission/purpose of my company make me feel my job is important?
9. Are my co-workers committed to doing quality work?
10. Do I have a best friend at work?
11. In the last six months, has someone talked to me about my progress?
12. This last year, have I had opportunities at work to learn and grow?

If you find either you or your employees providing negative answers to more than half of these questions then it is time to call contact John Coxon & Associates, to discuss strategies to help improve employee engagement and reduce the cost of staff turnover.

Let The Journey Continue

John Coxon
Taking You From Frontline Manager to CEO
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Monday, December 1, 2008

Creative staffing solutions

Predicted labour shortages over the next two decades will challenge many non profit organisations, especially NGO's.

Non-government, not for profits will have to compete for qualified and experienced staff against the public sector and corporate sector. Both are more adequately funded to attract quality staff.

The key strategy for non profits for the future will be to focus not on recruiting people but on retaining their best people, while also developing the potential of those that are not delivering on their potential. A loss of key staff will impact on how services may be delivered and ultimately will impact on future funding. It is not an overstatement to suggest the very viability and sustainability of many non profits will be on the line over the next ten years or so.

What can your organisation do to combat this? There are a number of potential solutions. Some will require you, and your committee, to move outside of their comfort zone.

Look to other organsiations in your region. Form an alliance with them. Meet to discuss staffing issues, needs and wants. Identify ways in which you may all work together on common issues. It could be you create job sharing, or second workers from one org to another. You could share some back office functions for example to free up cash flow which can then be used to bolster salaries of key people in service delivery.

Move beyond clinical supervision and look to develop potential. Every employee has potential, most of it hidden, simply because noone puts in place a process to identify how they would like to contribute - and I am sorry to say that most supervision or appraisal processes are woefully inadequate and incapable of achieving this. Look at leadership and management development. Look for areas where people might take on additional responsibility. Look at how work and jobs are structured.

A key area for helping to retain key staff is workplace stress. Research shows the quickest way to lose a key player is to not address the core causes of workplace stress. When there is an alternative to workplace stress, when another organisation offers a less stressful environment then money is not even discussed. People do not need, nor do they deserve, to be placed in ongoing stressful environments at work. The key activity here is to focus not just on the individual but also on the organisation and to identify the root cause of stress - then try to remove the cause.

Stop taking employees for granted. Every day I hear this, 'people work in this sector because they have passion'. Granted, it is true, that is until the cost of petrol and groceries escalates due to increased cost of labour and then, man oh man, passion be damned - it will be show me the money.As an employer you need to work with each employee. You need to help them identify what it is they actually contribute to your organisation, the value of that contribution and how their work contributes directly to the strategic direction of the organisation. This creates pride in what they do.

Find a way to get rid of the deadwood NOW. It will be to late to do so when there is a labour shortage. Those that have no desire to develop their potential have no future. They will be the last people to leave voluntarily. Give them to someone else to worry about. You may well be running a charity - for the community that is - not for deadbeats who want to collect a paypacket without actually contributing to the organisations sustainability or to the community.

In summary, it is time to take an organisational-wide perspective on the entire issue of workforce development in your organisation. A bit of time and money spent now will place you in a good position for the future. Call John Coxon on +6135561 8882 or email to discuss how we are able to help you achieve this.

Let The Journey Continue

John Coxon
Taking You From Frontline Manager to CEO
Skype: john_coxon
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Many involved with the not for profit sector have an interest in sustainability, especially creating sustainable communities. How often do you give some thought to the sustainability of the organisation you work in?

Community organisations, whether they be schools, local government, hospitals or community organisations have a responsibility to build sustainability into their service delivery. They cannot help build community wellbeing if the organisation is unwell or missing in action.

For some sustainability is viewed in purely economic terms. Such a perspective can create its own barriers. Serving the community is not about doing something for the money, yet it is not about wasting community resources either. The money your organisations garners to enable it to deliver its services comes in part from funding bodies, philanthropic trusts and donations. Your organisation has been entrusted to utilise these funds and the resources they purchase in a responsible and sustainable manner.

This essentially means everyone in your organisation should focus on leaving the organisation in better shape that when they joined. It is a joint responsibility to ensure this. Can you truely say this about yourself? If so, how have you measured your contribution to the sustainability of the organisation. Are you guessing or have you some process of measurement in place?

Do you set personal goals for your contribution to building sustainability or do you simply do the job as described and go home at the end of the day? Do you review your progress on meeting those goals and make adjustments to your activities if your not on track or do you simply carry on as usual?

Building sustainability is not about sitting on apple crates in a dilapidated building someplace. People working in non profit orgs have as much right to beneficial workplace environment as any one working in the the corporate sector or the public sector.

Sustainability starts with taking an interest in areas beyond your role. It begins with have an understanding of the value of your contribution. It continues with building collaborative relationship in all directions. It builds momentum by ensuring everything you do in your work is aligned with achieving the goals you have commited to achieving. It gains strength by ensuring you as an individual are aligned with others in your team, and that your team is aligned with the wider function and that the function is aligned with the over strategic direction of the organisation.

Where might you start? Begin by reading the annual report and any other documents about your organisation. Many do not do this one simple thing. Dont gloss over it, especially the financial pages. Read, question, learn, develop and then contribute. That is the beginning of the process of building sustainability.

Let The Journey Continue

John Coxon
Taking You From Frontline Manager to CEO
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Friday, November 28, 2008

Creativity needed in face of labour shortages

If there is an upside of the current economic crisis it is that a greater number of people will remain in the workforce longer than they may have planned to, say six months ago. I appreciate some will consider calling this an upside a little strange. My point in doing so is to show the need for managements to think outside the square.

The current economic meltdown is temporary, it is a blip on the future and will have only a small impact upon a looming, more significant issue - that being the exit of baby boomers from the workplace over the next twenty years.

Look around you. What is the average age of people involved in service delivery? I don't know the exact answer however I can see what you see - the majority are middle aged. Let's assume the average age is 45 years. In twenty years all those people aged 45 and above will have retired. I can tell you two other facts. This group of baby boomers represents around 25% of the population (including those already retired). The next group coming through represents around 15% of the population. The numbers coming into the workplace are less than are retiring - and much less than the total needed to maintain reasonable economic growth!

Our sector needs to retain as many mature workers as possible, for as long as possible. Let's identify what it is that makes them want to retire and then remove the cause - create a solution that enables them to remain productive for as long as they wish to contribute.

Older people are a fountain of knowledge and experience. Let's not throw away years of hard gained knowledge. Younger workers require access to that knowledge. Identify those mature workers with the ability to teach and coach, then let them become teachers and mentors to those coming into the system. The added cost will be low compared to the value of the benefits.

Look at changing the way work is done or changing how we go about working. Adjust the work to suit the needs of the worker. How work is done is not nearly as important as what is achieved. Utilise technology, modify places of work and adapt to get the job done.

Let The Journey Continue
John Coxon
Taking You From Frontline Manager to CEO
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Partner with tertiary providers to conduct research

An issue for community organisations is that they are not funded for research and often have limited funds to initiate such projects on their own.

There are a couple of solutions to this problem. Firstly look to partner up with other like-minded community organisations. Identify organisations with similar aims to that of your organisation, someone who will actually benefit from the results of the research. Approach your local tertiary provider. Universities, TAFE's and Polytech's offer course in psychology, applied research, quality, marketing etc. Students in their final year of these courses are keen to undertake research projects. Often all they require is for their costs, not salaries, to be met. In return they get real world experience, they produce something that will be use and they retain a copy of the final report to use for their own purposes.

Every community organisation can benefit from applied research. It might be an audit of existing programs, research into how consumers percieve the value of programs, or even seeking opportunities for growth. Funding bodies appreciate evidence of need to support funding submissions.

Student researchers are not an alternative to consultants and they are not suitable for all projects. Students have only limited experience and limited time yet in some circumstances the funding simply isnt there for consultants and therefore students can be a good alternative.

Let The Journey Continue
John Coxon
Taking You From Frontline Manager to CEO
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Monday, November 24, 2008

New Plymouth workshop fully subscribed

Good News. Our workshop on Practical Project Management for non profits scheduled for New Plymouth in New Zealand on February 16th 2009 is fully subscribed. The even better news is that we will hold registrations open and plan to offer a second workshop on February 15th. Email for an information kit and registration form. At the session on February 16th we have with us people from Hauora Taranaki PHO, Agriculture ITO, Womens Centre New Plymouth, South Taranaki District Council and Tui Ora Ltd. Don't be shy. More than 200 people attended these sessions in 2008 throughout Australia and New Zealand. Join us in 2009.

We had a great time in 2008 meeting all these people and sharing their stories. They also provided us with invaluable feedback, much of which we will be incorporating into our presentation. We are having a break now for the next couple of months while we prepare for the 2009 series of professional development courses. This one on project management will be back, bigger, better and brighter than ever. Plus we have two news courses. One on helping develop coaching competencies with managers. The other providing senior executives with an insight into how they might create a culture for successful project management. Details can be viewed on our websites.

Let The Journey Continue
John Coxon
Taking You From Frontline Manager to CEO
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Generational Interaction

Why should there be any generational gap in the workplace? Outside of work people have different needs and associate with different groups for different reasons. In the workplace we all have the same needs and goals. Most importantly we need to work together in a collaborative manner to achieve those goals. Organisations comprise teams of people. The majority of people work willingly and happily in a team environment. By definition a team is a system where each team member holds a piece of the jigsaw and needs the collaboration of others to complete the puzzle. Everyone contributes their piece of the jigsaw.

Young, middle aged or mature, we all bring something to the discussion in the way of our experiences. Being young and lacking experience doesnt mean having nothing of value to contribute. To the contrary the younger members of the workforce bring a fresh, and sometimes different perspective. Being older doesnt mean being stuck in the ways of the past. Those ways have been responsible for many of the economic issues we face today.

Leadership is paramount here. Team leaders must develop the ability to bring groups of diverse people together, to facilitate conversations, to help form collaborative action, to hold people to their commitments and promises. This is achieved by listening and asking questions. Effective leadership, and teamwork, is a process of continuous learning by everyone, regardless of their age or experience.

Let the journey continue
John Coxon
Taking You From Frontline Manager to CEO
Skype: john_coxon
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Share your management experiences

I would like to request your help. I am seeking feedback from managers at all levels on the issues they have faced as a manager and the strategies or tools they used to resolve the issue. Don't be shy. Your experiences will benefit everyone reading this blog. Your will enrich their knowledge base and we will all become or effective managers as a result. Share your ideas on here.

Let The Journey Continue
John Coxon
Taking You From Frontline Manager to CEO

Friday, November 21, 2008

A structure for future development

As I was writing the previous entry for this blog I was reminded of a situation a client asked me to involved in about two years ago.

The client had been offered an opportunity to expand its services into another geographic region and the CEO at the time proceeded to develop a proposal for this to take place, and involved the board in discussions.

Issues arose when the time came to submit the proposal. The board backed away from the idea for a number of reasons.

Looking back, with the benefit of hindsight, this organisation didnt have in place a framework or process for growth. Prior growth had been opportunistic and had taken place on an ad hoc basis, albeit successfully.

The lesson here, amongst many others, is this. Opportunities can present themselves at any moment. Without a framework to work within these opportunities can be missed or an incorrect decision made. In the case of my client, the lack of a framework to guide both the board and the CEO resulted in a split between them. The lack of a framework can lead to the board becoming mission focussed or even risk averse rather than focusing on growth and sustainability.

What might such a framework include? First of all what type of opportunities might the organisation consider? What degree of alignment is needed with strategic direction, or mission, for such an opportunity to be considered. The framework might include parameters such as geographic boundaries (or avoidance of), ethical considerations, compliance with legislation or even quality compliance, the identification of risk factors and a model for assessing risk, the decision making process, level of information required to enable a decision. These are some of the components of such a framework.

With a framework in place there is less room for reactive or ad hoc decision making. There is less opportunity for misinterpretation, nervousness by boards or even executive staff taking an inappropriate direction.

John Coxon
Taking You from Frontline Manager to CEO

Manage Strategically

I participated in a meeting with a group of non-profit CEO's yesterday where one of those present made the comment 'in my 50+ years I haven't seen anything like the current economic crisis. The next 18 months are going to be very difficult'.

Clearly this comment was made in context to the conversation at the time yet it made me think a little about how you might go about managing your organisation over the next two years.

There is an old adage that goes like this. When the going gets tough the tough get going. Similarly, those that are bold in troubled times will reap the benefits when times become better.

It is tempting to pull in the shutters, lock the doors and hunker down in the bunker till the storm passes over. It is a strategy. It ensures you will still be there to open the doors at a later date. It also ensures you will have missed out on the opportunties that present themselves during troubled times.

Conversely it is tempting to act in an ad hoc and reactive manner. Grabbing at everything that presents itself. This may be an equally disasterous course to steer. Troubled times need a structured approach to sustainability not just a grab for gold or a struggle for survival.

What systems and processes does your organisation have in place to facilitate strategic decision making? Are decisions made on the fly or do you have in place a framework within which major decisions are made? Do you have in place a process of collaborative consultation and discussion - not death by committee - an actual process of healthy debate? Is his process aligned to the mission and values of your organisation?

It might even be time to reconsider the mission. When things are cruising along happily, few take the time to consider what you do, why you do it, who you do it for and how you go about the process.

The environment in which we operate is changing. Assuming a sufficient level of financial support from Government funding sources is folly. The cost of providing social services, in every area of society, is likely to increase significantly over the next few years and continue for many years to follow. The increased cost will be driven by rising labour costs.

Looking at how you organisation goes about generating revenue will always be a contentious issue. Sometimes revenue raising flies in the face of being a mission-driven organisation. The reality is that if your organisation is not able to remain sustainable for the long term it will not be able to effectively deliver services to the community. Funding will then be directed to those organisations able to demonstrate effectiveness, viability and sustainability.

Bring together managers and staff. Conduct a facilitated brainstorming session on the emerging environment and the issues this presents. Then take the time to relate the future to the present. It may be time for some strategic planning.

My advice. Dont pull in the shutters. Dont hucker down to wait for the storm to pass. As a service provider you owe it to your staff and your consumers to provide them with the best opportunities and services possible. This cannot be achieved by moving backwards or standing still. The future is viewed by looking forward and having in place systems and processes for well debated decision making.

John Coxon
Taking You from Frontline Manager to CEO

Boring, boring, boring

This blog is boring. Well that is not actually true. I just wanted to draw your attention to the fantastic offer I am about to make.
Would you like to participate in free management coaching? It’s an easy question to answer. Yes or No. If yes please read on.
Throughout 2009 I will be delivering a series of management workshops throughout Australia and New Zealand. At each event, on either the evening prior or the evening after I will be holding court in a lounge at the venue. I will be providing free, no obligation, coaching to those in attendance. I will help you solve management issues, develop competencies, reduce stress and enjoy your work more. It’s free, no cost, no obligation, no books, no CD’s, no hidden agenda’s or products and definitely no hard sell. If you are there you benefit from the combined knowledge of all in attendance. If you are not there then you miss out. Whether 5, 50 or 500 turn up I will find a place for us to work together. If need be we will move out into the street and work there.
Why am I making this offer? I operate a successful consultancy working with managers in the health, aged care and not for profit sector. The work I do allows me to travel throughout the two best countries in the world. It allows me to spend time with my wife, Liz, to enjoy holidays together and it allows me to spend time with my children, Tara and Byron. I do what I love and I love doing it. I also like to give back as much as I get. Most management advice is freely available. If you had the time you could read all the books, articles, blogs, research reports, white papers I do. After many years as a management coach I have learned one irrefutable fact. Most people can access information. What they need me to do is help them develop and implement the action plans that convert knowledge into results. By coming along, meeting me, letting me meet you, it means that when you do call me seeking my help we already have had contact. You are comfortable with and we spend less time becoming comfortable and move quickly to help you reduce stress and enjoy your work.
How do you register for these events? You don’t. Just turn up. If you wish you may SMS me a message on +61427390376 the day prior, regardless I will be there.
How do you find out about dates and times? Firstly, go our either of our websites, or and follow the link to services and to workshops. Here you will find details of cities, venues and dates. Court will be in session from 5.30-7.00pm.
Secondly, sign into and follow john_coxon, here you will see announcements of dates and venues also. You could also return to this blog in one week and you will see a list dates on here.
Are you in? What have you got to lose? Absolutely nothing. What value on the stuff you learn? Priceless.
Let me help you reduce stress and enjoy your work as a manager.
John Coxon

Thursday, October 9, 2008

The practice of Governance

The Carter model of governance sets out the roles and responsibilities for members of the governance group. The roles are clear; the board sets out strategy and the executive implements that strategy, and takes whatever actions are called for, within operating guidelines.

In practice the two groups meet at regularly scheduled meetings where issues of policy and practice are discussed and decisions made that enable the organisation to operate smoothly.

In practice it is not quiet as smooth as that, as I am reminded from time to time, when clients contact me to discuss the issues they are experiencing. A couple from the past twelve months or so come to mind.

In the first instance the CEO made a decision to expand a nfp organisation beyond existing geographical borders. There was a precedent for doing so, the organisation had done just that a year or so earlier. In a sense the CEO was simply continuing a process that had begun earlier. The issue here was the CEO assumed the board wished to continue that process and forgot one important consideration. The CEO serves at the behest of the board. It is correct the CEO runs the business; rather than the Board. At the same time the CEO is a servant of the board and should choose to seek guidance, or ask, rather than assume and tell.

In the second instance, the CEO of another non-profit made a decision to purchase another business. This intention had been flagged during earlier discussions but no information had been provided to the board. When the opportunity came to make the purchase, which was in line with the strategic direction of the organisation, the CEO provided the board with a one paragraph email and a rudimentary set of figures. The issue for some board members was the inadequate level of information and insufficient time for informed debate. The decision was eventually discussed and endorsed by the required minimum votes. The outcome was a division of board members and the eventual resignation of some. Boards are there to hold the CEO accountable. CEO's need to consider that if they expect volunteer board members to put their name to the activities of an organisation then those board members deserve to be provided with an adequate level of information and sufficient time for debate.

Friday, August 8, 2008

Looming labour shortage

Over the next 3-4 decades, throughout the developed world, 26% of the adult population will enter retirement age. Simply becoming 65 years old doesn't mean automatic retirement, for some the option of retiring simply is not there. However employer agencies will face a number of issues related to our ageing society.

The community sector will be particularly hard hit by this emerging scenario. Why? The community sector is the poor cousin when it comes to remunerating its people. As a sector it recruits a range of professionals including psychologists, counsellers and social workers. These same people are in high demand in our public sector, health sector, education sector and the private sector. Where upon in recent years there has been a surplus of people entering these professions, there will be less people doing so within the next generation of people and those that are currently in the workplace are rapidly heading towards retirement age.

To add to the complexity of the equation, many professionals in our field are female. In many instances, females are more suited to many of the roles and in the past many of these roles have been part-time, again suiting the need amongst working mums for flexible work hours. For many of the baby boomer group, both parents have been working for a number of years now, they have invested and saved towards their retirement and they don't share the viewpoint of their parents that they should work themselves to death. While employers would prefer phased retirement, it is possible the bulk of those turning 60+ over the next few years will simply choose to take their money and relax to the best of their abilities.

From 2021 the baby boomers will begin to enter the retirement stage of their lives, in fact the first of that group will begin to enter aged care. This will likely create shortages of staff in our sector. The community sector is a people business - outcomes are achieved by people interacting one on one with other people - when there is a shortage of labour, our service sector organisations will be unable to effectively deliver services.

As service providers what can we do to minimise the impact of this trend? Firstly, we cannot reverse the trend. We need to look at our recruitment and retention processes. We will need to look, critcally, at our workplace practices and at how we deliver our services and we will need to look at our funding strategies as we will likely need to pay higher levels of remuneration than Government funding would allow for. One thing is for certain we will need to be proactive rather than wait for Government guidance. While Governments are aware of the looming issues, they are incapable of proactive action and will only react to public pressure for change after the cost has been incurred.

First step is some long term strategic planning. While it is difficult to predict labour needs beyond the short term; it is possible to make some projections and undertake scenario planning. More importantly the process focuses the governance team and management on the emerging environment and begins to shape future planning.

Predicted labour shortages are likely to cause a great deal of heartache amongst governance teams of community organisations, in particular those that have paid employees. The traditional approach within the sector is to wait till a problem impacts, then to complain loudly about the lack of support from Government. This approach will little effect in regards to labour shortages. Government everywhere cannot change the population statistics. They cannot build factories to clone and create the numbers of workers needed worldwide over the next 40 years. If those people are not born now, then it is to late.

Governance teams will be forced to grapple with a number of strategic issues. Top of the list will be how to fund their organisation. Look for exponential development of hybrid non-profits, those that have a commercial arm to the operation, as they seek to develop a revenue source independent of Government. For many governance groups this strategy is an anathema. Similarly, as organisations look to their operational processes and their ability to deliver services, governance groups will have to grapple with questions of merger and shared service delivery. Fighting over a limited pool of people is counterproductive. It will generate a self-feeding cycle of remuneration increases thus directly impacting upon service delivery.

In a strange way, pending labour shortages will likely impact more upon smaller service providers than the large providers. The large providers have greater resources and financial reserves, the will likely be able to be more strategic in their offerings to employees, they can share resources across centres and minimise costs.

In the past non-profits have relied upon 'social conscience', a vague term used to describe why someone would work hard for little remuneration in a sector that provides little in the way of personal recognition. Look at today's Gen Y, do they have a social conscience? Yes they do, however it is one that is tailored to meet their own personal needs, not those of society in general or any specific sector of the community. They also clearly understand the need to earn sufficient money to fund their needs. They will not work for nothing as many of the current generation do in the community sector.

One benefit an ageing population may offer is a growing pool of potential volunteers. Twenty six percent of the population will be seeking ways to utilise their time during their retirement. Many will also seek to implement a phased retirement process, therefore a pool of part time workers will be available. Will they work for peanuts? Only in so much as Government policy forces them to. On the flip side a larger pool of people will be available to draw board and committee members from. This may lead to more proactive governance.

A downside of an ageing population will be an increased need for service delivery by community organisations, from aged care to medical services, to support and advice, the list of needed services will continue to grow. At a time of the greatest need our service providers will face the greatest shortage of labour!

Monday, August 4, 2008

Front line managers are the key

Let me share with you the results of a piece of management research conducted in 2007 amongst health providers in the USA. View summary and white paper here. I originally posted this on my health management blog and though the research focuses on health management I believe the findings are applicable to management of the non-profit sector.

The research was conducted over five years and involved 500 healthcare organisations and 200,000 healthcare professionals. The study aimed to study, job satisfaction, organisational loyalty and degree of professional engagement. What was the main finding? Here it is. Leadership capability at the front-line level influences overall performance more than any other contributing factor. Rankings of leadership capability showed positive correlations with -

  • Job Satisfaction
  • Organisational Loyalty
  • Professional Engagement
  • Willingness to continue employment
  • Voluntary Turnover
  • Patient Satisfaction
  • Performance to projected budget
  • Employee productivity
  • Financial success (profitability)

I welcome feedback on this topic. Why not share your stories of how your organisation has utilised the strengths of its front line managers and supervisors?

Monday, July 21, 2008

Serving on the Board

Serving on the Board or Committee of Management for a non-profit can sometimes be exhilerating and other times damned frustrating. One thing is guaranteed it will likely always be interesting.

Unless your being asked to serve on the Board of a biggie such as Red Cross or the Salvation Army or something similar then it is unlikely you will be faced with issues of global significance. You will, however, be served a wide variety of regional or local issues to work upon. You will also likely be asked to give up far more time than the minimal one meeting per month; especially those with skills and experience in areas such as strategic planning, financial management and human resources - areas where small non-profits are particularly deficit.

Everyone knows the boardroom of your average non-profit is a hot-bed of conflicting interests and petty politics. These are people with passion. They are there because they believe. This passion does not always lead to logical decision making. For those of us that are more logic-driven than emotion-driven, the process can be frustrating. Despite the best intentions of those more anal creatures who actually believe logic overrules emotions, there will always be people on your board that will never follow logic. At least not your perspective and definition of logic.

Logic-driven people need patience. Lot's of patience. They also need well developed communication skills, the ability to sell a big picture. This helps to counter the narrow interests (and vision) of those on the board due to their passion. It's a complimentary process as those committee members with a global perspective often do not have a good understanding of local issues. This is the challenge faced by various chairpersons as they seek to bring together various perspectives. The chairperson needs to have a well balanced personality and be respected by all board members for his or her ability to blend the various perspectives.

Repore between the Chairperson and the organisations Executive Officer is critical. When relationships break down between these two people the potential for conflict and personal lose is great. The Executive Officer heads the organisation at the request of the board and reports directly to the board. While it requires extreme dislocation for a board to remove an executive officer from office; it is a brave, or foolish, executive officer that goes head to head with the governance group. Far better to spend time discussing and understanding the needs of all board members and using that understanding to help create healthy debate and informed decision making.

In theory the governance group are there to help the Executive Officer to establish policy and strategy and to provide advice when sought. It is also a role of the board to hold the Executive Officer accountable for the implementation of strategy. In practice, the theory isn't always applied. The low level of suitable candidates to serve on boards, particularly in rural areas, can lead to a form of in-built nepotism, where board members become 'yes' people and serve to simply rubber stamp the ideas of the executive officer. The risk here is that mediocrity can set in and the best qualified people end up leaving the board. The key strategy is to have in place a robust process for recruiting new board members and rotating existing members, rather than just making a 'mates appointment' when a vacancy occurs.

Membership of many non-profit boards is membership driven. You become a member and then become eligible for board membership. Given the shortage of suitable candidates for board duty, the selection process is often superficial. Very little consideration is given to required levels of expertise or skill. It is important for boards to conduct an analysis of the expertise required by the organisation they serve and proactively seek out potential board members with that experience.

Sunday, July 20, 2008

Sustainability is created through meeting community needs

The bottom line for community organisations is sustainability - the ability to effectively deliver services, as funded, to those in need; and where possible, to also add value through the creation of community programs designed to meet the needs of those that fall outside funding body guidelines.

An organisation can only effectively deliver services if it has in place three things. One, effective systems and processes, including quality financial management systems. Two, management and administrative support and three, a team of experienced people to deliver services. These three form the legs of a triangle. Remove one of the three legs and the ability of the organisation to remain effective will be severely compromised.

Sustainability is created by ongoing funding. This can only be ensured by achieving outcomes. Funding bodies are overwhelmed by submissions for funding. To be considered your organisation must be seen to be able to achieve the outcomes it committed to achieving. Your ability to do this is enhanced by having in place appropriate systems and support.

The key to achieving outcomes is for all involved with the organisation to remember the reason for their existance; that being to help those in need within the community. All the funding, all the systems and all the people should be in place to achieve just that. Your organisation will be judged by funding bodies based upon your ability to implement programs and achieve agreed upon outcomes or service standards. Ongoing funding is dependent upon your ability to meet agreed upon outcomes.

One of the risks of being a recipient of funding grants can be that the focus is entirely on service delivery in line with funding requirements. The ease of accessing mainstream funding can often remove the need to understand the needs of the community; instead the funding guidelines become accepted as the indicative community need.

Sustainability is enhanced by understanding community need and being in a position to meet as much of that need as practical. Don't become reliant upon the guidelines of funding bodies. Become familiar with the needs of your community and with the capacity of both your organisation and others in the community sector to meet that need. The greater your understanding of community need the better your ability to attract greater levels of funding from multiple sources. In that way your organisation will achieve sustainability and the community will benefit.

Thursday, June 26, 2008

A corporate focus

At a recent conference held by the New Zealand Council of Christian Social Services, Lin Hatfield Dodds, (Press Releases NZCCSS, Monday April 14th), was reported as saying it is time for the community sector to stop referring to itself as being 'not for profit'. I absolutely agree with this statement. It is time the sector grew up and realised that to effectively deliver services beyond the basics demanded by Government funding bodies it is necessary to earn more than we spend. Every organisation in the community sector that generates funds is first and foremost a business. If it generates revenue and spends that revenue then it is a business and it should be operated in a business-like manner.

Dodd's suggests the call to mimic the corporate world is a challenge to the core identity of community sector organisations. On this point I disagree. If we fail to operate in a structured manner our community organisations will remain ineffective, be unable to deliver any more than a basic service, continue to operate under restrictive funding models, be unable to attract quality key staff in an era of looming staff shortages, be unable to provide existing staff with an enjoyable work environment and the list goes on. The best outcomes can only be achieved if firstly the organisation is operated along established business practices.

It is not a given that a corporate approach ignores or somehow jeopardises our ability to meet the needs of people. Such thinking is a state of mind. The key factor that enables a community organisation to help those in need is money - good, old fashioned, dirty old lucre - without it your community organisation can achieve very little. It is true that a corporate-like approach to service delivery enhances our ability to maximise the benefits to the widest possible group of people. People deliver services not corporations, however these people need behind them systems and processes that enable them to deliver their service in an effortless manner. This support costs money.

I am not denigrating the thousands of small volunteer run community organisations when I say that there is a limit to what can be achieved by each individual community organisation that chooses to be run entirely by volunteers. I fully comprehend the value many of these organisations add to our community. I believe also they could contribute a lot more if they moved away from protecting their own little kingdom and looked at the options for improved service delivery.

Dodd's and others suggest the community sector should be a 'people sector'. One that puts people ahead of profits. Agreed, we are in the people sector. More to the point it is not about making a profit; it is about generating sufficient revenue. Government funding options will never be sufficient to meet a need. Additional funding has to be obtained from a variety of sectors, each which demands a degree of accountability. I would suggest the reason a service is curtailed or not made available is because the provider has insufficient 'revenue' to do so.

The mentality in many community organisations is to tailor their service delivery to match the level of current funding. Instinctively this suggests costs will be cut to match operational funding and to avoid any use of reserves. This approach is self defeating. It limits the ability of the organisation to be truly effective. It creates fear at all levels within the organisation, it discourages creativity and initiative and it stifles innovation. Worse still it ensures we only attract people to our organisations that are completely risk averse.

I would suggest that instead of focussing on cutting expenses to the level of revenue, your organisation would be well served by identifying the level of service it believes is needed and can effectively be delivered, the appropriate systems and process and the resources and people needed to deliver that service. Having done that, go out and source the amount of funding from a variety of sources, that enables your service to be delivered, that enables the maximum number of people to benefit. Don't tailoring the service to the revenue, instead maximise revenue to maximise service delivery.

Wednesday, June 18, 2008

The Gap Between Big and Small nfp's

A glance through any directory off not for profit organisations will quickly illustrate a single statistic. That is the gap between the large not-for-profit organisations and the small not-for-profit organisations. This gap is measured is gross operating revenue - much in the same way as we would measure those organisations in the for profit sector!

In Australia it is estimated there are around 700,000 nfp organisations, which around 30,000 employ staff, the remainder are operated mainly by corps of volunteers. In New Zealand it is estimated there are around 30,000 nfp organisations. The vast majority of not for profit organisations are small, have only a handful of paid staff, if any, and survive (just) on meagre resources. For the majority their revenue comes from small time sources such membership fees, fundraising activities and donations.

At the 'big end' of town, again to borrow terminology from our colleagues in the for-profit sector, we have those non-Government, not-for-profits primarily funded by Government to deliver services on behalf of the Government. In total, these nfp's number few yet they have access to the vast majority of funding and resources. Let us not forget also, the nfp's at the big end of town are also significant employers of staff.

This dichotomy clearly disadvantages the majority of not-for-profit organisations, yet it is a natural process. Tirrana Surhood labelled this larger group Small Non-Government Organisations (SNGO's) in a paper she presented to the Partnerships and Activism conference at the University of Western Sydney in 2000 when she called for SNGO's to create a 'voice' for themselves - so that they may be heard. Tirrana's call may have been ahead of its time, or maybe no one was listening back then. I believe the rationale that Tirrana applied then remains relevant today - maybe even more so.

The emerging environment of the nfp sector favours those larger, better resourced, more coordinated organisations, in particular those able to distribute services into multiple communities. I stated earlier that the division of organisations based upon size is a natural process - to a degree - yet i do not believe it needs to be an inevitable process. I also believe it is unhealthy for any market, whether it be in the commercial sector or the nfp sector, to be dominated by a small number of suppliers. The ultimate losers will be those the organisation is supposed to help.

Divisions in the corporate sector occur as a result of competition. Some organisations are better at doing the job than others therefore they garner a greater share of the market. The not for profit sector is not a competitive sector, at least not in the sense that the sector 'sells' its services. The pricing mechanism within the not for profit sector is not used as a competitive tool. Divisions in the not-for-profit sector are created by funding bodies being selective in their distribution of funds. In their desire to make life easy for themselves funding bodies prefer to deal with one larger provider than several smaller organisations. While this is understandable it is debatable as to whether such selective practices actually create efficiencies in service delivery.

The reality is this. The division between large and small already exists and it will continue to exist into the future. Those SNGO's can elect to sit on their bums and await the inevitable grim reaper or they can elect to become proactive in controlling their own destiny. Tirranna Surhood was right, the smaller nfp's need a voice, a coordinated peak body that will speak and act for them, that will advocate and attempt to influence funding decisions. Tirranna even suggested in her paper that the 'voice' may not need to be a national one; that a combining of resources at a community level may be even more effective. But even more is needed. the larger nfp's should recognise the inherent benefits of a diverse group of providers. They have the resources, courtesy of inequitable funding distributions, and they are in the business of helping others - it is time to extend some of that help to the smaller not for profit organisations that work along side them. There are many ways in which this could be achieved, from seconding key staff to sharing resources to providing back office support in the form of human resources and many, many others.

In turn the SNGO's need to become more proactive, they in turn need to explore how they might latch onto the resources and expertise that exist within larger organisations. Near to where I live a large nfp aged care provider prepares the payroll for a much smaller nfp aged care provider. They compete for customers yet they collaborate and they cooperate and both survive in a market that is much richer for the diversity and choice that is then available to the customer.

Thursday, May 29, 2008

Nurturing those middle managers

It has been stated that middle managers are the glue that holds an organisation together. Well okay, we will live with the generalisation. It is also possible that were there much better collaborative and participative management processes in place then there would be less requirement for middle managers, and for many senior managers for that matter!

Regardless of whether your organisation is the traditional command and control model or whether it operates within a flattened hierarcy , you will have some middle managers, or supervisory staff. They are important. They form the link between management and staff. They are the implementers of strategy. Executives design strategy but they rely upon the skills of their middle managers to build collaborative relationships with staff, to sell the benefits, to negotiate the change process and to provide feedback that enables adaptation. Without middle managers, the traditional organisation would grind to a standstill.

Yet this group of managers remain the most maligned and mistreated individuals in an organisation. They are between a rock and a hard place. Neither management nor staff. Unable to be loyal to any faction other than themselves. Some 20 percent of middle managers will eventually progress into an executive role. Another 20 percent will drop back into a staff role. This leaves 60 percent that will remain in a middle management role; for better or for worse. It is in the interest of the organisation to ensure those 60 percent are effective.

Just as there are numerous examples of ineffective senior executives creating blockages to progress, there are also examples of middle managers doing the same. The difference is that a senior executive will likely be found wanting when they are monitored for their ability to plan and implement strategy far quicker than a middle manager who is often protected by a senior executive. Of course, the removal of a senior executive that has been shielding a middle manager can result in the middle manager becoming exposed to the scrutiny of an incoming manager. It is doubtful an ineffective middle manager would survive such scrutiny.

The problem for organisations with middle managers is that only a small percentage of supervisors will progress into an executive role. In some organisations it will be less than the suggested 20 percent. This can lead to either a high turnover of middle managers or stagnation fueled by frustration, which in turn, leads to mediocrity. Those middle managers on the bottom of the heap, the blindingly obvious bad managers will out themselves and slide back into the ranks of general staff. The challenge for organisation is this. How can they get the best out of their middle managers?

It is recommended all middle managers have a mentor, or two, or three. Different mentors serve best at different times or in different circumstances. The benefit of mentoring is widely understood, however it is a relationship the middle manager needs to instigate. Mentors rarely present themselves to a manager. You have to approach them with the idea. Mentoring relationships are build upon mutual respect, the mentors understanding of your workplace environment and a willingness by the manager to be open and honest.

Management coaching can be expensive and has traditionally been reserved for the ranks of senior executives or up and coming middle managers on a fast track to the corner office. This needs to change. Our experience of providing coaching to middle managers has always been positive. Traditional practice suggests executive managers benefit most from coaching. Our experience is that many senior executives have become entrenched in their behaviors and find it difficult to acknowledge their faults after they have gained higher office. Middle managers, on the other hand, still have progress available to them, they have more to gain from coaching and are likely to offer more back to the organisation as a result. Effective organisations will remove ineffective middle managers and provide coaching to those in this role; simply because good management behavior developed during middle management years transfers to good executive behaviour in later years.

We persist with the belief that managers are born not made - well at least we do when it comes to providing management training. It appears that we believe any manager worth their salt will develop competencies by osmosis. This is partially true, much management competency is the result of accumulated experience. In the past, when managers took many years to work their way up through the system, this was very true. In today's workplace we promote the majority of managers on demonstrated competency rather than longevity. The result is many managers are younger and have not had the opportunity to accumulate experience. So what do we do? We send them away to residential management courses to learn the theory. Yes while there they engage in role places and situational game play, but these are no substitute for practical experience. Dont misunderstand. Management training, and ongoing training is essential, some would even suggest critical. The key is to apply critical analysis to those providing the training. Look for trainers with practical experience to back up the theory. Look for trainers with practical experience rather than just case studies. Look for trainers able to blend theory, case studies and their practical experience. Look for trainers that follow up their training with coaching, so as to increase the potential for implementation of concepts and methods.

Do organisations need middle managers? Yes they do. Do they need a lot of middle managers? No they should minimise the number of middle managers by creating more collaborative and participatory workplaces at all levels (very scary for senior executives). The outcome of this will be more effective middle managers and more effective senior executives and this will lead to more effective organisations.

Hybrid nfp organisations

Should not for profit organisations seek to implement a hybrid model? On the surface this question would be answered with an emphatic yes; the hybrid model where a not for profit seeks to generate a surplus through commercial activities makes economic sense. Under the surface is another matter. NFP's operate on a set of values. These values underpin the ethos and operations of the organisation. They do not operate on a commercial basis where making money for the sake of doing so is considered normal behavior. NFP's have a focus upon service delivery, often to a captive audience. Not only does this philosophy shape their operational structure it also shapes their strategic thinking process. Making money requires a different mindset to one where the focus is entirely upon service delivery. Many governance teams struggle with the concept of making a profit from commercial operations, especially those that have been weaned on Government funding.

The obvious benefit of the hybrid model is the ability to generate funds that in turn can fund programs which would not otherwise be funded by mainstream funding. A greater percentage of self-generated income reduces reliance upon Government funding and can enable the organisation to operate independently and without fear of upsetting funding bodies.

Despite these advantages, overcoming the in-built and traditional fears of committee members, employees, volunteers and clients can prove to be challenge that is to great for even the most imaginative executive officer. The process of changing cultures on such a scale, even for a modest sized organisation is long, convoluted, time consuming and fraught with personal risk.

Friday, May 16, 2008

Seminar - Practical Project Management

You gotta go to this seminar! Why? Cause I designed it and I deliver it and I can promise that you will learn a helluva lot about practical aspects of project management, including practical strategies for common issues, practical easy to use tools to assist with project planning, strategies to improve stakeholder communications and improve teamwork - all this will contribute to you achieving a successful outcome for your project. Who should attend? There is stuff in this seminar for Executive Officers, CEO's, Operations Managers, Project leaders and supervisors.

The first was held yesterday (May 15th) in Adelaide. The feedback from participants was fantastic and all positive. Everyone learned something helpful, many learned many helpful things. Just listening to the input and feedback from participants was energising. Next week we deliver this seminar in Auckland - this session is already fully subscribed and a further event has been scheduled for Auckland on August 19th. Registrations are rolling in fast for all scheduled events throughout Australia and New Zealand. Register now. Email to reserve your place and to request a comprehensive information kit - it contains all the details - so go for it, do it NOW.

Seminars are scheduled for -

May 15th - Adelaide (completed)
May 22nd - Auckland (fully subscribed)
June 19th - Hobart
June 24th - Melbourne
July 10th - Perth
July 17th - Sydney
August 19th - Auckland
August 21st - Christchurch
September 18th - Brisbane
October 23rd - Wellington
November 13th - Canberra

Friday, February 15, 2008

How well does governance of your not-for-profit rate?

What is the purpose of having a governance group? There is only one answer to this question. The purpose of the governance group is to set strategy and hold the management team accountable for implementing that strategy.

Governance is a planning process. Governance is about bringing together all the elements required to ensure an organisation is moving in the desired direction. Governance is about monitoring.

Does your governance team have a dedicated time allocated at each meeting to review progress against its strategic plan? Does it even have a strategic plan? If you answer no to the second question then you are probably already in trouble. If you answered no to the first question then you will likely get into trouble at some point in the future.

For strategy to be implemented there firstly must be a strategic plan. It doesn’t matter if it is a single page document or a 100 page document; the plan must exist. Creating the strategic plan is a major function of the governance group.

Someone has to take responsibility for implementing the strategic plan. This is a function of the executive team, not the governance group. It is a function of the governance group to review progress, by the organisation, against the performance indicators contained within the strategic plan. Time should be allocated for this purpose at every governance meeting.

If your organisation has a complex strategic plan it is recommended the governance group discuss with the executive team a structure for review of the strategic plan. For example, it might be agreed that one key outcome will be discussed at each governance meeting. This is important to ensure all outcomes are monitored in a timely manner and to enable the executive team to prepare relevant information.

Holding the executive team accountable for implementation of strategy is a key performance indicator of the governance group. When an executive team falls down and fails to achieve the desired outcomes it is as a result of failure by both the governance group and the executive team. Before the governance group seeks to make changes to the executive team, the governance group should look at themselves first and ask what changes they might need to make within their own group and their own processes.

Saturday, January 19, 2008

Effective management

The not-for-profit sector differs from the commercial, for-profit, sector. For a start, organisations in the nfp sector do not have to 'sell' something to earn revenue. In the majority of instances the revenue is donated from one source or another. Fee for service within the nfp sector is growing however still represents only a small amount of total revenue.

What are the management implications of the difference between the two sectors? In the commercial sector managers will be judged upon indicators such as revenue, profitability and growth. Some might suggest such indicators are not relevant for the majority of the not for profit sector. Is that true? Surely not for profit organisations are businesses, regardless of where they obtain their revenue from? Were that the case then managers within not for profits should be judged on similar indicators to those in the for-profit sector.

A possible outcome of managers not viewing their nfp organisation as a business might be that they focus on the wrong indicators, insufficient indicators or in some instances, no indicators at all. Not for profit organisations need to spend less than they earn - financial management. They need to make a surplus to remain viable - financial management. They need the right people in the right place to do the right job - people management. They need to tell consumers about themselves and how to access programs - marketing management. They need to satisfy the needs of those consumers - customer service. They need direction and strategy - governance. They share all these attributes with organisations in the for-profit sector.

Not for profit organisations have one attribute their counterparts in the commercial sector do not have. Not for profits are dependent upon the vagaries of political cycles and decision making. Unlike their commercial counterparts the not for profit organisation cannot easily change direction, implement a new strategy or introduce a new product or service - unless it does so by using its own resources - a powerful argument for making a surplus and having a mixture of funded programs and fee-for-service programs.

Not for profit organisations cannot manipulate their margins in the same manner commercial operators might. This places a greater emphasis on financial management within the not for profit, especially if the strategy is to create surpluses.

The one attribute not for profits share with those in the commercial sector is the use of people to deliver services. This is also the one attribute the not for profit has full control over. People are the key to an effective organisation. People implement strategy.

The board or governance group within not for profits are ultimately responsible for the ongoing viablity of the organisation. Their responsibility extends beyond simply setting visions and ensuring activities fit that vision. They have a responsibility to regularly review the activities and outcomes of the management team. Some of the issues the governance team might look for include; a lack of clear direction from themselves; signs the organisation is able to cope with its growth, complacency within the organisation, acceptance of poor performance, autocratic management or a lack of delegation, seemingly chaotic activity by management and poor communication.

Indicators that all or some of these issues may exist in your organisation include; a lot of activity with little in the form of clear outcomes, frustration by staff at barriers or a lack of clear understanding by management as to what it is they should be doing, an insistence on doing things they way they have always been done, people not challenging the status quo, high turnover of staff, low moral, criticism of the organisation, a lack of new ideas or new services, those patently unable to achieve the desired outcomes being protected by management, lack of trust, 'silo' mentality between departments or service areas, lack of information sharing, staff not knowing what is actually happening in their organisation or not being valued for their contribution.

Management failure is not terminal; often it can be an evolutionary process. Many managers are good at specific areas of management, for example, growth or change, and may become bored or complacent once the desired outcomes have been achieved. A good governance team would have understood this possibility when they recruited and looked to the future when a replacement might be needed.

The governance team is responsible for setting direction and strategy and they are responsible for holding the management team accountable. Effective implementation of strategy equals effective management.

Understand the stage of development for your organisation and plan ahead. In this way the resources are available and the transition will be smooth.

The management team must display leadership. Conduct an audit of your organisation, its needs and the gap between what it has and what it needs. Cut out the deadwood. Build an organisational structure that is designed to deliver the desired outcomes. Never try to make the outcomes fit the structure, that is a recipe for mediocrity.

Finally, foster and nurture the human resource. People are the key. The single most important characteristic of an effective manager is the ability to work with and get the best out of people. If your managers cannot do this then they are the wrong person in the job and they should be replaced with someone with those skills.

Monday, January 14, 2008

Rudd Government to remove gagging clauses

For the past decade the Australian Federal Government has inserted gagging clauses into service delivery contracts with the not for profit sectors. These clauses were designed to prevent service delivery organisations from speaking out on the state of their sector. The impact is muted advocacy. A Government that does not wish to hear off the problems does not have to work towards solving those problems.

The recently elected Rudd Government has moved quickly to indicate that such clauses will be removed from future contracts - a brief window of opportunity for meaningful dialogue - at least until the next authoritarian government is elected - or the current government begins to find the truth a tad unpalatable!

On the surface the removal of gagging clauses is a relatively easy political decision and it appears to have little downside. However the removal of gagging clauses is much more than a political stunt. It opens the door to dialogue between from the three sides of the social service triangle; those that fund service delivery, those that deliver the services and those consumers that actually need the services. It is important the channels of communication are open, in both directions and that the feedback to fed, unfiltered, to Government ministers.

The challenge for the not for profit and community sectors is to work with both the Government and their consumers to develop effective channels of communication. Government ministers are a long way from the coalface, there are a lot of layers of people in between those that dispense the funds and those that need the services. Many of those people in the middle are bureaucrats and many of them have their own agenda. Sector peak bodies, lobbyists and influencial organisations within the sector have a responsibility to gather information and present it to Ministers in a clear and truthful manner. There is little difference between a Government that gags sector representatives and a sector that tries to use information to manipulate for mislead Government; the outcome will be the same, poor information, lack of trust and poor political decision making.

The removal of gagging clauses opens up the potential for increased civil advocacy. Opportunities will be created for increased dialogue. Ministers can be made more aware of the real issues. The Rudd Government is to be congratulated for its moves in this direction, exposing themselves to the truth may from time to time be an unpleasant experience and there will be those amongst their adviser that will from time to time advocate a return to a more restrictive regime. It is a fundamental tenant of a fair and just society that all groups and all peoples are enabled to speak out and to be able to do so without fear of retribution.

Sunday, January 13, 2008

Draft code of Governance

Our Community, an Australian community sector online clearing house, has released a draft Governance Code for discussion. A copy of the draft document may be downloaded from here.

Public comment is welcomed. Those making submissions should do so prior to Tuesday 15th April 2008. Fax (03) 9326 6859. Our Community is particularly interested in feedback on areas such as -
  • the underlying principals of the code
  • the specific detail of the draft
  • the difficulties your organisation might face if implementing the code