New management blog details

Hello to readers. Please be advised this blog is no longer being serviced. A new blog on management title Managers That Care has been estabished and is being hosted at http://managersthatcare.wordpress.com I hope you will join us there.
John Coxon

The Listening Project

Connecting Up Australia recently released the Listening Report, prepared after twelve months of active research throughout Australia into issues faced by the not-for-profit sector. http://bit.ly/cPocMe

It's a great report. Well, it's a great read, it is very pretty, well laid out, full of case studies, professionally researched and presented. Fantastic. I have just one little, tiny, almost insignificant concern. The report is very short on ideas about how nonprofit organisations should adapt to face the future. There you are, I told you it wasn't a really important thing!

So what does the report tell us? In short, much the same as we have known for a considerable time. What is the main conclusion? It's this. What the sector is doing at present isn't sustainable. So it needs to do something different. That makes sense. What it doesn't do is explain what doing something different will be in a sector dominated by parochial and territorial Boards and Committees more intent of being trustees than leading into the future. What about those over stretched, burned out corps of management and staff involved in service delivery. Have they the energy, time or desire to look up from their tasks and plan for the future?

The report identifies four key issues. (1) Government Funding. (2) Alternative revenue sources. (3) Human resources. (4) Research, capacity building and evaluation. The author's three paragraph conclusion (at the end of 365 days of research, a period of reflective writing and a 36 page report) is this. This project has been useful in that it gathers rich data, highlights common themes and suggests that if the sector was to unite for its common causes, the value proposition would be strengthened and the doors unlocked to a paradigm shift within the sector. Yep. Okay. I get it, not. The way forward is now clear!

It's not that the project was worthless or bad in any way. I just feel the sector, all the Boards and Committees, management teams and those involved in service delivery deserve something better. They deserve some sort of roadmap into the future.

So here it is, well my roadmap at least -

Government Funding - is an oxymoron. If you choose to operate your nonprofit solely on Government funding then you have to accept the restrictions that will be placed upon you. Despite all our dreams, Government funding will never be sufficient. Therefore those management teams that continue to rely upon Government funding as their sole source of revenue or the dominant source of revenue may be doing a disservice to their staff and their clients. The choice of whether staff sit on apple crates and type on outdated computers is made by the governance and management team, not the Government. It is no good blaming beaurocrats for being short-sighted, they live and work to their masters (or mistresses) election time frame. The proliferation of non profits and community organisations mean they have to distribute a finite pool of money to an ever growing number of organisations. I believe the Government should take heed of Carol Mead's suggestions for simplifying the funding process. I also believe that while the nfp sector continues to engage in activities on behalf of Government that are poorly funded, then Government will continue to underfund. Maybe its time to say no to some of the projects available! Any thoughts about the Government providing money without some form of checks and balances into how that money is spent is an idea long past its use by date and should be taken into retirement along with those Baby Boomers unable to adapt to a new and uncertain future. The Board and Management team in any funded non profit need to develop and implement an integrated funding plan that identifies a variety of sources of revenue and develops a range of strategies for accessing additional revenue that then enables more creative solutions to be applied to a wider range of community needs.

Alternative funding - It's time everyone, Government, those in the sector, stakeholders and most importantly Boards and Committees and the general public arrive at an understanding that 'not for profit' does not mean we should not make a profit, it means profits should not be distributed to stakeholders and must be used for service delivery. Yes I accept there are theoretical limitations to the amount of funds held in reserve (try telling that to old established sandstone charities) however it is not about making money for the sake of making money it is about making money to add value to service delivery, to enable creative solutions to be applied outside of the Government funded 'boxes', to ensure sufficient reserves to pay an equitable and competitive salary to key staff, to ensure adequate professional development and where necessary to shore up the gap between Government funding and community needs. Let's stop being precious about our funding sources and our financial surpluses and get on with the job of doing what needs to be done to attract and retain good people and deliver good services. Don't use other revenue to reduce the level of Government funding, use it to reduce reliance upon Government funding and to give your people true choice.

It is also time the sector clearly explained the unique characteristics that define a funded nonprofit organisation. Funded organisations that provide services on behalf of Government are not the same as your local football club. At the community level it is expected volunteers will work for love. This perception cannot be carried over to funded service providers. Yet we persist with a model for funded providers based around the old volunteer community organisation model. Along with that come outdated perceptions of Governance, funding, expenditure, recruitment, working conditions and demarcations between passion and profit.

Human Resources - Stop waffling about the lack of professional development. Yes it's important, however professional development is only a small part of developing an effective workforce. More important is learning how to do more with less. That doesn't mean working people to the point of breakdown, quiet the opposite. Let's find ways to make work easier to do, less stressful, more enjoyable. Let's redesign the workforce. What we have has worked to date but it is becoming dated and less effective; the labour resources of the past twenty years will not be the same for the next twenty years. If we continue with the same workplace strategies used in the past then the sector will go backwards. We have an entire core of predominantly Baby Boomer managers who cannot get over the fact that they dont know the answers. Go to your workforce and ask them how to do it. You might not like them telling you how to run your organisation but I will bet my fee anytime that they know exactly what needs to be done to get the job done. Yes they would likely seek more money and more people, as we all would, however when people realise that hanging onto that belief will likely result in no one working in the sector then they will come up with better ways of doing things. One person, the head of the organisation simply does not have sufficient understanding or knowledge to impose such a change.

Research, capacity, evaluation - evidence, evidence and more evidence. The sector needs to stop hiding behind the old furphy that it is too difficult to measure outcomes that occur over a long period of time. We all know that, we also know its an excuse for not wanting to justify our expenditure. Stop believing the sector has a right to exist and spend money, provided by others without having to explain where and how that money was spent. That is irresponsible. We need to develop the means to provide evidence of community need, evidence of impact and effect of service delivery and evidence of social return on investment. It is the only way the sector can combat negative perceptions of money being wasted. Simply stating that the sector is fiscally responsible because it is audited by multiple stakeholder groups is insufficient and doesnt cut the mustard with those looking in from the outside.

Anyway those are my thoughts. I hope others will either agree or disagree with me and add their thoughts and together a variety of possible solutions will emerge which might, just might be more useful to our non profit sector than those offered in the Listening Report.

Let The Journey Continue
John Coxon

Taking You From Frontline Manager To CEO
john@johncoxon.com.au
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Telephone: +61 427 390376

Preparing for adverse events

Third Sector magazine from the UK reported recently that only 25% of charities have experienced an adverse event in the past two years yet only 44% have in place plans for dealing with threats to the credibility and viability. http://bit.ly/aWZaT0

Recently while working with a nfp that had weathered a period of bad publicity about internal events I became aware that in this instance, while the organisation had weathered the storm, and while the storm had been predictable, there appeared to have been little in place in the form of prior risk assessment or any form of positive publicity to counter the negative publicity. This is a short sighted practice.

It is my experience the not for profit organisations are good at telling each other how well they do but not very good at telling the whole world about the good the do. We tend to assume the term 'charitable organisation' will protect us from the evils of the world. Once upon a time when charities were entirely volunteer operated organisations there might have been a certain level of forgive and forget. In today's world where charities are managed by professional mangement teams, are responsible for the daily income and lives of corps of employees, compete for funding and for service delivery and market aggressively for donations, they are viewed in much the same way as any profit making organisation might be.

The traditional approach to risk management in a charity has been to (a) keep costs so low that it cannot spend more than it earns and (b) dont engage in activities that stray from the core mission. The traditional risk management activities have been for auditors to audit accounts, the CEO/EO to present financials to the Board or Committee, who then oversee to ensure money is not spend in a 'frivoulous' manner.

There is nothing wrong with that approach, however it is only the beginning of the process of risk management. How would your organisation cope with a major fraud incident, or if the premises burnt down, or if you were taken to court over an employment issue, or if the media exposed some form of dubious practice? The list of possible risk events is almost endless.

True, risk assessment is a bit like life insurance. You dont want to have to have it but you dont want to not have it in the event of your death. How many of you forgo having appropriate insurances in place? Not many, I suspect. We have insurance in place in case some thing goes wrong. It is to late to put insurance in place after an event. Risk assessment is a governance activity. Board members should have in place a process and a timetable for assessing risk and deciding upon appropriate risk management activities.

There are four stages to the risk management process. The first is identifying what potential risks exist and assessing the likelihood of any specific risk occuring and of it having a negative impact. The assessment should cover all areas of an organisation including governance, financial, operational, human resource and service delivery. The second stage is to implement risk management strategies, or in some instances, harm minimisation strategies. The further ahead a potential risk is identified and strategies implemented the less harmful the impact will be. The third stage is to have in place a process for coping with the fallout should a risk event occur. The fourth stage is to evaluate the lessons learned and repeat the risk assessment process.

Health care providers, due to the nature of their environment have in place very specific risk assessment and risk management processes. When your organisation deals daily with keeping people alive then the environment calls for such an approach. Outside of the health sector, where the fall out will most likely not result in death, we have a tendency to take risks for granted. At our peril.

Imagine if a client was to take their life while engaged in an activity at your premises and imagine if the media were to try to make a story of it. Would you have the processes in place to cope with the media attention, would staff know who had responsibility for speaking to the media, would you have in place a set of guidelines for staff using online media sources? How would your organisation cope with a loss of funding, or a service or a competing nfp? Do you have a relationship with the media, can you get your message into newspapers and onto radio or television? Do you have a relationship with a publicist or a media consultant? How well developed are your managers in transitioning people through change or a crisis?

Recently in Christchurch a significant earthquake caused a lot of damage to infrastructure. Another notch up the Richter scale and much of the City would have ceased to exist. Fortunately deaths and injuries were minimal however the disruption to commercial activities has been significant. If some form of natural disaster were to take place in your area, how would protect confidential records, maintain computer systems and gather together people to be able to get back into operation at the earliest moment?

Does your Board choose to plan for the possibility of such events or does your Board and Management simply assume they will be able to make do on the day?

There's money in those bank accounts

Pro Bono news recently reported that nonprofit organisations in Australia have around $295 billion - yes that is billions, sitting in daily trading accounts, where the money attracts little or no return on investment. This sum represents considerably more money than is needed for day to day operation of the sector.

This single factor highlights both a dilemma and an issue for our nonprofit organisations. The dilemma is that they are trustees of public monies and community interests and by nature risk averse. For Boards of Management it is less risky to leave funds lying around, earning little, that to risk the consequences of a poorly considered investment.

This leads to the core issue. That is managers that do not have the knowledge or skills in financial management to be able to provide Boards with well informed and strategic advice on investing. This is a more significant issue than it might appear on the surface. High end financial management is not something to be done intuitively, afterall it can go wrong. It is a learned skill - learned from very experienced and skill people. This requires an investment in appropriate development. Equally importantly it requires board members with similar levels of experience to enable them to firstly understand investment processes and tool; while also assessing the risk of such investments.

At the top level, perhaps in the 1% of larger nonprofit organisations these skills exist. For the remaining 99% of nonprofits, the lack of knowledge, experience and education at both board and management level is creating a situation where money that could be generated and used to enhance service delivery to the community is being squandered and donated to the banks - who, in turn, use your money to make their profits.

What is the answer? A two-fold approach is required. The first is that board members and managers gain knowledge and understanding of financial management, beyond simply setting organiational or program budgets. The second is people involved in the management of nonprofits need to base their investment decisions on knowledge and facts rather than misconceptions about how financial tools may be used; or worse still based upon common mythology.

Let The Journey Continue

John Coxon
Taking You From Frontline Manager to CEO

Ruckus at Vinnies

St Vincent's NSW have recently experienced their State Board being replaced by its national body, amid claims of 'corporate bullying' and counter claims of 'political interference' and 'wanting to get hands on monies'. Likely the truth will never come out.

The aim of this blog is not to engage in debate about St Vincents or any other church based charity, but to highlight what I believe to be the bigger issue and one that is being faced by many other nonprofits, regardless of their origins throughout Australia and New Zealand.

Most nonprofit organisations are mission-driven, yet increasingly pressure is being placed upon them by funding bodies to become more accountable, to have in place appropriate systems and processes and to maintain a triple bottom line. These demands clash with the mission of many involved in these charities. In short many people cannot grasp the connection between systems and sustainability. They continue to believe that somehow, money will always appear from somewhere and that the service they provide will continue ad infinitum. This issue is compounded by the increasing gap between those that volunteer their services and those that are paid for their services. This issue is not going to go away - despite the best efforts of volunteers to try and achieve just that. The reality is that if charities want to perform to their best ability, by achieving the high possible funding from various sources and providing the high level of service to those in need then they need access to people with appropriate experience and skills.

Is there a way to reduce this tension? Yes there is and the answer lies in doing something different to what is being done at present. The corporate model doesn't sit comfortably with mission driven organisations. Yet elements of the corporate model are necessary to achieve transparency and accountability. The gap between volunteers and paid employees, in particular managers, doesn't sit comfortably in a nonprofit environment; yet these people are necessary as they have the experience and skills to provide transparency and accountability.

I am not laying the blame at the feet of funding bodies either. They disperse public monies, as a donor I expect them to do so in a transparent and accountable manner. Public money is not money to be wasted. Yet I don't believe funders fully understand what it is they are funding or properly fund all aspects of service delivery.

Firstly I believe it is important board membership is made up of people with passion but who also have business skills in areas such as finance, marketing, fundraising, strategic planning and volunteer management. All board members should have a good understanding of governance best practice. Such skills and experience in themselves do not constitute a corporate model; these are simply the preferable degrees of experience to ensure transparency and accountability.

Secondly the time has come to stop treating volunteers as volunteers and instead treat them as unpaid staff members, subject to exactly the same standards and expectations that apply to paid employees. It is time for volunteers to understand that they don't own the business; it does not belong to them, they, as do paid employees, serve the greater community.

Thirdly management groups need to develop the ability to lead through collaborative actions, not through 'command and control'. This means managers need to learn how to engage everyone, at all times, in all aspects of operation, by creating an environment of sharing and continuous learning. This requires an investment in learning and development at every level of the organisation, including volunteers.

Finally, funding bodies, especially Government funders need to recognise the long term benefit of investing in development, of having in place effective systems and processes and having in place people with appropriate experience and skills. They in turn need to fund the development of people. A for-profit organisation funds this development from its sales. In the non-profit sector, Government is the chief source of revenue (so that nonprofits can do the job that Govt doesnt want to be held accountable for) and therefore have an obligation to provide sufficient funding to enable investment in people. To do otherwise is to short change both the sector and the community. Funding bodies claim to have the interests of stakeholders at heart, in particular the needs of clients. They need to understand that there are internal stakeholders as well as external stakeholders; staff also are stakeholders and clients.

Lastly, nonprofit organisations needs to develop hybrid models that enable them to maximise revenue from business activities, without compromising mission, to that they might have sufficient funds to invest in the development of their people. Which of course means, that they will need to build capacity at all levels in business development and business management (which most do not currently have) and so the cycle goes on . . .

Let The Journey Continue
John Coxon

Taking You From Frontline Manager to CEO

Acres of Diamonds

The Baptist preacher Russell Conwell wrote the original story titled 'acres of diamonds' about a farmer that sold his farm to seek his fortune in diamonds only to fail; yet the person that purchased the farm discovered what he thought were crystals in a creek; that turned out to be diamonds in their raw state. The very diamonds the orignal farmer sought were on his own farm - if only he had taken the time to study what diamonds in their raw state actually looked like. Many of us chase the gleaming, polished gem that others have already discovered while we fail to look for the raw, undiscovered gems in our own backyard.

Earl Nightingale expanded upon the story in his series of motivational lectures where he asked the following questions (which I have adapted and modified for managers)

1: How well do I do what I do at present? Think in terms of customer satisfaction.
2: Can I call myself a first-class professional at work? Think in terms of continuous improvement.
3: How does my management compare to other managers? Think in terms of best practices.
4: How well do I understand my sector and its environment? Can I link impacts of emerging events?
5: How can I improve customer service? Ask how do my customers use our services?
6: How can I increase my customer service? Ask my customers how I might better help them.
7: Do I understand what a 'rough diamond' looks like in my sector? Think in terms of customer benefits that remain unexplored.
8: Have I broken down my work and removed barriers and blockages that impede effectiveness and customer service?
9: How well do I understand how we might serve customers in 20 years time?
10: How can I look ahead, do the things that are not yet being done and lead the way?

To often during a recession we hucker down into our bunkers and try to protect the status quo while all round us the status quo is changing, being taken away or ceasing to remain the same. When we emerge from our bunkers we discover that what we were trying to protect has gone and we are all alone.

All to often when times get tough we begin to look at other people's gleaming gems (cars, houses, jobs, holidays) and we leave our farms in search of riches. What we fail to understand is that they got what they have by being ahead of the game, in the past.

Your farm is yourself, yet the one thing we neglect to develop is ourselves. We are to busy following the development of others. On your farm you have an undiscovered diamond mine of opportunity. For a start you are in control. You can choose what you want to do. You can make your own decisions. You own your farm, noone can take it away from you. Others can take your home, your car, your passport, even your freedom but they cannot take you away from you. They cannot take away your ability to choose a future for yourself.

No matter how difficult your life may appear you have options, lot of them. Start by looking at yourself. What do you have to offer? How could others benefit from what you have to offer? Look at your work situation. If you could do something better for a customer, what would you do? Then go and do it. So many of the things we take for granted today started with an idea in a garage, a pub or a kitchen. Yes money invested made the idea big - it was passion and self belief that got the idea off the ground. Someone said, bugger the world, I'm going to do it anyway. There is something very satisfying about giving the one-finger salute to those that would rather you drowned in mediocrity!

Stop thinking about you. It will only make you miserable. Instead think of others, think of customers. Instead of saying to yourself, this is what I want or this is what I need, change it around and ask yourself what am I interested in? You will soon discover others interested in the same thing. They become your initial customers. Change how you perceive a customer. Many people perceive a customer as being someone that purchases something from them. This is wrong. A customer is someone that benefits from your services. It's not about money dummy, it's about what you can do to help others obtain their 'polished gems'. In helping others to succeed they then help you to succeed.

Let The Journey Continue
John Coxon

Taking You From Frontline Manager to CEO

Why They Change Jobs

Recent research conducted by Catalyst and reported in Harvard Business Review, March 2010, showed that almost 25% of women, and 16% of men left their first job due to experiencing a difficult manager.

This serves to underline the importance of those in frontline management roles and in line management. This is often a new employees first experience of working with a manager in a full time work environment. Your experiences here impact upon us and form our perceptions for a long time, maybe forever. It is feasible more talent is lost at this stage than at any other stage. Yet now more than than at any time in the past 30 years we need to focus on retention rather than recruitment.

The initial direct report relationship is critical. The development of frontline managers is critical and it is important those in such management roles develop the ability to build effective manager-employee relationships.

The traditional 'sink or swim' approach is a dinosaur, a rock around your organisation's neck. When you fail to develop the potential of your frontline management team you risk the future of your organisation.

What can managers do to build good workplace relationships? The first thing is to ask questions and listen. People want to feel they are valued for their experiences and their ideas, they want to contribute. Collectively those in your work group have a better understanding of any issue than you, alone will ever have. Tap into that collective knowledge. Your team will perform well, they will achieve their outcomes and you will get the brownie points because you have the title of 'leader'.

The second piece of advice I offer frontline managers is to 'shut up'. No one cares about your opinions, and rightly so. Your role is not to tell others what you think, it is to facilitate a process of collective decision making. That doesn't mean you abdicate responsibility for making a decision; it means you make an informed decision. How? By asking questions and listening to what others have offer.

Thank people for their input and provide them with feedback on progress. When it comes to the workplace, it is preferable to over-commmunicate than to under-communicate.

Take time to learn about the people on your team. What are their individual strengths and weaknesses? What does someone do well and where do they need development or support? Encourage people to use their initiative and support them through the learning process than comes with making mistakes.

Get out of their way and let them get on with the job. If you want to do something then remove or minimise the impact of organisational barriers that get in the way of actually doing stuff.

Lastly, celebrate every little win as if it were a landing on the moon, give credit to those that did the work and came up with ideas; then start the cycle all over again.

The benchmark has been set. The challenge is in place. What can you do to ensure you minimise the loss of new people and continue to build the experience in your team?

Let The Journey Continue
John Coxon


Taking You From Frontline Manager to CEO