Book Review: Managing the Nonprofit Organization

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Peter Drucker‘s Managing the Nonprofit Organization
was full of good ideas. I started ripping off pieces of my bookmark to mark interesting pages and ended up with no bookmark!

Managing the Nonprofit Organization discusses mission, marketing, fund raising, performance, people, relationships and developing the leader.

Mission

According to Drucker, mission matters most in a nonprofit – much more than the leader’s charisma or talents. Non-profits exist to bring about change in individuals and society and focusing on the desired outcome is essential for defining plans, executing a strategy and putting the right people in the right roles.

A few specifics he had in this section were:

  • New ideas should be tried out separately – you shouldn’t try to convert the whole organization at once. “Babies don’t belong in the living room, they belong in the nursery.” I’m not sure I agree with the quote but I agreed with the idea that it’s often easiest to incubate an idea in part of an organization before you move it mainstream.
  • Focus on people’s strengths, not what they don’t have when hiring. He said in most interview processes people talk a lot about what each candidate is missing instead of the strengths they bring to the table. A criteria he really liked was asking the question: “Would I want one of my sons to work under that person? Would I want my son to look like this?”
  • Unlike for profit businesses, non-profits have lots of bottom lines, not just profit. Not just one constituent, one group they are trying to please.
  • Don’t forget to offer training for volunteers! Give them the tools they need and treat them not as volunteers but as nonpaid staff. (This idea comes up again and again in the book.)
  • Mistakes are part of education, as long as that person wants to try.
  • Measure leadership not by publicity but by how organization adjusts to change, how well does the organization deal with conflict, meet the needs of customers, etc?

He also talked a lot about the importance of understanding your mission and articulating it well. I paid attention in this section because a couple of the GNOME advisory board members have told me they couldn’t articulate GNOME’s mission. (It’s to provide a free desktop accessible to everyone regardless of ability, language spoken or financial status.)

His example of a mission that is often misunderstood is a hospital’s mission. Most people (even those working at the hospital) think that hospitals exist to keep people well. If that was the case, they’d focus on outreach to healthy people. A hospital’s mission is to help the sick. Knowing that changes how you work.

Marketing and Fundraising (He calls it “From Mission to Performance”.)

Marketing is not selling or advertising, as most people think.
Marketing is studying the market, segmenting it, targeting the right
groups, positioning yourself and creating a service to meet that
group’s needs.

What’s of value to your customer? Don’t start with
the product but with the satisfied customer. Companies typically learn
about their customers but they should focus on people that should be
their customers but aren’t.

On fundraising:

“Fundraising is going around with a begging bowl, asking for money because the need is so great. Fund development is creating a constituency which supports the organization because it deserves it.” I don’t think the term fund development has caught on but the point is a good one – you want people supporting the organization because they believe in the mission and how the organization is carrying it out, not because they feel sorry for all the people in the world that are starving.

This made me think we should change some of the GNOME goals from “hiring a system administrator” to being able to receive reports from users about problems in less than two minutes. Or something that shows how a system administrator will help with our mission.

He also pointed out you should make sure you tell your donors about the results you accomplish. “Educate donors so they can recognize and accept results” -” they don’t automatically understand what the organization is trying to do.”

Donors are customers – focus on what they need. Why are they supporting your mission?

Performance

Nonprofits have lots of people they need to perform for (unlike businesses.) Nonprofits need to satisfy employees, volunteers, donors, board, beneficiaries, …

He talked a lot about decisions:

  • Disagreement (but not fighting or bickering) is essential for good decision making. Fighting and bickering is a sign of a need of change – you’re probably set up to meet yesterday’s needs, not today’s. (Given the amount of back and forth I see on some mailing lists, I thought this was important. Perhaps those groups are showing that its time for a bigger change of mission or organization.)
  • If there’s consensus on a decision you probably haven’t decided much or people don’t really understand the issue. There should be discussion and disagreement.
  • No decision is made until someone is assigned to work on it. Some one accountable with a plan. And especially in nonprofits you need to think about what training and tools that person needs.
  • Make sure you really know what a decision is about – often the decision
    is a sign of a bigger problem and a bigger underlying decision that
    needs to be made.

I thought he had a couple of points that free software projects would agree with:

  • “Don’t tolerate discourtesy.” “One learns to be courteous – it is needed to enable different people who don’t necessarily like each other to work together.”
  • “Build an organization around information and communication instead of around hierarchy” People have to be responsible for educating their colleagues and bosses, for making sure they are understood.

And a few more points on managing performance:

  • Delegators rarely follow up with the people they delegated too but they should because they are still responsible for that work.
  • Never start out with the negative points in a review – you’ll never forget that part. Be sure to focus on the strengths – the things they can do well instead of the things they can’t do.
  • A big difference between businesses and nonprofits in his mind is that
    businesses are used to making mistakes but nonprofits think they have
    to be perfect. When mistakes are made, the focus should not be on whose
    fault but rather on who is going to fix this?

And one big one:

You have to be able to define what the results are – the results on the world, not the organization. I think this is one area nonprofits have a particularly hard  time with. Even when we define a result, we don’t know how to measure it. GNOME wants everyone to have access to desktop technologies. How do we measure that? How do we know if things are getting better? Is it when we have a complete free desktop? Or when more people in developing countries can access it? Or when it’s in more languages so that more people can use it? And if it’s all of the above, how do we measure it?

People

Drucker’s advice is to hire people with a proven track record not people with high aptitude for success. And to focus on strengths and the mission when placing someone.

He thought developing new leaders often takes more than just one mentor. He had example where a really successful leadership development program actually provided four “mentors” for each potential leader:

  1. a mentor to guide
  2. a teacher to help develop new skills
  3. a judge to evaluate progress
  4. an encourager to encourage them to try again when they made mistakes

I think some of my favorite managers were Peter Drucker fans, or at least they’d learned the same skills or had the same insights. He said something that I learned from my very first manager at HP.

“An executive’s first responsibility is to enable people who want to do the job, who are paid for doing the job, who supposedly have the skills to do the job, to be able to do it. Give them the tools they need, the information they need, and get rid of the things that trip them up, hamper them, slow them down. But the only way to find out what those things are is to ask. Don’t guess – to and ask.”

(My manager came up to me one day and asked me what I needed to do my job better. I came out ahead a new computer and a couple of meetings less. He was my hero! With more insight and experience now, I might ask for different things but the thought – that managers exist to help their employees get their work done – has stayed with me throughout my career.)

Some other tips from this section:

  • Build relationships with the people you serve. He had an example of a hospital that everyone loved even though it wasn’t the best hospital because the hospital always called a few weeks after a visit to follow up.
  • Treat volunteers as unpaid staff. Hold them to high standards. Give them responsibility, training, tools and hold them to it.
  • Make sure you don’t lose the top of your class, your best volunteers. Keep them inspired and everyone else will stay.
  • When working with a group of people (like the board), meet with them before hand, at least the key ones. You can’t change their minds in a meeting and even if you don’t change their mind, you will have set them up to understand what you are trying to do.
  • When building a team, start with what you are trying to do and then
    match skills with work. The purpose of a team is to “make the strengths
    of each person effective”.

He had a really good idea for meetings between leads and non-leads
that I’m going to try. Leads should say:

“This is what you are doing
that helps me. This is what you are doing that hampers me. And what do
I do that helps you? What do I do that hampers you.”

Developing yourself as a leader

This section started out with some excellent advice I wish I could get many of my friends to hear:

“The right decision is to quit if you are in the wrong place, if it is basically corrupt, or if your performance is not being recognized. Promotion itself is not the important thing. What is important is to be eligible, to be equally considered. If you are not in such a situation, you will all too soon begin to accept a second-rate opinion of yourself.”

I actually left a job because a promotion came up and my manager said that nobody that worked for him was ready for it. I could have understood if I wasn’t ready or a few of us weren’t, but we’d all worked for him for a long time. The thought that he hadn’t been working with us to make sure we were ready made me realize I wanted to work with someone who would provide more opportunities for learning and growth.

Some more advice in this section:

  • Change is necessarily to stimulate yourself. Burnout often just means you are bored. His solution to burnout is to work harder! But work harder at something a big different. Like volunteer at a different organization or arrange for a couple of visits to similar (but different) organizations. So when you are feeling burnout or stress, you should work harder! 
  • To learn from your work and life, write down what you expect to happen every time you launch a new activity. Then compare it to what did happen later.
  • Always answer the question “What do you want to be remembered for?” He points out that your answer should change as you get older and wiser!

I also learned some where along the way that the best job you could do is to work yourself out of a job – then the job was really done. (Note that some people get really nervous when you say this to them, especially when they are working for you! I always assure people that there’s plenty, plenty, plenty of work to be done out there.) The manager that taught me this must have also read Peter Drucker’s books:

“If I were to leave tomorrow, I don’t think it would make much difference. They would carry on.” That’s the proudest boast any executive can make, to have built the team that will perpetuate my work, my vision, my institution. That, in my experience, really distinguishes the true achiever.

So if you are interested in learning about management, Peter Drucker has some good insights.