Yesterday I drew on the concepts presented in the book The Warren Buffett Way to offer a robust definition of High Performance that goes beyond high operational performance. These posts are following on the comment fueled debate generated by my post on High Performance vs High Impact.
Today I’m going to draw on the book Forces for Good by Leslie Crutchfield and Heather McLeod Grant to offer additional aspects of High Performance in the nonprofit sector that are not captured within the framework followed by for-profit investor Warren Buffett.
Forces for Good is a remarkable book. Crutchfield and Grant present a fascinating approach to understanding how organizations that achieve high impact actually behave. The search for high impact is all about research on whether particular programs work. The search for high performance is all about analyzing how a nonprofit organization works. In Forces for Good, the authors identify twelve high impact organizations (as defined by an extensive process including: peer surveys, expert interviews and the authors in depth research) and then reverse engineer the practices they shared in common.
This reverse engineering process was ingenious in my opinion. Because it allowed the authors to find nonprofits that were widely believed to be creating high impact and then figure out how they did it rather than proposing a theory and having to wait 20 years to see if it worked out.
Below are the six practices that the authors argue lead to impact. These practices cut across all types of nonprofits and are features of a High Performing nonprofit. In other words, these practices do not reference an organizations programs (proven, or not, to create impact). They look at how the organization itself is run (don’t miss the six myths of high impact listed at the end of the post.
Advocate and Serve
High Impact organizations do not simply execute programs. They also engage in policy advocacy. Those that start out as advocacy groups, maximize their impact by adding direct service programs.
Make Markets Work
Rather than seeing for-profit firms as the enemy, high impact nonprofits find ways to work with markets and help businesses “do well while doing good.” They influence business practices, build corporate partnerships and develop earned income strategies.
Inspire Evangelists
They see volunteers, donors and advisors not only for the time, money and talent they can contribute to the organization, but also for what they can do to evangelize for their cause. They build strong communities of supporters.
Nurture Nonprofit Networks
High impact nonprofits help their competitors succeed. They build networks of allies and devote a remarkable amount of time and energy to advancing their field. They freely share their wealth, expertise, talent and power with their peers. Not because they are saints, but because it is in their own self interest.
Master the Art of Adaptation
These organizations have mastered the ability to listen, learn and modify their approach allowing them to sustain their impact and stay relevant. They’ve made mistakes and even produced some major flops, but they respond to changing circumstances through constant innovation.
Share Leadership
High impact nonprofits are led by charismatic CEOs, who distribute leadership throughout their organization and nonprofit network. They cultivate a strong second-in-command and build enduring executive teams and highly engaged boards.
Just as importantly, the book offers Six Myths that they say are not systematically found in high impact nonprofits.
Myth 1: Perfect Management
Although some of the studied organizations treat their systems, processes and strategic plans as top priorities, others are more chaotic and regard “plan” as a four-letter word.
Myth 2: Brand-name Awareness
Some high impact organizations are household names, others hardly focus on marketing at all. For some, brand-name is critically important, for others it is not significant.
Myth 3: A Breakthrough New Idea
Some groups came up with radical new ideas. Others did not. Their success was due more to implementation and execution.
Myth 4: Textbook Mission Statements
All of the high impact nonprofits had compelling mission, visions and shared values. But only a few of the groups spend time fine-tuning their mission statement on paper.
Myth 5: High Ratings on Conventional Metrics
Many of the groups did not score well on traditional measures such as Charity Navigator ratings. A few had only one or two Charity Navigator stars (on a 1-4 scale).
Myth 6: Large Budgets
Size doesn’t matter much when it comes to making an impact. Some of the groups had large budgets, some had relatively small budgets. They all used different fundraising strategies.
Tomorrow, I’ll attempt to reconcile the themes put forth in The Warren Buffett Way with those advanced by Forces for Good. Taken together I think they paint a picture of High Performing nonprofits whose activities inevitably lead to high impact. My argument is that the best way for philanthropists to achieve impact is not to focus on analyzing impact directly, but through identifying and funding High Performance nonprofits.
12 Comments
Sean,
I have been consulting with a corporate foundation, that has an employee-driven grantmaking process, to develop what we are calling “Excellence Criteria.” The criteria are designed to transcend giving areas and provide a common language for 100% of this company’s employees to research, evaluate, advocate for and ultimately allocate grants to not-for-profit organizations. The criteria is being piloted this fall with the hope that it will serve as a simple tool for employees to identify nonprofit organizations that are both high performance and high impact.
The criteria include: operational excellence (strength of leadership team and fiscal responsibility), mission, goals, and impact. Each of these four areas are more fully defined for the employees. We expect few organizations to excel in every area, but it will help employees take a more comprehensive look at prospective grantees, decide which areas they are comfortable with allowing room for improvement, or not, as well as benchmarking progress over time. I also agree consideration should be made for the “only show in town” organizations as someone commented yesterday. This is just one model that works for an organization of this type and size, and I look forward to hearing about others and seeing what the common denominators may be through the dynamic discussion that your blog has sparked. Thank you.
– Lisa
Maybe it’s there (or implied?) and not as obvious from reading a short summary of qualities, but surprised not to see anything that says these organizations really know — in great depth — the individuals, groups or “markets” they serve.
Lisa,
Let me know when you roll out the program. I’d love to see it in action!
Bruce,
I wonder if at some level of performance, something like that is not noticeable because all of the organizations do it and are implicit about it because it is just baked into their DNA.
I’m wondering if anyone has any thoughts on the consideration of community partnerships in the definition of high performance. To be high performing, should an organization have criteria for partnering only with other high performing organizations and ensuring a clear delineation of expectations in the arrangement? Based on my observations, I think this would warrant some consideration, particularly in a “subcontracting” type of relationship.
Cindy, Forces for Good does say:
“Nurture Nonprofit Networks
High impact nonprofits help their competitors succeed. They build networks of allies and devote a remarkable amount of time and energy to advancing their field. They freely share their wealth, expertise, talent and power with their peers. Not because they are saints, but because it is in their own self interest.”
The point does not seem to require that all partners be high performing, but it does speak to the value of community partnerships.
I’m sorry — I think I wasn’t clear in my comment/question. The issue that I was referring to is one that I don’t see as being sufficiently addressed by the Nurture Nonprofit Networks statement from Forces for Good. I’m thinking of partnerships in which one organization relies on another to provide certain services. It seems to me that the performance of one organization could have an influence on the overall performance of the other. It may be that others don’t see this as a significant issue to address here. I just wondered if there were any other thoughts on it.
Ah, I got it Cindy. Sorry I didn’t understand your comment. It certainly seems to me that in any time of partnership the performance of each “node” on the network is important. But I agree that Forces for Good doesn’t seem to focus on this.
I have been absorbing this rich conversation, so grateful to you for generating it, Sean! And I apologize that this is long – you’ve really got me thinking.
As I’m reading, I fear that focusing on high-performance / high-impact organizations may miss the more important question of what is really needed to aim this whole sector at greater results. The real question, in my years of exploring these issues, begins not within the organization but in the community.
Organizations, the systems and individuals within those organizations, philanthropists who provide funding and volunteers who provide labor – they are all catalysts for the desired end result of healthy, vibrant, resilient, compassionate communities.
Currently, more by accident and adaptation than by intentional design, our system uses all those inputs in a certain way. Adjusting / fixing the performance of those inputs may incrementally change some organizational systems and some individuals’ lives. But those tweaks simply cannot dramatically change communities.
If we intend to create dramatic results in communities, we need to begin asking different questions.
• How can we look to the future results we want to see in our communities, and reverse engineer the combination of inputs and efforts that will lead us to community wellness, vibrance, resilience?
• What combination of our existing resources (community members, organizations, capital, etc.) would most effectively create the healthy communities we want?
Clearly there are many answers. We have seen remarkable steps taken in those directions, some of which we documented in “The Pollyanna Principles.”
Will those answers include enhanced performance and impact at individual organizations? Undoubtedly. Boards that hold themselves accountable FIRST for the end results they create in Community, and who lead and plan to create those results? Individual programs that are engaged and collaborative at the core? Absolutely.
But to significantly improve the quality of life in our communities, those are just some components of one piece of the puzzle – the organizational piece. There are many other puzzle pieces as well – caring community members, social infrastructure, philanthropists, foundations – all of which themselves have components to adjust.
I just fear that as a sector, we are spending enormous time and resource trying to patchwork the ineffective system we have, simply because it is the system we have. Perhaps it is time to acknowledge the elephant in the room and begin aiming at overall systems change, to align this whole sector-ful of participants behind the healthy, vibrant communities we all want.
Thank you again, Sean, for generating such thought-provoking discussion!
Hildy
Thanks Hildy,
It seems to me that there might be a philosophical question at the root here. Do many independently functioning agents create the best society as long as a system is in place to reward the top adaptations and limit funding to low performers, or does it make more sense to designed the envisioned end state and engineer the conditions you hope will create it.
That’s an argument that has raged in economic circles for years. Do I have it right or are there other issues at work in your comment?
You are rightly sensing that many thoughts are going on for me simultaneously, Sean.
First, at least one aspect for me is the issue of “who decides?”
Do funders and organizations decide from the top down what is best for a whole community via a system of rewards as you note above? Or is the community convened to find a different path to a vision they all mutually share, for their own benefit, creating systems that will achieve those results (which may or may not include “organizations” as we currently know them)? And what values do each of those approaches not only reflect but perpetuate?
Which leads me to the driving force behind writing The Pollyanna Principles – a single question: What systems create visionary community change – systems for organizations, for funders, for communities overall?
The 6 principles that repeatedly proved themselves in guiding visionary community / social change were the ones we documented. The first two are all about FIRST aiming at visionary end results; the other 4 principles align systems around the interconnected strength and values we bring to bear when we work together and engage community members in creating their own change (Gandhi and MLK being the most visible examples of what is possible when those 6 principles are aligned).
In testing various approaches, we repeatedly found that when work accomplished significant community change, it was done cooperatively, engaging community members in creating the community they envisioned. When work assumed competition was the only way to create innovation, those “best of the best” efforts tended to be less visionary and more reactive and incremental in what they accomplished.
Again, it was not a study in organizational effectiveness, but in the bigger question of what systems and models will help lead ALL players in social change work – organizations and individuals and funders and etc. – to create the future we all want.
Not sure that answers your question or not?
Hildy
Hildy, I’d like to think that what I’m pushing for is not at odds with your line of thinking. We need coordinated approaches to creating vibrant communities with rich soil for individual orgs to thrive. We also need to figure out how to best fund those individual orgs.
I don’t see my model as being any more competitive than the landscape already is today. I’m just focused on philanthropy supporting the healthy growth of high performing organizations and I would think that a strong community is made strong by being made up of high performing individual ors.
Sean:
I guess what I am suggesting is that we can do better than “not being any more competitive than we already are.”
Current funding systems are already highly competitive. Interestingly, funders / donors almost universally acknowledge that cooperation will be critical if this sector is to dramatically improve our world. However those same funders / donors continue to use competitive funding approaches even as they bemoan the lack of cooperation those approaches create.
Given all that, what I am suggesting is that we need a different model.
History has shown us that the most dramatic shifts in human capacity come in leaps, not increments. Adjusting the current system may create incrementally stronger organizations, and perhaps incrementally more benefit for certain individuals, but it will not create dramatic, visionary improvement in the quality of life in our communities.
As I note in “The Pollyanna Principles,” it all comes down to what we hold ourselves accountable for. If funders / donors hold themselves accountable for rewarding strong capable organizations, then our communities will have strong, capable organizations who will create incremental improvement in narrowly defined areas.
If, however, funders / donors hold themselves accountable for creating dramatically improved communities, then we will begin to see solutions we have never even considered before. And the funder case studies in “The Pollyanna Principles” bear that out.
It’s all a matter of where we aim. We can aim at the results, and create systems that lead to those results. Or we can continue down the path we are on – a competitive path that funders universally bemoan even as they perpetuate it.
I guess, in short, we will have to agree to disagree!
🙂
I appreciate your raising the issues, though – great thought-filled discussion!
Hildy