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.
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.
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.