Key to Authentic Leadership

Self Awareness: The Key To Authentic Leadership

Still trying out things on the iOS WordPress app…photo loading insert seems a bit wonky…

Read the article though, it is a good one.

“bong”

Specific Social Media Objectives

Nonprofit organizations seem to have trouble figuring out what to do with social media. So what I’m going to do in this post is tell you exactly how to set objectives by using a brilliant post by Beth Kanter over at Beth’s Blog. You’ll get the Cole’s Notes version here – so please, for a full version click on the links up there.

Also, you might want to take a look at this post and prior posts on Sensible Social Media Policies, Social Media Planning, and Social Media Auditing.

OK, so here are some specific social media objectives you can set:

Specific Social Media Objectives

1. Increase website traffic by X% by adding social media content starting [date].
2. Acquire X new donors/members/subscribers/patrons through social media by [date].
3. Increase email list sign ups through social media channels by X names by [date].
4. Increase the number of website visitors who purchase by X% by [date].
5. Increase online and print mentions by X% by [date].
6. Increase “Friends” through Facebook to X by [date].
7. Increase blog subscribers by X% by [date].
8. Increase mentions by X% on Twitter before, during, and after [event] for [time period].
9. Increase likes and comments on Facebook/blog to X likes/comments per post by [date].
10. Increase views on YouTube Channel by X% by [date].
11. Increase number of retweets and @replies on Twitter by X% by [date].
12. Increase web site traffic from Facebook/blog/Twitter by X% by [date].
13. Identify top 25 influencers on Twitter to spread the word about company/programs by [date].
14. Increase the [key target demographic] of Facebook fans by X% by [date].
15. Conduct an constituent survey to determine where to expand, grow, and diversify social media presence by [date].
16. Create one video per [time period] to tell stories about the impact of our organization by [date].
17. Recruit X staff members in various departments to contribute to social media content X times per [time period].
18. Conduct social media use surveys at the end of every [production/program/class/workshop] by [date].
19. Increase visual content creation by posting X videos, X photos by [date].
20. Create and support social fundraising via [platform] by [date].

So, if you wonder what to measure – there you go. Take a crack at these. No you don’t have to pick them all, in fact I wouldn’t recommend that. I’d focus on a handful that have meaning for your organization.

As far as the dates and percentages go – pick small percentages and long time frames (months). That way you can surprise yourself when you surpass the goals. You’ll have to consider too how mature your market and your efforts have been, and relatively speaking how successful you’ve been so far (do an audit first). For example, you can’t get a 50% increase if you already have 80% of the market.

Braiiiins…Getting the Best from your People w/Brain Science

Are your employees or co-workers shambling around the office like zombies? Take a defensive position and grab this book:

Shine: Using Brain Science to Get the Best from Your People

Your job as a manager is getting harder all the time. But your most critical responsibility–especially in today’s world of intensifying competition and economic stress–is how to help your people shine their brightest. In Shine, Hallowell draws on brain science, performance research, and his own experience helping people maximize their potential to present a proven process for getting the best from your people:

(1) Select: put the right people in the right job, and “light up” their brain

(2) Connect: strengthen interpersonal bonds among team members

(3) Play: help people unleash their imaginations at work

(4) Grapple and Grow: when the pressure’s on, let employees master their work

(5) Shine: use the right rewards to promote loyalty and stoke people’s desire to excel.

I like this approach as it merges nicely with a number of other approaches I think work well, plus it goes one step further.

Certainly there is a history of trying to “get the right people on the bus”, Hallowell gets them in the right seats.

Strengthening interpersonal bonds among teams members might be the hardest part.  Not everybody wants to be buddy-buddy with their colleagues at work, but I don’t think that’s exactly what Hallowell is talking about.  More reading for me on this point, I guess.

But the rest of this, I am totally on board with!  Play at work equals innovation in my book, and “grapple and grow” to me is the same idea that I’ve espoused, which is giving people control – even more when the pressure is on.  Throw the rules out the window, let people try anything that moves the “issue” forward.

In the end, it is the “shine” portion that Hallowell has gotten the most attention for.  Kevin Sheehan at “Become A Leader” put it best:

Ned Hallowell’s Ten-Step Action Plan

1. Recognize effort, not just results. ”Of course, you want the results, but if you recognize ongoing effort, results will more likely ensue. Cheerleading works.”

2. Notice details. ”Generic acknowledgment pales next to specific recognition.”

3. Try, as much as possible, to provide recognition in person. ”E-mail packs much less of a punch than face-to-face interaction.”

4. In meetings—and everywhere—try to make others look good, not bad. ”Scoring points off the backs of others usually backfires.”

5. As a manager, you need to understand that your most important asset is the self-esteem of each of your employees. ”Recognition is a powerful tool to preserve their self-esteem.”

6. Acknowledge people’s existence! Try always to say hello, give a nod of the head, a high-five, or a smile in passing. “It’s incredibly deflating to feel that someone you work for has just passed by you without noticing your presence.”

7. Tap into the power of positive feedback. ”Granted, it’s important to be able to acknowledge and learn from mistakes. But positive feedback is often a more effective means of consolidating the learning.”

8. Monitor progress. ”Performance improves when a person’s progress toward a goal is monitored regularly.”

9. As a manager, the more you recognize others, the more you “establish the habit of recognition of hard work and progress as part of the organizational culture.”

10. Bring the marginalized people inside the tent. ”In most organizations, about 15 percent of people feel unrecognized, misunderstood, devalued, and generally disconnected. Not only is recognition good for that 15 percent to help them feel valued, it is good for the other 85 percent as well, because it boosts the positive energy across

What do you think about these ideas?  What has been your experience as an employee or as a manager?

Community Engagement: What Is It?

 

Community engagement is the exchange of information, value, and control between two increasingly equal partners.  It is a process ranging from simply informing a community (on the minimal end of the spectrum), to assisting a community in goals outside of one’s organization (on the maximum end).

I base my model of community engagement on Sherry Arnstein’s model of citizen participation, and David Wilcox’s ”Guide to Effective Participation”.

Based on these sources, I suggest that community engagement is a spectrum of activities like these:

*  Information – telling people what you’re going to do (Informative – Advertising and Education)

*  Consultation – asking them what they think (Consultative – Feedback and Reviews)

*  Deciding together – providing options, decide with you (Collaborative – Working Groups and Boards)

*  Acting together – letting them do it with you as partners (Cooperative – Partnerships and Coops)

* Supporting one another – helping them do what they want (Active – Community Service and Volunteering)

It is not a sales function, and not simply an education function, but rather a management function appropriate for company-wide implementation. As such, there are points of involvement for nearly every area of an organization that wishes to better engage with their community.

We’ll talk about those in future posts.

The key thing to know now, is that any level of engagement may be an appropriate end point for your organization. It depends on your mission, your community, your level of comfort with community engagement, and the appropriateness of community input in your operations.

For most organizations, it is common to be at the Information level.  For many, that is an appropriate and comfortable place to be.  For those that wish to go beyond that, I hope this model provides a model to consider as you put your plan together.

What To Do With Your Hood-Rat Employee

Acme Glass Company (Hope Not)

People think its not fair that you can get fired for actions outside the workplace. This article is not for those people. This article is for the business owner who comes in on Monday morning only to find that one of her hood-rat employees is on the front page of the newspaper rioting in a company shirt. Not exactly the coverage your company was looking for. Do you fire them? Here’s some things to consider:

1.Is the misconduct illegal and proven in a court of law? No matter how bad it looks, each employee deserves their day in court. Later on in this article, I’ll get to what you can do in the meantime.

2.  Is there a connection between the misconduct outside the workplace and this person’s role in the company? Did they use any company assets to misbehave? Did they damage company property or assault company employees, patrons or vendors?

3. Is there a fundamental effect this misconduct might have on the workplace or working relationship with this employee? Did they burn an effigy of the boss in the town square? Did they engage in violence targeted at a protected group prevalent in your workplace?

4. Is this employee in a position of trust or prominence that is undermined by their misconduct? Did your head cashier get caught shoplifting? Did your head of security get caught stalking? Has your head of IT been identified as “the masked bomber”?

5.  Did they illegitimately present themselves as acting as a representative of the company? Did they wear their company work shirt to the riot?

Here’s what to do if you want to discipline or fire them:

1.  Talk to your HR expert or legal counsel. If none is available, call the agency in charge of applicable labour law. They can at least tell you what part of the law to read, but should not give you advice on what to do.

2.  Follow you internal procedures. If you have a company disciplinary policy, follow it.

3. Carefully consider your actions and their impact on the employee and the company. Compassion is a virtue, but so is consideration for your other employees, who will be watching.

4.  Remember in most jurisdictions and for most non-union jobs, so long as appropriate notice and/or compensation is made, no advance notice of termination is necessary. No reason need be given in many cases, just whatever required paper work and a severance check or other due compensation.

In the meantime, if you have a hood-rat employee you’d rather not have around, but who is an “unindicted co-conspirator” you might consider the following:

1.  Again, refer to your disciplinary policies. Follow them. Again, consult legal counsel or HR if you can.

2. Depending on the employee and how critical they are to the day to day operations of the company, it might be in the best interests of both the employee and company if he/she took a few days off. If they have unused leave, you might encourage them to take it.

3. Depending on how public or widely known within the company the misconduct is, you might want to address it. “Chris has found himself in a situation none of us would wish for ourselves. This company believes in both personal freedom and personal responsibility, and until this situation is judged by the authorities……”

How to deal with the public:

1.  No comment won’t get you very far. Start with “we will not discuss individual personnel matters publicly”. Then try “we will address this matter according to the terms of our employment agreement (or company policies).”

2. Be clear, concise and as transparent as you can be without commenting specifically on your employee or their actions. It is never wise to do so, and particularly so in a situation likely charged with emotion and opinion. You cannot win if you go down that road.

3. Cite your company’s core beliefs and fairness in dealing with all employees. Express sympathy and compassion to those effected. Lay no blame, condemn no one.

Wildcard situations:

1.  Each employee and each situation is different. Be flexible.

2. Respond to safety concerns. If there is a threat to public or workplace safety if this person is on the job, or not promptly dealt with internally, then immediate action is critical.

3. Keystone support is critical. If you are at risk to lose a key staffer, vendor, or customer; act faster than perhaps you might otherwise.

4. Stay abreast of your legal responsibilities. If you have a situation that requires notification of the authorities, or regulatory issues, by all means, take care of that first.

Above all, act with appropriate force. Make sure your response is proportional to the misconduct and effect on the company.

You have an opportunity to act with fairness and wisdom, make good use of that opportunity.

Emergency Succession Planning: The Magic Bus

I once worked for a company that had the company parking lot across a city park and an awkwardly curving and fast street. On more than one occasion I nearly stepped in front of the #15 bus in a dreary haze either to or from the office to my car. It was like this bus would magically appear out of nowhere and nearly run me down. It was about this time that I came up with the “Magic Bus” contingency for emergency succession planning. Over the years I revised it as I gained an executive viewpoint. Here are some thoughts on a still-evolving plan.

1. Nobody wants to talk about it – you are on your own
I’ve never found a Board or a senior staff seriously interested in discussion succession planning. There are always more pressing matters and some people either think you are a) gunning for them, or; b) morbid.  Nothing could be further from the truth. Ask this of your senior staff or Board:  Do you have life insurance? Do you want all your hard work to be for nothing?  I had a CFO who just would not discuss this until I pointed out that without a “how to” binder from her, I could guarantee we’d decimate her ledgers and chart of accounts before she could get out of the hospital. Show me a CFO who doesn’t believe that!

So here’s the deal. Start at the top. Bosslady, clearly define who’s in charge if you get hit by the “magic bus”. Face it, if the bosslady gets hit by a bus, a general freak0ut it guaranteed. Better have figured out who’s got keys to the castle, so to speak.

For senior staff, I like to let them choose, with the boss getting a veto. I believe that the marketing director knows better who can pick up the ball and keep the PR game on better than anyone.  Let him pick who does what if he gets whacked.

2.  Go through job description and pick out the absolutely critical functions that need coverage in the first 24 hours, 3 days, a week, a month, or a business cycle.  You may find (as I did) that in the first 24 hours, the critical functions are FAR different than they are on a longer time-frame, and that the middle of the timeline is actually the hardest to manage.  To make you job easier, focus on no more than the first three days.  This should give you breathing room to get the team in one room to regroup.

3.  Focus on IT and communications. Does someone have all the passwords they need to get in your files? Can the staff get in and change your outgoing voice mail quickly? Does someone have the Board President’s vacation home and cell phone number? Is marketing prepared to release a statement to the press if needed? Do front-line sales people know who’s in charge if he bosslady takes a dive? Get this in line and review/revise your IT security and crisis press procedures at the same time!

4.  Consider a crisis management team. There’s probably a reason the bosslady is boss and not Mr. What’s His Name, who is now pressed into service.  Support your interim leader with a small team of senior staff and no more than three board members. Your interim needs support on areas of inexperience, and needs the backing of the Board for any unusual decisions to be made.

5. Backfill as you go up the ladder.  If the bosslady goes down, consider it “all hands on deck” time.  Remember if you are filling in for the higher ups, some things will get dropped to deal with it.  You are best advised to pass along some duties downstream. This will lead to the next level of planning on down the organizational chart.

6. Awkward situations can be avoided if you work a policy in advance that if you must fill-in for a higher up, a pay adjustment kicks in after X number of days.  There will be a tremendous amount of work to do. Nobody should be worried about whether or not they’ll be compensated.  If no additional compensation is to be had, make that clear.  People just need to know.

7. Don’t make things difficult. Start small. A little plan is better than none. I once had my senior staff start by simply writing a note to be read in case they were hit by a bus. I asked them, “Tell us what we need to know if you get hit by a bus.”  For some people it was surprising to learn that it was less about files and to-do lists and more about relationships that needed to be maintained.  This little exercise saved us a huge amount of time and helped us focus on what really needed to be addressed, rather than what we might have guessed based on a job description.

Like checklists? T here are some excellent check lists from the Centre for Nonprofit Advancement (www.nonprofitadvancement.org)

 

 

 

Social Media Planning

Social media planning? What a nightmare. Where to start? Some people dive in and figure it out as they go, and some people plan and plan and plan.  Well, here’s my suggestions having first deciding to dive in:  

 1.    Determine your message
What are you trying to say? Do you have more than one message? Develop a short paragraph that encapsulates what you want to say and continually reference it as you work on social media tools. Here’s a sample:

Our Company is a vibrant and innovative company integrally engaged with its community.

2. Determine who your audience is
Who is your audience? Are they tech savvy? Creating a plan to enter the social media arena is irrelevant if none of your audience will follow you there. Consider surveying your patrons to determine how they want to hear from you. Here’s a sample:

Audience is defined as those tech savvy, moderately to minimally engaged supporters.

3. Develop goals
What do you want to achieve from social media? Sales? Donations? Awareness? Determine your goals and remember to keep them handy as you progress. Sample:

Goal is to increase awareness, engagement, purchase behavior, and media coverage.

4. Determine the exact ROI you are expecting
This goes hand in hand with #3. Get specific about the return on investment you are expecting. If you want sales or donations, what’s the amount? If you are looking for new supporters, how many? Some suggested measures:

Awareness measure:  awareness polling in key demographics. Really simple to do on-line now.

Engagement measure:  volunteers, purchase, donation, attendance, buzz, commentary, memberships, info requests, content creation.

Purchase behavior:  measure number of new to file purchases as % of total purchases for each product.  While some products will sell more new to file due to their popularity, an overall positive trend is targeted.  Segment purchasers by use of medium-specific promo codes.

Wider media coverage:  List media outlets targeted and measure column inches or mentions.

5. Research and determine which social media tools work for you
There are multiple social media tools out there. It’s important to determine which ones work for you. Signing up for everything isn’t going to be the best use of your time. It may be a good idea to see what your competition is doing, the make a conscious decision to either beat them or out-maneuver them.  Whatever your plan, make sure it jives with your overall marketing and company plans.

Here’s a blog-centered media plan. It may not be appropriate for you, but note how each tool is fully explained:

Blog:  “Hub of Activity”  “Center of Engagement”  Used for multimedia, content-rich material.  Customized and repurposed company- generated material, and “pulls” from industry sources.  This medium seems to have long tail.  Rules for content:  informative, interesting, timely, engaging, vibrant, creative, innovative.  Measure:  # visitors, #unique visitors, Time on site, #of subscribers, traffic sources. Voice: Informal as with friends

Facebook:  “Postcard from the company”  “Center for Awareness” used to sample, tease, redirect.  Used for network building, like a yearbook of fans.  Largely re-purposed company-generated material.  Medium seems to have 30 day tail.  Rules for content:  Interesting, sample-sized, compelling enough to redirect.  Measure:  #friends, #visits in past 30 days.  Voice:  Conversational as with friends of friends

Flickr:  “That’s Me!”  “Visual Cue for Branding” Used for photos that reinforce brand image as vibrant, innovative, engaged company.  Imagine as 21^st Century. “society page”.  Company-generated material used to generate desire to be a part of activities.  Medium seems to have six week tail.  Rules for content:  Engaging, vibrant, creative, innovative.  Measure:  #views, #contacts, #tags or comments.  Voice:  Trendy as in coffee house conversation among younger demographic.

Twitter “That’s Interesting” “Community Switchboard” Used to attract tech savvy base and facilitate two-way communication.  Ask “what do you think?”, and “How are we doing?”.  Company-generated material and news/gossip.  Medium seems to have very short tail (1 day).  Rules for content:  Interesting, Immediate, Necessary.  Measure:  #followers, #RT’s in last 10 days, #responses to tweets in last 10 days.  Voice:  Hip, almost irreverent

YouTube “Brand Endorsement”  “Brand Sampling” Used for video that reinforce brand image as vibrant, innovative, engaged company.  Imagine as video sampler.  Company-generated and repurposed material.  Medium seems to have long tail.  Rules for content:  Interesting, engaging, informative, evocative of brand experience.  Measure # video views, #subscribers to channel.  Voice:  Conversational, as with those just met.

Homepage “The Mothership”  “Source of Record”  Used for text heavy materials and serves as official formal voice of corporation.  The Newspaper of Record or Voice of the Boss or Board.  Medium seems to have long tail.  Rules for content:  Official, actionable, accurate, purposeful.  Voice:  Formal

6. Create a strategy
Developing a strategy for your social media activity is extremely important. You need to determine what content you want to create and where you want to put it. The question you need to answer is “Once we have them, what do we do with them?” For example:

Drive all activity to blog first, then to homepage for purchase and engagement activities.

7. Create the analysis method and benchmarks
What is your method for analysis? It’s important to track if you are achieving the ROI that you want. Over what time do you expect to see a change? Is this time period relevant to your sales or production period? Is this timeline supportable with the resources given?

See Measures in Section 5 above for each medium.

8. Determine the main contributor as well as any sub-contributors
Who is writing the content for your social media site(s)? Is the same person posting all of them? Is there more than one person contributing? Hashing this out ahead of time will make the process flow much smoother.

9. Develop content ahead of time and determine how often you will update
Create some of the content you need ahead of time so you aren’t scrambling to find something to post/write about every day. Create a stockpile of relevant info. Use any scheduler function available to queue up content for peak traffic times. Here’s an example of a possible policy for posting content:

Post every 24 to 30 hours.  Repurpose all content.

Assume targeted 30 day  (4-5 week) news cycle for wider awareness content pieces.

10. Develop a response procedure
What’s your procedure if you receive a negative comment from someone, or a positive one? Determine how you handle questions and comments in advance.  Here is one example:

Screen all comments if possible before allowing to post.

Negatives: head of communications responds within 2 hours.

Positive: person responsible for the channel responds immediately.

An immediate response is critical. Equally critical is transparency.

So long as comment is not obscene or abusive, consider posting.

That really is about it. Ten steps to a social media plan.  Any one of these could be expanded into a post, but really, this isn’t rocket surgery.  Like I mentioned at the top, I jumped in feet first, made mistakes, flailed around, and swam back to shore multiple times.  I was fortunate to have a supportive organization and an almost competition-free marketplace as an early adopter.

Here are some final words of advice:  Listen. Learn. Ask questions. Be respectful. Be transparent.

Consider those five things your life ring as you jump into the ocean of social media.

OK, if you read down this far, you deserve a treat:

Sensible Social Media Policy

A Sensible Social Media Policy

Setting up Social Media - Social media identities, logon ID’s and user names may not use the company name, or imply that you speak in an official capacity for the company.

Don’t forget your day job – Don’t let social media interfere with your job.

Don’t Tell Secrets – You are bound by confidentiality.  Don’t cite or reference patron info, financial info or other confidential info.
 

Do Be Yourself - Do not blog or comment anonymously, using pseudonyms or false screen names. But also be smart about protecting yourself and your privacy. Don’t be afraid to be yourself, but do so respectfully.

Do Be Honest - If you have a vested interest in something you are discussing, point it out.  Use your real name, be clear who you are, and identify that you work for the company if it is germane to the conversation, and be sure to make it clear that the views and opinions expressed are yours alone and do not represent the official views of the company. Then, it would probably be a good idea to let someone know at work about the conversation/debate/argument/flame-war, the last of which you hopefully avoided.

Do Respect Copyright – It is critical that you show proper respect for the laws governing copyright and fair use.

Do Own Up to Mistakes – If you make an error, be up front about your mistake and correct it quickly. If you choose to modify an earlier post, make it clear that you have done so.

Do Think About Consequences – Once again, it’s all about judgment: using your blog to trash or embarrass the company, our patrons, or your co-workers, is ill-advised. You’d be surprised how small the internet is when you do that.

Controversial Issues – The public in general, and the company’s employees and patrons, reflect a diverse set of customs, values and points of view.  You don’t have to share them, but please respect them, even if you choose to argue against them.

Company Issues – Don’t contradict the company website regarding company information. If you see an error on the website, contact the person responsible, so it can be fixed. If you see misrepresentations made about the company in the media, you may point that out. Always do so with respect and with the facts. Avoid arguments. Let PR or the appropriate person know about it.

Disclaimers – Many social media users include a disclaimer saying who they work for, but that they’re not speaking officially. This is good practice and is encouraged, but don’t count on it to avoid trouble – it may not have much legal effect.

Enforcement – Policy violations may be subject to disciplinary action, up to and including termination for cause.

Is Your Nonprofit In Good Financial Health?

Reading nonprofit financial statements

 

This primer has been created to assist board members in reading and analysis of financial statements of a typical non-profit arts organization.  It assumes no prior experience. Any board member can (and should) be able to do these types of analysis. Senior management should be able to speak to all of them within the context of current operations and strategic decisions.

 

Operating Statement:

This is generally a line-item document showing revenue and expenses in all the major categories of operation.  It might be presented at each meeting of the board.

What Matters:

“Net Revenue” line. It should be a positive number.  If not, it means there are more expenses than revenues this year and borrowing or cash reserves have been used to meet expenses.

Compare the “Budget” column to “Current Projection” to see how different the current expectations are to the original budget.  The “Variance to Budget” column shows how much it varies.  They can vary widely, and it may be worth asking why.

Compare “Variance to Prior Projection” It shows how much projections have changed since last reported.  The numbers should be small, and if not should be commented on.

Look at “YTD Actual”.  Shows “year to date” brought in or spent for that item.  The number should be smaller than or equal to “Current Projection” line.

 

Balance Sheet

This shows how the company is doing overall as a snapshot in time.  It lists Assets, Liabilities and Fund Balance.

What Matters:

Fund Balance (also known as Net Assets): This number should be positive.  Fund balance is the accumulated amount of assets you have over and above your liabilities.

Current Assets vs. Current Liabilities:  Compare Current Assets, to Current Liabilities. There are two tests you can run to determine financial health:

Current Ratio. Divide Current Assets by Current Liabilities.  Goal is a result of at least $1.00, meaning you have adequate assets on hand to meet current liabilities.

Acid Test.  Divide Cash alone by Current Liabilities.  Goal is a result of at least $1.00, meaning you have adequate cash on hand to meet current liabilities.  This number may fluctuate wildly during the normal business cycle.

Comparing similar periods, the numbers should generally be about the same unless the company has changed its producing or fundraising schedules.

 

Cash Flow Statements

This shows cash in (receipts) vs. cash out (disbursements), typically on a monthly basis.  It can project how long cash will meet expenses before having to borrow or dip into cash reserves.  Most companies have negative cash flow in some months (more money went out this month than came in), and this is normal.

What Matters:

Look at “Net Change in Period”.  A negative number should generally be less than the current assets you have at the time.  (See the balance sheet)  If the net change in period is larger than current assets, it may mean that the company is borrowing money or dipping into cash reserves to get by in that period.

Look at “Balance at End of Period”. This number should be positive.  If this line is negative it means the company had to borrow or dip into cash reserves to meet expenses.

Cash flow should be positive: when subscription money is coming in ahead of the season starting; when the company is closing a very popular show; or when money is being raised ahead of project needs.

Cash flow is often negative: just before the start of the subscription campaign for next season; just about the time rehearsals start for the next show; or anytime a large project begins that you’re still raising money for.

 

How to Read Nonprofit Financial Statements

How to Read Nonprofit Financial Statements

Four Measures of Financial Health

I have found that many well-meaning board members for nonprofits don’t know how to read financial statements and simply write them off as the responsibility of the bankers, accountants or “numbers people” on the Board. Fortunately every board member has a fiduciary duty and there’s no reason they cannot learn these simple methods of reading the balance sheet of their organization to see if their company is in good financial health.

Quarterly financial statements including balance sheets should be available on a timely basis to any board member so that they may adequately execute their responsibilities.  These statements should provide adequate information to do the following calculations and management should be able to speak to the industry norms and organizational benchmarks for each metric, so as to provide a context for analysis.

Four key measures of financial health for nonprofits are:

Working Capital – consists of unrestricted resources available for operations, plus any restricted working capital reserves.  Adequate working capital provides financial strength and flexibility to a company and the ability to meet obligations as they come due.  Each company must determine its own working capital needs.  An increasing (positive) trend in proportion to an  increase in operating budget is a healthy trend.  Negative ratio shows a drawing on deferred revenues, lines of credit, or “aged payables”.

 

Working Capital = Unrestricted net assets – Fixed assets (net) – Unrestricted investments + Temporarily restricted or Permanently restricted working capital reserves.

 

Working Capital Ratio = Working capital/Total expenses

 

Invested Capital – includes assets usually invested long term, approximates reserves and endowment, and may be unrestricted, temporarily restricted or permanently restricted.  Income from invested capital is generally available for operations or specific purposes.  Each company must determine its own invested capital needs.  An increasing trend in proportion to increases in operating budget is a healthy trend.

 

Invested Capital = Total investments (endowment and reserves)

 

Invested Ratio = Total investments/Total expenses

 

Fixed Assets – includes all land, building, equipment, and other fixed assts owned by company.  The amount should be tailored to the needs of the company.  A declining trend is a healthy trend in many cases.  A deferred maintenance indicator greater than 15 years may indicate a need to invest in plant/facilities. A deferred maintenance indicator greater than 6 years may indicate a need to invest in equipment.

 

Fixed Assets = Total property & equipment – accumulated depreciation

 

Deferred Maintenance Indicator = Accumulated depreciation/Depreciation expense

 

Debt – includes all short term and long term contractual obligations of the company, such as notes, bonds, and leases payable. Debt must be actively managed and should be closely tied to organizational mission, rather than consequences of prior actions or failures. As noted below, a debt ratio alone will not provide an adequate indicator, but must be compared to one or more of the other metrics mentioned above and strategic and operational matters.  A declining trend, however is typically a good indicator.

 

Debt = Notes payable + Bonds payable + Capital leases payable + Lines of credit

Debt Ratio:  Many models exist but few are indicative of financial health alone.

 

These four key measures of financial health are provided as a basis for quick analysis, and should be coupled with a discussion with management regarding operational and strategic factors that may play a role in any analysis.  Board members, funders, and senior staff are wise to keep these measures close at hand as an ongoing tool to take a snapshot of financial health of their nonprofit organization.

To thrive as a cause, you must survive as a business.

Going Rogue To Solve The Problem

I was re-reading Jonathan Fields’ blog this morning and his post “Going Renegade“ and I had some thoughts to add.

Fields points out that many “Voila!” moments come in the spaces outside the structured formats of daily business. They come when you go for a walk, when you’re washing your child’s hair, when you’re playing golf. He cites Prof Herbert Benson’s book The Breakout Principle for extra authority.

It seems Fields and Benson both agree that you must allow for an empty space within yourself and within your project and decision making process. By putting aside the problem, it allows the mind to make connections that would otherwise be blocked. Benson goes so far as to ascribe a biological process to it and his book aims to train one in how to trigger it

If you like, you can go the way Benson does and describe it in terms of the body/mind connection. Benson argues that a four step process should be sought: that struggle; relaxation; breakout (or peak) experience; and a new normal is the beneficial cycle for resolution and growth.

Fields breaks this down into three phases: first, identify the problem; second, work crazy hard on your problem; third, step away from it all (work, computers, pda, everything) to achieve your solution.

I offer only the “empty bowl”. No steps, no phases. The non ado way.

This goes beyond the concept of leading with an “open mind”, and extends to the level of your team. It can benefit a team to have established the ability to “go rogue”, especially at the outset or when things get blocked. What happens when you do this, I think, is your team is allowed the time and space to connect to their innate creativity.

When you’re struggling to solve a problem, meet a deadline, or make a key decision, it’s easy to get caught up in the output. You have to deliver X by Y or else.  If you get focused on the deadlines, the budgets, the rules and processes to get an outcome, you’ll get a result, but you’ll only reinforce the stress.  This may create a team of incredible crisis managers, but it is no way to run a company.

I suggest that if you focus instead on keeping an empty bowl at the table, not only will you have a satisfactory solution, finish, or decision, but you will have a result that actually makes the next matter easier to resolve.

Try this:
Be an empty bowl. There is space within you, empty, clear of obstruction, instruction, structure, ego, or intent, but surrounded and supported by your experience and knowledge.

Into this bowl you pour your matter at hand. Now strip away everything to the soft kernel of the matter.

Start with yourself, your agenda and that of your team. The leader should spend time keeping the bowl clear of the agendas, calendars, egos and intentions of the team, and let them focus on the matter at hand.

Try various methods to do this, without setting any store by it. I used to say “we take our work very seriously, but not ourselves.”

Be supple, be flexible, be fluid. Change the leader of the meeting, ban electronics, meet in the park, go for a walk together, make a meal together, whatever. As a leader, focus on providing your team space to “go rogue”, off message, or from a strange point of view, but always without the things that bind and complicate things.   The only rule is there are no rules or set roles for them to play.

The matter at hand may appear complex, but if you build a process through practice that allows your team to “go rogue” to simplify it, you’ll find the it and the next matter easier to solve, and your outcomes simpler, more focused, and truly useful.

To paraphrase:
Make an empty space to deal with matters at hand right from the start. Keep it clear and clean of outside intent or issues. Reduce and simplify, again and again until only the kernel of the matter remains.  Simple things are easy to manage with little ado.

It is said, that learning consists of doing and accumulating; but the “empty bowl” consists of undoing and diminishing. Keep diminishing and diminishing, until you reach the simplest matter. Then the simplest action will resolve all things.

An aside: This is not easy. I don’t want to give the impression that it is. But right now you are likely expending just as much effort in building a team of crisis managers.  And if you’ve spent all that time and effort to build such a team, is it any wonder that everything starts to look like a crisis?

Social Media Policy Sample

If your company is going to engage in social media (and why would it not) it is probably a good idea to let your staff know what you expect from them as employees.  Although most of their social media lives will not be on company time, it is a fact of modern business life that what they do on social media can have an impact on them in their professional lives, and for your company.

I’ve spent some time thinking about this and gathered together the best clauses from social media policies that I have reviewed.  I include them here as a sample for anyone who cares to use it.  To me they seem reasonable. Perhaps they will apply for you.

Social Media Policy Sample

Setting up Social Media – Social media identities, logon ID’s and user names may not use Company name, or imply that you speak in an official capacity for the Company.

Don’t forget your day job – Don’t let social media interfere with your job.

Don’t Tell Secrets – You are bound by confidentiality.  Don’t cite or reference patron info, financial info or other confidential info.

Be Yourself - Do not blog or comment anonymously, using pseudonyms or false screen names. But also be smart about protecting yourself and your privacy.

Be Honest - If you have a vested interest in something you are discussing, point it out.  Use your real name, be clear who you are, and identify that you work for the Company.

Respect Copyright – It is critical that you show proper respect for the laws governing copyright and fair use of copyrighted material.

Own Up to Mistakes – If you make an error, be up front about your mistake and correct it quickly. If you choose to modify an earlier post, make it clear that you have done so.

Think About Consequences – Once again, it’s all about judgment: using your blog to trash or embarrass the Company, our patrons, or your co-workers, is ill-advised.

Controversial Issues – The public in general, and the Company’s employees and patrons, reflect a diverse set of customs, values and points of view.

Don’t contradict the Company website regarding Company information. If you see an error, contact the person responsible.

Don’t be afraid to be yourself, but do so respectfully, and be sure to make it clear that the views and opinions expressed are yours alone and do not represent the official views of the Company.

If you see misrepresentations made about the Company in the media, you may point that out. Always do so with respect and with the facts. Avoid arguments.

Disclaimers – Many social media users include a disclaimer saying who they work for, but that they’re not speaking officially. This is good practice and is encouraged, but don’t count on it to avoid trouble – it may not have much legal effect.

Enforcement – Policy violations may be subject to disciplinary action, up to and including termination for cause.

Killer Sysadmins and Their Pugs

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IT professionals are worth their weight in gold. The trouble is that this is an area in which nonprofit organizations typically lack capital, personnel and training. I have some suggestions on how to make due.

1. Audit. Figure out what you have, what everybody uses, what works well (or doesn’t), and what people wish they had. It is important to be realistic, but let staff list whatever they like.

2. Group meeting. Invite everybody but don’t make it mandatory. Those not invested in making things better won’t show. The ones to form your IT team will be there, as will those whose buy-in you will need. At the meeting, lay out the results of the audit. Maybe not everybody knows marketing has a laptop. Maybe nobody knows you’re not on an exchange server (or what that means). But everyone will be happy to know that everybody else hates the email system too, or that everybody really wants remote access. Use this meeting to set priorities. How democratic you want to be depends on corporate culture, but get buy-in from everyone and tell them you’ll put prices to everything and will meet with them all again in a week or whatever, but make it quick.

3. Come to Jesus meeting. Again, invite everyone but not mandatory meeting. Those who wanted to bitch will have had their turn, those who weren’t engaged may see that you’re serious and turn up. With numbers in hand, time to lay out the costs associated with the priorities of the last meeting. Now is the time to speak with authority (or beg one to come in as a favor) about the IT structure of the company, it’s needs, and the financial realities of fixing things. Then ask what the staff wants to do. You have to do this honestly. I suggest the final priorities must be made by the group as a whole. You will need company-wide buy-in to achieve meaningful change. My hope would be that you would choose one priority that could be achieved with existing resources, and one that would make meaningful change if resources could be found. This could give you an fast, early win, and an aspirational goal on which staff could focus.

4. Establish a Power User Group. My last IT Director called them “pugs”. This is a workgroup from all areas of the company (one from each) that will oversee, in the absence of an IT staffer, the IT priorities of the company. PUGS are charged with taking their department’s needs to the meeting, and collaborating with all the other PUGS to achieve the priorities. Give this group autonomy to act within a budget and timeframe and have them report directly to the highest level of operational oversight, not through another department.

5. Set and maintain an IT budget. It may be modest at first, but make it a line item, stick to it, and make it a funding priority that cannot be cut any easier than benefits. Just like benefits, consider good IT necessary to attract and retain good talent. Just like paying the rent, consider IT needs critical to operations.

Beyond this, tactics vary. You might outsource. If so, have the PUGS oversee the bidding and the vendor. You might hire IT staff. If so, you are very fortunate and now have someone to oversee the PUGS. Don’t hire someone who can’t or won’t. You might have to make due with the Frankenstein of a system you have, but if so, you will have gone through the necessary steps to establish priorities and buy-in from the key staff, and created a staff-led oversight body to manage your monster.

Rub my belly and I'll reboot your router

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How To Dismantle A Silo

Dismantling Silos Starts At the Top

Improve organizational performance by dismantling the normal silos that occur. Here’s some thoughts on how.

1. Start from the top down. Get your silo bosses together and explain the problem. They didn’t get to where they are by being stupid (hopefully), so a well-placed “for instance” or HBR article on the subject should do the trick.

2. Tie management reviews to collaboration. Make at least one goal of each manager dependent on performance by another silo.

3. Open up yourself. Start from the position that everyone needs to know everything. Short of compensation packages, I think that in a mission-driven organization, the entire staff should be privvy to pretty much everything. Concerned about leaks? Improve your staff handbook and confidentiality clauses. I have found it far easier to manage informed staff.

4. Cross-train. This too, should come from the top down. What are the critical functions of each silo? Make silo managers make a list. Exchange lists. Pick and item from someone else’s list. Learn how to do it. Good for emergencies, too.

5. Focus on Best Practice. As a senior executive hopefully you are doing this regularly as part of a best practices regime, but if not, now is a good time to see what works best in one silo and see if it can be adapted in another. Focus not on why it won’t work here, and rather on why does it work over there and does this silo have shared desired outcome?

6. Cross Pollinate. Take talented junior staffers and loan them out to another silo for some set period of time. During that time they have all their same duties, but they must attend the other silo’s meetings, and not their own. See how quickly information can travel across silos to get the job done. There are variations on this move, which is having them attend both silo meetings, having them report back to their home silo. One might also consider some job swapping, or task swapping. I might write a separate post just on this.

7. Joint meetings based on coroprate outcomes. Create a workgroup of select employees from many silos. Focus intensely on an organizational need. Set a time limit. Base performance review on collaboration and joint responsibility for outcomes.

8. Share the Love. Meet as a group. Share praise for outcomes, collaboration, shared processes, and all the outcomes of the suggestions above. If you want silos torn down, support for this must come from the top and must be expressed publicly as praise for employees that walk the walk.

I’d love to hear examples of how this works from your personal experience.

Effective Meetings

# of staff * hrly rate * mtg length = ???

There is much to learn from mistakes, and I’ve learned how to run a good meeting because of how many bad ones I’ve run. Here are some things I’ve learned about how to run an effective meeting.

1. Set an agenda, stick to it, and send it out in advance.

2. Don’t make it about reports, make it about the reports that don’t happen. As a manager, you need to be at the nexus of information, and often you will see where the gaps are. You’ll hear that marketing is running behind on graphic design, which might be good for sponsorship to know, as they need more time to close a deal. Besides, those staffers who care, make themselves aware, and you’ll be wasting the time of your best people if you simply ‘report out’.

3. Make sure there’s a reason for everybody to be there. If IT will have little to do with the issue, give them a pass. I never tell them not to come, but give them a heads up to option out. Don’t waste people’s time. Also, you may find that the matter at hand is really a ‘two hander’ requiring a much shorter and much smaller meeting.

4. Assign someone to take notes. A junior staffer who you want to cultivate into leadership is ideal. They’ll likely hang back in the debate unless they have something important to add, will maybe like the opportunity to be in the meeting, and will quite frankly, take better notes. BTW, the notes go to everybody immediately after the meeting, after the leader vetts them. This sets the agenda with action items to cover before the next meeting.

5. Carve out micro-meetings at the end of the agenda. This one I took from Marissa Mayer at Google. If an item comes up during the meeting, or came up anytime really, but can be addressed by a subset of the room fairly quickly, kick it to the end of the agenda. This is the “Bill, can I see you for a minute” meeting without the stigma of getting called to the principal’s office. This micro meeting section is where you can resolve issues quickly, fairly, and in a timely fashion, rather than setting an entirely new meeting.

To these five rules I’ll add one more: Mind the clock. If you’ve set a time period for the meeting, stick to it. Personally, I have a one-hour guarantee. If you can’t get through your agenda in an hour, then there’s too much on it. Sticking to the clock, which means starting on time and ending on time shows respect to those attending, keeps the group focused, and gives you the hammer you need to cut off ramblers, prevaricators, dissemblers, politicians, and to engage the unengaged. I mean, really, if you can’t lead a meeting for and hour and keep your staff engaged, how are you going to do it day in, day out? Alternately, if your staff can’t keep it together for an hour, a little heart-to-heart might be in order.

But don’t make that a meeting, try coffee instead.

Management via “The Middle Way”

Source: Lifehacker

I have for some time studied Taoism, which in my interpretation means doing a fair amount of “going with the flow” and doing the right things at the right time.

There is a temptation to treat your personal and business life as a seamless whole. Franklin Covey attacks this problem from a top down method: figure out your strengths and work a plan to achieve your ultimate goal. Another method, described by a writer at D*I*Y Planner is the “bottom up method” of what I call “Git ‘Er Done”, which is sort of like that old system of never handling a piece of paper more than once.

The trouble I have is that I can spend forever trying to figure out my strengths and mission in life, and/or lose complete focus on what the ultimate goal is while trying to prioritize some actions called for in the “Git ‘Er Done” method.

I’ve not had luck putting together a Taoist management tool, but this “Middle Way” seems to hold some promise:

1. Determine your mission. Why were you put on this planet at this time?

2. Establish your vision. Where do you want to be when this period of your life is all over? Note that I’m not talking about your whole damned life, just the part you can see right now. That might be five years or fifteen, or one. I like to think of this as my next achievement. What can I feel pride in next, what does that look like?

3. Figure out what roles you have to play in your life. Father, Son, Husband, Friend, Employee, Boss.

4. How do each of these roles fit your vision and how can they help you THIS WEEK. Some weeks you might have to put some of those roles on hold, while others get the bulk of the attention. I’m assuming your vision didn’t include you alienating your friends and family in pursuit of your vision. Set a goal for each role, which may be as simple as “don’t piss off so-and-so because you’re spending all your time this week on X”. Come to think of it, that might not be simple.

5. Rank it by importance. That’s subjective and there’s no advice I can give you on that. Be Flexible.

6. Break down the week into action items necessary to achieve each goal, and number them, assigning dates, work time allotted, and any check points along the way. Best get the most important stuff out of the way as soon as possible, or your Friday is really going to suck. Just sayin’…

7. Review daily.

Now how to deal with stuff that happens each day. Deal with it as the flow of work allows. For instance, everybody has a down time, a mid-afternoon lull, or what have you. Do it then. Flexibility is strength.

I try to hold in my mind an image of my daughter crawling across the floor to my wife/her mother during a family gifting party (I forget what it was, birthday, Christmas, baby-shower). She had a plan and an objective. As she crawled over obstacles or had things soft and fuzzy presented to her, she dealt with them quickly and happily but never stopped her forward progress.

The plan exists to help you deal with the things that you cannot plan for. If you know what you want, where you are going, and what must be done to get there, then you can deal with the unexpected. If you lack a plan to begin with, then any small thing can throw you into disarray.

The plan is the net to manage the day-to-day. With the net, you can catch many fish, and let the uninportant pass through. Without a net, it is anarchy, as you lunge from one flash to the next.

 

Author’s note: My interpretation of the Tao is worthless. “Pride yourself and you will not endure.” says Lao Tzu, and so I take no pride in either authorship, insight, nor advice. If you find my thoughts helpful, it is entirely as a result of your insight, not my words.

Image: Ramesh Jhawar, Chinese Fishing Nets, Watercolor on paper, 2010. Link Here

Arts Innovation

The claim that the performing arts lack innovation in an attempt to please a greying audience is foolish. Those sixty and seventy year olds need another old chestnut like they need another pill to take. They’d sooner fend off telemarketers than see another Tannhauser.

The arts attracted folks because of new work and it keeps them for the same reason. These old folks didn’t just show up that way. They started coming when they were thirty and still want to be treated that way.

To think otherwise is to disrespect a whole generation of patrons. If Michael Kaiser wants to sit in this ivory tower at the Kennedy Center and bemoan the lack of innovation, he has only himself to blame. I suggest he bulk up his travel budget and head west.

Innovation is just over the horizon, Michael, west of the sun, and south of your $60 million straw man.