Posts Tagged ‘nonprofit lifecycles’

A closer look at nonprofit lifecycles

As consultants, one of the major considerations when working with clients is understanding their lifecycle stage – both their current stage and where they are headed – and what this all means for your project. For the fifth session of the Consultant Leadership Forum, Leslie Allen and Ann Goldman of Front Range Source facilitated a lively discussion on this topic and what it means for our work (Thank you, Leslie and Ann!). In response to some of the topics brought up during the session, we have complied some additional resources that may be of interest to CLF members, along with a few highlights from the discussion.

During the group discussions, participants made the following observations (not a full summary, just a few highlights):

When using the lifecycle model, we need to remind clients that moving through the stages is not a linear process and not all organizations will experience each stage. Some organizations will cycle through stages while others may stay within a single stage for long periods of time, based on their evolution as an organization.

Some participants commented that while this kind of model can be helpful, these models miss they dynamic nature of the environment in which organizations operate. A long-standing, well-regarded organization can go from established to decline in a shockingly fast amount of time, just like an innovative start-up can attract attention and grow quite quickly. For some types of organizations, these models do not capture the fluid and fast-moving environments in which some organizations are operating.

The ability to innovate and adapt is becoming an essential organizational capacity for organizations at all stages along the lifecycle continuum. As a consultant, teaching adaptive capacity can be a very important role, especially for projects like strategic planning or fund development.

Some declines cannot be turned around, for both individual organizations and entire niches of organizations (symphony orchestras were mentioned as a type of organization that needs to operate in a radically different way to be viable in the future). Also, as consultants, we can be a good partner in supporting an organization through decline and closure.

To be an effective consultant, it can be important to know where your skills, expertise, and personality best fit among the lifecycles.  Engaging in this kind of analysis and positioning your practice among the organizations that are a good fit for you can increase your success, effectiveness, and happiness in working with clients.

Building Nonprofit Capacity, the book that we used as the basis for the session’s discussion, references two other books on nonprofit lifecycles (both easily available online):

Nonprofit Lifecycles: Stage-Based Wisdom for Nonprofit Capacity by Susan Kenny-Stevens

Navigating the Organizational Lifecycle: A Capacity-Building Guide for Nonprofit Leaders, published by BoardSource

We handed out a copy of the TCC Group’s nonprofit lifecycle model at the session. If you would like this for future use, you can access a clean copy of the diagram in one of their PowerPoint presentations available online, which you can download here.

During the discussion, the idea of adaptability and adaptive capacity came up multiple times, with a few group members making the important point that being adaptable is essential since nonprofits are operating in increasingly fast-moving contexts. With the lifecycle phases shortened for many organizations, continual reinvention and adaptability can foster greater sustainability and success.  For those of you interested in learning more about adaptive capacity, the TCC Group offers two other good resources (links to PDF articles):

Everyday Leaders: Building the Adaptive Capacity of Nonprofit Organizations: TCC Group Adaptive Capacity

The Sustainability Formula:  TCC Group Sustainability Formula

We know that many of you use these ideas in your practice on a daily basis, so please add information or links to other great references in the comments.

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The decline phase: highly influential yet rarely discussed

“Organizational turnaround and the closing of an organization are the least written about areas of thought and research relating to the nonprofit lifecycle, even though they are the driving force behind what occurs in the other phases of the lifecycle,” say Nonprofit Capacity Building authors, Brothers and Sherman.

If you’ve landed on our home page this week, you know we’re featuring an important read about change management through the lens of nonprofit lifecycles. Why is it essential to know where you land on the nonprofit lifecycle continuum? The authors, Brothers and Sherman, argue that nonprofits can make better decisions and manage change more efficiently if it understands the implications of operating within a particular phase.

While we don’t know why the latter half of the lifecycle is the least common of areas debated in nonprofit lifecycle research, we do know no one wants to be in the middle of a turn-around or closing—they’re exhausting not to mention emotional for everyone involved. Perhaps that’s the reason why this passage from the mature phase to the decline phase captures so little attention.

So, in an effort to boost the minority opinion, I asked Brothers and Sherman about the “decline phase” of a nonprofit lifecycle as it relates to long-standing organizations and the economy.

Anne Sherman

JB & AS: Growth for growth’s sake is a common error, and an understandable one. In the for-profit sector, there is a principle that the company that isn’t growing is by definition declining. Too often this maxim is misapplied in the nonprofit sector, where competition and profit certainly have roles to play, but differently than in the private sector. We can never lose sight of the fact that achieving mission is our bottom line. In fairness, funding for nonprofits can be capricious, unpredictable and irrational. So there is some logic in pursuing funds opportunistically. But that’s not really a sustainable path. Mature or well-established organizations that grow without careful attention to strategy or desired impact increase their risk of decline.

John Brothers

JB & AS: We think most would agree the recession has exposed or exacerbated flaws in nonprofit business models. We hear a lot about how the greatest challenge nonprofits have faced is a decline in giving. Interestingly, the number of nonprofits that have gone “out of business” has been far smaller than what was predicted in 2008-2009. Just as it is really hard for nonprofits to find financial sustainability, it also appears to be really hard for the market to “weed out” less effective or weaker organizations entirely. The book discusses when organizations hit decline and the different ways they can enter it. This, if using lifecycle thought, can be discussed as the arc of the lifecycle.

Ask yourself if your nonprofit is on the path of growth for growth’s sake or attention to strategy and desired impact on your mission.

CausePlanet members: Don’t forget to register for our next live author interview with Kari Dunn Saratovsky, coauthor of Cause for Change. We’ll discuss how Millennial engagement should be at the forefront of your fundraising plans as well as a primary consideration for your organizational culture.  Bring your questions and join us on your computer or mobile device on Wednesday, September 25 at 11 a.m. CST.

See also:

Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

Cause for Change: The Why and How of Nonprofit Millennial Engagement

Fundraising and the Next Generation

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Are your nonprofit decisions age-appropriate?

If you’ve ever cared for a child, you may have found yourself asking if something is age-appropriate. These days it feels like that question surfaces more often with how sophisticated caregiving has become. You no longer have your child join a club; your child has 25 different clubs for which s/he “can apply.” Your child simply can’t join the local team; your child has a dozen leagues with varying levels of competitiveness for which s/he can “try out.” You’re getting the idea and we haven’t even discussed entertainment, hobbies, summer camps, curriculum and schools yet. The list goes on and on. It’s just plain complicated sometimes.

Thankfully, I found the prospect of evaluating the maturity of nonprofits much easier thanks to John Brothers and Anne Sherman’s new book, Building Nonprofit Capacity: A Guide to Managing Change Through Organizational Lifecycles.

The decisions you make in all aspects of nonprofit management, including governance, planning, fundraising and marketing, are impacted by the maturity of your organization. Brothers and Sherman say the purpose of their book is to help nonprofits become stronger in their decision-making by using the organizational lifecycle continuum as a form of change management. The authors make a case for deliberately engaging in change management through understanding each phase of a nonprofit’s cycle so you can efficiently weather transitions.

One of the three models they refer to throughout the book is by Susan Kenny Stevens and builds upon the 1970s article written by Larry Greiner in the Harvard Business Review. Stevens wrote about lifecycles in the 1990s and then published a book on the topic in 2001, Nonprofit Lifecycles: Stage-Based Wisdom for Nonprofit Capacity.

The cycles include:

1)   Idea: “There is no organization, only an idea to form one.”

2)   Start-Up: “An organization that is in the beginning phase of operation.”

3)   Adolescent (or Growth): “An organization whose services are established in the marketplace but whose operations are not yet stabilized.”

4)   Mature: “An organization that is well established and operating smoothly.”

5)   Decline: “An organization that is operating smoothly but is beginning to lose market share.”

6)   Turnaround: “An organization that is losing money, is short of cash, and is in a state of crisis.”

7)   Terminal: “An organization that no longer has a reason to exist.”

 

In our CausePlanet interview, I asked the authors about the book’s relevance for new and seasoned nonprofits alike as well as about the value in revisiting certain stages.

CausePlanet: Will you revisit why this book is essential for start-ups, declining organizations and everyone in between?

Brothers

Brothers and Sherman: In this book, we tried to provide a framework that would offer something for any nonprofit, regardless of where it is in its lifecycle. The nonprofit sector in the U.S. is remarkably diverse, and of course there is no one-size-fits-all. However, there is a set of characteristics that applies to most, if not all, nonprofits: mission, vision, values and the imperative to maximize impact. Our goal in this book was to visit some of those core features at different lifecycle stages.

 

CausePlanet: Under what circumstances is it appropriate for seasoned organizations to go back to the basics (where mission, vision, values, etc. are formed)?

 

Sherman

Brothers and Sherman: One of the points we tried to make is that no organization should ever lose sight of the basics—mission, vision, values, program strategy. Just like it’s good to get your teeth cleaned or your car tuned up on a regular basis, nonprofit leaders are well-served by reviewing and assessing the core elements of their strategy. That said, sometimes a more intensive review or “step back” is warranted. Whenever there is reason to believe program effectiveness is at risk or there is a growing sense they are far removed from the comfort zone of their missions, a real look in the mirror is important. It’s often when that organization is assessing where it is that we find whether there will be positive forward momentum or it has not really confronted the image in the mirror and a decline begins.

Learn more about John Brothers at www.quidooconsulting.com, where he is the principal of his consulting firm, or Anne Sherman www.growthphilanthropy.org where she is the vice president of nonprofit strategy.

If you enjoyed this excerpt of our Page to Practice™ summary, find out more about our summary library and store or purchase the book.

Based on Stevens’ stages above, ask yourself in what phase your nonprofit exists and if you need to revisit the “start-up” phase.

CausePlanet members: Don’t forget to register for our live author interview with Tom Wolff on Thurs, August 22 to learn more about high-performance collaborations.

See other books about change management:

Buy-In: Saving Your Good Ideas From Getting Shot Down

Repeatability: Build Enduring Businesses for a World of Constant Change

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