Posts Tagged ‘The NON Nonprofit’

Is your nonprofit mission-frenzied or market-driven?

It’s no secret there is a noticeable drift of for-profit professionals turning in their Blackberries and travel loyalty cards for the less frenetic pace and soul-filling way of life working for a nonprofit. Bridgers, as they are sometimes called, are professionals from the marketplace bringing unique sets of talents, treasures, skills, perspectives and practices that work to increase productivity, effectiveness and efficiencies; all while improving the delivery of services of nonprofits—tangible and intangible—to their customers or clients. While increasing these outputs is intuitive to the for-profit and nonprofit professions, it’s approached by each in very different ways.

Steve Rothschild was one of those bridgers and brought his years of experience at General Mills and Yoplait to found Twin Cities Rise! in 1994. The culmination of his for-profit and nonprofit experiences led to the creation of his seven principles outlined in his book, The NON Nonprofit: For-Profit Thinking for Nonprofit Success. I, too, made the switch. I had a long career working in marketing and public relations for a variety of high-profile firms in the fashion, entertainment and higher education industries. As a fellow bridger currently working with identity-based affinity groups, it’s easy for me to connect with Rothschild’s principles in theory; however, these seemingly oversimplified principles can be perceived by those who have never worked in the for-profit world as pithy and disingenuous. Even for those who find the value in these principles, adopting and implementing them is a far more greater challenge. In reviewing Rothschild’s principles, I offer a critique and a recommendation.

The Critique

As Steve Rothschild points out, the “customer-focused” approach, typically seen as the focal point of for-profit models, puts the client at the center of the work and the mission (and most often the grant proposal supporting the program being delivered). Rothschild requires a nonprofit to determine who its customer is—but this is not always as clear to identify for a nonprofit organization as it would be for a for-profit firm. Having made the transition from the for-profit to nonprofit world, I learned the complexities of this challenge firsthand.

While nonprofits want with every fiber of their being to serve the customers (the folks who actually use their services, members, etc.), they can find themselves serving many masters such as donors, funders, board members, and often times the most complicated customer of all, the ever-loved founder. Consequently, what a nonprofit thinks of as its market and what the market really is may not be in alignment. This inadvertent perplexity can cause a very complicated bout of, what I like to call, mission-schizophrenia. In the race for delivering services, building sustainability, pleasing donors, aligning programs with the philanthropic funding du jour (of the day), and satisfying staunch ideal-firm founders, it’s easy to steadily creep away from one’s mission. The result may lead to diminishing the value nonprofit programs bring to the market or the programs may actually become obsolete. In the for-profit world, identifying who the customer is and putting the customer first is far more clear-cut: How does/will our decisions affect our customer or does this decision align with what we have promised to deliver? If the answer is “no,” then there is no room for debate—you learn (Rothschild’s Principle #7: Be Learning Driven), process and implement changes as needed for the organization. This leads me to my recommendation.

The Recommendation

While Rothschild’s Principle #7 highlights that nonprofits be learning driven, I would say this is not enough. I have been part of a number of learning-driven organizations in the for-profit and nonprofit worlds. I find, particularly in nonprofits, that being learning-driven isn’t the problem—especially as it relates to being market-driven. The challenge is more in the flexibility to respond to the learnings obtained from customers, stakeholders, etc. This inflexibility can be due to a number of reasons, including the most elemental: lack of will to be flexible.

So what can organizations do to get started in becoming market-driven? Applying any or all of Rothschild’s principles can be daunting, overwhelming and even downright frustrating. Staff and resources are limited and are seemingly becoming more and more scarce. Nonprofit staffs are typically small (1-10 people) and are often multitasking to the hilt. In a recent CausePlanet interview with Rothschild, when asked which of his principles a small nonprofit should focus on first, Rothschild suggests that while they are all important, Principle #3, Be Market Driven, is a good place to start. I would agree and would suggest the process begin with an open, frank conversation with your board, staff and founder (if applicable) to discuss where and how the organization may be falling short. It’s always good to come to this conversation with comments from your customers and staff regarding how they view you. This way the conversation begins from a customer-driven perspective versus what could be perceived as your own personal opinions.

Regardless if your organization adopts Rothschild’s seven principles or some other success model, my humble suggestion is be patient and flexible throughout the process. Remind yourself and your staff to be patient and flexible. Adopting these (or any) principles demands a paradigm shift—a different way of thinking—sometimes big and sometimes small in how your organization functions. This is no different than the shift one makes when looking at one of those pictures with a hidden image. It can be confusing and sometimes frustrating but if you stick with it, you’ll see the full picture and be glad you did.

See also:

The Page to Practice™ summary of Steve Rothschild’s book, The NON Nonprofit: For-Profit Thinking for Nonprofit Success

Forces for Good: The Six Practices of High-Impact Nonprofits

Do More Than Give: The Six Practices of Donors Who Change the World

The End of Fundraising: Raise More Money by Selling your Impact

Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

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Uncover new donors by creating economic value

“To be market driven, you have to determine who your customer is. And interestingly enough, it may not be the people your organization is dedicated to serve–your clients. Your customer is the one group from among all your stakeholders who, more than anyone else, determines your survival and your success.”

Steve Rothschild’s seven principles of success in his book The NON Nonprofit are rooted in his revelation of consistent methods he has implemented as an accomplished business leader in a Fortune 100 company and as a CEO of a thriving nonprofit that succeeded in creating economic value from social benefit.

If phrases like “Be market driven” (principle #3) and “Create economic value from social benefit” (principle #6) have you thinking you’re reading from a business book, think again. After creating the seven principles in the corporate world, Rothschild tested them in his own nonprofit, Twin Cities RISE!, and observed them in many other sector examples he discusses in The NON Nonprofit.

I asked Rothschild to explain his view of creating economic value in his own nonprofit:

CausePlanet: Principle #6 (Create economic value from social benefit) addresses the notion that “we are accustomed to thinking about social good in terms of moral imperative rather than economic benefit. But every improvement in social good does in fact have monetary value—to the participant, the state, or some other stakeholder.” Jason Saul, who authored The End of Fundraising, would wholeheartedly agree with you on this point. What did you determine was your “marketable” social benefit at Twin Cities RISE!?

Rothschild: Twin Cities RISE! trains underemployed and unemployed adults, primarily black men, with multiple barriers to employment, including low academic skills, criminal and addiction backgrounds, and poor work histories for living wage jobs. Over the last 15 years, it has been successful in boosting graduates’ pre- to post-training incomes from an average of @$5,000 to @$25,000. As its graduates’ incomes have increased, they pay more sales and income taxes and use less low-income health care, childcare and housing. They also save corrections costs. These cash benefits to the state of Minnesota and also the federal government derive directly from the social value that was created by lifting individuals and their families out of poverty.

What is your marketable value are you creating in your organization? If you can identify your marketable value, Jason Saul argues that you can pursue an entirely new set of stakeholders. He calls this new set of stakeholders “impact buyers,” who are willing to pay for social outcomes. Saul identifies the three highest value outcomes these funders want to buy and we highlight them in the Page to Practice™ summary.

See also:

Forces for Good: The Six Practices of High-Impact Nonprofits

Do More Than Give: The Six Practices of Donors Who Change the World

Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

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Seven principles of success from one leader in two sectors

“I don’t want to be told my nonprofit should run like a business,” asserted my colleague. She and I were seated around a table with a half dozen other nonprofit leaders gathered to advise on the development of a training curriculum for nonprofit CEOs. The group was discussing the merits of corporate and nonprofit management topics. My friend bristled at the thought of her own nonprofit being ruled by profit rather than mission.

I distinctly recall her statement because I was shocked by it. Why wouldn’t anyone want to adapt what works in the corporate world and use it in the nonprofit sector?

Fast forward six years. As I reflect on that conversation today, I understand where she was coming from. It’s not only paramount to put the mission first; it’s what defines our organizations and separates us from corporations after the almighty buck. At the same time, our current financial pressures force us to depart from business as usual and innovate using cross-sector solutions.

What companies learn from us

Fortunately, we’ve seen both sectors look at one another and see value in what each has to offer. More companies are taking a look at how their products and services can make an impact through corporate social responsibility or perhaps how green their operations are. There are numerous examples today as compared to a mere six years ago when I sat at that table with my colleagues.

What we learn from companies

Equally important, nonprofit CEOs recognize they need to focus on innovative income strategies to complement their traditional fundraising. Why not adopt some of the earned revenue strategies or performance management techniques that work in the corporate sector as long as your board and staff preserve the mission?

A look inside a success formula in both sectors

Our new Page to Practice™ book feature of The NON Nonprofit is a rare look at seven principles of success developed and tested by a supremely successful corporate executive for General Mills and equally successful nonprofit CEO for an organization he founded called Twin Cities RISE!

Author Steve Rothschild held both of these positions and put great effort into testing these key principles personally as well as identifying nonprofits in the sector that demonstrate their applications. I was excited to feature this book because Rothschild has had a foot in both worlds and come out on the other end to tell us about his successes and hiccups along the way.

I would love to hear your feedback about his seven principles if you read the book or download the summary. Another question for you, “Do you currently apply strategies that would be considered relevant in the corporate world?” If so, tell us about it.

See also:

Forces for Good: The Six Practices of High-Impact Nonprofits

Do More Than Give: The Six Practices of Donors Who Change the World

Nonprofit Sustainability: Making Strategic Decisions for Financial Viability

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