Universal

The Purpose Economy

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Plenty of for-profit corporations operate with some measure of community benefit, often limited to charitable contributions to offset tax liabilities. However, there is a growing trend toward purpose-driven business. The indirect benefits to corporations who "give back" are hard to measure, but clearly arguable. Employees who work for an engaged company and witness positive impact in their neighborhoods are likely to be happier, more productive and loyal. Potential customers who observe the same actions may be more inclined to purchase the company's products or services.

Socially responsible corporate leadership could argue that an investment in the community beyond the standard 1-2% of pre-tax profits positively impacts the bottom line. But, would their argument hold up in court?

eBay vs. Newmark

Did you know that eBay purchased a decent share of Craigslist in 2004 and owns approximately 25% of the for-profit corporation?

Craig Newmark, the founder and namesake of Craigslist, along with CEO Jim Buckmaster, have been fairly transparent about their desire to simply provide classifieds, rather than maximize shareholder value.

Obviously, this isn't in eBay's best interest as a major shareholder and making a fairly long and complicated story short, eBay sued Craigslist and won on several points.

The bottom line?

For-profit corporations have a law-binding fiduciary duty to maximize profits. Which makes it difficult to divert any significant resources to social impact.

In steps the BCorp

As described in a prior post, benefit corporations are a recent corporate entity breed that maintains the for-profit nature of business, but adds in a mandate to have a “material positive impact” on society and the environment.

As of this post, 27 states have passed benefit corporation laws. In May, local purpose industry organization, P3 Utah, celebrated the addition of Utah to the list of states benefiting from BCorps.

P3 Utah is a nonprofit promoting business for people, planet and profit. Founder and Executive Director, Steve Klass, was interviewed by Utah Business last month and described benefit corporations:

They define success by what is called the ‘triple bottom line,’ or the degree by which they can improve human existence for their employees and communities and the environment, while also making a profit. It’s doing good while doing well.”

Becoming a B-corp doesn’t come with any financial benefits, tax incentives or preferential treatment. However, as a B-corp, the company can expand its fiduciary duty beyond maximizing profits, without fear of investor or shareholder whiplash.

One might also predict that the new breed of consumer will begin looking for the B-Corp designation when making purchase decisions.

A Purpose-Driven Economy? 

Economists and marketing experts have commented on the timing of socially responsible businesses, noting that the millennial generation has much greater expectations of the businesses they patronize, demanding a give back philosophy and tangible results rather than an annual corporate social responsibility report on dollars donated.

Aaron Hurst, author of The Purpose Economy, describes the concept of an economy that caters to our need for something more:

 

Could an increasing consumer demand combined with a highly entrepreneurial generation equate to a major impact to our economy?

Harvard professor and corporate strategist, Michael Porter, thinks so, having launched the Social Progress Index, a global index that measures more than GDP (the US ranks 16th with an overall SPI of 82.77 as of 2014).

There's also been an explosion of mutual funds and investment opportunities for the socially responsible investor, from 50 in 1995 to over 500 "SRI" funds today.

Claim Your Stake

Businesses like TOMS Shoes with it's one for one donation promise and Starbucks with its healthcare coverage for even part-time employees are proof that social impact is highly correlated with profit in light of the changing values of consumers.

Is your business ready for such scrutiny?

P3 Utah's 4th annual conference will provide insights, tools and resources, and a network of role models on September 18th and 19th in Salt Lake City. Session topics include social enterprise, local partnerships, employee engagement, sustainability through LEAN, and more.

Register now to ensure you get a seat at the purpose economy table.

P3 Utah Conference

When to Hire a Consultant

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In my experience, most organizations are fairly wary of consultants. We don't have the best reputation. My own personal experiences with consultants as an executive weren't all that impressive either.

Here's how it generally goes: 

1. We have a problem/opportunity, but we lack the expertise and manpower to act on it.

2. We can't stand consultants on the whole, so we either:

(A) do absolutely nothing beyond talking about the problem/opportunity; or

(B) we hire an "affordable" and inexperienced employee to tackle it.

More often than not the situation is a problem, not an opportunity: compliance issues, lack of funding, poor sales, a fried server, etc.

In the nonprofit industry where I focus my attention, executives often recognize the problem, talk about it a great deal, and then succumb to option A: do nothing.

Within the larger organizations I've spent time with, the route starts the same, but leads to authorizing a new part-time or full-time employee as the fix.

Why the fear of consultants? 

Consultants are a dime a dozen. Anyone can flunk out of their career and change their title to consultant.

Many consultants make the mistake of taking any work that comes their way rather than exclusively offering services where they have genuine expertise, which leads to poor results for the client.

Plus, most consultants work in the arena of "soft skills" (ie. leadership development, retreats, communication skills, sales, etc). It's next to impossible to measure the immediate and long-term impact of these types of investments, so executives will often dismiss them outright.

When should you hire a consultant despite all this? 

A great consultant will provide value that is 10x their expense. These are specialists with substantial talent within a specific niche. They have the ability to quickly observe your situation and efficiently implement action based on diverse experiences with a variety of organizations like your own.

Doing nothing is not a viable option. I recently watched a small organization lose nearly everything because they refused to invest in an "expensive" IT professional to set-up a secure internal network or at least a cloud-based back-up. All it took was for one laptop to get stolen.

Conversely, I've also seen a small nonprofit triple their budget by investing in an experienced fundraiser to craft a strategy and develop grant templates to serve as the model for all future proposals. They raised more than $150,000 in the next 6 months and the consultant charged a measly $3,000 (a scary price tag at first).

Hiring an employee to fill the gap can be smart for ongoing needs, but for temporary challenges or opportunities that are outside of your expertise, a new employee will likely cost much more than a consultant while taking much longer to respond to the issue successfully, if they succeed at all.

The bottom line is that the resources that will be consumed by new hire activities, socializing with colleagues, supervision, lunch breaks, research, and failed attempts will rack up to an expensive missed opportunity and increased overhead.

Rather than reinventing the wheel each time you're confronted with a sticky problem or an opportunity, at least consider bringing a consultant into the mix. Their expertise can pay for itself right out of the gate while keeping your organization agile.

Not sure how to find a great consultant?

Get in touch with your industry hub for referrals.

For businesses, this is often your local chamber of commerce or small business development center. For nonprofits, you're local community foundation or United Way probably have a short list of experts they would be happy to share.

Prevent the 5 Pitfalls of Your Emerging Leaders

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I landed in my first leadership role in my early 20s, before I even owned appropriate executive apparel. Unfortunately, gaining the leadership skills to go along with my new pin-striped skirt wasn’t as simple as a trip to The Loft. In fact, it was a painful series of confidently crafted catastrophes. Your succession plan requires that your emerging leaders succeed. By watching out for these five common pitfalls of early leadership, you can prevent the fallout and grow your bench.

1. Fixer Upper Edicts

Do you have a hot shot eyeing leadership? Be wary of the tendency to project their personal expectations and begin making changes to suit their narrow focus right out of the gate. This often begins with executive orders and ends with a lot of frustration on all accounts.

Lacking experience, high achievers fail to appreciate the scope of planning and effort associated with what they see as simple requests. As McKinsey & Company notes, “…managers drive results via budgets and quotas; real change leaders achieve objectives by mobilizing a broad base of people.”

Don’t let your potential leaders learn the hard way. Involve top players in project teams early so they can gain the firsthand experience necessary to lead change effectively when it’s their turn.

2. Monochrome Cloning

Some personalities, especially the bold personalities of top performers, fail to appreciate the benefits of other, less driven personalities. I went through three secretaries before I realized I shouldn’t attempt to hire a clone of myself. In mentoring emerging leaders, it’s important to coach them in balancing the personalities and strengths on any given team, including their direct reports.

The Color Code by Taylor Hartman is a fun and effective way to increase awareness of different personality styles and how to play well together. The bold red COO learns to appreciate the stabilizing effect of the white CFO during difficult meetings, while the blue, people-oriented CEO takes advantage of the yellow HR executive’s ability to build a bright and exciting culture.

3. Isolated Juggling

For many first-time leaders, the lightbulb doesn’t click on that the how of completing our work has completely changed; we simply acknowledge increased responsibilities. If you frequently find your new leader in front of their computer issuing bits of communication via email, you’ve got a problem.

As Kevin Kruse defines it in his classic Forbes article, What is Leadership, “Leadership is a process of social influence.” This can be frustrating when your known method for winning is buckling down and doing the work better than anyone else.

Take your emerging leader along for casual coffee meetings and visits with frontline staff. Role model that the Ivory Tower doesn’t hold up in your organization, and create opportunities to demonstrate the insight and trust generated from face-to-face engagement.

4. Efficient Decision Fallacy

It can be easy to get caught up in the confidence of eager new leaders. They often have great ideas, albeit naïve at times.

The scenario: Your excited new executive stops you in the hall for a quick chat about how the organization can save thousands by going paperless. “Sounds great,” you say, and continue to the urgent meeting in your office.

The consequences of quick hallway decisions are often immediate. Those down the line who are already wary of the 20-something who advanced above them get a bit rattled when they aren’t consulted about change that impacts their teams. It’s a setup for the aforementioned Ivory Tower trust gap. Avoid it by always responding to good ideas with encouragement to gather input.

5. Expert Alienation

Taking on the mantle of leadership isn’t easy. Confident bravado can garner quicker results than genuine leadership. Observe your emerging leader in meetings and in teams. If he or she always has the right answer and fails to encourage the perspectives of peers and subordinates, they probably won’t get much done at the top.

Coach your rising star to become a better facilitator, rather than the oracle. Judith Ross summed it up in the Harvard Business Review: “…an empowering question does more than convey respect for the person to whom it’s posed. It actually encourages that person’s development as a thinker and problem solver, thereby delivering both short-term and long-term value.”

It all begins with the C-Suite. Are you role modeling leadership that empowers, involves and engages your organization? Or are you sitting in front of your computer carrying out a hallway decision? It’s not too late to invest in a robust and productive organization that grows mature leaders of the future.

Originally posted on the C-Suite Network blog, the most powerful network of C-Suite leaders.

New Tools for the DIY Founder

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I specialize in building the backbone of young organizations, allowing them to scale their impact. Over the years of working within this segment, several consistent pain points have emerged:

  • Preparing a professional annual budget that actually helps guide decisions
  • Setting up compliance activities (business licenses, charitable solicitations permit, labor law compliance, etc)
  • Establishing paperwork and procedures for new hires and independent contractors
  • Implementing financial controls
  • Developing overall policy and procedure documents

Often times, figuring out exactly what is causing the ceiling on your efforts is part of the mystery.

However, I often encounter passionate executives who are know they are missing these pieces, but they just don't have that expertise. This is especially true in the nonprofit sector where founders become CEOs without much formal training on the dark side of organizational leadership: spreadsheets, paperwork, and compliance.

This is why I'm launching affordable toolkits for the Do-It-Yourself founders out there.

Reinventing the wheel is time expensive and often results in subpar outcomes, but hiring the expertise is often cost-prohibitive, even under a temporary consulting agreement.

Instead of paying $300-500 for someone like me to commute, meet you face-to-face, and develop an annual budget, simply throw your figures into a spreadsheet and exchange it for a professional workbook containing your annual budget and variance reports, automatically calculated based on your actual results during the year. All for a flat, affordable fee and in just a couple days.

Already have a decent grip on your budget, but need to convert it to a format that will help you track revenue and expenses easily and present professional reports to your Board? Simply download the DIY Budget template.

Hiring your first employees or bringing on an independent contractor? HR is synonymous with paperwork and payroll demands you do it right. Download the HR quickstart toolkit and get a handy checklist for your new hires plus all the paperwork you need, easily customized for your company:

  • Employment application template
  • Timesheet template
  • Contract template
  • Invoice template
  • IRS Forms

Virtual Budget Prep, the DIY Budget Template, and the DIY HR Toolkit are all available now. More products are on the way, including starter policy and procedure, an earned income for nonprofits workbook, and a financial controls toolkit. Be sure you're on the mailing list to get the latest product updates.

Growing your organization shouldn't mean late nights pouring over IRS publications or scouring an Excel spreadsheet for the broken formula. You have better things to do to advance your mission.

Give a man a fish...and you've got a problem

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The problem? He's coming back for another fish tomorrow, and the next day, and the day after that. Too many organizations fail to empower men (and women) to fish on their own. There exists a powerful opportunity to improve the long-term outlook for every client we reach, whether we operate a nonprofit or a for-profit. And consumers recognize the difference.

What is the long-term impact of your work? For the individual? For the community? 

Case in point: The U.S. Healthcare System

Within the traditional disease-oriented "healthcare" system:

My child has a rash that is concerning. I call the local pediatric clinic after searching online for which one is in my plan. I make the earliest possible appointment for tomorrow afternoon. It's the only appointment available, but I will be at work, so I ask my husband to handle it. They drive 15 minutes to the clinic, fill out four forms, and wait 15 minutes for the physician. The nurse rooms my daughter and they wait for another 10 minutes. The physician looks at the rash for 5 minutes, recommends an over-the-counter cream, and then bills the insurance for $180. After contractual adjustment, we pay $153 a week later. The rash has still not cleared and my daughter came down with a bad cold several days after the visit...my own throat is a little scratchy.

Consumers, within the healthcare sector and beyond, are beginning to demand a different experience.

They recognize when they are authoritatively told what to do and when they are educated, cared for, and empowered. The latter is a much more satisfying experience.

In what ways are you only giving out fish? Your customers may be demanding a fish. They may genuinely appreciate the fish. But, how you could add in the resources, tools, and approach to truly empower them to fish?

This is especially imperative within mission-driven organizations.

I can hand out a box of food at the local pantry to an impoverished single mother of four and feel really good about it. But, what will that mother do when the food in the box runs out in a few days? Will she have a job, transportation, child care, a living wage, a safe home, and the ability to buy or grow her own food?

The next step could be as simple as a job skill training once a month in the pantry warehouse or posting the job ads and relevant wrap-around services on a bulletin board where clients wait in line to pick up their box.

For-profits get caught in the fish giveaway trap as well.

As a consultant, I may undermine demand for my own services by offering do-it-yourself resources and tools, but the truth is: If you serve your customers well and empower them to do more, you will always be in demand. Meanwhile you will empower yourself to do more by removing dependence on a limited asset...you.

I hire a CPA for my taxes to avoid learning all the ins and outs of various IRS schedules, but I demand that my accountant educate me on how to manage my personal finances better. I've referred nearly a dozen friends and family members to my current CPA because he exudes this rare quality.

The organizations who will rise and stay at the top aren't creating dependency. They are creating empowered evangelists who sing their praises, and become donors or referral sources.

Are your teaching your clients to reel in their own tuna?

The Laws of Subtraction

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The Laws of Subtraction by Matthew E. May was selected in a book club I recently joined. It's a compelling concept and I would have picked up the book otherwise, but I might not have finished it. The six laws of subtraction that May proposes are designed to help us remove the superfluous because success in the "age of excess everything" demands the skill of subtraction. That piqued my interest, as we really do have unlimited options and distractions and the key is the ability to prioritize and tune out the rest.

May compiles more than 50 different stories and perspectives on the topic, resulting in a book more than 200 pages long. I am an easy reader - I love nonfiction and I love new ideas that I can put to use. Unfortunately, I fell asleep twice while attempting to read The Laws of Subtraction.

May failed to apply his own methodology to his writing. The stories and metaphors designed to illustrate his laws went well beyond the point. I would have expected a book on the laws of subtraction to be short, concise, and laced with thought-provoking "Aha!" moments. Unfortunately, the gems were buried in lengthy explanations and I truly don't recall any of the specific laws themselves - they weren't catchy and actionable.

That being said, I respect May's obvious expertise and passion for the topic and took away a few pearls that certainly made the read worthwhile:

Pulsing

Pulsing is the concept of working in 90 minute stints with recharging breaks in between, such as a walk, meditation, doodling, or reading. Studies of brain activity show that we move from higher to lower "alertness" every 90 minutes. May points out that the symptoms of pushing the boundaries include restlessness, hunger, drowsiness and loss of focus, which explains why I find myself staring out the window and eating M&Ms.

I would add emphasis on the first 90 minutes of the day. What would happen if you invested the best of yourself each day into your highest priorities, with a targeted deadline less than 90 minutes away followed by an enjoyable activity? Sprints result in quick wins that build momentum.

Design...In Everything

FedEx LogoWe often only think of design when it comes to logos and advertisements, like this FedEx logo. (Do you see the white arrow?) But simplicity and clarity truly are desirable in all our interactions, so why not consider how simple and clear our lives and businesses are designed?

I often explain too much, burying my focus in a muddle of words. I also save way too many documents in a pile on my desk, just in case I might one day want to review one. What areas of your organization are cluttered or absorb an inordinate amount of your energy? Do you have white space where a person can relax, create, and work effectively?

Intentional Limits

In the past two years, I have often found myself paralyzed by the sheer number of directions I could go in. We all have a variety of passions, interests, and strengths...which to pursue? May observes that intelligent limitations provide the necessary frame to contain our efforts. Without those purposeful guideposts, we stare at a blank page.

Derek Sivers, author of Anything You Want, notes, "Give yourself some intentional restrictions in life and you'll finally get inspired to act. Restrictions will set you free." In what ways can you set better boundaries on your work, your time, and your relationships so that the next step is obvious and builds on the steps that came before?

The Principles of Skunk Works

Skunk Works is the top secret Advanced Development Program for Lockheed Martin. Their legendary chief engineer, Clarence "Kelly" Johnson, developed a strict set of principles for leading this shoestring rapid innovation team to repeated success, and they hold true for leading any team:

  1. It's more important to listen than to talk.
  2. Even a timely wrong decision is better than no decision.
  3. Don't halfheartedly wound problems - kill them dead.

The implications of the lessons contained in The Laws of Subtraction are open for application to large organizations, small groups, and individuals. Fewer distractions, clear direction, and clean space benefit everyone involved.

A surprising and genius vacation policy

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Last Thursday, I had the opportunity to speak to my local American Society of Training and Development chapter on building a change-ready culture. During the presentation, I had participants team up to discuss how they could tackle some of their urgent change problems. The teams shared some of their results afterward and a couple gems emerged around corporate vacation policies that I had to share:

The typical company vacation policy: 

Each employee has the opportunity to take up to X vacation days during the organization's fiscal year and must submit their vacation request ahead of time with manager approval contingent on coverage, seniority, yada, yada, yada.

Invisible fine print: We pretty much expect you to still manage everything while you are out on said vacation. While we can't force you to respond to emails and calls, we will reward and promote the type of employees who aren't ever really on vacation.

The genius company vacation policy: 

You MUST take at least X vacation days and management will actively monitor whether you are taking said vacation days and how your team functions while you are gone.

If YOU are required to deal with the situations that arise, then you are FAILING. If you are micro-managing from Tahiti, you will find yourself across from your supervisor when you return. In fact, we are going to monitor the number of emails you send while you are off duty and if it surpasses X, IT will shut off your access on your next vacation.

Why? 

As Wes Stockman of Nicholas & Company and Jay Naumann of RC Willey pointed out (two fantastic minds on organizational development):

Vacations provide natural opportunities to grow your teams and develop new leaders. Micromanagers hold their teams back and communicate to their direct reports that they are not competent or responsible enough to rise to the occasion, which sabotages a culture of ownership and excellence.  Leadership should empower synergy, not bottleneck growth.

Of course, there is also the more obvious benefit: your employees actually return to work recharged and rested and should they fail to return (or need to be escorted out at some future date), you will have plenty of competent replacements ready to jump in without interruption.

So, next time one of your employees requests time off, consider who will be empowered to practice their role while they are out and communicating strict email boundaries - for everyone's sake.

The Purple Cow | Why It Matters & Giveaway!

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Do you have a purple cow? While Seth Godin may not be an author you are familiar with, this concept might change the way you think about fulfilling your mission, especially if your organization has been around for years and years. All too often, the experience within the purpose-driven community, especially among nonprofits, is a territorial one. It is a sense  of scarcity. The myth of a limited pie of donations is still strong. Many opportunities are wasted by focusing on what others are doing and how to guard the island of grants we've carved out.

But what would happen if instead of chasing dollars with dollars, after all it does cost money to ask for money, we invested some of that cash and effort into being remarkable.

Literally...remarkable.

As in, "I cannot believe how neat this project is. I want to be a part of this. I can't want to tell my friends and family about it."

The concept of a "purple cow" is just that...it's remarkable, unlike the hundreds of other white or brown or black-spotted cows. What do you do within your organization that is truly remarkable?

Thousands of organizations feed the hungry, shelter the homeless, and save the children. What if a new organization opened their doors in your hometown with a remarkable way of fulfilling your mission better, or just differently? What kind of impact would that have?

We have entered an age of social innovation rather than "social work". Social entrepreneurs, benefit corporations, social enterprises, and impact investments are driving forward new ideas and testing opportunities to create a bigger impact.

While the recognition of opportunity within the social sector benefits us all on the whole, the climate is charged with tension. There is a divide between the old traditions - boring galas, silent auctions, and holiday appeals for the broken dishwasher - and the exciting pioneers who are pushing the limits and taking major risks.

Regardless of where you fall on the continuum, you're in a crowded field. What sets you apart? What makes your organization remarkable?

Wouldn't it be remarkable if the local homeless shelter installed a large greenhouse on their roof and the homeless and unemployed could work part-time farming food for the soup kitchen, building their resume and earning income?

Would you talk about a women's empowerment group that sent young women to flight school as a precursor to business school scholarships?

Salt Lake City Bicycle Collective "Earn-A-Bike" Program

What if a bicycle collective taught disadvantaged kids how to build a bicycle and then gave it to them, providing confidence, exercise, and transportation? What if they then hired these youth later on to work as bicycle techs in their shops?

The Green Urban Lunchbox

What if a sustainable farm-to-table organization transformed a school bus into a greenhouse so that kids could actually see and take part in where their food comes from at local schools?

These last two purple cows already exist right here in Salt Lake City.

Could you create a purple cow within your mission delivery?

Since we can all agree that passionate, creative organizations who are excited about solving problems in our community are a more attractive location to invest our dollars, share with us what you already do or could do to stand out.

The purplest commentator by the end of the day Sunday, April 13th will receive a free copy of The Purple Cow. Good luck!

6 Steps to Boost Ownership on Your Frontlines

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If the complaints in your organization tend to burn up the ladder until you finally take the initiative to resolve the problem, you’re not alone. In fact, upset customers are communicating directly to the C-Suite these days, bypassing the ladder altogether. Once relegated to the limits of family and friends, a bad experience can now circle the globe in a matter of minutes, thanks to social media. In the Economist Intelligence Unit report, Getting Closer to the Customer, Frank Eliason, senior vice president of social media for Citi, puts it bluntly, “Consumers now own the brand.”  It’s become imperative for leaders to nurture customer loyalty.

The C-Suite is fairly removed from the day-to-day customer interactions. Yet, many of us have a tendency to own the process. The very idea that a busy executive — removed from the customer experience by three to five layers of management — has the time to resolve every hiccup or even has the best idea of what will work is absurd.

How do we change the culture to instill ownership of the customer’s happiness with the ability to make a real impact in real time?

Click here to get the 6 critical steps.

 

5 Ways to Unleash Your Inner Intrapreneur

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I always imagined that once I reached the executive level, I would be free to focus on the bigger picture. Sadly, the C-suite is not a rooftop loft with inspiring views and glass walls where we hatch innovative ideas and brilliant plans with scented dry-erase markers. The reality, for many executives, is a never-ending load of administrative oversight with a fairly constant interruption of “not my job” problems that land on your desk as the last stop. After all the daily organizational maintenance, how do you ensure you stay ahead of the curve — or, better yet, pave the way in your industry with new and better solutions? Whether you’re naturally entrepreneurial — and your inner innovator has simply been stunted by the mundane — or you’re a traditional administrator needing to solve entrenched problems, you can quickly incorporate inventive thinking into your daily repertoire with a few interventions.

Click here to read my full article on the C-Suite Network

Community First, Then Marketing

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I think it's safe to say that the vast majority of mission founders or directors are lacking marketing experience. It's just not a typical precursor to starting an organization to feed the hungry or distribute clean water. But we can all agree that sharing our message is paramount to fulfilling our mission. The more people who care about our cause, and associate us with the solution, the more donors, volunteers, and talented team members available to scale our impact. Marketing is a bit of an intimidating word. It's often associated with advertising, events, radio and television interviews, published articles, and slimy people who launch a lot at bad jokes and drive black BMWs.

It's also easy to pigeon-hole ourselves in comparison to bigger, well-funded players. When you're relying on word-of-mouth or a few hundred printed brochures from Vistaprint, those tear-jerking American Cancer Society ads can make anyone feel inadequate.

How do you stay grounded in what you do best, while effectively spreading your message, so that you can grow your impact?

You may be surprised to learn that many small nonprofits are making waves on social media. A Nonprofit Technology Network article by Susan Gordon highlighted a interesting comparison:

Following the major earthquake in Japan in 2011, quite a large number of diverse nonprofits put out fundraising campaigns. In looking at those on the crowdfunding platform, Causes, the Japanese Cultural and Community Center of Northern California, a relatively small organization with just over a million in annual revenue, had raised more than $400,000. Comparatively, the American Red Cross, an organization with more than $3 Billion in annual revenue, pulled in $322,540.

The most successful mission-driven organizations have built loyal and motivated communities.

Social media and online platforms simply provide an efficient (and inexpensive) method to mobilize your community (and their community) around your cause, even if your cause doesn't have cute pictures of babies to post on Facebook.

Social media can seem intimidating and ineffective at first. Most companies have tasked low-level interns to post inspirational italicized quotes on backdrops of flowers every few days.

Unlike this giant waste of time, organizations who engage in activities that build their direct community and then connect regularly with that community online through stories and relevant information take advantage of social media as an amplifier. An example:

A 45-year old banker who regularly gives $20 to various charities loses his 19-year-old son to an accidental overdose. Having previously distanced himself from substance abuse, "those are bad kids whose parents weren't around", suddenly finds himself personally connected to how insidious even a little experimentation can be. He becomes heavily involved over the next year with a local organization that offers prevention, treatment, and support services to his community.

The banker and his wife are now donors and volunteers for the cause and the organization is doing a great job engaging them in their mission. The wife connects with the organization via social media and invites her local church group and a dozen of her friends to donate with a few clicks. They do because they know the family well and are equally horrified at the loss of their son, a young man the same age as many of their children.

A social media ask is a lot easier to swallow for many of us. There is social approval involved in being associated with a good cause and the visibility of our association online can attract others in our network without even an invite. Many stories are so compelling that they go viral, enlisting thousands of unknown supporters in spreading the message and contributing to the need.

You can't duplicate this effect with a direct mail appeal or an event. We don't share the postcard with the hungry kids on the front with our neighbors, coworkers, and family. We also don't often talk about our charitable contributions or affiliations.

While a case can certainly be made that the older members of our communities may prefer a traditional appeal, on a human level we are all more interested in being part of a community, rather than an address on a list. It's not about the ask, it's about whether you provide a compelling space to interact and connect. Even if you engage on social media with stories, if you lack a genuine community on the ground, the few strangers who retweet you or like your page are likely never going to get more involved than that.

If you're struggling with concept of social media:

Instead of looking for strangers in the dark recesses of the internet, step back and evaluate your genuine followers. You may have a list size in the thousands, but do those people have a real connection to your cause and are you providing opportunities to interact? A few small changes in this realm may make all the difference, with the bonus of social media evangelists praising your work to all of their friends online.

The Last Days of the Superbowl as a Tax-Exempt Fundraiser

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The fact that the NFL is still considered a nonprofit tax-exempt entity is really an embarrassment to Congress and a slap in the face to the genuine charities who are working hard to change the world for the better, including the many sporting organizations that actually serve a higher purpose than primetime ratings. Legislation was introduced in both the Senate (Senator Tom Coburn-R, Oklahoma) and the House (Representative Chaffetz-R, Utah) in the past few months to finally close the loophole that allows the National Football League, the Professional Golf Association, and the National Hockey League, among others, to slip under the tax radar while organizations like the National Basketball Association and Major League Baseball pay.

Cleverly named the Properly Reducing Overexemptions (PRO) Sports Act, the legislation would amend Federal tax code to prohibit professional sports organizations who garner more than $10M in annual revenue to qualify for the 501(c)(6) tax exempt status as industry trade associations and public interest groups.

While some may argue that professional sports enrich our lives and provide a culmination that encourages involvement in lower level sporting leagues and organizations, I'm not sure anyone could suggest that the NFL operates with a mission-first approach. Even their mission statement reeks of a profit-first model:

To present the National Football League and its teams at a level that attracts the broadest audience and makes NFL football the best sports entertainment in the world."

This is not to suggest that the NFL is "bad"; for-profits play an enormous and important role in the economy and in our lives. Americans (including myself) love football. In fact, the Superbowl is the one thing most of us can agree on. Whether it's the wings, commercials, or the intense action of professionally-tuned athletes at their peak, 81% of us said we plan to tune in today.

Major League Baseball apparently renounced their tax exempt status voluntarily in 2007. If you quack like a duck, be loud and proud about being a duck. The Superbowl is not a fundraiser for charity.

Author's Note: This particular piece reflects my personal opinion on this topic and other thoughtful opinions are welcomed. 

Book Review: Your Mark on the World

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I have been waiting to review Your Mark on the World for quite awhile. Written by a fellow Utahn, Devin Thorpe, the best part of this review is that you can get this book for free simply by subscribing to the Your Mark on the World blog. Thorpe has an extensive background in finance as past CFO for a corporation with hundreds of millions in revenue, a prior boutique investment bank owner, former investment advisor, and former treasurer for a global company, among other roles. However, what makes him stand out among his peers who have also done well in the financial sector is how he has managed his personal finances.

Devin Thorpe

A few years back, Thorpe left his position as CFO with MonaVie unexpectedly. He turned it into an opportunity to spend a year in China with his spouse, giving back. He simultaneously wrote Your Mark on the World to help others take advantage of the same opportunity to make a difference, in whatever way that calls to them.

Your Mark on the World literally weaves together basic, but comprehensive, personal finance principles that many of us never learn with compelling stories of regular people making an indelible impact on the world. It's both functional and inspirational.

Financial freedom is a topic I am personally passionate about (I write about frugality frequently on my personal blog). Without learning some basic rules about money, especially how to dump debt and save for emergencies, myself and my spouse would never have been able to pursue entrepreneurship, which for me includes having a much larger social impact than with one organization.

I am consistently shocked at how normal conspicuous consumption is in our society. It is inherently addicting and almost socially required to engage in behaviors that jeopardize our financial freedom, including our ability to give back. I know from personal experience with credit cards, leased vehicles, and even a fancy car financed over 30 years on a second mortgage.

Because of the painful, but liberating, effort required to dig out of our own hole, I find resources like Your Mark on the World to be a breath of fresh air in a world that is constantly suffocating our opportunities to experience and do more than work.

I do have to admit though that the stories were by far my favorite aspect of the book. Thorpe went to great lengths to include stories that personally touched his life. They are all deeply intimate portraits of everyday people taking up a cause and literally changing the world for the better.

Ranging from China to Cambodia and from leper colonies to orphans, the incredible impact of just one dedicated person is illustrated so tangibly that one cannot read Your Mark on the World and continue to turn away from the immense possibilities for your own legacy.

Drop by Thorpe's blog right now, subscribe, and take the next steps toward leaving your own personal mark on the world.

What happens when you curate real teams

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There comes a point in your career where the word team causes indigestion. We've all been on a "team" that did absolutely nothing beyond meeting and talking about doing. There was no one to carry out the plans or the team stopped being relevant long ago and no one disbanded it.

We've been on teams that got momentum (and therefore noticed by leadership), only to have the team's resources cannibalized and diverted to additional projects.

Then there's the dreadful committee, thrown together on a whim, without any real authority, and consisting of already overworked employees.

Whether you are developing your board, an executive team, or a project team, diversity reigns. This includes diversity in capacity. Without conscious curation of compatible personalities and balanced skill sets, leadership breaks down from within, never getting the chance to fulfill the collective goals of the group.

I've witnessed multiple nonprofit directors salivate over a potential board member from a behemoth law firm or bank. They don't consider that these high-level professionals often sit on multiple boards, have honed their skills at saying no when assignments or donation requests go around, and may never have time to show up to a meeting.

Similarly, I've watched as new executives are promoted into leadership teams based on their ability to do the day-to-day work only for chaos to ensue because their personality and style steps on the toes of the established team they must work within.

Project teams are one of the most obvious examples of terrible team dynamics. We assign the already swamped department head to oversee and add in her direct reports.

How many committees, boards, or teams have you sat on? How many have truly engaged you in action rather than just sitting?

Let's build our teams to get stuff done:

  1. Establish a list of priority outcomes for the team.
  2. Identify the critical skills and resources necessary to produce those outcomes efficiently.
  3. Begin identifying the people who have those resources AND the capacity to bring them to the table. Mix it up. Cross-functional teams create better results and companies that take advantage of energy and talent lower down stimulate employee engagement, problem solving, and intelligent succession routes.
  4. Once you have a list of ideal recruits, identify each person's personality and typical group role.
  5. Create a final team line-up with one dominant leader, at least two task-oriented doers, and at least one wise person who has a knack for setting the tone, managing dominant personalities, and drawing out the observant personalities.
  6. Finally, invite these players to your team specifically to fill those roles in a way that brings out their unique contributions. Don't leave your hopes and expectations to chance, but also provide space for them to share how they think they might best support the goals.

Ask your wise person to set the tone. Ask your type-A personality to record results and track progress (forces them to listen). Ask your doers to be implementation leads. When the team first meets, introduce the people AND the primary resource you hope they can offer to the team.

By using this method we:

  • Create ownership by allowing team members to opt-in;
  • Guide contributions to fill the actual needs;
  • Prevent the doers from becoming martyrs by appreciating their skills and ability;
  • Remove the guilt from the advisors who don't have the time or skills to implement; and
  • Produce momentum and engagement, leading to outcomes.

The bottom line: If you can't commit to at least rushing through these steps prior to creating a "team", don't do it at all. People are a valuable and limited resource, especially volunteers. Don't waste such opportunities haphazardly.

Have a horrid team experience? What was the problem? Conversely, what created the magic within the teams that brought out the best in you? 

Happy New Year! Let's Change the World

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I am so excited to launch the Impact Ignition blog and hope you will enjoy the coming content. Whether you're mission-driven or just here for the universal content around innovation, collaboration and leadership, welcome! The Impact Ignition blog will curate content to help non-profits and other mission-driven organizations become more savvy; to streamline their operations, develop strategic partnerships, and innovate to multiply their impact. It will also include resources, such as training, networking, and funding opportunities.

Subscribers can choose to receive all of the content or to have the non-profit content left out. If you migrated from the other blog, you have only been subscribed to the universal content (unless I know you personally and knew you'd want it all). You can always adjust your preferences at the bottom of any of the emails.

Take a peek at the new blog and let me know what you think. Better yet, it's the perfect time to share some of your expertise via a guest blog post. Why not hit the ground running in the new year by helping mission-driven organizations become better, stronger, and more adaptable?

Thank you for joining me here. I look forward to the community we are creating that will change the world for the better. What's your cause for 2014?

Root Cause Analysis: The 5 Whys

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I love memorable and easy to implement tools for problem solving. After all, solving problems is at least half of what leaders spend their time doing. Mine as well make it simple. Root cause analysis sounds uber complex and it can be. There are a variety of methods and tools out there that take hours upon hours to complete. Sometimes that's necessary, but I'm a fan of trying the simplest solution first and then escalating the complexity if the problem continues to rear it's ugly head.

The 5 Whys is nothing new, it's part of the Six Sigma process and became well-known from it's use with Toyota Production System in the 70's. I was just recently reminded of it from a good friend, Kim Barber. Kim is an adjunct professor with the University of Utah's School of Business and a wealth of practical information. In fact, that's what she teaches: putting management theory into practice.

Quick & Dirty Root Cause Analysis: An Example of The 5 Whys in Practice

Problem: Phone calls and emails aren't returned in a timely fashion or at all. Instituting a "Return all communications within 24 hours" rule has been ineffective in changing the trend.

1. Why? Quick interviews with the worst offenders reveal that they "just don't have time."

2. Why? They indicate that they have too much paperwork that they are behind on.

3. Why? Pushing the question, it becomes apparent that these staff are always behind, making paperwork more time-consuming since they have to go searching for the old information.

4. Why? Their supervisors nag about the deadlines, but never actually enforce them with any interventions or consequences.

5. Why? Addressing the identified issue with supervisors reveals that they don't feel comfortable enforcing the deadlines that they themselves don't keep. This is the way deadlines have always worked; ie. this is a problem embedded in the culture.

Without peeling the onion back five layers, the folks interested in solving the problem with returned phone calls would have been left with supervisors blaming their staff on the surface, but enabling the behavior through their own lack of commitment. The root cause of poor role modeling was able to be impacted directly, trickling down to the staff members.

Sometimes what appears to be the problem in the surface is only a symptom. More often than not in my experience. Try the 5 Whys for yourself next time you encounter a problem in your organization.

Sunk Costs: Let the Project Sink

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We'd all like to believe that we make decisions based on the best possible future trajectory given all of the available information at hand. But it's pretty common to pour more and more resources into a dead end rather than admit defeat. If you're a really thoughtful decision maker, that may be the case when you first approach a change. However, even the best leaders struggle to re-evaluate mid-course and accept the fact that we're clearly going under.

Part of it is an essential bit of entrepreneurial optimism and part of it is a fear of loss, which is apparently genetically encoded from our ancestors: those who were risk aversive were more likely to survive to parenthood and pass on the predisposition.

But we don't live in the time of saber tooth tigers and groin cloths anymore. No revolutionary success ever got off the ground based on the risk calculation and many certainly would toss in the towel when the inevitable waves washed over the sides of the little boat. That being said, there comes a point when sinking is inevitable and it's time to switch gears and try a different boat.

It can be hard to tell whether it's fear or optimism that drives us to purchase deck chairs for the sun-soaked beach that certainly lies ahead while our feet and fellow travelers get soggy, but developing the awareness and distance to call it quits when you've passed the point of no return is critical if leading the next boat, or an armada, is in your future.

In order to combat our tendency to believe we are the leadership-embodiment of Leo Dicaprio at the front of an unsinkable ship, the business world came up with the term sunk costs.

What's a sunk cost? 

It's the money, time, and other resources that are lying at the bottom of the ocean, completely unrecoverable. The Titanic has broken in half and no amount of money or effort is going to put it back together and deliver the passengers to America.

You have a few options here: 

  1. You can pretend that the Titanic is unsinkable. More time, money, and adjustments will certainly fix the problem.
  2. You can watch the ship sink in abject horror and sob violently over your losses.
  3. You can face forward, learn from the mistakes, and cut your future losses as early as possible. No use crying over sunken ships.

An everyday example: 

You purchase non-refundable tickets to a major concert for over $200. You dye your hair blue and make the 30 minute drive to the arena. 15 minutes into the show, your absolutely miserable. Turns out this particular band only sounds good synthesized on the radio and the lip syncing that you can clearly see from the front row seats you paid handsomely for is appalling.

What do you do?

The irrational part of us says, "I paid $200! I drove all the way here! I dyed my hair blue!" So, you stay and get angrier with each mutilated song.

If you're feeling particularly rational, you say, "I am not enjoying this at all and I think I would rather leave now, grab a pizza, and catch up on Big Bang Theory." So, you go and have a wonderfully funny evening.

Irrational decisions aren't a huge deal on this scale, but organizations buy much more expensive "concert tickets". In fact, the sunk cost fallacy is nicknamed the "Concorde fallacy" after the $6 BILLION (in today's dollars) dumped by the British and French into the development of the Concorde aviation project for many years after it was crystal clear that the venture would never produce a return. Just the year-to-year operating costs AFTER the Concorde was developed ran in the red.

Are there any projects that you or your organization are currently pursuing that are already waterlogged? How would you know?

The Most Valuable and Neglected Leadership Tool

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This isn't just a leadership tool, it's a basic personal development cornerstone. Without it, you are completely handicapped. With it, you can capitalize on your strengths and mitigate your weaknesses. However, it is time-intensive and must be purposefully engaged; therefore, it is often neglected.

Reflection.

Let's face it, unless you have an unbelievably amazing staff or you're a lazy leader, there is very little free time at the top. There is always more to do. The corner office might have a great view, but it likely doesn't get appreciated by the frenzied executive who spends the majority of their waking hours in that space.

My first three years as a leader are a blur. The pace was grueling and exciting. When I left my job, life went from 100 mph to 0. It was only then that I began to truly reflect on my experiences in leadership, the lessons I learned the hard way, and the larger impact I could have had if I just stepped away for a few minutes to refine my approach.

It's difficult to make time to do nothing when there is so much to do.

Productive reflection truly requires the absence of productivity. It's about time and space to simply absorb, digest, and consider our experiences.

Given the right environment, both mentally and physically, reflection leads to clarity and creativity. We gain a broader understanding of what we are doing and how we are doing it. Most importantly, we become acutely aware of our internal barriers to success and this insight can drive breakthrough change.

One of my brilliant clients reminded me of the classic tool, the Johari Window:

Johari Window - Great Leaders Take Time to Reflect | Leadership & Lifestyle by Emily Capito, LCSW, MBA

We get moving so quickly as leaders that we often shutter all but the known, public self. We don't make the time and space for reflecting on who we are as a person and as a leader.

Much of what we hide from public view can and should be integrated back in, producing a whole and genuine person that others can trust and follow.

Much of what we are currently blind to is readily accessible if we take the time to consider how others interact with us, how we respond to stress, and how our stakeholders view our actions.

This level of perspective is game changing. 

Imagine the value of consistently engaging in your own proactive 360 degree assessment; refining your ability to observe and apply the feedback that others are constantly providing you about your personal strengths, weaknesses, opportunities, and threats.

You may have moved into leadership because you're goal-oriented and driven, but you won't succeed as a leader if you continue to apply yourself solely to production without the aid of adequate reflection.

This goes for most challenges, including marriage, parenting, friendship, or starting a business.

By three methods we may learn wisdom: First, by reflection, which is noblest; Second, by imitation, which is easiest; and third by experience, which is the bitterest."                                                                                       - Confucius

Take 15 minutes today, away from work and email and people, and allow yourself to put the pieces of the puzzle together in order to connect with the bigger picture.

Ignite Your Intrapreneurs Into an Innovation Engine

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Many organizations, especially non-profits, are lacking an innovation engine - the capability to identify and invest in long-term strategic opportunities that produce growth.

Identify Your Intrapreneurs:

A recent article on the Harvard Business Review Blog Network (Recognize Intrapreneurs Before They Leave) and another from Forbes contributor David Williams (The 4 Essential Traits of Intrapreneurs) help to identify this unique and often neglected species of employee through 6 traits:

1. Their primary motivation is influence and freedom, not money.

2. They're future-oriented and passionate about learning.

3. They "greenhouse" ideas - carefully tending to seeds until they have a strong plan.

4. They engage in "visual thinking" - formulating a series of solutions from the initial spark.

5. They are able to "pivot" - balking momentum in favor of better direction.

6. They're confident, but humble with high self-awareness and sense of purpose.

Interestingly, the authors of the HBR post suggest:

In a firm with 5,000 employees, we’ve found, there are at least 250 natural innovators; of these at least 25 are great intrapreneurs who can build the next business for your firm."

That means that only 5% of your workforce are natural innovators and one half a percent are great intrapreneurs.

If you don't have thousands of employees, you may be looking for a needle in a haystack, which makes it all the more important that you intentionally prepare for and nurture these hidden gems, taking advantage of their entrepreneurial combination of talents.

Nurture an Innovation Engine:

As a former intrapreneur who became fed up with bureaucracy and jumped ship, here's what kept me loyal for years and what would have kept me around longer had it been done better:

  • Foster a culture of grassroots best practices, even if you have a long way to go. Intrapreneurs want to be on a winning team. If you involve your frontlines in steering toward a better direction, your natural innovators will come out of the woodwork.
  • Recognize intrapreneurial qualities and connect your innovators with a mentor. Intrapreneurs question the status quo, which often isn't rewarded in management meetings at lower levels. Connect them with a mentor who can support their ideas and refine their approach to change leadership.
  • Recruit several intrapreneurs onto your executive leadership team. Without change leadership, your executive meeting is all talk with depressing status updates.
  • Intrapreneurs in leadership positions are prone to burn out. Support these executives with enough authority and a team so that they can effectively tackle strategic initiatives with success. This is your innovation engine.
  • Channel your innovation engine's ideas into an ambitious goal and gift it back to them. Big projects that will have a big impact are bright, shiny objects to intrapreneurs. I was always excited to be part of the process of strategic innovation.
  • Create a safe environment for experimentation and revisions. Too many leadership teams try to change on demand, doling out deadlines and metrics to their innovators, which in turn deters creativity and the ability to change course when needed.
  • Lead with integrity. Nothing kills loyalty quicker than deception and loyalty is a cultural pre-requisite for the change that your innovation engine needs to initiate. Adhere to strict values and take swift action to remove negative influences in your culture before they drive your talent out.

The concept of entrepreneurial employees isn't necessarily new, but it's gaining more attention because it's easier and more rewarding than ever before to leave your 9-to-5 and start your own business. Your best intrapreneurs are an online form and a quick website away from complete autonomy.

That being said, people are social creatures who want to be part of something bigger than themselves. By creating and nurturing an innovation engine, your organization will gain enormous competitive advantage over time. Plus, you will likely keep your intrapreneurs from going rogue longer and attract a steady flow of new ones to fill those big shoes.

What do you think? 

Don't be a Tupperware Leader

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One of my favorite books on leadership is EntreLeadership by Dave Ramsey, probably because I lean toward the entrepreneurial side of the continuum. The lesson that has stuck with me in the years since reading the book was that as a leader, I am the ceiling. To give fair credit, Ramsey takes this concept from John Maxwell's The 21 Irrefutable Laws of Leadership. Maxwell calls it the "Law of the Lid", as in the lid on your organization.

As leaders, we are both our organization's solutions and our organization's problems. Hopefully with more tally marks on the solutions side. Our strengths become our organization's strengths. Our weaknesses = the organization's weaknesses.

This is a fact of life. None of us are perfect.

That being said, if we fail to take a good, hard look in the mirror every so often to become increasingly aware of our weaknesses and act to mitigate them, our organization will run up against that lid sooner rather than later.

This is critical whether you are a project leader, department manager, or the CEO. So, how do we mitigate our tendency to micromanage, our inability to lead an effective meeting, or any other personal shortcoming?

  1. At the very least, acknowledge the deficit. Don't pretend it doesn't exist.
  2. Build your team purposefully to fill in your gaps. Don't clone yourself or you will simply magnify your own flaws.
  3. Focus on applying your strengths first, then work to improve your weaknesses where appropriate.

Opposites attract in marriage for a reason. I am great with managing the little details. My spouse is great at keeping perspective. This naturally creates conflict, but it also creates balance.

This is how a fine tuned leadership team works. Diverse strengths lift the lid a little higher, allowing the organization to reach greater heights.

This is also why filling in the gaps with natural talent is #2 on the list. It's faster, more efficient, and more reliable to bring established assets to the table than to try to course-correct your shortcomings.

You may never be the best meeting facilitator, but you should observe your empowered replacement to continuously grow and adapt because you also never know when the recruited talent could call in sick or walk away.

Bottom Line: Don't be vacuum-packed tupperware. With awareness, purposeful team development, and personal development, you should continuously push the lid for your organization.

How have you mitigated your leadership weaknesses?