Goodwill’s Directions

Posted on June 1, 2012 by

Over the past decade, Goodwill in central Indiana has developed and now operates several small high schools. More recently, we have launched services for very young children and their moms. These are not areas in which Goodwill Industries around the country have typically been directly involved, and I am occasionally asked why we have moved in those directions.

At Goodwill, we have an overriding desire to help improve lives and communities and, as best we can, help solve serious social problems. We generally prefer to:

  • Strive for long term impact
  • Take a holistic approach with individuals and, in many cases, with their families
  • Enhance education levels and the attainment of credentials that will improve an individual’s employability and earning potential
  • Prevent problems and develop potential rather than engage in remediation

Strategic planning in our organization has morphed from a discrete event we used to do every few years into a strategic thinking process that is continuous. Changes in our environment are occurring at a very rapid rate, and we find ourselves with more new opportunities than ever before.

Every major step we have taken over the past twenty years has been a result of (1) what we have learned from previous experiences, (2) what we know about the communities in which we operate, and (3) how we believe we can have the greatest possible impact in the lives of people and in the larger community.

Key factors that have heavily influenced our recent directions include:

  • A recognition that many major social indicators have become worse over the last 30-40 years, despite massive increases in public spending and a huge proliferation of not-for-profit organizations. Many existing systems have not adapted well to changes that have taken place in our society. The silo structure of the public sector and the fragmented structure of the not-for-profit sector are part of the problem. Fragmented approaches have not worked and will not work to solve complex social problems, regardless of how much money is made available. Neither will highly bureaucratic, overly prescriptive approaches. One size does not fit all.
  • A belief that there are no quick fixes to many of our society’s problems, and we must not allow ourselves to be satisfied with gradual, incremental progress. We need long term thinking and long term solutions. We also need a strong sense of urgency.
  • A recognition that many of the pieces needed to solve societal problems exist, but in relative isolation from other pieces that could also be part of a long term solution.

I believe that two of the most important elements necessary to reduce generational poverty and its accompanying social problems are:

  • Raise the education levels of children, youth, and adults in low income households. This is why we developed and operate the Indianapolis Metropolitan High School and The Excel Centers.
  • Ensure that children are behaviorally and cognitively ready when it is time for them to enroll in kindergarten. There is powerful evidence of the enormous positive long term impact of high quality early childhood development programs for children in low income households. We must greatly increase the availability of such opportunities – and there must be a strong sense of urgency to do so. Goodwill has taken a major step in this direction by launching Nurse-Family Partnership in Marion County.

It’s also important to emphasize that on all of these initiatives we are working with a lot of other organizations that have compatible interests and complementary resources. In some cases, those relationships are evolving into networks that I believe will play an increasingly important role in developing human potential and reducing serious social problems.

Posted in Business and Mission, Education | Tagged , , , , , , | Leave a comment

Evaluating the Success of High Schools

Posted on March 28, 2012 by

When we started the Indianapolis Metropolitan High School in 2004, our initial objective was to help increase the high school graduation rate in the city. We soon added the goal of helping increase the percentage of graduates who enroll in and complete a post-secondary course of study.

We also decided that we would not be obsessed with standardized test scores. It’s not that we didn’t think test scores are important; it’s just that we didn’t think all the emphasis should be on them. We also knew that many of our students were coming to us far behind where they should have been academically and that it could take awhile for many of them to make up lost ground. Consequently, we decided that when they passed a test or graduated was not nearly as important as that they eventually did pass the test and graduate.

Over time, we came to the conclusion that the best indicator of how well our schools perform is in how well our graduates do in the next phase of their lives. In other words, how well did we prepare them for what comes next? If we give a student a diploma and that student enrolls in college and has to take a remedial course, we have failed. We’ve failed that student; we’ve failed the taxpayers; and we’ve failed ourselves.

Similarly, if we graduate a student who goes to work, but lacks the work habits or cultural capital to succeed on the job, we have failed that student. We have also failed the student’s employer.

We take this view because we are well aware that our schools operate in a larger context. We receive inputs (e.g. students, money) from outside the school, and after a period of time we send those students out to another school, to a job, or – in a worst case situation – to the unemployment line or the streets. What happens to those students – the ones who do well and the ones who don’t – matters to us.

Character, cultural capital, social skills, problem-solving ability, academic achievement – all of these are important. We pay attention to them. We also keep track of our graduates as much as we can for as long as we can. We want to know where they are, what they are doing, and how they are doing. From time to time, our graduates tell us how well we did or did not prepare them for college. At times, their feedback has prompted us to make changes so we might do a better job going forward.

We believe schools should be held accountable for their results. We hold ourselves accountable, and we want others to evaluate us based on what really matters. We also recognize how difficult it is to design an evaluation system that does that. Current systems by which we are evaluated use measures that are readily available and that provide immediate feedback. These can be useful and meaningful to a point. But for a more complete picture of how well a school is doing its job, we need to look at student growth and success over a longer period of time.

We will continue to do the best job we can to help every student develop his or her potential and be well prepared for what comes next. As we go about our work, it helps to keep in mind Einstein’s view that “Everything that can be counted does not necessarily count; everything that counts cannot necessarily be counted.”

Posted in Education | Tagged , ,

Improving Over Time

Posted on February 15, 2012 by

As I am writing this, Indianapolis – my home for nearly 40 years – is still basking in the overwhelming success of hosting Super Bowl XLVI. Those who led the multi-year effort did a magnificent job planning and executing a week-long series of events that exceeded almost everyone’s expectations. In fact, I suspect the only people who weren’t surprised may have been those who led the immense effort. They expected it to be great, and it was.

When there’s a major goal that captures the imagination of and mobilizes a lot of people, good things can happen. In the early 1960s, President Kennedy issued a challenge for the U.S. to put a man on the moon and return him safely to earth by the end of the decade. It happened. In a very different type of situation last year that some people liked and others didn’t, we saw uprisings in Egypt, Tunisia, and Libya that had a defined goal of overthrowing long-standing regimes. They succeeded, but now they are faced with the very different challenge of building a different kind of society.

Building a society, changing a culture, solving a major social problem are open-ended challenges that have no defined end. It’s harder to mobilize people around open-ended challenges and sustain their interest and involvement over time than it is for a task with a defined end goal within a time frame of a few years or less.

I’ve now led the same organization for the better part of four decades. Occasionally, someone will ask me what I’m most proud of in my career. My answer is always the same. It’s not any one development or accomplishment. Rather, it’s how far we’ve come over time. It’s not all about growth, although we have certainly grown a lot. More importantly, the organization functions at a much higher level than it did earlier in my career. We are much more effective and have much greater positive impact in the lives of people and in the communities in which we operate than was the case even a decade ago. I’m also more convinced than ever that the greatest accomplishments and life’s greatest rewards come from making and keeping long term commitments.

Organizational development and evolution over time are never linear. We have our ups and downs, our successes and our failures. It’s a never ending process that – at least in our case – involves a lot of small, incremental improvements and occasional major new developments. From time to time, we also have to stop doing things that have outlived their usefulness or that we have found are simply not a good fit. Of course, there are plenty of projects within the organization that have a defined beginning and end, and there are plenty of milestones along the way that are worth celebrating.

Some of the challenges we face in our society today have developed over a period of several decades. There is much debate over causes and solutions. One thing we can be sure of, though, is that there are no quick fixes. The time it will take to substantially reduce some of our societal problems will be measured in decades rather than years. To sustain the required effort and commitment long enough, we need to focus on a well-defined set of short, medium, and long term metrics, concentrate resources on improving those metrics, shift resources when necessary, and celebrate successes. Problems such as many of those we now face have resulted from a downward spiral over a long period of time. With enough concerted effort over a long enough period of time, we can create an upward spiral that will build on successes and eventually perhaps even sustain itself.

Posted in Evolving, Growth | Tagged , , , , , , ,

What goes around comes around – a brief historical perspective

Posted on January 13, 2012 by

In the late 1930s, in the midst of the Great Depression, the small Goodwill organization in Indianapolis was offering the following services:

  • A kindergarten
  • A pre-natal clinic
  • A dental clinic for school children
  • In conjunction with the Marion County Medical Society and Methodist Hospital, a home-based health care program
  • Classes for female heads of households. Topics included childcare, food preparation and purchasing, and how to run a household when a spouse is in prison
  • A library with books that mothers could read to their children

And yes, the organization also provided jobs in Goodwill stores. While the available resources and number of people served were small, the approach Goodwill took in those days was – using current terminology – holistic and dealt with the whole family.

When the U.S. became involved in World War II, Goodwill’s primary emphasis shifted to employing people – particularly people with disabilities – who previously had few, if any employment opportunities. Following the war, an emphasis on vocational rehabilitation was added. For the next forty years, Goodwill’s primary mission could be paraphrased as helping people – primarily, but not exclusively people with disabilities – prepare for, find, and keep jobs.

By the early 1990s, major societal changes – some of which began gaining momentum in the 1960s – prompted Goodwill to become involved in several initiatives designed to address growing social problems. Eventually, we launched efforts to try to improve education outcomes for young people who had struggled or failed in other settings. Those experiences, in turn, made us increasingly aware of the need to work with students and their families in a much more holistic manner.

Simultaneously, we began seeing a great deal of dismaying data that vividly illustrated the long term negative trends of a number of significant social indicators, despite massive increases in public spending and a huge proliferation of not-for-profit organizations. We also began searching for programs that have demonstrated long term positive impact reducing social problems.

As a result of all of this, we have begun implementing Nurse-Family Partnership in Marion County. In addition to the basic, nurse-led services offered under this highly regarded, evidence-based national program, each mom or mom-to-be will be linked with a Goodwill Guide who can assist her in accessing education services (e.g. through Goodwill’s Excel Centers) and/or employment opportunities (e.g. in Goodwill’s retail system). The Guide will also advise the mom on financial matters, housing and transportation, child care, and health care. It is a holistic, whole family approach that we believe can help reduce generational poverty.

With and for parents who so desire, we intend to take a similar holistic approach with the children of Indianapolis Metropolitan High School students and graduates, Excel Center students and graduates, Goodwill employees with barriers, and families of all of these individuals. To the extent possible and desired by the parents, we intend to maintain these relationships for a long period of time – ideally, until the children are grown.

As this approach develops, it may increasingly resemble Goodwill’s approach in the late 1930s – only with much greater scale, current information and technology, and, hopefully, long lasting impact – in the lives of people and in the larger community.

Posted in Education, Employment, sustainability | Tagged , , , , ,

Adapting to Technological Changes

Posted on November 15, 2011 by

The fastest growing part of our organization is our ecommerce unit. By enabling us to sell many items for substantially more than they would sell for in a Goodwill store, our ecommerce operations enable us to be better stewards of the goods people give us. The growth of our ecommerce operations has also created a lot of jobs, as we currently have nearly 100 employees at clickgoodwill.com – over twice as many as we had at the beginning of this year.

Down through the years, technological changes have eliminated some jobs and created new ones. At Goodwill, for example, when I started my career we repaired radios and television sets. Doing so wasn't too difficult in those days. The sets used vacuum tubes (younger readers, look it up on Wikipedia), and we had a tube tester. Check the tubes, replace the bad ones, and many of the sets would work just fine. Vacuum tubes were eventually replaced by solid state electronics, and this effectively put an end to our repairing radios and TVs.

During those same years, we also repaired toasters and other small appliances. Over time, though, technological improvements in the manufacturing processes and increased sophistication of the products, coupled with rising labor costs, made many new small appliances less expensive than the cost of repairing broken ones. Fortunately, in more recent years, technological improvements have also helped create recycling and secondary markets for many products that can no longer be repaired economically.

Another example: From 1974 till 1992, we manufactured high quality oak file boxes for 3×5 and 5×8 cards for the federal government. For quite a few years we had 18 employees – most of them people with disabilities – who produced an average of 50,000 boxes a year. But over time, as the use of personal computers rose, the use of file cards fell and, consequently, the government didn’t need as many of the boxes. Eventually, the volume declined to the point where we exited that business.

Our involvement in online retailing began very slowly about twelve years ago after Goodwill in Orange County, CA created shopgoodwill.com. The Orange County Goodwill continues to maintain that 7-day auction site, which is designed to enable any Goodwill organization to post items on it. About five years ago, we began to increase our use of shopgoodwill.com, and we also began posting some books on several book-selling Web sites. We subsequently added CDs, DVDs, video games, and jewelry to the array of items we could effectively sell online. Better software and packaging equipment have improved our efficiencies to a remarkable degree, and we believe there is enormous additional growth potential in that part of our organization.

Of course, as is the case at most relatively large organizations, new technologies have created other entirely new departments at Goodwill. Known in many companies as IT (Information Technology), in our organization it’s TS (Technology Solutions). Composed of bright, talented people, TS keeps us connected, helps develop and optimize uses of technology to improve our effectiveness, and helps us be good stewards of our resources. As the organization continues to evolve, so too do the services of the Technology Solutions department.

While we’ve come a long way, we can be sure that technological changes will continue to create new challenges and opportunities for us. We can also be sure that if we do not adapt well enough to those changes, we will be left behind – less effective, perhaps irrelevant, and in a worst-case scenario maybe even extinct.

Posted in Evolving, Growth | Tagged , , , , , | 1 Comment

Newton’s Laws and Goodwill

Posted on October 17, 2011 by

In high school and college physics, I became well acquainted with Sir Isaac Newton’s Laws of Motion. After nearly four decades as a CEO, I’ve concluded that the concepts underlying at least two of those three laws apply to organizations – actually, to institutions of all kinds – as well as to the physical world.

For example, Newton’s First Law of Motion – the Law of Inertia – is often paraphrased as “A body at rest will stay at rest until acted upon by an external force.” How can that apply to organizations? It’s been my observation that the more an organization is removed from day-to-day competition (a powerful external force), the slower it is to adapt as its external environment changes.

When you are subject to competition on a day-to-day basis, there’s more of a sense of urgency, more of a drive to improve. You know that if you don’t improve, someone is going to take your customers (or in the case of a school, your students) away from you. For organizations that lack strong competition, the faster the rate of change on the outside, the more they tend to lag. They might survive, but they are likely to become increasingly ineffective.

This is not generally as much of a problem in the for-profit world as it can be in the public and not-for-profit sectors. In the for-profit world, if you don’t successfully adapt to external changes – including new or stronger competition – in most cases you will become extinct.

Newton’s Third Law of Motion – or a reasonable facsimile thereof – also applies to institutions. This law is often stated, “For every action there is an equal and opposite reaction.” A Corollary might go something like this: “For every excess there will be a proportionate reaction and correction. The greater the excess, the greater the pain associated with the correction.”

Think about that in light of the financial problems currently plaguing the U.S. and much of the rest of the world. For example, excessive spending (and related borrowing) by individuals, organizations, or governments will eventually prompt a correction. Sometimes the correction will come only after years of excess. But eventually it will come. And with the correction will come pain proportionate to the degree of excess.

Of course, excessive conservatism can also be a problem. Companies that do not spend enough to properly maintain their physical assets, develop and retain their human capital, and improve their productivity are jeopardizing their future. They can also jeopardize their future when they fail to invest in opportunities for which they are well-suited, thus leaving the door open for more aggressive, well-managed competitors to increase their strength.

Governments – cities, states, nations – that fail to adequately maintain their infrastructures will eventually have a huge price to pay – and you can count on a strong reaction from their citizens when the bill and the pain associated with it come due.

While we take nothing for granted, at Goodwill we’ve thus far been able to avoid the kinds of excesses that can jeopardize an organization’s future. Goodwill is also fortunate to have functioned in a competitive marketplace since its founding. From the beginning, we have operated a commercial enterprise that sells goods to the public as a primary means of accomplishing our mission. This has been a driving force in creating and sustaining the culture of our organization and is a major reason we’ve grown and evolved the way we have.

Posted in Business and Mission | Tagged , , , ,

Head and Heart – an Unbeatable Combination

Posted on September 28, 2011 by

One of the keys to our organization’s success has been our ability to attract and keep a lot of terrifically talented people. As a large, diversified organization that operates in a highly competitive environment, we require a level of talent comparable to that of any organization of similar size in any of the sectors. The fact that over half of our 2500 employees rely on us as the primary source of income in their households further magnifies how essential it is for us to have people who can operate our businesses really well.

There’s a major difference, though, between our requirements and – with some notable exceptions – those of most companies in the for-profit world. For example, in our retail, commercial services, and support functions (e.g. Accounting, IT, Human Resources, Facilities Management, Marketing), we must have a lot of people who have really good business or related functional skills. In addition, though, they must also have a strong commitment to our mission. We must have the “head” and the “heart.” For Goodwill – a not-for-profit social enterprise – that’s an unbeatable combination.

Commitment to mission has always been an important requirement in all parts of our organization, and for many years we’ve also recognized the need for good business skills in our retail and commercial services operations. But early in my career I did not appreciate enough how important it is for us to also have top talent in our support functions. When we finally started hiring people who could elevate the performance level of those functions, we found that they added substantial value to the direct service and revenue generating parts of the organization. From that experience, I concluded that it’s a mistake to try to minimize overhead. Rather, our objective should be to optimize it. We’ve also seen that in any part of our organization highly talented people who are committed to mission enable us to be more effective and more productive. In other words, they enable us to be better stewards of our resources. They earn their keep many times over.

There are a lot of talented people who want more meaning from their work. Hardly a week goes by that I don’t talk with at least one person who has spent the last fifteen or twenty years in a job or career that he or she doesn’t enjoy. They are looking for more satisfaction out of what they do to earn a living, and many of them are hoping to find such an opportunity in the not-for-profit world.

This desire for more meaning is not confined to people in the U.S. Recently, a manager in a Goodwill store in South Korea told me he was 50 years old, had 21 years of retail experience, and had wanted more meaning out of the work he would do for the rest of his life. Goodwill in Korea gave him such an opportunity, and he felt he was now in his “second life.” From what I could tell, he and Goodwill in Korea are fortunate to have each other.

I do not believe that one can find such meaningful opportunities only in a particular type of organization or sector of our society. In fact, I know there are many unfulfilling, unrewarding situations in the not-for-profit world, as well as in other sectors. But I’m certainly grateful that our organization has been attractive to a lot of highly talented people who, with Goodwill, have found a place that’s a good fit with their “heads” and their “hearts.”

Posted in Business and Mission | Tagged , ,