Building Strong, Dynamic, Serving Institutions

Two pieces in the August 24, 2014 New York Times that were, on the surface, unrelated to each other offered insights on a topic I’ve been thinking about in recent weeks.

Tom Friedman’s column referred to the growing lack of order in the world – especially in societies that have overthrown autocrats, but not developed the values-based legal systems and institutions that enable people to grow and prosper. Tearing down the old order was much easier than building a new order with sustainable leadership and institutions.

The other piece, written by Stephanie Rosenbloom, was titled, “Dealing with Digital Cruelty.” It focused on how to deal with the nasty, often cruel barbs posted on social media by “trolls” who intentionally strive to distress or provoke and cause others pain. When I see comments of such people, I always think about how much easier it is to tear down an institution or the reputation of an individual than to build one. I take some comfort in the realization that most of those who delight in tearing down others have probably never built anything in their pathetically negative lives. But I’m also aware they can often do a lot of damage.

Three weeks ago I announced my intention to retire as President and CEO of Goodwill Industries of Central Indiana, Inc. in a little over 10 months. At that time I will have been in this position for 41 years. During those decades many talented colleagues and I have worked together to build an organization that is offering a wide array of opportunities to thousands of people who, in many cases, haven’t been dealt a very good hand in life. We haven’t succeeded at everything we’ve tried, but we’ve continued to learn, adapt as the world around us changes, and evolve to higher levels of impact in the lives of people and the communities where we operate. Today we have a tremendous pool of dedicated, talented people who bring their heads and their hearts to their work every day.

Over 20 years ago I began thinking of what we were trying to do as building a strong, dynamic, serving institution. And with a lot of help, we’ve done that. In addition to those who work in our organization, our helpers have included tens of thousands of people across central Indiana who donate goods, shop in our stores, hire our graduates, serve on our boards, or contribute money. They, too, are institution builders.

There are some indications that trust in institutions of all kinds is at an all-time low. It’s no mystery why. While no institution has ever been perfect, today the flaws are much more visible and tend to receive much more attention in the ever-present 24-hour news cycle than do the positive attributes. Couple that with the pervasiveness of social media and the tendency of negative stories – the more scandalous the better – to quickly go viral, and it’s no wonder that a lot of reputations – of individuals and institutions – have suffered.

I have no idea what the long term implications of these tendencies will be. But I’m quite certain that a decent, stable society will continue to need strong, dynamic, serving institutions that can function well over time despite the inevitable criticisms – justified or not – that come their way.

I’m also convinced that we will continue to need teams of passionate institution builders who devote their energy and talents over sustained periods of time to helping create a better society. At Goodwill we have been blessed with many such persons over the years, and I have no doubt that will continue to be the case as this organization continues to learn, adapt, and evolve to higher levels of service and impact.

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Two Stories

We have a lot of stories at Goodwill. Here are two recent examples – very different from each other, but each a great illustration of some of what gives our work at Goodwill so much meaning.

The Sanders Triplets

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Amber, Ashley, and Angel Sanders are identical triplets. They were raised by their grandmother because their mom had severe addiction problems, and their father wasn’t around. On two separate occasions, they were placed in foster care. During those early years, they struggled, but they didn’t give up.

They enrolled in and thrived at Indianapolis Metropolitan High School, the first charter school Goodwill opened. Graduating with honors in 2009, they received scholarships that covered all of their expenses at Indiana University, where they maintained GPAs above 3.0 and in 2013 graduated with bachelor’s degrees.

At IU, Amber and Ashley majored in East Asian Languages and Cultures. Ashley’s language focus was Korean, Amber’s was Japanese. Angel, who did part of her undergraduate work in Korea, had a double major in International Studies and Slavic Languages and Literature with a focus on Russian.

In their own words, they have “surpassed the stereotype of African-American women who have graduated from neither high school nor college.”

The Sanders sisters have been accepted by Yonsei University’s Graduate School of International Studies in Seoul. Their goal is to earn masters degrees, immerse themselves in an Asian culture, and become fluent in one or more Asian languages. They then hope to work in the United States or abroad for government or a multinational corporation, become connectors, and help bridge borders around the world.

I have no doubt Amber, Angel, and Ashley will achieve their goals.

Verdell

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In 2012, Verdell came to Goodwill through a work release program after serving 17 years in prison. Initially employed as a janitor in one of our outlet stores, she let it be known that while in prison she had learned to clean floors and loved cleaning floors. She was then moved to Goodwill’s contract site at the VA Hospital, where she had the opportunity to clean floors every day. She did so well she was promoted to a team leader position.

In November 2013, while attending a Goodwill safety meeting at the VA Hospital, Goodwill COO Kent Kramer, who was aware Verdell had been homeless, asked about her housing situation. She told Kent she had an apartment, and then Kent asked her if she had ever thought about owning a home. Verdell thought she could never afford that, whereupon Kent connected her with Habitat for Humanity.

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Goodwill and Habitat for Humanity have developed a very good relationship over the last several years, and Verdell was given the opportunity to start the process to become owner of a new HFH home. She got support from staff at both Habitat and Goodwill, put in a lot of “sweat equity,” and on June 14, 2014 was given the keys to her new home. As she said at the dedication ceremony, she had gone “from homeless to homeowner.”

These two stories illustrate a variety of ways Goodwill provides opportunities for people. Some of those we work with (e.g. the Sanders sisters) need assistance because of circumstances over which they have had no control. Others (e.g. Verdell) need help because of bad choices they have made. Regardless, when we provide the opportunities, it’s still up to the individuals to make the most of those opportunities. Most – including Amber, Angel, Ashley, and Verdell – do.

Goodwill’s evolution – an organic process

For years, I’ve considered the most unique aspect of Goodwill to be the way and the extent to which we blend business and a social mission. More recently, though, perhaps equally unique is the extent to which we are leveraging our resources and capabilities with those of others to create new opportunities that benefit people and communities. I’ll explain.

A lot of social problems have become worse over the last forty years despite massive increases in public spending and a huge proliferation of not-for-profit organizations. Part of the problem lies in the “silo” structure of the public sector and the fragmented nature of the not-for-profit sector. In many cases, organizations are doing very good work addressing pieces of a larger problem, but seldom have we been connecting the pieces well. As a result, we have not been solving the big problems.

A lot of our work at Goodwill is now focused on connecting pieces. Some of those exist within our own organization and some involve other organizations that have complementary capabilities. We see numerous examples of this, as Goodwill retail employees and Nurse-Family Partnership (NFP) moms enroll in an Excel Center or begin working toward a certification through a class taught by Ivy Tech or Vincennes University.

More examples: We have Eskenazi Health referring expectant mothers to NFP and also hiring graduates of The Excel Centers. We see Indianapolis Day Nursery Association offering employment to NFP moms, helping them work toward certifications, and providing high quality care for their children. And we see graduates of Goodwill-operated schools becoming employed with help from TalentSource, Goodwill’s job preparation and placement service.

The extent to which Goodwill is evolving into an array of networks that link services across organizational boundaries in a holistic, often whole family manner is unique. This approach brings high quality services together to make more effective use of existing community resources and result in greater lasting impact. With sufficient scale, this approach can play a role in reducing generational poverty.

The way we are evolving into this array of networks is not the result of a brilliant grand plan. Rather, it’s an organic process that is ongoing, and it’s largely a product of three primary factors:

  • A lot of smart, talented people who bring to their work not just their knowledge and skills, but also a strong commitment to what we are about – in other words, they bring their heads and their hearts.
  • A culture characterized, in part, by a constant desire to find ways to improve and further increase our long term impact in the lives of people and the communities where we operate. It’s also a culture in which people generally work well with each other.
  • Strong relationships with a lot of people in a lot of other fine organizations across all the sectors.

It’s also important to note that everything we do is built on a solid financial foundation that depends largely on the oldest part of Goodwill – our retail system, which provides jobs for 1300 people whose options are limited by disability or other significant barrier and that is, in turn, dependent on donations of used goods from and purchases by hundreds of thousands of central Indiana residents.

This organic evolutionary process results in a Goodwill that is constantly changing. We try things, we learn, we adapt as the world around us changes, and we evolve as an organization. It’s the approach we take to continue increasing long term impact and help reverse some of the negative trends we’ve seen in our society over the last forty years.

Some Implications of Becoming a Large Organization

Over the last decade, we’ve had enormous growth in our organization. We now have over 3,000 employees, nearly two-thirds with limited vocational options because of a disability or other barrier. We also have over 3,100 students in the ten schools we operate and 450 first-time moms and expectant moms enrolled in Nurse-Family Partnership. Our total revenues this year will be approximately $130 million. For a not-for-profit, we are a big organization.

Our size has many positive aspects. We have been able to attract a higher level of managerial and professional talent than was possible before, and this has enabled us to become substantially more productive and decrease the percentage of our revenue we spend on overhead.

Even more importantly, our heightened capabilities have also made it possible for us to greatly enhance the scope and quality of our mission-related services and develop new approaches that have substantially increased our long term impact in the lives of people and in the communities in which we operate. The work we are doing today is by far the best in our history.

But there’s also a downside.

The bigger and more visible we are, the bigger target we become. In addition to having a lot of employees, students, and people served in various other parts of our organization, we now have 2 million donation transactions and 5 million customer transactions a year. Bottom line: We have a lot of opportunities to make people like us or mad at us. And nearly all of them have access to social media.

We are also a complex organization that has been changing rapidly – especially over the last five years. Regardless of how much we’ve done to tell our story, most people have no idea of much of what we do. Perception always lags reality.

Moreover, while we have a lot of wonderful people doing terrific work, our organization is composed of 3,000 human beings, and not one of us is perfect. All institutions have flaws, and despite all the good work we do and all the improvements we have made, there is nothing we do that can’t be improved even more.

We always hope that those who talk or write about us – for example, through social or mass media – will treat us fairly. Our positives far outweigh our shortcomings, and we hope for perspective, a sense of context, and balance. If someone publicly calls attention to a flaw or a mistake someone in our organization has made, we hope they will give proportionate attention to the good things we do. We also know, though, that in this day and age such hopes are usually unrealistic. As negative emotions tend to be stronger than positive emotions, negative stories seem to attract a lot more attention – viewers, listeners, readers – than positive stories.

So what must we do? Obviously, we need to find more effective ways to increase awareness of our mission-related services and impact. But there’s more. With greater size comes greater responsibilities, and we must hold ourselves to an ever higher standard. While continuous improvement has been one of our Five Basic Principles for 20 years, we have to do more to improve every aspect of what we do. There is never any room for complacency. We must constantly work to raise our game.

And regardless of how others – individuals or media outlets – might treat us, we must continue to treat others as we would want to be treated. We must keep our focus on the work to be done, acknowledge and correct our mistakes when we make them, and continue to uphold our values and the basic principles by which we operate. And we will continue to become ever better stewards of all our resources as we work to help improve lives and strengthen communities. Because – even if others don’t recognize it – that is who we are.

A Macro Approach to Reduce Social Problems

As I’ve written before, despite the spending of billions of dollars by the public and not-for-profit sectors on all kinds of social problems, progress toward solving some of the problems is slow or nonexistent. One reason is that many of the problems are interrelated – they reinforce and compound each other, yet we tend to treat each of them in isolation from the others.

The public sector operates through silos that generally don’t communicate well with each other, while the not-for-profit sector is incredibly fragmented. Individually, many organizations do good work. But collectively we are not solving the big problems.

Bottom line: Overall, resources are not being utilized as effectively as they should be. Different approaches are needed. Here’s one.

  • At a high level (e.g. state or community), develop a scorecard that includes goals and metrics toward which resources can be aligned. High level goals should be designed to:
    • Drive up desirable social indicators such as high school graduation rates, post-secondary enrollment and completion rates, etc.
    • Drive down undesirable social indicators such as obesity, smoking, incidence of pregnancy among unmarried teens, recidivism rate of first-time offenders, etc.
  • Create networks of organizations that leverage their resources to accomplish what none could accomplish on its own. Each network must have one or more clear, measurable objectives that are aligned with the overall high level goals. The participating organizations should have complementary resources and mutual trust in one another. Their respective roles must be clearly defined, and they should strive for collective impact.

There must be a “backbone” organization with a strong infrastructure at the core of the network. The backbone organization “owns” the overall effort and is accountable for the results. It creates the network, keeps the various parts aligned toward the common goal, provides support as needed to the various players, and tracks and analyzes data. In some situations, a backbone organization might help strengthen the network by strengthening a strategically important partner. For example, the backbone organization might provide back office services to a partner organization that provides important direct services, but has a weak infrastructure. Of course, there might also be times when the backbone organization will find it necessary to replace a partner.

Individual organizations that desire to be part of a network must:

  • Understand their context. How does what they do relate to what others around them are doing? Where do they fit in the communities in which they operate?
  • Where do they fit in the field(s) in which they are engaged?
  • Have a realistic understanding of their strengths.
  • Determine how they might add unique value to help maximum long term impact.

The philanthropic sector can help by:

  • Supporting the development and/or growth of backbone organizations.
  • Supporting networks that are collectively working in focused ways toward a big goal.
  • Giving preference to evidence-based programs that have demonstrated long term impact.

Governments can help by:

  • Giving preference to funding of evidence-based programs.
  • Fostering the use of impact investing pay-for-success approaches that increase the productivity of tax dollars.
  • Creating their own networks to better leverage resources across public sector silos.
  • Focusing more on the change they want to occur as a result of the program or service they are funding and being less prescriptive about how the work must be done. They should focus less on how much is spent in various expense categories and more on the cost per outcome and, where possible, on ROI metrics.
  • As much as possible, ensuring that bureaucracies function in ways that are likely to enhance rather than detract from accomplishment of the goal.

Others might have better ideas than these. Regardless, the status quo is not an option.