Category: Growth

Second Chances

jmmcclelland

It’s not unusual to hear someone speak of America as a land of second chances. In this country, most people tend to be reasonably forgiving and willing to give a person another chance – most of the time and within limits, at least.

Neither is it unusual for me to hear people at Goodwill talk about how we or someone in our organization gave them a second chance. I frequently hear this from students in our Excel Centers. Our students are older youth and adults who, for any of a variety of reasons, had dropped out of school. While many of them later wanted to complete the work required for a diploma, the options available to them just didn’t fit their life circumstances.

Since we opened the first Excel Center, the demand for space in these unique high schools has been phenomenal. From 300 students in one location just three years ago, we now have nearly 3,000 students in nine central Indiana locations. All of our students have enrolled voluntarily, and most are grateful to have another chance to complete what they didn’t finish the first time around. Better yet, their opportunities don’t end when they receive their diploma. If they have the desire and are willing to put forth the necessary effort, Goodwill will continue to work with them until they attain a post-secondary credential, become employed, and remain in the workforce for at least a year.

There’s another group at Goodwill that is benefiting from a second chance. Over 300 of our employees have criminal records, and many of them have had a very hard time finding an employer who would give them an opportunity to start life anew. Does it always work out? Of course not. But most of the time, it does. The benefits – to the individuals who have been given a second chance and to our society at large – are huge.

Throughout its history, Goodwill has employed a lot of people few others seemed willing to hire – whether because of a disability, a criminal history, a low education level, or some other barrier. In many cases, rather than a second chance, Goodwill has given them a first chance to become productive, contributing citizens.

There are limits, of course. While we are happy to work with those who put forth their best effort and try to do a good job, those who make it difficult or impossible for us to trust them will seldom find another opportunity in our organization. Neither will those who demonstrate a pattern of treating others poorly.

On the other hand, employees who demonstrate good work habits and a good attitude, consistently treat others with respect, have a genuine desire to improve their education and skill levels, and are willing to put forth the necessary effort to do so may qualify for assistance from Goodwill that can lead to better career opportunities with us or with another employer. The options available through Goodwill or other entities with which we have strong relationships are greater than ever.

One of Goodwill’s historic values is that we provide opportunities, not charity, and foster development, not dependency. That value is just as strong today as it was when Goodwill was founded in the early years of the 20th century – whether it’s a first, second, or maybe even a third chance.

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Improving Over Time

jmmcclelland

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.

Adapting to Technological Changes

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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.

An entrepreneurial culture

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“Continuous improvement,” one of our Five Basic Principles, has become so ingrained in our organization’s culture that our people implement countless relatively modest, incremental improvements throughout Goodwill each year. Cumulatively, those mostly small improvements make an enormously positive difference in the quality, effectiveness, and productivity of our work.

In addition, though, we have an entrepreneurial inclination that has been a huge factor in how we have grown and evolved over the years. I recently compiled a list of 95 significant initiatives we’ve undertaken during the last 37 years. Some were completely new business ventures or mission-related services, while others were major variations or extensions of something we were already doing. The financial investments associated with those initiatives have varied substantially, and in several instances the risks to our reputation have been greater than the financial risks.

I classified the success (or lack thereof) of those initiatives in baseball terms. Here are the results:

  • 10 home runs (six with bases loaded)
  • 73 singles, doubles, and a few triples
  • 12 strikeouts (one with bases loaded)

I don’t know if there’s any real significance to the fact that the number of home runs and strikeouts have been approximately the same, but it might be a reasonable indicator of our tolerance for risk. Of course, the fact that we’re not only still around, but are doing pretty well overall, is evidence that we haven’t bet the whole organization on any of those initiatives. And the overwhelming success of the “grand slam” home runs has far outweighed the cumulative effect of all of the strikeouts.

The primary key to our ability to take this approach has been and remains our board of directors. They’ve not only given us the freedom to try lots of different ways of growing the organization and increasing its impact, they’ve also given us the freedom to fail at some of what we try and learn and grow from the experiences. Of course, it helps that our batting average over the years has been pretty good.

In a piece titled “Fail often, fail well” in the April 14, 2011 issue of The Economist, Schumpeter wrote, “The best way to avoid short-term failure is to keep churning out the same old products, though in the long term this may spell your doom. Businesses cannot invent the future – their own future – without taking risks.”

The same column noted that “there is no point in failing fast if you fail to learn from your mistakes.” We’ve been fortunate in having had a lot of continuity among people in key positions – especially at the board and senior management levels. This has blessed us with a strong institutional memory, which helps prevent us from repeating our mistakes. Of course, because we have strong entrepreneurial instincts, we’ll make new mistakes. But that’s OK as long as we continue to ensure that the risks we take are prudent and that we continue to learn and grow from our experiences.

Change

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There are a lot of wonderful quotes on the subject of change. Some of my favorites are:

“It is not necessary to change. Survival is not mandatory.”  –  J. Edwards Deming

“Things will get better – despite our efforts to improve them.”  –  Will Rogers

“Change is not a problem to be overcome. It is the essence of business success.”  –  From Complexity and the Nexus of Leadership by Goldstein, Hazy, and Lichtenstein

“Change is debilitating when done to us, but exhilarating when done by us.” – Rosabeth Moss Kanter

“People don’t resist change. They resist being changed.”  –  Richard Teerlink

“No organization is so screwed up somebody doesn’t like it as it is.”  –  Anonymous

“He stayed the same as before, but the same was no longer befitting.”  –  Cicero

“Change is good. You go first.”  –  Dilbert

“If you can’t learn to love change, at least learn to live with it without whining too much.”  –  Jim McClelland (I had to include one of my own)

There are three basic reasons for change in an organization:

  1. Sometimes we initiate change because we see an opportunity – including an opportunity to improve or innovate.
  2. Sometimes we initiate change because of something we think or fear might happen.
  3. Sometimes we are forced to change in response to something that has already happened.

We’ve had plenty of examples of all of these in our organization, as over the years we’ve tried an enormous number of different ways of growing our businesses and accomplishing our mission. Some of those initiatives have been wildly successful, some have worked out reasonably well – at least for awhile, and some have been miserable failures. But we’ve learned from all of them. Over time, this approach has resulted in a culture in which change is normal and expected, though certainly not always loved and embraced.

In his book, Managing in a Time of Great Change, Peter Drucker wrote, “Society, community, and family all try to maintain stability and prevent, or at least slow down change. But the modern organization must be organized for innovation, or ‘creative destruction’. We should periodically ask of every process, product, procedure, and policy, ‘If we did not do this already, would we go into it now, knowing what we know now.’ If the answer is no, then we must do something – plan abandonment.”

The first time I had to shut down something I had started, it was difficult. Over time, though, as an increasing number of our initiatives have outlived their usefulness, we’ve become pretty good at it. Of course, we always try to minimize the impact of those changes on our people, and I’ve concluded that the more we can help our employees learn and grow, the better able they will be to adapt to the changes they will face – in our organization, with other employers, or in other aspects of their lives.

Continuous learning may, in fact, be one of the keys to effectively adapting in an era of rapid change. As Eric Hoffer wrote, “In a time of drastic change it is the learners who inherit the future, while the learned usually find themselves beautifully equipped to live in a world that no longer exists.”