Collaborating to increase impact

The fragmented structure of the not-for-profit sector makes it very hard to aggregate capital or talent and develop scale for greater impact. There’s also a lot of reinventing of the wheel. While, in theory at least, the overall effectiveness of the sector could be improved by a fair amount of consolidation, mergers of not-for-profits are very hard to bring about. Egos and turf issues can get in the way, and sometimes it seems the smaller the organization, the bigger the battle.

Still, if we are to significantly alleviate some of our country’s most pressing social problems, we need to make more effective use of existing resources – in part, by combining and leveraging some of those resources in different ways. Much of this can fall under the general heading of “collaboration.”

Over the last 20 years we have been involved in collaborative relationships with many different organizations. Some of those collaborations have caused some good things to happen that otherwise probably would not have happened. In some cases, though, the collaborations were effective only at wasting time.
Our most successful collaborations with other organizations have been those in which:

  • We and our partner have a common goal – with specific, measurable objectives – around which the collaboration is built.
  • We have compatible values.
  • We have complementary resources.
  • We trust each other (Without this, the collaboration will almost always fail)

Additionally, in an effective collaboration:

  • Each party must bring something of value to the table, and each must benefit from the collaboration.
  • The mutual trust and respect among the parties must go deeper in the organization than just board to board or CEO to CEO. Effective working relationships and trust at multiple levels are essential. We have never had any success where the CEO of a collaboration partner was in favor, but key people at lower levels were not.
  • All parties must conclude that they can accomplish more toward a specific objective by working together than by going it alone.
  • Each party must resist the temptation to seek recognition or credit for itself, but be willing to give credit to the other parties or to the collaboration as a whole.
  • All parties must realize that there will be compromises in the process and that change in the program or service over time is inevitable.
  • Roles must be carefully defined and put in writing.
  • Issues and disagreements must be confronted directly and immediately.

Great care must be taken in selecting collaboration partners – especially when the organizations are very different in size and may have different ideas about the importance of the collaboration. We have also been involved in a few situations in which we were simultaneously competitors and collaborators with another organization. If this were easy, I suppose we would have done a lot more of them.

It’s also important to keep in mind that a successful collaboration can be undone as a result of a change in one key person. In reality, we don’t have relationships with other organizations; we have relationships with individuals in those organizations. When key players change, we must develop relationships with the new players.

Despite the difficulties, developing focused collaborations can be well worth the effort and go a long way toward making better use of our collective resources and increasing our combined positive impact.
Collaborating to increase impact

Why do some social problems persist. . .

Why do some social problems persist despite massive expenditures to solve them?

Consider the following:

  • From 1968 to 2007, the amount of money spent on income security programs – the bulk of all federal anti-poverty spending – increased 484% in constant, inflation-adjusted dollars. Yet, the poverty rate is higher today than in the early 1970s.Federal Anti-Poverty Spending and Poverty Rates graph
  • Per-pupil spending – in constant dollars – on public K-12 education has more than doubled since 1969. Yet, measures of education attainment have fallen (e.g. On the U.N. Education Index the U.S. ranking has dropped from No. 1 in the world in 1980 to No. 17 in 2010).Elementary & Secondary Education Spending and High School Graduation Rates graph
  • We are incarcerating people at three times the rate we were in 1980 and four times the rate we were in 1970.Correctional Spending & Population graph

Consider, too, that as public spending on education and a wide array of social programs has increased, so too has the number of not-for-profit organizations. Yet, many major social indicators have gotten worse instead of better.

Why?

The root causes are debatable, but it’s safe to say there’s no single reason. Regardless of the causes, we have an enormous problem for which there is no quick fix. Long term thinking is essential, as is a willingness to face facts.

There is an enormous amount of data showing the links among poverty, low education levels, crime rates, teen pregnancy, and a number of health issues. They are inter-related and tend to negatively reinforce each other. Yet, we tend to treat them individually.

The public sector has a lot of resources, but typically administers them in large, bureaucratic silos – education, workforce development, social services, criminal justice, housing, transportation, etc. More often than not, those silos don’t communicate well with each other.The Public Sector graph
Meanwhile, the not-for-profit sector is composed of hundreds of thousands of mostly small organizations that do a lot of good work, but that typically focus on one problem, one target population, or one (often tiny) geographic area. It’s an incredibly fragmented sector that has great difficulty replicating what works and achieving scale.Not-for-Profit Sector graph

While a lot of the pieces needed to reduce some of the problems do exist, neither of our “helping” sectors is structured to deal effectively with complex social problems. Yet, our experiences working with people in high poverty situations reinforce the notion that if we are to have significant, long-lasting impact helping people move out of poverty, we must work with them holistically, in many cases with the whole family, and over an extended period of time.

We cannot solve our major social problems by layering on another massive bureaucracy, and spending more money to do more of the same won’t work either. We must try some different approaches.

So what can we do?

We can improve overall results by learning how to combine resources across organizational lines and across the sectors, aligning them in new ways toward specific goals. The not-for-profit sector could become more effective with a lot of consolidation, and social enterprises (organizations that operate businesses as a means of accomplishing a social mission) can play an increasing role, as can the emerging field of impact investing.

Our problems are pervasive enough that we need to attack them on multiple fronts simultaneously. But to substantially alleviate poverty in the U.S., the greatest long term impact would come from focusing on children in low income households from the womb to kindergarten. I’ll write about that in my next post.

Evolving to Increase Impact

In the late 1980s, most of the people we worked with were adults with disabilities. We employed several hundred and helped others become employed with other firms. Then we were asked by a state agency if we could help “welfare” recipients find jobs. We found that we could, but only low paying jobs because hardly any of them had high school diplomas. Still, we continued to provide “welfare-to-work” services for 17 years. Meanwhile, we also continued to work with people with disabilities. We had simply expanded our scope to include more people than before.

In the early 1990s, unemployment in the Indianapolis area was very low, and employers were desperate for workers. We responded by aggressively trying to find anyone who was employable, but not working, and helping them find jobs. In addition to persons with disabilities and those on public assistance, we started assisting larger numbers of people coming out of the corrections system and newly-arrived immigrants with poor English language skills.

In the mid-1990s, we became involved in the operation of the one-stop employment service centers in Indianapolis, which were serving an average of 45,000 unemployed people each year. When we started examining demographics, we found that 50% of those individuals did not have high school diplomas.

About the same time we were becoming increasingly aware of the magnitude of the dropout problem in several of the city’s high schools, and we began to wonder if, as an organization, we had anything to offer young people who weren’t headed in a positive direction. We thought that if we could help them stay in school and graduate, they would be less likely to need Goodwill’s services once they became adults. Therefore, our organization’s long term impact would be greater.

We became involved in a number of small scale initiatives with local schools, found that we did have something to offer, and started exploring ways to maximize our impact. That led to a decision to start a charter high school that has now completed its seventh year of operation. The learning from that experience and the relationships that have developed led to our designing and launching a second school, the Excel Center, to provide a diploma option for older youth and adults who had dropped out. The demand for space in the Excel Center has been overwhelming, and we will begin replicating the school this fall.

These and all other major steps we’ve taken during the past twenty-five years have been to increase the organization’s long term impact. A few years ago we articulated the following as the ways Goodwill can add the greatest value in the communities in which we operate. Those are:

  • Help young people and adults who have struggled or failed in other educational settings complete high school and attain a post-secondary degree or other recognized credential.
  • Employ people whose work options are limited by disability, criminal history, low education level, or other significant barrier to employment.
  • Help unemployed people become employed.
  • Leverage Goodwill’s resources with those of others to help develop and implement practical, effective approaches to reduce major social problems.

Of those four, only one – providing employment for people with limited options – has been part of the organization since its founding in 1930. The others are a reflection of how we have evolved over time as we’ve learned more, our external environment has changed, and our internal resources have increased.

That process continues.

Some Basics for a High Performing Organization

Following, in a format intended for leaders, is a summary of some of the basics for a high performing organization in any of the sectors.

    • Understand the goal. Know what you want to accomplish, how it fits into a larger context, and how you will measure success.
    • Seek out and bring on the best talent you can find.
    • Put those people in positions where they will be able to use their abilities and perform at a high level. Make sure they have the tools, other resources, environment and an organizational culture that will enhance their performance.
      • It’s the leader’s job to make resources productive. This applies regardless of the leader’s title (e.g. CEO, director, manager, supervisor, coach, principal, superintendent, etc.). Every person and every organization will have strengths and weaknesses. Organize around and build on the strengths; make the weaknesses irrelevant. Never put a person in a position where a weakness of that individual would undermine prospects for success. Never set a person up to fail.
      • The leader should provide support, encouragement, coaching, feedback, constructive criticism when necessary, and should help each person continue to learn, grow, and develop. The leader might also need to help resolve problems and conflicts that arise, as well as know when to stay out of the way and let people learn from and grow from their experiences.
      • Crucial questions: Can the leader attract and keep top talent? Do really good people want to work for this person? Does this person help good people become even better?
        • As much as possible, people should seek positions where:

        • There is a good values fit.
        • They can substantially use their abilities.
        • They can learn and grow.
        • They are likely to enjoy the people they work with.

To what extent does the leader provide this kind of situation?

Align everything in the organization toward accomplishment of the goal.

      • Governance
      • Organizational structure
      • Resource development and allocation
      • Recruitment, hiring, and training
      • Leadership development
      • Performance reporting
      • Policies and practices
      • Internal and external communications functions

In addition, do everything possible to ensure that the organization’s internal bureaucracy functions as an enabler and not a hindrance to accomplishing the primary goals.

ALL of the above should be mutually reinforcing and MUST be aligned with the ultimate goal. If any significant factor is not aligned with the ultimate goal, high performance will not be possible.  As others have noted, most organizations are perfectly aligned for the results they are getting.

Finally, keep in mind that none of the above will be static.  As Collins and Porras pointed out in their book, Built to Last – Successful Habits of Visionary Companies, organizations that thrive, not merely survive, over long periods of time have constancy of purpose and a few core values.  But everything else – including everything on the above list – changes over time as new needs and opportunities arise, as people come and go, and as the external environment changes.

Context and Change

Organizations that want to be effective for very long must understand their context – their context within the communities in which they operate, their context within the larger society, and their context within the industry or industries in which they compete. They need to understand where they fit and how what they are doing relates to what others around them are doing.

They also need to have their antennae out and constantly be alert to changes in their external environment. They need to be aware of what’s happening “out there” – changes in the economy, demographics, technology, the competitive landscape, the legislative and regulatory environment, etc. – that could affect what they do or how they do it – that could create a new opportunity or pose a threat.

Organizations that fail to understand their context or the changes taking place in their external environment run a serious risk of becoming irrelevant or extinct. This happens far too frequently  – especially among smaller organizations in which the chief executive is too preoccupied with day-to-day operations to pay enough attention to what is going on outside the organization.

The more an organization is removed from day-to-day market forces, the greater the danger it will develop 20/20 tunnel vision and eventually be blindsided. People in leadership positions in some not-for-profits can also be so focused on and passionate about what they are doing that, even if they are aware of external threats, tend to ignore them and just hope they’ll go away. Organizations that allow themselves to engage in such wishful thinking may have a short life.

Of course, once you’re aware of changes that might affect your organization, you have to decide how to respond. During my career we have had to adapt to an incredible number and variety of changes in the world in which we operate. Some of the changes we’ve made have been incremental; others have been more revolutionary. Some have involved launching new initiatives; others have involved shutting down operations or services.

We put a lot of emphasis on continuous improvement and innovation. If you look at what we are doing this year compared with last year, you might not see a lot of change. But look back five or ten years, and you might wonder if it’s the same organization.

Occasionally, someone will ask me what I’m most proud of in my work with Goodwill. The answer is not any particular initiative or development. What I’m most pleased with is how far we’ve come over time. We’ve grown, to be sure. But the level at which the organization functions is orders of magnitude higher than it was 30 or 40 years ago. Our challenge is to continue raising that level, increasing the organization’s impact, and making better use of all of our resources. And that will continue to involve frequent incremental improvements,  occasional major innovations, and constant adaptation as the world in which we operate continues to change.