Goodwill and Politics

During my career, which now spans four decades, there have been leaders from both major political parties at various times at local, state, and national levels. We’ve worked well with both Democratic and Republican administrations.

Goodwill is fortunate to have a mission that transcends politics and has appeal across political lines. Our employees, members of our boards of directors, donors, shoppers, students, and others we assist have political leanings that cover the entire spectrum. However, as we go about our work, we tend toward the practical rather than the ideological. We agree on a goal, find common ground around the means to achieve the goal, work together, and accomplish a lot. We’re mainly interested in what works – as long as the means are consistent with our values and basic principles, some of which are:

• Every individual has value, and we strive to treat everyone in a respectful manner.
• Work adds meaning and purpose to life.
• Goodwill offers opportunities, not charity, and fosters development, not dependency.

Opportunities we offer include employment for people who have had limited options because of a disability or other barrier. We also offer opportunities through our Excel Centers for adults who want to earn a high school diploma and begin work on a post-secondary credential that will enhance their employment options.

During the recession of the early 1980’s, we concluded that nothing would help our organization or the people we assist more than a strong, growing economy. That continues to be the case. Also, it seems to us that the better we develop the potential of our people – especially by increasing education attainment levels – and provide conditions that enable people to productively use their talents, the stronger the economy is likely to be.

As our organization has evolved, on numerous occasions we’ve redeployed resources from efforts that were marginally effective to initiatives that showed more promise. Over time, this shifting of resources, combined with a substantial increase in our pool of talented people – our human capital – has enabled the organization overall to grow not only in size, but in long term impact.

Unfortunately, over the last forty years, we’ve seen in our society negative trends in a lot of social indicators, including poverty rates, education attainment levels, incarceration rates, and a lot of health-related issues, despite a lot of well-intentioned programs that have cost enormous amounts of money (see my July 6, 2011 post). Fortunately, there have also been a few programs that randomized controlled trials have shown to be highly effective in preventing problems and developing potential. One of those is Nurse-Family Partnership, which Goodwill is implementing in Indianapolis.

In the face of massive federal deficits, it would seem reasonable to reduce or eliminate funding for programs with marginal effectiveness and increase support for evidence-based programs that produce significant long term impact. The future economic and social benefits could be enormous.

Reasonable people can and will disagree over many things, including how best to reduce social problems and generate a higher rate of growth in the economy. However, in the face of such disagreements, reasonable people must try to find common ground and not allow their view of the perfect to be the enemy of the good. My hope is that enough of our elected leaders in both major political parties would resolve to overcome and move beyond a toxic political atmosphere and resulting gridlock that have been preventing steps that might lead to a stronger, healthier, more civil and economically vibrant society that would benefit all citizens, including those we assist at Goodwill.

Newton’s Laws and Goodwill

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.

Goodwill and the Economy

Goodwill in central Indiana was founded in 1930 during the depths of the Great Depression. Since that time the organization has experienced the effects of several recessions, several wars, many changes in the political landscape at the local, state, and federal levels, and incredible technological changes.

During the recession of the early 1980s, it became apparent to us that nothing would help Goodwill or the people we assist more than a strong, growing economy. That continues to be the case.

Despite the economic challenges of the past several years, though, Goodwill has had some significant growth. At the end of 2007, we had 1867 employees in central Indiana. Today we have 2500, nearly 2/3 of whom have limited options because of disability, criminal history, or low education level. We weathered the most recent recession better than we had any right to expect. However, with continuing uncertainty about the economy, the toxic political atmosphere in this country, and a widespread lack of confidence that our elected officials in Washington will be able to agree on a course of action likely to lead to a renewal of economic growth , we wonder if we will be able to continue to grow.

Time will tell, of course, but at Goodwill we’re in a stronger position today than we were in 2007. During the last three years we’ve taken advantage of some opportunities that were a consequence of the slow economy and opened several new stores that have been well supported by our customers and donors of goods. We have also invested in and seen rapid growth in our e-commerce operations, which now employ 80 people. The success of these initiatives has helped further strengthen our balance sheet.

The largest customers in our Commercial Services Division, which employs over two hundred people with significant disabilities, are in sectors of the economy that are more stable than many, and funding for the schools we operate is likely to remain reasonably stable.

It’s not all positive, of course. The outlook for job opportunities for people who come to us for employment assistance is not likely to improve – and may even worsen – thus placing even more importance on Goodwill’s ability to provide jobs for a lot of people with limited options. That, in turn, is dependent on our ability to continue to grow our businesses in a financially sustainable manner.

Also, the amount of money we have to invest in new initiatives might be reduced by the negative effect of market declines on the endowment in the Goodwill Foundation. Fortunately, we do not rely on those funds for day-to-day operations.

The brightest comment we can offer about the gloomy economic outlook is that it will continue to be a good time for people to upgrade their education and skill levels. For those who lack a high school diploma, it’s a great time to return to school. The Excel Center, launched by Goodwill Education Initiatives in 2010, offers a viable option for many adults, and we’ve expanded the school this year in response to heavy demand. And for adults who have some college, but no degree, this may be a very good time to go back and finish.

We have no control over the economy. But we do have control over how we respond and adapt to the circumstances we encounter. At Goodwill, we will continue to take actions that we believe will enable us to have maximum mission-related impact while maintaining a financial position that will enhance our prospects for continued long term viability.