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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On Lifelong Learning

Jim-StudentInteraction
Jim McClelland shares a laugh with a graduate of the Indianapolis Metropolitan High School.

When I was 17, I thought I knew a lot. Throughout my adult life, though, the more I’ve learned, the more I’ve realized how little I know. I figure if that process continues long enough I will eventually reach the logical conclusion that I know absolutely nothing. (I realize that just confirms what some of you have always thought….)

Nevertheless, I don’t think we can overemphasize the importance of being a lifelong learner. This is particularly true for anyone who works or wants to work, as changes occur at such a rapid rate we have to keep learning just to stay current in whatever field we’re in or, in many cases, be employable at all.

I’ve had the same title at Goodwill for forty years, but the work I do today is vastly different from what it was even a few years ago. In part, the changes in what I do and how I go about my work are reflections of how we have adapted to enormous changes that have taken place over the years in demographics, technology, the economy, competition, laws and regulations, and American culture. Goodwill has also changed in response to what we’ve learned from our own experiences, from the experiences of others, and from research. And we’ve changed as a result of the different perspectives, insights, knowledge, and skills of people who have become part of our organization and caused us to question old assumptions, ask different questions, and consider new approaches.

From a personal standpoint, I have learned an enormous amount over the years from being in a position to work with people at nearly every level of society and in all parts of a community. I’ve also had the opportunity to work with a lot of people at national and international levels, try to understand their experiences and perspectives, and learn from them. The variety is tremendously appealing to me, and having those experiences has caused me to be skeptical of anyone who claims to have all the answers.

I also read a lot. I read to stay current with what’s going on in the world and in my community. I read in hopes of learning something that will help me do a better job or be a better person. I read for insights and to learn about topics I’m interested in. And sometimes I read simply for pleasure and no other purpose.

My regular reading includes publications with different perspectives, as I do not want to confine myself to being exposed only to the thoughts and opinions of those who have one particular point of view. Gary Hamel’s book, Leading the Revolution, (Harvard Business School Press, 2000) reinforced my desire to try to understand and learn from people with different experiences and perspectives. My notes on that book include:

  • Most people in an industry are blind in the same way. They’re all paying attention to the same things and not paying attention to the same things.
  • Insights come from new conversations. All too often, strategy conversations in large companies have the same ten people talking to the same ten people for the fifth year in a row. They can finish each other’s sentences. You’re not going to learn anything new in this setting.
  • There is so much individuals cannot imagine simply because they are prisoners of their own dogma.
  • The more you pay attention to information that supports your world view, the less you learn.
  • You can’t use an old map to find a new land.

While Hamel was writing primarily for leaders in business and industry, perhaps his admonitions could also be helpful in other aspects of a society that has become dismayingly polarized over many issues.

Forty years experience summarized on one chart

Forty years after starting my Goodwill career, I attempted to summarize on one chart the essence of what I have learned about the ingredients necessary to sustain organizational success over a long period of time. Here’s a brief explanation of what appears at the end of this post.

  • Every organization exists in a larger context and is affected by many external factors, including changes in the economy, demographics, technology, competition, laws or regulations, the political climate, and external shocks, which can be natural or man-made disasters. Organizations must be able to adapt quickly and effectively to such changes or risk becoming ineffective, irrelevant, or extinct.
  • It can be useful to keep in mind that organizations change for three reasons: They see a need or an opportunity; they have a sense or fear of something that might happen; or they change in response to something that’s already happened.
  • Organizational leadership in the not-for-profit sector is a function of three components: governance, management, and aspirations (or vision). The organization’s leaders should begin with the end in mind, i.e. by asking how they will measure success. They should translate the aspirations into concrete, measurable goals and align everything toward the goals, including organizational structure, business models, products and services, resource development and allocation, recruitment and hiring, training and development, performance reporting, recognition and reward systems, policies and practices, internal and external communication, and organizational culture. The leaders should be aware that most organizations are perfectly aligned for the results they are getting, and if any major factor is significantly out of alignment, it will be nearly impossible for the organization to excel.
  • The leaders must also recognize that none of the above is static. Everything is subject to change as new opportunities or challenges arise and as the external environment changes.
  • Success is a function of three elements: (1) impact, which is a function of mission-related results, (2) sustainability, which is a function of financial strength, and (3) adaptability, which is a function of the organization’s culture. An organization can be successful for a time with just the first two, but it will cease being so if its culture does not enable it to adapt effectively as the world in which it operates changes.
  • A good overall objective for a not-for-profit organization is to maximize mission-related impact while maintaining a financial position that enhances long term viability.
  • The leaders of a successful organization must constantly be aware that sustained success can result in succumbing to the demons of inertia, complacency, myopia, or arrogance. They must remind themselves of the old proverb, “Whom the gods would destroy they give forty years of success.” Today, though, it doesn’t take anywhere near forty years for any of those demons to cause an organization to be destroyed by outside forces or to self-destruct.
  • In the final analysis, the most important factor determining the success or failure of an organization is the quality of its leadership or lack thereof. Successful organizations have leadership that:
    • understands its context
    • knows what it wants to accomplish
    • aligns everything toward that end
    • is never content with the status quo
    • and continues to learn, adapt, and evolve

This is one model of the ingredients necessary for sustained organizational success. But it’s good to keep in mind George E. P. Box’s admonition, “All models are wrong. Some models are useful.”

mcclellandmodel

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.

Why Doesn’t Everyone Like Us?

Those of us who are part of Goodwill know that we have a good organization that is made up of good people. And we know we have a mission that is appealing to just about everyone. We also know that well over 90% of the population is not only aware of Goodwill, but also has a favorable opinion of the organization. But there are still some people who don’t like us. Why? And what can we do about it?

I believe the people who don’t like our organization fall into four categories:

1. The uninformed or misinformed. Some people don’t like us because they don’t know enough about us. This category includes those who have erroneous assumptions that logically lead to incorrect conclusions about our operations and services (and sometimes about our competence and integrity).

To reduce the number of people in this group, we must seize every opportunity to provide facts that counter erroneous assumptions and constantly do as much as possible to increase public understanding of what we do and why we do it.

2. The aggrieved. These are people who have had a bad experience with Goodwill. I subdivide this group into two categories:

a. The pouters. These are people who don’t like a decision we made or an action we took, even though we acted responsibly and were fully justified in our actions. There’s not a lot we can do about those in this category other than ensure that the decisions we make and the way we operate are consistent with our values and based on sound criteria and sound processes. We also need to respond as well as we can to these kinds of concerns when they are addressed directly to us.
b. The justifiably aggrieved. These are people we have not treated well or with whom we have made a mistake. Obviously, we can reduce the number of people in this category by constantly improving our performance. And when we do become aware of a mistake we’ve made, we should correct it as quickly and fully as possible, do our best to make amends, and remember to say, “I’m sorry.”

3. The philosophically opposed. Goodwill has not historically encountered much opposition on philosophical or ideological grounds. However, in our efforts to provide opportunities to certain populations or address a particular social problem, we do occasionally encounter people who simply do not agree with our position or direction. While we might never win the support of some of those individuals, we can at least do our best to explain the rationale behind our positions and directions.

4. The jealous. The larger and more successful we become, the more we are likely to encounter individuals who are jealous or resentful of our success. There will always be some people in this category, and we can’t control that. But we can guard against adding to their number by treating everyone with respect, by not acting or appearing arrogant, and by not bragging.

Altogether, I suspect the total number of people in all of these categories is a very small percentage of the population. However, it is in the best interests of our organization to constantly strive to reduce the number of such people. This, in turn, will tend to increase the number of strong supporters we have and will minimize the amount of time and energy we must spend responding to complaints, criticisms, and accusations. While we should realize that, regardless of what we do, not everyone will like us, it is important for us to do all we can to avoid unintentionally giving anyone a reason not to think highly of our organization and its work.