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

Improving Over Time

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.