December 22, 2010

Risk Management Essentials

The Fall edition of Risk Management Essentials is now available. The brand-new issue features articles on two important topics:

• Managing risk at the end of the road: practical tips to ensure a peaceful end to employment and other business relationships.
• Mistakes in nonprofit life: suggestions on how to learn from your mistakes in order to grow.

Click the links above to read the articles online, or click here to open the four-color, interactive edition of the newsletter. Special thanks to the advertisers featured in the Marketplace section of the newsletter. The support of these companies makes the publication of Risk Management Essentials possible. Two advertising slots remain available for the 2011 edition of the newsletter. Click here to download a copy of our two-page “media kit.”

Salty and Sweet

By Melanie Lockwood Herman

Recently I’ve noticed an interesting trend in restaurant desserts: the addition of salt as a prominent ingredient. Experienced home cooks know that a small amount of salt is typically present in even the sweetest desserts. But the trend of featuring salt in the name of the dessert and prominently in the dish itself is still quite new. Several weeks ago I had an unforgettable taste of salted caramel ice cream*. This transformative experience has persuaded me to abandon my default practice of sharing dessert with fellow diners. Next time I’ll order my own serving.

Reflecting on my first taste of salty and sweet ice cream led me to think about the diversity of perspectives found in healthy nonprofits. When I think about the numerous boards and management teams I’ve worked with this year, the teams whose members were encouraged to express wide-ranging perspectives stand out. Yet many leaders, sometimes without even realizing it, dampen or discourage the contrarians in their midst. The staff member or board leader who suggests that the nonprofit consider an entirely new approach—the road not heretofore taken—is politely but firmly told that her idea is impractical, too risky, or simply not how we “do things” around here.

If your nonprofit’s past is a reflection of your dreams and ambitions for the future, then following a well worn path makes perfect sense. But if the leaders of your nonprofit aspire to build a more effective organization that stretches to advance its mission, you need to listen carefully to the contrarian view. I can recall several contrarian views expressed at Center board meetings over the years. One board member had the audacity to suggest that the organization did not need to be located in the middle of a high-rent urban center like Washington, DC in order to reach and serve nonprofits across the country. I was among those who scoffed at the thought of relocating to the suburbs. Fifteen years later we find ourselves happily headquartered in a distant and affordable suburb. Another board member suggested that eventually most people would prefer downloading materials from the Internet rather than waiting for books to arrive by mail. Everyone around the table was using a slow, dial-up connection to access the Internet. I remember several of us shaking our heads at such a radical idea. Today, approximately 75% of the leaders who order Center publications choose the e-book option from our e-store.

Tips for Cultivating the Contrarian View

• When everyone around the board table is nodding in agreement about the approach under consideration, invite the board to stop for a minute to identify and discuss one or more dramatically different approaches. Ask: what if we did the opposite of what we seem compelled to do?
• Invite your board and staff to discuss the big risks that your nonprofit could take in 2011 to advance its mission. Encourage the people who care about the organization to think and dream “big.”
• Recall the last time you said something along the lines of: “we’ve always done it this way” or “we already tried that…years ago.” Try to recall the idea or approach that you summarily rejected. Make a mental note to stop being the leader who predictably pours cold water on new or refurbished ideas.

In his book, The Art of Quantum Planning: Lessons from Quantum Physics for Breakthrough Strategy, Innovation and Leadership, Gerald Harris observes the “tendency to get stuck in old patterns, unhealthy group think, and narrow safe zones.”

Harris urges leaders to make flexibility and adaptability important strategic objectives. Doing so requires that we cultivate the contrarian view. Harris describes ideas as “particles” which exist in the “context of values.” An idea’s value is directly related to the context in which your organization exists. That’s why an idea that was proposed and discarded years ago might be worth revisiting today. Your world has changed. The concept of focusing marketing efforts on e-books that customers print themselves seemed bizarre in 1996, yet common sense today.

We cling to ideas whose time has passed and discount ideas that represent uncharted territory, or conversely, territory we believe we have traveled unproductively before. But the truth is that the world as we know it has never existed before today. The challenge to nonprofit leaders is to encourage and embrace the salty contrarians in our midst and cultivate the patience to consider ideas that we may be instinctively inclined to discard.

To learn more about the Center’s consulting practice and how we help nonprofits develop a deeper understanding of risk and reward, click here to visit the new webpage that introduces our consulting practice.

*If your mouth is watering as you read this and you own an ice cream maker, consider attempting the recipe available online from Epicurious.

Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your feedback on this article, salty and sweet dessert recipes and questions about the Center’s resources at Melanie@nonprofitrisk.org or (202) 785-3891. The Center provides risk management tools and resources at www.nonprofitrisk.org and offers custom consulting assistance.

Melanie’s recent books include Ready…or Not: A Risk Management: A Guide for Nonprofit Executives, available as an old fashioned hard copy book or as a downloadable PDF.

Custom Workshops and Polished Speakers Available

The staff of the Nonprofit Risk Management Center spend countless hours on the road each year speaking to diverse audiences of nonprofit leaders. We are available to design and deliver customized keynotes, workshops, seminars or stay-at-home webinars to address the challenges facing your members, affiliates, staff, board or training program attendees. During recent years we’ve spoken on topics ranging from Managing HR Risk, to Governance Risks, Insurance Buying for Nonprofits, Volunteer Risk Management, Community Public Relations, Managing Reputation Risk, Top Legal Risks Facing Nonprofits and much, much more.

We’ve identified a handful of “hot topics” for 2011 based on what we’re hearing in our travels, from clients in our consulting practice and from our day–to–day work answering questions from seasoned nonprofit leaders. We hope these topics will serve as inspiration as you plan your educational offerings in 2011. To learn about our fee structure and review our list of “hot topics” for 2011, click here. To review our upcoming engagements, click here.