January 12, 2011

Employee Benefits Conference Announced

The Nonprofit Risk Management Center is pleased to announce the scheduling of a brand-new conference addressing challenges in managing employee benefits. The conference, which will be held over a 24-hour period beginning at noon on Monday, May 16th, will convene at The Salvation Army New York Conference Center, a state-of-the-art facility located just 24 miles from New York City in West Nyack, NY. To learn more about the conference, visit the event webpage. Click on the Program tab to view the line-up of general sessions and workshops. Click on the Register tab to sign up. Attendance is limited for this brand new program and we expect that it will sell out by early April. Register today to reserve a space.

We’re All Human

By Melanie Lockwood Herman

When nonprofit leaders approach the Center for advice about strengthening their risk management practices, most imagine that what they need is a new “system,” a toolkit, workshop, a list of definitive do’s and don’ts or a checklist. The Center’s resources include all of the above. But what we often discover in our risk assessments, other consulting engagements or even technical assistance calls, is that the area that requires the greatest care and attention is human behavior.

Humans are at the heart of every nonprofit mission, from the humans who design and deliver services to those who participate as members, service recipients, consumers and attendees. The success of risk management in every organization depends in large part on human factors.

Aspects of human behavior that are antithetical to sound risk management include:

• The very human tendency to blame others or look for scapegoats to explain why things did not turn out as we had hoped;
• The common challenge of getting lost in the weeds and failing to see the big picture;
• Pride. The first of the seven “deadly” sins is evident when human beings fail to admit that they do not understand the rules and policies of the workplace or the performance expectations of their supervisors; and
• Discomfort hearing “bad news” or in extreme cases, ignoring unproductive behaviors in the workplace and imagining that all is well, all the time.
• Fear of confrontation, particularly when it leads us to turn a blind eye to undesirable behaviors that are early warning signs of risk. Hoping misaligned behaviors will spontaneously cease is neither effective nor defensible as a risk management strategy.

We humans are quick to blame, prone to lose focus, prideful and easily discomforted. New systems, methodologies, training and the occasional checklist can be helpful in strengthening risk management practices. But if resources are constrained and time is precious, your best investment in risk management is in the work you do to change human behavior. An impressive risk management program “on paper” will be of little benefit if your staff and volunteers disregard its purpose, fail to appreciate its underlying rationale, or work to undermine its effectiveness. Consider the following tips to empower the human beings that are the cornerstone of mission fulfillment:

• Be proactive. When you notice misaligned behaviors (including your own), nip them in the bud. Begin by exploring the incentives and disincentives for desired behaviors. In most cases, you’ll find that your people are well intentioned but haven’t necessarily thought through all the consequences of their actions. Use the conversation as an opportunity to demonstrate risk thinking and explain how aligning with expected standards of behavior contributes to the successful achievement of performance objectives and also helps to avoid undesired outcomes. Use what you learn to strengthen the incentives for desired behaviors and disincentives for undesired behaviors. This kind of vigilance reinforces risk awareness and sends a strong signal that sloppy or reckless behaviors shouldn’t be tolerated.
• Encourage candid assessments of employee performance, organizational results, and progress towards ambitious goals. Admitting that you fell short of the target is the first step to determining “why” and how to improve performance in the future. Glossing over results that fell short of the mark will increase the likelihood of repeating the same mistakes next year.
• Coach staff and volunteer leaders to become comfortable with uncertainty. Resolving to identify “every risk” and ensure that a plan is in place for any eventuality is impractical. Mission-driven nonprofits exist in an uncertain world. There is no checklist or framework that will change that. The key to thriving in an environment of uncertainty is to aim for equal measures of agility and resilience. Effective organizations maneuver and bounce back and a great risk management program can increase your skills in both areas.
• Inspire a commitment to continuous learning. No nonprofit can avoid every possible wrong turn or misstep. Making mistakes, some argue, is the essence of deep learning and organizational advancement. Rather than let mistakes slip from your grasp, commit to inspire the human beings in your nonprofit to learn from their experiences, both expected and unexpected. Show them how it’s done and lead by example. Great questions to support learning include:
  • Were there any signs or warning signals of the outcome? Are there ways to better spot and act, in a timely basis on those signs should they occur again?
  • How is the risk evolving… as we speak? What different signs or signals should be looking for our in changing environment?
  • What steps can we take today to increase our agility and resilience in the face of similar (or not so similar) future events?
  • What were the most important lessons from this experience?
• Provide outlets for employee and volunteer frustration. Today’s employees and volunteers have an unlimited array of avenues for venting, and a few clicks on a mobile phone keyboard can broadcast the gist of a complaint to a large audience. The degree to which employers can regulate statements made outside the workplace is an evolving area of the law. While the courts wrestle with balancing the interests of employees and employers, you can reduce the risk of potentially harmful venting by providing accessible and meaningful opportunities for employees and volunteers to provide candid feedback. Remember that a complaint is a potential gift to your nonprofit that can help you improve the organization.

As you continue the process of planning for 2011, I invite you to consider how to address the “human factor” in your risk management program. Invite staff and volunteers from all corners of the organization to participate in broadening your view of risk. Ask members of your team if the rationale behind the key rules and policies of the workplace are understood. Invite staff and volunteers to actively participate in your efforts to identify and understand the changing environment in which you operate as well as the risk-related implications of your changing world.

As always, don’t hesitate to reach out to me to discuss your challenges, blue-sky ideas, or risk management plans for 2011.

Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your feedback on this article 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 spent more than 50 days on the road during 2010 delivering custom workshops and presentations to diverse audiences of nonprofit leaders. We are available to design and deliver customized keynotes, workshops, seminars or even stay-at-home webinars to address the challenges facing your members, affiliates, staff, board or training program attendees. During recent months 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 have 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.