November 2, 2011

New! — 2nd Edition of Ready…or Not Released during Risk Summit

At the annual Risk Management & Finance Summit for Nonprofits held in Seattle at the end of September, the Nonprofit Risk Management Center released the 2nd edition of Ready…or Not: A Risk Management Guide for Nonprofit Executives. This easy-to-read, practical guide addresses topics ranging from risk awareness to calibrating risk appetite. Authored by Melanie Herman, the Center’s executive director, Ready…or Not invites readers to embrace risk-taking in their organizations while paying close attention to stakeholder perceptions, risk communication and the relationship between risk and strategy setting. The 2nd edition features updated content throughout, including brand-new chapters on “human factors” in risk management and risk awareness/risk appetite. Learn more or order a copy today, here.

Is Your Door Open?

By Melanie Lockwood Herman

I enjoy reading about and observing the intersection of human nature and “best practices” in organizational management. This week I had an opportunity to read the October 2011 edition of HR Magazine, the monthly publication of the Society for Human Resource Management, and I also finished reading Mob Rules: What the Mafia Can Teach the Legitimate Businessman, by Louis Ferrante. SHRM’s magazine explores timely topics in the human resources field from the perspective of experienced HR professionals. Mob Rules offers 88 lessons from Ferrante’s years as an “associate” in the Gambino family. The book is a quick read, but is definitely not for the faint of heart or anyone uncomfortable with “colorful” language.

My favorite lessons in the second half of Mob Rules are Lesson #62: “Social Clubs Have Solid Steel Doors—That Are Always Open: An Open Door Policy,” and Lesson #63: “Don’t Bother Me Now!: The Value of Interruptions.” The insights in these two lessons dovetail nicely with the advice from the nation’s leading HR organization.

One of the feature articles in last month’s edition of HR Magazine explores the benefits of “getting—and acting on—ideas offered by employees.” (See “Give Employees a Say,” HR Magazine, October 2011). In the article, freelance writer Tamara Lytle explores the value of employee feedback and engagement through interviews with academics and HR practitioners. One of her interview subjects is James Campbell Quick, professor of organizational behavior at the University of Texas at Arlington. Quick explains to Lytle that too often CEOs are focused “on being the center of the known universe. They’ve got to know everything and be in charge.” (Sound familiar?!) As a result, according to Quick, these center-of-the-universe leaders respond defensively to employee suggestions and dismiss them “without explanation.” Lytle adds: “The flip side is an opportunity—an epidemic of idea sharing.” Quick’s comments and Lytle’s analysis offer a timely reminder to nonprofit leaders: look for the opportunity in the suggestions and feedback you receive from employees and volunteers, and resist the urge to say “we’ve already tried that,” or “there isn’t money in the budget for that.”

Louis Ferrante advises business leaders to guard against being “closed” to the bright ideas their employees have to offer. Ferrante writes about the all-too-common tendency to limit the flow of people—and information—into the CEO’s office. In Lesson #62, Ferrante writes, “A boss who closes his door to his employees ties his own hands. When someone controls the information that reaches you, that person controls you. Allowing, for example, only three people into your office is equal to placing yourself in the custody of these three people—something you should never do.” Ferrante advises leaders to temper all-too-common impatience with “interruptions” in Lesson #63. He writes, “I received another benefit from welcoming interruptions: the more glimpses I had into different personalities, the better I understood human nature. And the more we understand human nature, the greater our chances for success.” Well said!

The creative spark may be evident in certain employees, and not so obvious in others. But just as we can’t (accurately) predict the future, we probably don’t know which team member will conceive the next game-changing, great idea. When we limit access to the executive office or send signals that “great ideas” generally come out of rather than in to the big corner office, we risk—rather than inspire—creative thinking and true engagement. The sector’s most successful leaders refuse to see themselves as the “center of the universe,” and work at overcoming an instinctive impatience with interruptions. The office doors of truly effective nonprofit CEOs and executives are flung wide open, sending a clear message that “great ideas are welcome here.” Maybe the “epidemic of idea sharing” begins with a simple belief that every staff member has the potential to imagine a game-changing, mission-advancing idea.

Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your ideas about any risk management topic, 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 consulting assistance to organizations unwilling to leave their missions to chance.

If Evolving Your Risk Management Program to Address Changing Times is Your Goal, We Can Help

Whether you’re trying to better understand your nonprofit’s appetite for risk-taking, sharpen your risk management skills, evolve your risk management efforts in response to changing circumstances, or educate your board about risk-taking and risk management, don’t hesitate to reach out the team at the Nonprofit Risk Management Center for assistance. We can support you in a number of ways. We’re available to help you:

• draft or revise risk management policies;
• design custom on-site, virtual or Web-based training programs;
• undertake an in-depth risk assessment; or
• design and implement an Enterprise Risk Management framework.

We offer advice and consultation on topics ranging from developing or updating youth protection policies, to strengthening governance practices. Why make the evolutionary journey alone when you can partner with a team of nonprofit specialists who live and breathe nonprofit sector risks? Contact Melanie@nonprofitrisk.org or call (202) 785-3891 to discuss your needs and learn how we can help.