August 28, 2013

Thank You!

The board and staff at the Nonprofit Risk Management Center extend our deep thanks to the attendees, faculty, volunteers and sponsors—everyone whose help and support made the 2013 Risk SUMMIT fun. That’s right. While tackling topics such as risk appetite, fiscal dashboards, Enterprise Risk Management, and fraud prevention, we managed to have fun. With refreshments inspired by our host city of Boston and terrific entertainment provided by “Drive” and “Caravan of Thieves,” the conference offered many memorable moments. A special note of thanks is due to the conference sponsors, without whose support the event could not have been held. This year’s corporate sponsors were: HCA Asset Management, LLC, 501c Agencies Trust, Great American Insurance Group, Charity First Insurance Services, Inc., First Nonprofit Group, Chubb Group of Insurance Companies, Munich Reinsurance America, Inc., Philadelphia Insurance Companies, Riverport Insurance Company, Hanover Insurance Group, Inc., and Arthur J. Gallagher & Co. and our Group of Companies.

If you are interested in expressing your public support for the Center’s mission by joining our Corporate Sustainers Program, contact Kay Nakamura, Director of Client Solutions at (202) 785-3891 or Kay@nonprofitrisk.org.

Real Partners Plan Ahead

By Melanie Lockwood Herman

Last week I was reminded that the word “risk” lurks behind the seemingly harmless term, “alliance.” While attempting to check-in to the final two legs in a multi-city itinerary, I was informed by the counter agent at SAS Airlines that there was no information on my final leg—the flight that would bring me back to Washington, DC. The agent told me that if I could produce a piece of paper with a confirmation number, she could help. I retrieved the modern age version of the requested piece of paper by showing her complete booking details in my email inbox. Once she had the information she had requested, the agent informed me that there wasn’t anything she could do.

The crux of my dilemma was an assumption on my part that the term “alliance” meant collaboration with coordination. In this case I had booked travel on United Airlines, which is part of the “Star Alliance,” a worldwide partnership of airlines. I’ve flown multi-city, multi-carrier trips in the past with no difficulty. Yet in this case, several representatives at SAS told me that they had “no way to contact United Airlines” to help resolve my in flux status. They also indicated that they did not have access to phones or the Internet. For a few minutes, I wondered if I had inadvertently stepped through the portal of a time-machine to the days before 24-7 connectivity.

Nonprofit sector leaders are often heard using terms such as collaboration, partnership, and alliance. We use these terms because we want them to mean something to the audience to which they are directed, such as:

• “We’re working together to serve you better!”
• “We have coordinated our efforts to make your experience seamless!”
• “When you think of one of our organizations, don’t forget the other… we’re a team!”
• “If you trust our partner, you can trust us too!”

Yet in how many cases are the alliances we form nothing more than superficial attempts to sway consumers? Are nonprofits sometimes guilty of promoting poorly constructed partnerships in order to lure naïve members, participants and even volunteers? What is the obligation of a partner in any alliance to sort things out before touting the convenience, savings or other value of the partnership?

The downside risks to sincere collaborators often surface in the Risk Assessments the Center conducts for large, complex nonprofit organizations. Partnership risks frequently surface as among the most troublesome and poorly-understood risks facing a nonprofit. The risks that arise from innocent organizational pairings include:

• Harm to the reputation of one of both partners, resulting from the failure of either or both to deliver what has been promised (to each other, or to the ultimate beneficiaries of the partnership)
• Confusion on the part of the client, consumer or customer about “who’s in charge” or where to go for help
• Lost revenue or less than required net income when the collaboration fails to deliver the volume of activity, sales or participation anticipated by both groups
• Sour grapes on the part of one or both partners when a partner fails to live up to commitments made verbally or in writing.

So what’s an earnest, partner-seeking nonprofit leader to do? The following tips are based on years of hands-on, professional experience with painful partnering. If you’ve worked in the nonprofit sector for more than a few months, my guess is you’ve experienced your share of partnerships, from productive, mission-advancing collaborations, to catastrophic pairings you wish you had dreamt about rather than lived through.

Artful Alliance Necessities

• Say it, don’t assume. Start any discussion about a partnership by agreeing to define what you mean. The truth is that nonprofit leaders use common terms such as “partnership” to mean different things. The sooner you get to the heart of what both potential partners mean, the sooner you’ll get to the intended, mutually beneficial outcomes. Here are possible conversation starters to help you get real:
  • What do you mean by partnership?
  • What would success look like to your nonprofit?
  • What would an abject failure look like?
  • What do you absolutely require from us in order for this to work for you?
  • Do we know that a partnership will help our clients/consumers/service recipients? How do we know?
• Sit in the audience before heading backstage. A common collaboration error is to ignore the customer experience. Don’t naïvely assume that a partnership with another provider will save your clients time, money or frustration! Consider the possibility that customers may find it easier to work with one organization. Imagine ways in which the customer could become confused, or get lost at sea, and resolve to fix the weak points before allowing the first passenger to board your partnership. Remember that your clients should be valued stakeholders, not trial balloons or canaries.
• Create a clearly marked exit path. Circumstances, some beyond our control, sometimes change after the ink has dried on a document memorializing a partnership. In some cases the terms and expectations are no longer realistic, and in other cases the relationship sours and staying together makes no practical sense. Before finalizing a written agreement with a partner, remember to light the path to an accessible exit. Don’t make the mistake of leaving an exit strategy out of your plans simply because talking about failure makes you uneasy. Take the risk of insulting your soon-to-be-partner by discussing “what we’ll do if one or both of us needs to walk away.”
• Listen to your gut. The seeds of irreconcilable differences are often sown on the way to the completion of the partnership document. One partner perceives that the other may be inflexible, or hard to work with. Or the other partner senses her new mate may be understaffed and incapable of meeting agreed-upon deadlines. Whether you’re getting ready to walk down the aisle with your soul-mate, or simply sign-up for a collaborative venture in social services delivery, always listen to your gut. If you’re feeling queasy about the ceremonial exchange of rings or signatures, don’t do it! Try to determine the source of your uneasiness, and if it can’t be resolved, consider calling the whole thing off.

I hope in time my unfavorable impression of the so-called “Star Alliance” will fade into the far corners of my aggravating customer service experiences memory bank. Given the number of times I will board airplanes during the next few weeks, it isn’t worth the risk of higher blood pressure to hold a grudge against an airline for its misuse of the term “alliance.” So I’ll do what only a small fraction of unhappy customers of collaborations do these days; upload my lament into the online customer satisfaction survey and hope that a human someone at the “Star Alliance” resolves to make the next customer’s experience a better one.

HR Icons: A Closer Look

During the upcoming First Wednesday webinar on September 4 we will be taking a closer look at the icons of human resource management, from employment-at-will, to paid vacation and sick leave and traditional employee handbooks. Find out whether these components of long-standing HR practice are soon to be forgotten relics, or concepts with staying power. Sign up for the upcoming or future webinars.

Melanie Lockwood Herman is Executive Director of the Nonprofit Risk Management Center. She welcomes your ideas about any risk management topic, suggestions for best-in-class risk management, 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.

Join, Learn and Save

Consider becoming an Affiliate Member of the Nonprofit Risk Management Center if you want to receive dedicated risk management help and access to valuable resources. Affiliate Members enjoy free, unlimited access to the recorded 2013 webinars, 100+ recorded webinars, free RISK HELP™ from Center experts throughout the year, and savings on valuable resources including books and cloud applications. Affiliate Membership is only $75/month for nonprofit organizations and $100/month for for-profit firms. Learn more about program benefits or enroll today.