April 23, 2014

With Thanks

The Nonprofit Risk Management Center is deeply grateful to the companies that have signed on as Corporate Sponsors of our 2014 risk-themed conferences. In addition to our Corporate Sustainers, we are pleased to report that USLI and The Hanover Insurance Group, Inc. have enrolled as 2014 sponsors. Thank you! Visit our 2014 Conferences webpage for location details, conference schedules, and online registration. Contact Kay Nakamura at (703) 777-3504 to discuss partnership opportunities.

Leadership is Hard

By Melanie Lockwood Herman

This week I’ve been reading “The Hard Thing About Hard Things,” by Ben Horowitz, the former CEO of Opsware, whose company was acquired by HP for $1.6 Billion in 2007. What practical advice might a Silicon Valley tech executive turned venture capitalist have to offer nonprofit CEOs and risk champions? Brutal but helpful lessons from the world of startups, dot coms, and life on the fine dividing line between financial success and disaster.

Like the corporate CEOs referenced in “The Hard Thing About Hard Things,” most of us leading mission-driven organizations awake each morning believing that we run great organizations. We yearn for opportunities to boast about our compelling missions and how we transform lives and communities. But I think Horowitz is right when he says that the true test of that belief is when the organization—and the CEO—have to do something truly difficult.

Here are just a few of the “hard things” I learned from this provocative new book.

• No Excuses, No Self-Pity – In one of the shortest but most memorable chapters, Horowitz explains that when disaster strikes, “nobody cares.” His advice? Conserve the mental energy needed to rationalize the mess, make excuses for the mess, or engage in self-pity. Use the energy you have to “find the one seemingly impossible way out… Spend zero time on what you could have done, and devote all of your time to what you might do.”
• Recognize Good from Bad – The opportunity to make a difference is often touted by nonprofit CEOs attempting to lure talented professionals to their organizations. Yet are we being honest about whether our nonprofits—regardless of the warm feelings our mission statements convey—are really good organizations? Horowitz explains that in a good organization, “staff wake up knowing that the work they do will be efficient, effective and make a difference for the organization and themselves. These things will make their organizations both motivating and fulfilling.” In contrast, in a poor organization, “people spend much of their time fighting organizational boundaries, infighting, and on broken processes. They are not even clear on what their jobs are, so there is no way to know if they are getting the job done or not.” Which characterization fits the nonprofit you lead? If you’re not 100% confident that the “good organization” label applies, what steps are you taking to dispense with mission-wasting processes and eliminate the confusion and chaos you need to evolve to good?
• Take a Hard Look at the Numbers and the White Space – Today’s nonprofit CEOs are becoming increasingly obsessed with numbers. I recall a board meeting more than 10 years ago when one of my business-savvy board members urged our team to conduct an annual “ROI” process. Her suggestion, which seemed novel in 2004, is not an uncommon theme at today’s board table. But Horowitz cautions against focusing on the wrong numbers or looking at them in the wrong way. He describes “management by numbers” as “sort of like paint by numbers—it’s strictly for amateurs.” The frequent mistake that leaders make is to focus on short-term results while sacrificing future opportunities, or “downstream competitiveness.” He urges CEOs to look beyond the black box with the numbers to the intriguing “white space” that explains how the organization achieved those numbers. He reminds his readers that in many cases, qualitative goals may be an organization’s most important ones.
• Invite Candid Feedback Through One-on-Ones – According to Ben Horowitz, a common mistake made by tech CEOs is to engage in one-way conversations with staff. Whether it’s a performance review, pep talk, or opportunity to make a big announcement, apparently many CEOs prefer to hear the sound of their own voices to hearing feedback from direct reports and the rank and file! Horowitz challenges CEOs to make time for one-on-one conversations with staff. During these one-on-ones, the most important rule is the 90:10 rule: CEOs should do no more than 10% of the talking. Questions to help spark the conversation include:
  • If we could improve in any way, how would we do it?
  • What’s the number one problem with our organization? Why?
  • What’s not fun about working here?
  • What are we not doing that we should be doing?
• Share Every Burden You Can – Horowitz writes that “It’s easy to think that the things that bother you will upset your people more. That’s not true. The opposite is true. Nobody takes the losses harder than the person most responsible.” The author’s antidote to lonely despair when things go terribly wrong? “Share every burden you can. Get the maximum number of brains on the problems even if the problems represent existential threats.”

Leaders of nonprofit organizations are fortunate that our missions attract smart and passionate staff and volunteers. It’s been years since I’ve heard any CEO complain about having a hard time recruiting top notch staff and brilliant board leaders. With the opportunity to work with and tap the enthusiasm, creativity and dedication of bright people, our missions know no bounds. But despite the talent at our doorsteps, leading a nonprofit requires making hard choices, choosing between sometimes painful alternatives, and never giving up or giving in when the going gets tough. You can reach out for help, look for opportunity in the face of disaster, but you can’t hide. Why? Because your mission deserves your commitment and fortitude to handle the “hard things” that are inevitable in the extraordinary world of nonprofit service.

Melanie Lockwood Herman is Executive Director at the Nonprofit Risk Management Center. Melanie’s calendar of upcoming speaking engagements is available online. Also available are “hot topics” for workshops in 2014. Questions? Call Kay Nakamura at (703) 777-3504 to discuss Melanie’s availability as a keynote or workshop speaker.

Suit Yourself Risk Management Training

Each month the Center records a brand-new Risk Webinar featuring up-to-date content on issues that are top-of-mind for nonprofit leaders. The one-time cost for each program is $59, or apply to become an Affiliate Member to enjoy unlimited access to our “vault” of more than 100 hours of risk management training. Frustrated with the limitations of your annual performance review process? Learn what’s new in the field of performance management by purchasing this month’s program on Managing Risk in Performance Management. Next month’s program, on The Insurance Marketplace will be released on May 7. To purchase any recorded program or peruse the “webinar vault,” visit our 2014 Webinars page today.