Applying McKinsey Survey Results to Small Non-Profits?
A recent HBR article - Where Boards Fall Short - made me think about my board service experience with the Good News Project, a 501-c-3 nonprofit which provides opportunities for volunteer services and contributes to poverty alleviation in St. Lucia and other islands of the West Indies. What are the transferable lessons and actions? Shortlink: http://wp.me/p27qSt-IR
The interesting HBR article by Dominic Barton (Global Managing Director of McKinsey & Co) and Mark Wiseman (President and CEO of the Canada Pension Plan Investment Board) suggests - supported by surveys of directors and C-suite executives - that most boards aren’t delivering on their core mission: providing strong oversight and strategic support for management’s efforts to create long-term value.
Only a startling 16% of directors say the boards they serve on understand the dynamics of their firms’ industries. The authors also note the need for pushing management to challenge the status quo, and consider disruptive innovations that could lead to new opportunities and business models.
Part of the problem may be the board composition itself. Only 14% of 692 directors and C-suite executives surveyed by McKinsey in September 2014 picked “a reputation for independent thinking” as one of the main criteria that public company boards consider when appointing new directors.
Also, it seems that public company boards often select too many generalists for their boards. Instead, more efforts are needed to attract the right expertise, diversity of perspectives, and functional knowledge.
Interestingly, there is a perception that insufficient board time is allocated to understanding, assessing and shaping the organization’s long-term strategy. This requires the development and application of non-financial metrics that can guide strategy as income statements often can’t speak to emerging and uncertain opportunities, and associated risks.
How does this all square up with my board experience at the Good News Project? I have listed three activities below to help illustrate how such issues can be/are being addressed at a small nonprofit.
But let's start by stating the obvious: there are may differences between public company boards and those that serve - pro-bono - at small non-profits. Non-profit board members tend to have a deeper working knowledge of the organization they serve. This is often derived from hands-on volunteer activities that transcend board duties. Also, the lack dedicated specialist staff (think accountants, marketing, engineers, lawyers, etc) means that non-profit boards also need to serve as a pool of expertise in various areas.
Core Good News Project activities, which transform lives of both volunteers and the beneficiaries in the West Indies, include helping 10-15 families each year, selected by local committees, to move from challenging living conditions depicted at the top, to simple volunteer-built homes (shown further below).
A recent year-end Good News blog entry It’s that time of the year highlights that over 80 volunteers, divided in seven teams, are planning to contribute 1,200 volunteer days during January and February 2015 in St Lucia, St Vincent, and Dominica to build 15 homes and visit over 350 children at local schools.
Innovative new initiatives, which are adding a new dynamic to Good News Project’s activities in St. Lucia, include a new collaborative partnership in form of the Gap Program, a new program for incoming freshman at St Norbert College (ranked among the Top 10 Catholic liberal arts colleges in the US). Other exploratory activities testing new volunteer opportunities which target different personal preferences of volunteers (ranging from availability of time to price point) include a first-ever Nation-based trip by Good News Project to the Winnebago Tribe of Nebraska (see also: Reporting from St. Augustines in Winnebago, Nebraska).
Closer to its home in Wausau, Central Wisconsin, the Good New Project also maintains a HELP Closet. This is a health equipment lending program. It provides gently used equipment to the increasing aging population in need of no/low cost (donations encouraged but not mandatory) hospital beds, walkers, wheelchairs, commodes, canes, crutches and similar other equipment.
The HELP Closet has been providing a total of over 600 check-in and check-out services in 2014. The program has experienced a double-digit growth rate since data recording started in 2013. This aspect has generated some lively discussions at the board about if and how the HELP Closet should be more actively grown, resourced and marketed, and leverage Good News’ existing tangible and intangible assets. These include a size-able warehouse (still mortgaged), a successful and demand driven health equipment lending program, mission compatibility and likely interested donors.
The Good News Project has also developed a convenient e-cycling program, which supports electronic recycling opportunities, including through partnership with other non-profits in nearby communities and villages, lacking such services. The dual environmental and social benefits, as income supports the Good News Project and partnering non-profits, has made this a successful program, about which I plan to blog at a future date.
In terms of governance, Good News has been diversifying its board membership, increasingly recruiting for specific and more diverse skills, experiences and backgrounds. My own recruitment three years ago is perhaps a case in point. I am not particularly driven by religious motives, which feature heavily in the history and culture of Good News. However, I have served as an officer or board member on other non-profits before. These ranges from the Fulbright Academy for Science and Technology (now merged with the Fulbright Association) and the International Veterinary Association, a 501-c-3 set up to test a model spay & neuter program with groups such as St Lucia Animal Protection Society (SLAPS). My professional and personal background as environmental and sustainability consulting professional focused on emerging markets, and my experience living and/or working on projects ‘around the world’ was viewed as an asset: an opportunity 'to think outside of the box' and, work with other board members and management, to innovate the Good News Project.
During my three years at the Good News Project, I have participated in three board retreats - and had the opportunity to facilitate one. These retreats have enabled an increasingly structured and probing strategic review, and renewal of Good News Project’s strategic activities and associated challenges.
The format of the last retreat, for example, involved short interviews of board member to identify the key issues that should be discussed and why. The resulting themes were tackled by combined board-staff teams to encourage shared learning, critical analysis and ownership. This retreat also allowed a review of Good News Project’s mission statement, and began the process of developing complementary new vision and value statements, which need to reflect the changing internal and external context of the organization.
Overall, the recent HBR article - Where Boards Fall Short – helped me realize the continuous improvement at work at the Good News Project. The board continues to be diversified, is inquisitive and fully engaged. The long term vision continues to be tested, not just in financial terms, but also by reviewing and updating the organization’s vision, mission and value statements. Moreover, the Good News Project is actively shaping its future. This is being done by critically reviewing and adjusting its direction, and exploring new strategic partnerships and initiatives.