The evolving landscape of non-profits

May 27, 2021

This week, I was asked by an international group to make some comments about what I’ve noticed since early 2020 in the not-for-profit (NFP) world where, as you might know, I spend a lot of my time.

Here’s what I wrote . . .

In the past year, I’ve noticed three distinct trajectories, both amongst my clients as well as numerous others. And, I suspect these are not specific to NFPs:

Some who’ve struggled: they’ve lost support, funding and visibility momentum. Often despite having done good work before 2020. But, as Marshall Goldsmith says, “What got us here, won’t get us there”.
Many who have maintained pre-2020 levels of activity, give or take 10%. Most have done so because their market is ‘protected’ (education, justice, healthcare, aged care).
But, about half of my clients have flown. They’ve either dramatically expanded their impact, or have done a lot more with what they had (or sometimes less).

What has this third group done?

It won’t come as a surprise to you that their success isn’t by chance. They’ve consciously doubled down on three things:

the right results
their clients’ best interests, and
empowering their staff to act.

Here’s my take on each. Let me know in the comments what you think.

1. They measure what counts

Joseph Stiglitz is a Nobel laureate who’s long been an influential champion for large-scale reform of economic systems. He’s noted the decline of middle-class prosperity and he concludes that our accepted measures of prosperity (like GDP and household income) are entirely measuring the wrong thing.

Stiglitz ironically (for an economist) proposes measuring not economic output, but wellbeing. He and his colleagues suggests 11 variables that advanced economic societies (like Australia and the US) should use as signals of shared prosperity.

Only three are material (income & wealth, jobs and earnings, housing), while eight are quality of life related (health, work-life balance, education and skills, social connectedness, civic engagement, environment, personal security, and subjective wellbeing). I’ve noted in the past 12 months that far more NFP clients are asking, “What does success really look for us?” beyond what they’re funded to do, or obliged to report on.

Question: What do you measure in your NFP that is “the wrong thing”? What are the ‘right things’ to measure?

2. They trust their people more

Nearly all of my clients are now talking about how to get people back to work, to ‘normalcy’: back in offices, back in front of clients and customers, taking public transport to and from work. (Although in Melbourne, we’ve just had this interrupted as of midnight last night!)

The problem is, they’re up against what I call the Trust Dilemma. Many of us have had a taste of relative freedom, where we can sleep until 15 minutes before our first Zoom meeting, we can walk the dog or do laundry between meetings, we can take our kids on a bike ride in that late afternoon gap in our schedule. And, yes, we’ll work on reports and presentations and business cases at 6.30am, or 10.30pm, to get the job done.

But, now, we’re asking whether all these people, whom society trusts to pay off mortgages and credit cards, look after children and elderly parents, are to be trusted to work independently when back at work. My clients, government, non-profit and for-profit, are faced with basic ethical questions that boil down to: “Do we trust our people?”. In the past, we’ve asked them to sign in on timesheets, be physically present at specified locations at specified times, and be accountable for work done, on an hourly (or sometimes a 6-minute) basis. What do we do from here?

The Brazilian industrialist, Ricardo Semler, in the 1980s transformed his organisation on the basis that he wouldn’t control and regulate the 2% of ‘unethical’ staff at the expense of the 98% who did the right thing. Now, in 2021, I’m noticing the best performing of my clients are trusting their staff more.

Question: How far can you trust your people to self-manage, and reform your work practices as you return from lockdown?

3. They pay real attention to their customers

Until Australia was cut off from international travel, I loved travelling to Bali. I’ve been about 40 times, and have returned again and again to the same village outside Ubud, where my family and I have formed some amazing friendships.

My wife and I love massage and we’ve road-tested dozens of masseurs and, long ago, we found the best, we think. Nyoman Suparsa is not a massage therapist. He's a healer who doesn't need you to tell him "my lower back's sore". He just knows. He doesn't need you to say, "A bit harder in there please". He just does it. He's become so popular, that he's trained numerous therapists to model his approach.

Nyoman says he has only four secrets, which he tries to pass on to his students:

1. Focus: Put yourself 'in the zone'. There's a mental, physical and emotional state which is conducive to great massage. Know how to put yourself in this state, even when it's hot, your wife's yelled at you, your kid's failed a test, the traffic is a nightmare (yes, even in Bali) and you're running late.

2. Concentrate on the client: Don't forget who you're here for. Don't' think about business, or the spot on the wall which needs painting, or the ceremony at the temple later on. Give the client your full energy.

3. Don't just practice your technique: just running through the same moves each time is not enough. You've got to watch different people massage, have massages yourself - and incorporate these into your personal style.

4. Get energy from your client. I’ve asked Nyoman how he can do 6, 8 or 10 massages a day. He says, “I get energy from them to give to me, through my hands”.

I’ve noticed the most successful NFPs, especially in the past year, do what Nyoman does: focus on the client, concentrate energy on them, and look for ways to get energy back from them.

Question: How do you systematise ways for your front-line staff to be focussed, concentrating, learning and gaining energy from their interactions with clients?

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