Solving Other People’s Problems

Daniel Pink recently wrote a piece in The Telegraph about how people are more effective at solving problems if the problems are not their own. In a recent study, those who were told they were solving a problem for someone else found more effective and creative solutions than those who were told they were solving the same problem for themselves.

In another study, people were asked to choose a gift for themselves, for someone close to them and for someone they barely knew. The less familiar the person, the more innovative the gift that was chosen.

Over the years, social scientists have found that abstract thinking leads to greater creativity. That means that if we care about innovation we need to be more abstract and therefore more distant. But in our businesses and our lives, we often do the opposite. We intensify our focus rather than widen our view. We draw closer rather than step back.

That’s a mistake, Polman and Emich suggest. “That decisions for others are more creative than decisions for the self… should prove of considerable interest to negotiators, managers, product designers, marketers and advertisers, among many others,” they write.

[…]

And while much of our business world is ill-configured to benefit from Polman and Emich’s insights, the rise of crowd sourcing and ventures such as Innocentive (which allows companies to post problems on a web site for people around the world to solve) suggests that the moment may be right for reconfiguring the broader architecture of problem-solving.

Pink offers five suggestions for either seeking the independent viewpoint of others or try to disassociate oneself from their business. A commenter, Lowell Nerenberg, talked about mentally calling on the spirit of his dead father to help him with his writing which I thought was an interesting approach.

What popped most prominently to mind, however, when I was reading the article was the question- If this is true, why aren’t non-profit boards more effective at leading and finding better approaches to doing business? While non-profit boards do essentially run and have ultimate ownership of an organization, most board members have a generally disassociated view of their relationship to the organization. This is essentially built into the basic design of non-profit boards. They generally don’t meet to discuss the business of the organization more frequently than once a month. According to the research, they should be fairly well positioned to generate creative solutions to the problems their organization faces.

And maybe they do come up with grand ideas. From what I gather from the research Pink references, no one looked into how often a solution generated by an outsider was actually compelling enough to be implemented. Good ideas may be generated, but perhaps there are impediments to actually putting them into effect. People may not feel confident enough in the idea to champion it. There may not be sufficient collective will to effect the necessary changes, especially if some sort of sacrifice was required. Or perhaps the board might feel it is the place of the senior staff to provide leadership in bringing about the change.

Operating under the assumption that non-profit boards of directors do possess the mental distance necessary to generate creative solutions, we get back to the oft mentioned discussion about training/creating a board which is knowledgeable and empowered about its role and responsibilities and is providing effective guidance and direction to the staff.

If the board finds it is too close to the problems of the organization to address them, then obviously the counsel of disinterested parties mentioned by Pink is likely to be necessary.

One implication of these studies I don’t even want to consider is that the nosy neighbor who is always butting into your business and giving unwanted free advice might actually be saying something of value. (Though likely they are too closely involved in monitoring our lives to enjoy the proper perspective of distance.)

Info You Can Use: Good Governance Policies

There is an old adage about the cleanliness of a restaurant restroom being indicative of the care being used in the kitchen for food preparation. There really isn’t an actual relationship between these two facts, but a dirty restroom is enough to give one pause.

The Non-Profit Law blog says the IRS takes a similar stance on whether you check Yes or No on your Form 990 about the presence of policies in the following areas:

* Conflict of Interest Policy (Part VI, Section B)
* Executive compensation approval process (Part VI, Section B)
* Document Retention and Destruction Policy (Part VI, Section B)
* Gift Acceptance Policy (Schedule M)
* Meeting minutes document practices (Part VI, Section A)
* Review process of Form 990 by the Board of Directors (Part VI, Section B)
* Whistleblower Policy (Part VI, Section B)
* Joint Venture Policy, if applicable (Part VI, Section B)
* Policies regarding chapters, affiliates, and branches, if applicable (Part VI, Section B)

It is not illegal to lack these policies, but their absence can be a sign of poor governance and therefore contribute to a decision by the IRS to subject an organization to greater scrutiny.

Emily Chan notes that just because you have policies in these areas doesn’t mean you are covered. It is important to evaluate the policies to ensure they are appropriate for your organization and its ability to adhere to them, comply with the law, are understood and actually practiced.

She supplies the following helpful info: “Note changes to policies are not required to be reported to the IRS unless such polices or procedures are contained within the organizing documents or bylaws and regarding certain subject matter such as conflicts of interests. See Form 990 Instructions.”

If an organization doesn’t have a policy, Chan advises not rushing to formulate them out of a desire to appear to be exercising good governance for public relations reasons (and to perhaps avoid the IRS’ steely gaze). Poor policy being nearly as bad as no policy. Proper policy takes time to formulate so give yourself the time to develop it. In her tips for evaluating existing policies there is an implication that one should avoid adopting the policies of other organizations in any significant degree.

The guidance she provides for creating new policies is:

Thoughtful considerations about how to get to “yes” can include questions such as:

* Which policies have a higher priority based on the circumstances of the organization? For example, an organization that frequently accepts non-cash gifts may have a more pressing urgency to adopt a useful gift acceptance policy as opposed to an organization that hardly, if ever, accepts donations from the public.
* What are anticipated governance issues or past governance issues that these policies should address?
* What kind of capacity limitations – staff, financial resources, or otherwise – should we be mindful of in drafting and adopting a new policy?
* What is the projected timeline for drafting such policy and presenting it to the board?
* If anticipating a prolonged delay (due to resources, time, etc.) before formally adopting such policies, what problems might this cause and what can the organization do to help mitigate these risks?
* Is the organization prepared to explain to the IRS, its constituents, or others why it currently does not have a certain policy and articulate its action plan moving forward to adopt one?

Additionally, it is important to note an organization lacking the recommended policies is not without any recourse on the Form 990. For example, Schedule O (2010) allows for supplemental narratives to further explain the policies or processes used at the organization to address these governance concerns.

Info You Can Use: Board Minutes

Emily Chan over at Non-Profit Law Blog has written a two part series on board minutes. Both entries comprise a fantastic resource for anyone who has questions about the format and content of board minutes and the laws surrounding them. I was fortunate enough to be working on my most recent board minutes when part 1 was published and made some changes in response to the suggestions she makes. I am also a big arts administration geek and excitedly awaited the second installation of the series so I could post about it.

Part One is mostly about the format and content of the minutes. In it, she enumerates some common mistakes that are made.

* Failing to document a quorum was present;
* Failing to document or provide a clear description about a board action taken;
* Drafting a transcript of everything said at the meeting, including information that might be harmful to the organization if read by someone with access to the minutes (e.g., employees or members) or by a court reviewing a board action;
* Drafting and distributing minutes to directors after a lengthy period of time has passed;
* Waiting to approve minutes from past meetings until a substantial period of time has passed, decreasing the likelihood that mistakes will be caught and corrected; and
* Failing to maintain a reasonable document management system, resulting in the loss of minutes from past meetings.

The format of the minutes can vary, but a person unfamiliar with the organization and the issues it faces should be able to easily understand what happened in a meeting and what decisions were reached. Chan outlines what specific information that should appear in the minutes. She also discusses what information should be kept confidential, how a board should proceed into executive session to keep that information confidential, how the minutes should reference the executive session and how the minutes of the executive session should be kept.

The format should be standard from meeting to meeting, including the detail in which decisions are recorded. Minutes should be issued before the next meeting or within 60 days of the last meeting and kept forever. I always wondered about that last part. Minutes are among the items the IRS advises a non-profit keep for ever.

Which provides a segue to Part 2 of the series which deals with the legal aspect of board minutes. Directors and members both have a right to access the board minutes. The rules relating to access vary from state to state, Chan deals with California’ laws.

The IRS also has an interest in seeing the minutes. The bulk of the entry is devoted to discussing what practices are important to stay in compliance with rules and regulations for non-profits related to governance, tax code and audits.

Different agencies of your local and state government may also want access to minutes, especially if the organization is involved with legal actions associated with decisions made by the board. In the course of the merger my presenters consortium is seeking to pursue with a sister organization, the secretary of state requires copies of board minutes where different decisions and resolutions were discussed and passed.

Grouse: What You Do When Your Salary Is Too Meager To Afford It

It looks like it was a weekend for griping about performing arts. Ken Davenport at Producer’s Perspective opened the floor on an atypical Saturday post asking people to share their gripes. He promised to make it a monthly ritual if he got more than 10 responses and he easily passed that mark. A summary of the comments in one sentence would be – “How can they charge such high prices for tickets, yet pay me so little if I can shoehorn my way into a position at all.” There are a few complaints about audiences thrown in for good measure. The general source of the comments seem to be people living in and around New York City with a few people coming form other places. The tenor of most of the comments will be familiar to you if you work in the arts at all and are familiar with the New York City scene. Those aspiring to careers are following the same path those before them followed. This includes tales of people both inside and outside the business wanting them to work for fun or for experience.

My initial thought was that Broadway won’t change because it doesn’t have to and that people need to look elsewhere for their experience. While a similar situation is just about as institutionalized outside of New York City, those organizations are at least marginally aware that they need to find a better way to run their business and interact with their employees.

Which brings us to the second post I came across. Barry Hessenius posted an entry on his blog noting that essentially every job description for an executive director and senior management of an arts organization seems to be taken from the same template without any effort to acknowledge the actual specific needs of their organization.

He provides a tongue in cheek translation of this:

“The successful candidate will be a strong leader with excellent management and interpersonal skills. S/he will have the proven ability to build productive relationships with a broad range of internal and external constituencies, and have the demonstrated ability to work collaboratively with the various segments of the community. S/he will be an experienced supervisor with the ability and willingness to mentor staff and encourage staff development. S/he will foster an atmosphere of teamwork and collaboration among staff and volunteers throughout the organization. S/he will have a strong working knowledge of programs, production, board relations and operations. S/he will have excellent financial management skills and a track record for achieving budget goals…”

Into this:

“We want someone smart enough to help us figure out a cool vision for our future (that one is stumping us); someone who will attract great talent to the staff (though we can’t pay the staff very much) and whom the staff (despite working conditions that are hardly ideal) will love and follow anyway (someone who will hopefully get them to perform above their potential, because actually we’re understaffed by all reasonable criteria). We want someone who can make various factions of the board (currently somewhat dysfunctional and at each other’s throats) work harmoniously together and take on an ever greater workload (or in the alternative someone who will assume the board’s workload for them because it’s highly unlikely they will do much more than they are doing right now – which isn’t that much). We try not to micromanage, but we still do. We’re looking for someone who can get the best out of us, but someone enough like us so we are comfortable with them; someone who will push themselves, but not necessarily push us too hard. Did we mention that we want someone who can raise a lot of money? “

I have only excerpted a small portion of his translation so you will want to visit the entry to read the whole thing. I have also excerpted a portion of his sample job description. Trust me when I say you don’t need to go to the entry to read that. You have seen it many times before. I did a verbatim Google search on a couple phrases from Barry’s sample and found a number of job listings using them. I understand a desire not to reinvent the wheel, but if you are looking for the same person as everyone else, most organizations are bound to be disappointed. There are only so many of those paradigms to go around. The truth is, most organizations are indeed looking for someone a little different from the rest.