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Continuing with the Drucker thread. He says that non-profits don’t focus enough on performance and results. He contends that while it is extremely hard to measure, it is more important in the non profit world than in the for profit one.
The question is how are performance and results measured? Most arts organizations talk about educating the community, but they measure success by the number of people who pass through the doors. How many times does an arts organization even survey its adult audience in regard to how much more they feel they have learned since they started attending performances?
Is performance measured by how quickly an audience can be processed? Is it how politely they are handled? Is it how often they return or tells their friends? Is it how diverse the audience is? Is it the size of the audience or the impact you have in the community?
Performance and results are informed by the organization’s mission. The problem, Drucker says, is that: “People are so convinced that they are doing the right thing…that they see the institution as an end in itself…Soon people in the organization no longer ask: Does it service our mission? They ask: Does it fit our rules? And that not only inhibits performance, it destroys vision and dedication.”
He lists a number of do’s and don’ts. His most important do is focussing the organizational information and communication flow. Each person, he says, should be asking what information they need to do their job correctly and what information they can provide others so they can do their job well. This doesn’t simply apply to coworkers, but to educating ones supervisors as well. Everyone from the executive to the volunteers are responsible for providing information to others along the chain.
Drucker speaks of setting the standard of success high. It is better to be slow at approaching the standard than to set the standard too low and thus inhibit progress beyond that point.
One of the most interesting parts of his management discussion revolves around decision making. He echos some of my earlier thoughts when he points out that many times executives make decisions subordinates are able to make. The best decision makers make few decisions and they focus on the tough decisions rather than tackling the easy, but irrelevant ones.
His idea is that the best way to make decisions is to try to discover what the true decision being made is. Is it not really about cutting the budget, but actually about abandoning a segment of the institutional mission? Will diminishing the funding of one area essentially make the functions of other areas extraneous and in need of cutting themselves or merging into other areas?
This idea seems to be core to his ideas on conflict resolution. He suggests looking at the real core issue rather than the ancillary ones that lead to people calling each other names.
An example to tie both these idea together– You may decide to decrease the size of an event to save money. Suddenly half the office is fighting with the other half, shouting that the cuts should come from the other’s area. The real issue isn’t that someone will have less money to work with as much as the decision signals that the organization’s focus will no longer be on a certain segment of the market. That segment may attend 90% of the other events, but the one being diminished is a signature event for that demographic. The ultimate consequence may end up being that the people who dealt with activities for that segment will be dissolved or have their duties shifted to other areas. This is the topic that needs to be addressed, not whether the cut should be shared across the organization instead of borne by one area.
Drucker underscores the need for dissent. He uses the example of Franklin Roosevelt who had the rule that: “If you have consensus on an important matter, don’t make the decision. Adjourn it so that everyone has time to think. Important decisions are risky. They should be controversial. Acclamation means that nobody has done the homework.”
He points out the dissent is not conflict. In fact, he quotes political scientist Mary Parker Follet who said “when you have dissent in an organization you should never ask who is right. You should never even ask what is right. You must assume that each faction gives the right answer, but to a different question. Each sees a different reality.”
To go back to the example of cutting a program. One faction may see the cut as abandoning the character of the organization. Another faction may see cutting it as a path to expanding what is great about the organization. They are both right because they are talking about two different questions-maintaining character vs. increasing efficiency.
He encourages cultivating dissent and disagreement because getting it out in the open lets people feel they are heard and makes you aware of the objector and what their objections are. It provides the manager with the opportunity to come to some accommodation that will help them accept the decision even if they don’t agree with it. He also points out that this process can reduce conflict by showing that the people on the other side differ with their point of view rather and are not “stupid or malicious” by nature.
I have to say from my own experience at a few organizations, but for and non profit, that this is some valuable advice. With all the pressures directors and managers face in trying to run an organization, these guidelines are not easy to follow. Having read these chapters, it suddenly becomes clear to me what those who employed what Drucker suggests were trying to do. It also opens my eyes to how they succeeded in many little ways I hadn’t recognized at the time.
Good stuff I say!