As I noted in an earlier entry, Peter Drucker, one of the most highly regarded management and leadership authorities in the world has written a book on managing the non-profit organization. I am about half-way through Managing the Nonprofit Organization: Principles and Practices. Though it might be better to discuss the book as a whole when I finished it, I thought it wise to attack a portion of it at a time lest I create an entry so long no one would have the time to read it. Also, I placed so many Post-It notes to mark passages in the book, it begins to appear a hedgehog.

Rather than try to summarize the whole book, I am mainly going to note some interesting concepts he speaks of that I hadn’t thought of, or at least, had not thought of to the extent his writing inspired.

The first was his idea that the product of a non-profit is a changed human being. In this he refers to the change a hospital, scouting organization or church might produce as well as exposure to the arts. This is an interesting idea because as much as mission statements declare their purpose is to effect this change, the focus of most arts organizations tends to be on presenting/producing shows.

He notes that since non-profits don’t have a conventional bottom line to achieve, they need guidance in management and leadership all the more “lest they be overwhelmed by it.” The problem, he says, is that most management texts and resources don’t address the particular needs and challenges of the non-profit and thus the impetus for writing this book.

One of the negative effects of not having a bottom line is that non-profits tend to view everything they do as “righteous and moral” and are reluctant to scrap efforts in one area to redirect organizational resources elsewhere. Drucker feels “they need the discipline of organized abandonment even more than a business does” in part because of the dearth of resources they possess.

The process of change and innovation necessitates looking outside of the organization. He notes that consulting “current reporting systems doesn’t reveal opportunities; they report problems. They report the past. Most answer questions we have already asked.” He says the biggest impediment to successfully innovating is trying to hedge your bets too much so that you are safe if your plans don’t work out. All that does is anchor you too much to the past and prevents you from creating the proper degree of change to provide success in the future.

Drucker has some thoughts about choosing leaders for change. He says that too often “selection committees are overly concerned with how poor the candidate is. Most of the questions I get are not: What is he or she good at, but we think this person is not too good at dealing with….The first thing to look for is strength–…and what they have done with it.”

The second thing he says is that selection committees have to look at what the one immediate challenge is and select a person whose strengthes matches that need. Then he says he would look for character or integrity because a leader needs to be a model for others in the organization. He says that the ultimate question to ask is would you want one of your children to work under the candidate. Would you want one of your children to look like that person one day.

He talks about the fact that a non-profit leader doesn’t have a single dominant constituency to serve like business has the shareholder and government has the voter. He actually defines the ones a non-profit serves as those whose “No” can adversely effect your organization. For an arts organization it can be the audience and volunteers and funders and students, etc. He points out that there has to be separate marketing and handling plans for each group as well as perhaps for segments of each group. They may all be coming to view the same product but what motivates their arrival differs.

He says the best time to innovate is when things are going so well, you don’t want to try to fix anything for fear you will break something and plunge to ruin. However, as everyone knows, the worst time to try to institute effective change is when the institution is fighting for its life. No one will be thinking about the best course for the next 10 years if they are worried they won’t be getting a pay check next week.

It isn’t always a matter of completely changing course, but heading in the same direction more efficiently. If you have achieved your objectives, figure out how to improve on them. Ask “Can’t we do better?” Build upon your strengths. Look at how expectations are changing and decide how your strengths fit into that world.

He also points out, somewhat amusingly, that “It’s an old rule that everything that’s new has a different market from the one the innovator actually expected.” He points out a number of examples where people intended a product or program for one group but ended up being wildly successful with a segment they didn’t intend to reach. Automobile manufacturers have a terrible time with this today when they roll out a vehicle with the intent of attracting young people only to have the parents buy it in droves instantly branding the car as unhip.

Although the book was written in 1990, many of Drucker’s messages have resonance in literature and articles I have cited in the last few weeks and months. He says that organizations need to take customers seriously. “Not saying, We know what’s good for them. But, What are their values? How do we reach them?” He cautions against an organization becoming to entrenched in fund raising and defining its value in terms of economics lest they “subordinate that mission to fund raising.”

There is quite a bit of truth in this. As he says, non-profits don’t have a bottom line. Because of this, lately they have been making appeals for money based on the benefit to others’ bottom lines. It never really occurred to me so clearly as now that in doing so, non-profits risk pushing their identity and mission aside and making themselves servants to corporate and community well being. They position themselves as the new 401k and health benefits package that will attract employees. Rather than being about beauty and reflecting the human condition, they claim to be contributing to improving economic and social conditions. Fear then the day when the arts are held responsible for keeping it so. In utilizing the rationale that like sewer lines, their existence contributes to rising property values, arts organizations are in danger of being viewed as such.

Look for more Drucker insights in future entries