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Posted on September 4, 2008 by Matt Argano, PHR, MA | Posted under Management
Critical Review of "Managing the Non-Profit Organization, Principles and Practices"
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Original Publication Date: June 5, 2007 Peter Drucker is the author of over 35 books to date and has made a profound and lasting impression on business leaders in corporate America. His works include over a dozen books on management and close to a dozen on economics, politics, and society. In his latest text, Managing the Non-Profit Organization, Drucker tackles the traditionally overlooked subject of the management skills necessary to effectively operating a “not-for-profit" organization. Drucker's writing is informative and concise and offers myriad real life, relevant examples of the principles in practice. The notion that managing a non-profit organization takes a different skill set and competency is relatively new. Drucker states in his preface “Forty years ago, when I first began to work with non-profit institutions, they were generally seen as marginal to American society...Today we know better. Today we know that the non-profit institutions are central to American society." Drucker proceeds to explain that non-profits fill the void in society between what corporations and government can do. Drucker even goes as far as to say that non-profits epitomize the values of American society and are central to the quality of life in America. They give community a common purpose - as many Americans no longer live in small towns, but have migrated to larger cities, they have lost the community that used to be provided by where they live. Non-profits fill that void and become the community that people are searching for - that sense of belonging and satisfaction that comes from giving. Part One: The Mission Comes First: and your role as a leader Drucker commences the first chapter with a profound statement “What matters is not the leader's charisma. What matters is the leader's mission." The main task of a manager of a “non-profit" is to implement the organization's mission statement into an actionable plan and fill in the specifics. Therefore, the manager's role is to mobilize the workforce to get the right things done. A mission statement has to have three main components to be successful: opportunities, competence and commitment; all three must be present in order to be successful. Drucker states that a leader's most important task is to anticipate crisis and prepare the staff to anticipate crisis, as well as, empowering them to handle it themselves. A staff that has high moral, trust in their leader and one another, and a willingness to adapt to change will be able to weather any crisis. A true leader instills these values in their staff and values innovation. One of the most important sections in Chapter One is “How to Pick a Leader." Drucker enumerates an effective strategy to accomplishing this task: look for strength; look at what the person has done with their strength; match the strengths with the organization's needs; and look for character and integrity. Drucker proceeds to discuss the “do's" and “don'ts" of an effective leader including effective communication to employees and staff and the “buy in" to ideas is crucial to success. Drucker contends “don't be afraid of the strengths in your organization; you run the risk of surrounding your self with mediocrity." The author's statement bears repeating over and over again. The “do" that Drucker applies the most weight to is that the task of the leader is what really matters and the leader is merely a servant of the task and the organization. Part Two: From Mission to Performance: Effective strategies for marketing, innovation, & fund development Part Two commences with a lesson on marketing and the what, the who, and the how. It is imperative to comprehend that marketing in a non-profit setting is very different to selling and even corporate marketing. Obviously the strategies are different, but the more subtle nuances are worth delving into. Drucker correctly identifies that in order for a nonprofit to run effectively, the marketing must be “built in to the design of the service." It is a “top down" strategy that begins with upper management. The organization is not marketing a service or a product but a concept. Drucker has re-coined the term fundraising to fund development in that he points out that development is creating a base of supporters who give because the organization “deserves it." Anyone with a valid mailing address knows just how much money and time goes into mailings of the hundreds of non-profits out there. Organizations send mailing labels, stickers, calendars, cards, all in the hopes that this “gift" will guilt the receiver into donating a “suggested" amount. Typically, the cost of direct mail is astronomical and the donor base is not loyal to the cause or the organization. Drucker is correct in his position on cause related marketing and fund development. When a marketer is challenged with defining the target audience and deciding who to market to, it comes down to an allocation of dollars and resources. Extensive market research is always useful and comprehensive understandings of existing data trends within the organization's donor base (i.e. database marketing at its best) are deciding factors between success and failure and as we all know performance is the difference between success and failure. Part Three: Managing for Performance: how to define it; how to manage it Drucker dedicates much of Part Three to discussing the “bottom line" and how to manage, define, and measure performance. Drucker states that “performance is the ultimate test of any organization." Oddly, however, Drucker also contends that “non-profits are not concerned with profits and the bottom line." Every organization in operation is concerned with the bottom line. The distinction needs to be made that the bottom line is not the be all and end all for non-profits, but many do earn a respectable profit that is then invested into other vehicles, such as stocks, bonds, real estate, etc. in order to increase solvency in times of need or lower than expected performance of the donors. While most “for-profit" organizations have a very narrow view of performance, or profits, which is to be expected, since their objective in operating is to serve their stockholders. The majority of stock holders invest in order to realize a return on their financial investment (ROI). One the other hand, many committed donors feel like stockholders in the non-profit they choose to support. In return for their monetary contribution, they expect that the organization performs as promised, reflected in the organization's mission statement. A non-profit would surely be considered under-performing if it didn't consider the bottom line and did not meet the financial obligations to their employees and programs. In turn, the donors would lose faith in the ability of the organization to fulfill on its mission. Part Four: People and Relationships: your staff, your board, your volunteers, your community Part Four of the text broaches the structure and relationships that differ between non-profits and corporations - the main difference being the management of people and relationships. With the added workforce of unpaid volunteers, the non-profit manager has an altogether unique situation of workers whose passion and drive come from “making a difference" in an organization. The board of directors is another entity that has a different role in the non-profit's management structure; one that may be wholly political, in that they are elected by membership or others outside the organization and thus not assigned based solely on merit. Every one in the non-profit organization has their own set of goals and objectives. The first responsibility of any person is their own assigned task. The second are the learning and teaching responsibilities, and this is even more crucial of the non-profit manager. A key skill in that managers must possess is the skill of listening. They must listen to the board, the volunteers, the donors, and their staff and in doing so they must also make the job and/or goals of these players easy. For example, a donor's job is supporting the organization through monetary means. The manager's role to ensure that the constituent can donate through the channel they feel most comfortable with be it online through secure, credit card processing, on the phone, or through the mail. The same is true for the staff and volunteers. Part Five: Developing Yourself: as a person, as an executive, as a leader Drucker commences Part Five with an interesting antidote about a dentist - “he asked his dentist one day what the dentist wanted to be known for. The dentist answered “When they have you on the autopsy slab I want them to say that fellow really had a first rate dentist." The moral of this simple story is pride and self respect; pride in excellence of a job that is done well and self respect from the satisfaction of personal growth and development. The non-profit manager's job is paramount in maintaining this level of excellence in his or her own development and the development of staff and volunteers. Since part of the reason why so many people work for a not-for-profit organization is because of the mission and the feeling of making a difference it is of utmost importance for a manager to ensure the excellence of work. As Drucker brings the book to a close, the final chapter of the text summarizes self development. He states “Developing yourself begins by serving, by striving toward an idea out side of yourself - not by leading. Leaders are not born, nor are they made - they are self-made." Self development is just that. Regardless of the circumstances or outside factors, one's own growth and development is ultimately the responsibility of only one person. He completes the text by posing two questions to the reader: What will you do tomorrow as the result of reading this book? What will you stop doing? As with any management course, by ending with an action statement or question, Drucker effectively is driving the reader to look closely at themselves to dig in deep, if you will, and put the words on the pages to work. About The Author: www.shrm.org ; www.astd.org |
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