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Year of the Horse: Commitment and Measurement

Posted By adminafgg On March 10, 2014 @ 9:57 PM In AFGG News,Blog,Initiatives | Comments Disabled

Rodney W. Nichols, past President and CEO Emeritus of the NY Academy of Sciences, is Senior Advisor to the Alliance.  rodney.nichols12@gmail.com.

The Chinese New Year opened on 31 January 2014.  It’s the Year of the Horse. According to one reference, people born in this year “make unremitting efforts to improve.”  That’s exactly attitude of the non-profits receiving Innovation Fund grants from the Alliance For Global Good during the past two years.

Genuine commitment is a critical component of any winning strategy by a non-profit aiming to earn revenue and serve its mission.  This is at the core of the passion of the Alliance’s founder, Leonard Kaplan, a successful businessman and philanthropist in Greensboro, NC, who has devoted his generosity to boosting the impacts of the best non-profits around the world.

I recently learned that Isaac Newton was born in the Year of the Horse. He was a hero of mine when I was a young physicist.  He showed not only rare intensity, with consistent commitment, but also profound originality.  As I mentioned in an earlier blog on this site {afgg.org}, Newton remarked: “When you cannot measure it, when you cannot express it in numbers, you have scarcely, in your thoughts, advanced to the stage of science…whatever the matter may be.”  He wanted to be reliable as well as to go deep.

Such rigor doesn’t apply to the arts, or romance, or parenting.  But measurement definitely does apply to running an organization, being accountable for its results. Just as a racing horse must be rated by its time around the track, a non-profit ought to be monitored by its cost-effectiveness.

In her perceptive synthesis of lessons learned by the AFGG in the first round of its grants, Dr. Susan Raymond, Founding Director of the Innovation Fund, underlined a key point:  combining markets with missions is a “new frontier, characterized by the unexpected.” Uncertainty and the variations flowing from it must be documented as fully as possible, then measured whenever and however possible. Careful, quantitative observations can be used to revise ongoing strategies.

Management itself must be measured. A recent study of 10,00 organizations in 20 countries looked at three commonly accepted management techniques: setting targets, rewarding performance, and measuring results. Good management  improves productivity, accelerates growth, and assures survival of business.  Those outcomes are also what any non-profit wants. The study found that about a third of the differential among more, or less, successful firms can be attributed to the impact of better management. Isn’t the same trend likely to be found for the non-profit community?

But wait, you might say: isn’t the “bottom line” different in a firm compared with a non-profit?  Well, yes in certain ways.  But is there is any excuse for waste, or inefficiency, or missed opportunities, or blurry targets? So management is not just central, it is indispensable whenever an organization aims to crack new markets – to cross into Susan Raymond’s “new frontiers.” For a non-profit to earn revenues in novel ways, honor its mission, and ensure its continuity among the shifting sands of governmental and philanthropic funders – all this is a huge challenge for management, by any nonprofit’s Board and its executives.

But this challenge is being met.  In Morocco, for instance, an AFGG grantee has worked with formerly struggling farmers to convert their lands to growing organic walnuts, a hot global market. Reasonable business plans show estimates of much higher profitability.  The grantee manages to hack down a jungle of national and global regulations while training the farmers, who were characteristically skeptical of change in their weather-vulnerable business. Several tiers of organization had to be meshed for higher performance. Success is coming through commitment and measurement.

Consider another example, which is, in a sense, the opposite point of view. A Unilever executive, describing his company’s mission to promote hand-washing and sell soap to hundreds of millions of Indians, said it is ”a marketing program with social benefits.” The benefits include significant reductions in diarrhea, a major cause of childhood mortality. This outlook may horrify purists in business. And the converse – earning revenue — may horrify the purists in non-profit social services. But a fruitful convergence is there to be exploited humanely. The AFGG’s Innovation Fund is exploring that convergence, slowly and patiently, through its greatly talented and deeply committed grantees.

Never rest on success, however.  As circumstances change, so must performance metrics and management outlooks. A wise observer once said: ”Every good and excellent thing stands moment by moment on the razor’s edge of danger and must be fought for.”

Later this year, the AFGG will announce the call for proposals in the third round of the Innovations Fund’s program of grants.  Watch for it. It is an unusual opportunity for nonprofits to display their commitment, take stock of their results and goals, and kick off a new initiative to gain revenue.

Rodney W. Nichols

February 2014

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