Part 2 – Mission Driven Values
As we discussed in my last blog, people tend to place for-profits (.coms) and nonprofits (.orgs) at separate ends of the economic spectrum. After reading Part 1 of this blog, you now see many areas where .org and .com leaders face nearly identical management challenges. In today’s blog, I am going to talk about how small businesses benefit their local communities.
Value to the community: All organizations must prove their value to the community to survive. In a for-profit company, their value to society can be equated with revenue – i.e., do people buy our stuff? Success is measured by a company's ability to turn a profit – which allows them to continue serving their communities.
The most significant “societal benefit” of for-profit companies is employment. Small businesses (companies with <250 employees) create two out of every three jobs in the US economy. It is not surprising then that local .coms inject lots of money back into their communities. An American Independent Business Alliance – AMIBA meta-analysis of published data reports that 48% of every dollar spent at a local store – stays in the local economy. By comparison chain retailers only return 13% of dollars spent back into local communities. Many other studies have reported similar results.
Another interesting statistic is that the US Small Business Association reports that local businesses donate an average of 6% of their profits to charitable organizations. Conversely, Fast Company reported that large corporations only give about 1% of their profits.
Passion for their work: I have had the pleasure of working with hundreds of leaders from nonprofits, small businesses, and startups. Most share the same ferocious passion for what they do and see their work as a fulfillment of a drive to create something of great value. This drive is the real backbone of our country. We are the most generous of nations - giving approximately $410B to charitable organizations each year. We create more new businesses than anywhere else on the planet as well.
We all know that there are good and bad players in both the .com and .org worlds, but as we face so many local and national challenges today, I am happy to report that the jerks are vastly outnumbered!
Part 1: Different Models - Same Challenges
Many people picture the nonprofit and for-profit worlds as opposite ends of the economic spectrum. To be sure, the .orgs and .coms of the world typically attract different personalities to fill their ranks, but from a leadership perspective, the challenges and rewards of running a successful organization have more similarities than differences. You only have to look at the failure rate of new businesses to know that many small businesses end up becoming “non-profit” operations. I don't say this to be clever. The fact is that most organizational leaders feel that their revenue does not support the scope of their vision.
In this, my first blog on the topic – I’ll focus on common challenges and the techniques that all leaders can apply to continue their missions for many years to come.
The bottom line: Making payroll can be stressful during lean times, however, even when cash is tight you should still be asking yourself, “What investments do I make to take the next step toward fulfilling my mission”? If this is not one of the primary questions on your mind as an organizational leader, it may be good to step back from your day-to-day grind so you can balance your daily challenges with your organization’s longer-term goals.
In this context, I use the term “investments” as something that may involve some degree of risk and discomfort. It does not mean writing a big check or stealing more hours from your personal life. Running any organization requires many different skills and no one (including you!) can master all of them. Successful managers learn to focus their time on what they do best and delegate the rest. To do this, you first need to be realistic about your current skill set and focus on the tasks that you enjoy doing. After you have mastered this step, you can concentrate on areas where additional training may be valuable.
Let’s break this down into three areas where you can make key investments in your organization without spending a lot of money.
Infrastructure: To many, this word conjures up frightening thoughts of technology they don’t understand, don’t want, or can’t afford. If you fall into this camp, you’ll be pleased to know that many simple apps can provide your organization with significant time savings. Platforms like Google's G-Suite (word processing, spreadsheets, email, and forms) costs only a few dollars a month for small businesses, and the basic platform is free for nonprofits. An added benefit of these solutions is that they can be linked to more powerful programs as your organization grows.
If new technologies are not a barrier for you, make sure you do your homework. There are many forums like G2 Crowd that feature reviews of common business platforms from real users. It is easy to over-spend or over-build. It is just as easy to underestimate the needs of your organization in the future. If you are considering a major purchase, it pays to hire an expert to assess your needs before you commit to a platform.
Personnel: Before hiring new employees, take a look at your current staff and honestly appraise how well each person is suited for their role. Most organizations grow organically, and people who succeed at entry-level positions are often given new responsibilities. For most, a promotion is a positive thing, but I have also seen valuable employees promoted out of a job because they were either not suited to their new role or not given enough training to succeed.
The decision to let an employee go is one of the most difficult decisions that managers face. Future blogs will look at this in more detail, but the bottom line is that bad employees are bad for your organization. Waiting too long to terminate a disruptive staff member can cause good employees to leave and upset vital customers and stakeholders.
Invest in yourself: Running an organization is not a 9-5 job. Often, it is challenging or downright impossible to attend a chamber of commerce meeting or a seminar in your field of expertise. That’s okay. Remember you don’t have to know every detail of running your operation or become the subject matter expert in your field to see your organization succeed. As we discussed earlier, the best thing you can do for your organization is first to figure out what you are good at and enjoy doing. Then focus on one or two skills you need to learn or improve on to meet the needs of your organization.
Becoming a manager or business owner takes tremendous dedication and hard work. But far too many managers fail to reach their potential because as they earn more promotions, they focus more on what they have done rather than what they still need to learn. P3's Special Advisor, Dr. Anthony Salemi often says “You have two ears and one mouth for a reason – namely, to do more listening and less talking." Without exception, the best leaders I have encountered spend more time asking questions than they do answering them.
I’ll leave you with a question that you can ask two or three people you trust and respect, “Which of my skills brings the most value to the organization that I lead." This may strike you as a bizarre and uncomfortable thing to do, but I assure you that the first question a major donor, bank, or investor will ask themselves before providing funds is - “Does this organization’s leadership have a broad set of skills to maximize my investment." When you gain enough confidence in yourself to build a team that fills the gaps in your skill set – chances are the answer to that question will be “YES”!