Wednesday, November 18, 2015

Coherence, Non-Profits and an Example

This week’s readings focused on coherence and how it impacts a company’s bottom line. Some examples of coherence were related to Walmart, GE, Southwest and Pfizer and because their broad goals are all the same – make the most money possible – it is clear to see how the examples are all good ones. Can this concept of coherence be applied to non-profits? As an example, I will draw from a Pittsburgh-based community improvement organization whose name will not be shared for privacy reasons.

This small non-profit accomplishes an astounding amount given its tight budget and small staff. However, the executive director and her staff know that they are not able to leverage their time and resources as well as they want because they spend so much time on “small” matters such as selling tickets for a local concert or calling Animal Control on behalf of a resident when they really need to be working on larger projects or strategizing about the organization’s future. However, these “small” things are what builds the trust between the community and the organization which allows the organization be so effective when it comes to the “big” things. None of this is to be taken as a criticism – they are simply amazing in the role that they serve for the community but they need to strategize and prioritize so that they can best leverage their limited resources.

If I were to make a few recommendations, I would suggest that they sit down with their Board of Directors and most active volunteers and figure out their priorities and the organization’s key strengths. As pointed out in the first line of The Coherence Premium, “Sustainable, superior results accrue to companies that focus on what they do best.” The results that accrue for this non-profit are not necessarily profits in the traditional sense, but they are none the less valuable for the community.

From my experiences, I can see that this organization’s activities focus around three interlocking core themes. There are some activities that are only tangentially related and I would recommend that they stop doing those activities altogether or put a volunteer group in charge of them. If I were to probe further, I might discover that these seemingly tangential activities are actually integral to the organization. In that case, I would suggest that they more clearly articulate the purpose of the activities so that they are obviously in alignment with the themes. The goal is to make all activities structured around what they do well and their priorities.

The one issue that didn’t adequately get addressed in the readings is the amount of time that it takes to strategize and to find a way to be coherent. We have talked about it a bit in class and in the reading it was mentioned that Immelt of GE spends considerable time strategizing. However, small non-profits frequently don’t have the luxury of time because any time that they spend on strategizing means that they are not doing their work. This particular organization, like many, doesn’t have a large fund available to pay a consultant or to hire another staff member to take on the responsibilities while the ED strategizes.

Despite some obvious differences and challenges posed to non-profits, they would greatly benefit by taking some of the lessons from business – such as the concept of cohesion - extracting what is useful and applying it in ways that make sense for the organization.

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