Thomas Tierney, co-founder of The Bridgespan Group, spoke today about:

1. The massive growth in the nonprofit sector in terms of number of organizations and associated philanthropy
2. Leadership concepts to help your nonprofit stay focused and achieve a sustainable future

Growth, Innovation, Excellence – some “wow” trends

According to Mr. Tierney, we are seeing a “wave of change” like an “industrial revolution” for nonprofits. There are several rather staggering statistics Mr. Tierney cited.

• There are 3,000 new foundations in the last 10 years and $20 billion held in donor-advised funds
• The number of nonprofits over the last 20 years has tripled and we are seeing almost 98 new nonprofits a day
• Volunteerism is at a 30 year high

Leadership Concepts you can use today

Mr. Tierney doesn’t see a pattern (or template) of how nonprofits successfully deliver results. However, they have found through their intensive study and work with nonprofits that there is a pattern of questions that the leadership can and must engage in answering on a regular basis. A bold, overarching question a nonprofit might ask itself is, “how do we double our impact in 10 years?” The four questions Mr. Tierney recommends are:

1. What results are we holding ourselves accountable for? If we can’t answer this question then we are dealing with too much ambiguity.
2. How will we achieve the results we’re holding ourselves accountable for? This might include the concepts of logic model or theory of change. We must engage in continuous learning and we can, and should, use field knowledge and not assume we always need an expensive evaluation.
3. What will these results really cost? How will we fund them? Too often we take a $10 million problem and convince ourselves that we can only raise $1 million; we do that and then we under-deliver. This creates a cycle of mediocrity and eventual decline. An example was an organization that decided to sell salad dressing for $3.50. They thought they were making it for $3.15. However, when you factored in all the costs necessary to produce 1 bottle of salad dressing (wastage, salaries, rent) it actually cost $90!
4. How do we build the organization we need to deliver our results? Executive Directors often start to get burned out, want a Chief Operating Officer and the Board says “that’s too expensive.” Often organizations are “strongly led and under-managed” with a concept like a founder and executive of an environmental organization who said to Mr. Tierney “I like trees not people!”

Mr. Tierney also talked about a number of leadership ideas we might take with us and attempt to use in our everyday efforts to do good in this world.

• An important principle for sticking with these questions is the ability to just say “no” to ideas, stakeholders, and even funding that pushes the organization away from the results it sets out to achieve.
• Fundamental concepts from management consulting hold true in nonprofits as well. For instance it is very clear that just like in the business world the “who” matters a great deal. Strong and united leaders will have little trouble with a less than “perfect” strategy but a perfect strategy will fall flat on its face without talented people.
• Financial incentives motivate people less than “culture” (how we do things here).
• We as leaders send daily signals (it is not what you say but what you do) and we must be courageous enough to deal with conflict. You must seek out performance feedback loops on yourself–constructive criticism is key.
• We have a span of influence, maybe 10 or 25 people, who will do the most to keep our organization vibrant and impactful. We should concentrate a lot of our time on these people and be ruthless about saying “no” to those outside this sphere!
• Ask yourself after a month or so, “what was the bottom quartile of my time?” You have one. Look for ways to spend more time in the top quartile.
• Focusing on the “leadership supply” is extremely important. Businesses select over 2/3 of their new leaders from within; nonprofits select over 2/3 of their new leaders from without–when culture is so important nonprofits try to bring in a new leader that often! Looking for the “right person in the right job at the right time” isn’t easy, but if you find yourself looking at your management group and thinking you wouldn’t hire them again if they interviewed for the job they’re in you are in trouble.

In closing, Mr. Tierney told a story about a top program officer at the Gates Foundation who keeps a very large photo of a young child in Africa in her office. She calls this child “the boss” and tries to do her best to make “the boss” happy. Everything is about “the boss” and we all have one just like she does. It is not the funder, the Board member or anyone else, it is the person, the life, on whom our work is making an impact.

All in all this was a very positive three hours spent learning about trends and leadership practices for nonprofits. I encourage you to visit The Bridgespan Group‘s website. Also, Mr. Tierney gave a wonderful talk that is available via podcast at the Stanford Social Innovation Review which is, in itself, a marvelous resource.

Thanks also to the NH Center for Nonprofits for putting on this great day.