Boxes

It is February 2012, a short month. I want to write briefly about boxes. How often have you heard the admonition to “think outside the box?” In my view, this phrase has won its place in the Cliché Hall of Fame, Business Section. The meaning is to think both creatively and unconventionally. Its origins are unclear although there is consensus that it derives from a solution to a puzzle first published around 1914 called The Nine Dots, where you are challenged to draw a single line through each dot without lifting your pencil from the paper. The solution is to go beyond the perceived boundaries of the puzzle – hence “outside the box.” A number of consultants and business writers in the 60’s and 70’s claim to have translated this notion into the general management advice employed today.

In any case the phrase is now ubiquitous and I find at times used to disparage the thinking of managers and/or boards who, in the opinion of the “advisor” are too conservative or hidebound. I have been in meetings where the attendees are sternly admonished to think Outside the Box. The reactions are sometimes amusing. Some people almost assume the physical attitude of Rodin’s “The Thinker” –others are puzzled and some are defensive, immediately throwing out ideas they hope might alight somewhere beyond the box.

At the risk of being too literal I suggest there should be a first step: what’s in the box right now? Shouldn’t those contents be analyzed so that everyone concerned will understand what might ultimately qualify as being “outside?” And maybe a creative idea is within the present box, like the Peter Drucker’s “systematic and purposeful abandonment” of programs I described in my December 2011 blog. The Outside the Box directive is useful in encouraging new thinking provided the “old” thinking is not summarily devalued. At the core of this approach is THINK, the old IBM company mantra, regardless of an idea’s location relative to the box.

The second box I want to discuss is the sandbox. There are instances where some nonprofit board members are tempted to take advantage of their positions to espouse and even personally act on pet theories about management techniques and programs, often usurping the authority of the CEO in doing so. In these cases the non-profit becomes like a sandbox, open for play. Board chairs in in particular have to be vigilant in confining board members’ activity to the essentials: financial sustainability, policy development and the hiring and/or firing of the CEO. If the weakness of the CEO has invited sandbox play, that becomes a legitimate issue for board review.

My final box is in the nature of a commercial. Not far from where I live and work is the remarkable Dia Beacon (NY), a facility for contemporary art on the Hudson housed in a former Nabisco box printing factory. At close to 300,000 square feet, it is a world –class museum and well worth a visit. When you do so you can witness firsthand the result of thinking “outside the box” - literally.

One way to ensure spirited board discussion –“try this at home?”

Before Christmas I received in the mail a DVD that brought back memories including an interesting and seemingly counterintuitive technique regarding board of trustees’ decision-making. The disc was made at a recent ceremony celebrating the contribution of two men, Moon Landrieu and Thomas Lemann, to the establishment of the Arts Council of New Orleans in 1975. Landrieu was then Mayor of New Orleans and is the patriarch of extraordinary political family that today includes his son Mitch, the present mayor and daughter Mary, a U.S. Senator. Lemann is a distinguished attorney and respected arts patron. It was Lemann, as its board chairman, who brought me to New Orleans to be the arts council’s first director.

In the DVD, Lemann reminds Landrieu that one of the arts council’s first achievements was the mounting of an outdoor monumental contemporary sculpture show that placed works by noted artists such as Mark di Suvero and Clement Meadmore in public places around the city. The idea for the show had come from a visit I made to a similar show in Houston. Both Lemann and I were enthusiastic about the project, but the arts council board would have to agree before proceeding. We knew that obstacles to acceptance, both internally and city-wide, might be that the city had then virtually no contemporary art scene and at the same time a reputation for conservative protection of local tradition – and this scheme was hardly conservative. I was worried.

A few days before the board meeting Tommy Lemann called me to discuss the agenda. I would do a slide presentation of some the art to be shown. Then he had invited two guests to speak to the merits and advisability of the project: Bryan Bell, a vaunted civic leader in New Orleans, would be a guest and the other John Lishawa, a British expert in old master prints visiting the city. Oh, good idea I said to myself, although a bit confused about the inclusion of Lishawa, Then he continued: Mr. Bell would speak against the project and the British visitor for it. Lemann went on to say that Bell would say it was just the wrong first move for our infant organization; Lishawa thought it brilliant. I was stunned and to put it mildly, apprehensive.

The meeting began; I made my presentation and left. My position was known and this was a board decision. Like an expectant father in the waiting room, I paced outside the board meeting location. An hour later the board emerged and I learned it had approved the mounting of the show.

What is the lesson here? Or was this simply a canny lawyer acting on the courtroom advice: “Never ask a question to which you do not know the answer.” I like to think – and believe- it was a risky but perceptive way of guaranteeing thorough and lively discussion prior to making an important decision. No one on that board could claim that both sides of the question were not presented and reviewed. The vote was positive and so was the feeling of those participating on how it was reached.

Now, I am not necessarily suggesting you adopt this particular gambit – or as the caption reads in some TV ads “Don’t try this at home.” What I want to propose is that some way be found to structure a critical board decision in such a way to assure airing of full and diverse opinion. It is tempting to “stack the deck” before a meeting, but it can be counterproductive if there is a lingering sense afterwards of a key vote having been rammed through. Boards can be and often are fragile organisms.

The sculpture show went on – something of a miracle as we then only had a staff of two (myself included). But a volunteer crane operator, the help of several of the sculptors and the forbearance of the city on whose property most of the works rested made its installation possible. There were some public cries of outrage, but also applause. The arts council definitely got on the map. In 2010 it celebrated its 35th anniversary. There are those in New Orleans who credit the quality and public nature of the show with laying the groundwork for greater appreciation of contemporary art in the Big Easy. And it may have started because the board chairman decided to try a different – and counterintuitive – approach of reaching board consensus by purposely inducing debate.

The "business" of non-profits

Should non-profits be operated as a business? Or does their mission-driven nature somehow exempt them from such a standard?

I am a big fan of the writings of Peter F. Drucker (1909-2005), the author of 39 books about organizational effectiveness. Often called a “management guru” – a term he hated (remarking once “that we are using the word ‘guru’ only because ‘charlatan’ is too long to fit into a headline”) - he was particularly appreciative of the importance and difficulty of work in the non-profit field. One of his legacies is The Drucker Institute at Claremont Graduate University (CA) where he taught for years. Each year the Institute sponsors three Nonprofit Innovation Awards, the winner of which receives $100,000.

In 1973, I received a MBA degree from the Harvard Business School. I entered the two-year program from the non-profit music field with the intention of returning to non-profit work, which I did. As far as I could tell only a handful of the 750 students in my class had the same background and goal. Harvard teaches using the case method and at that time there were very few cases dealing with the nonprofit field, so I had to engage constantly in mental translation of, say, a marketing case about Smucker’s jams into the not for profit arena. There were very few instances where I found this was impossible.

Here’s a provocative idea from the excellent “The Daily Drucker” (Harper Collins 2004). Drucker was fond of the concept of what he called “systematic and purposeful abandonment.” He was referring to casting off old and non-productive products and services in order to free up resources, especially people, to focus on the opportunities of tomorrow. It is especially difficult for an organization to abandon the “cherished” activity, one that has been in place for years.

He urges a systematic approach where regularly and dispassionately, if that is possible in a non-profit organization, programs are reviewed - and the question is asked: which one should we abandon? Whether it be the profit or non-profit world inevitably there are activities that are no longer as productive as they once were, yet are still being operated, because they have been going for years and/or have their internal adherents. This exercise next begs the question: OK, What do we replace it with? Drucker believes the point is that abandonment makes it possible for staff to concentrate on finding new and more productive program (s) instead of managing or providing life support to the old tired enterprises.

An abandonment analysis might be easier for the profit-making world using measures such as sales and profit/loss figures. But nonprofits can look to audience/ clients served and, even better, study program evaluations.

Here’s a distinction Drucker made that helps clarify the non-profit as business issue: “In the case of business enterprise, the end is economic; in the case of a hospital (for example), it is the care of the patient…” He always comes back to the importance of management, the task of which is: “ …to make people capable of joint performance, to make their strengths effective and their weakness irrelevant. That is what organization is all about..” Management is the critical and unifying factor that bridges any gulf between “bottom line” and “mission.” No wonder Peter Drucker called himself as “social ecologist.” He understood deeply that management is about human beings. And that is why he greatly valued and supported the non-profit enterprise.

1%-99% Philanthropy

As its central mantra the Occupy Wall Street (OWS) movement declares it represents the 99 % of Americans left behind by the 1 % who represent the wealthiest in the country. There is no doubt that the disparity and income gap portrayed is astonishing and disturbing. Largely ignored, for better or worse, has been what the 1% does in the way of philanthropy. Some recent gifts are as eye-popping as the wealth from which they must come. As examples: at the lower end $40 million to Harvard, $40 million to Seattle Children’s Hospital in a bequest, $150 million to The Stanford Business School and the winner - $265 million to Carnegie-Mellon University. Philanthropy Today reports all of the biggest donations this year have gone to universities, most designated for buildings or specific programs/institutes. These gifts have come from individuals.

Now The New York Times reports in a special Giving section (11/2/11) that the OWS spirit has brought more focus on the philanthropic record of the 1%: “As America’s needs grows, philanthropy and how it is carried out are being questioned more closely,” states the writer Stephanie Strom. The problem, in sum, is that needs, especially human needs, are expanding as government support contracts. The question is: what is private philanthropy doing to fill that widening gap, and if it is, who is doing it?

Last month, homeless people spent eleven days camped outside the $500 million HQ of the Bill and Melinda Gates Foundation (assets $37 billion) to secure a $30,000 grant to make up for City of Seattle cuts that had closed shelters. The protest ended when the city restored the funds. At the same time the Foundation declared its record of having previously spent over $47 million on homeless issues.

My calculator doesn’t do billions so I can’t figure what $30,000 might be as a percent of the income generated by the Gates Foundation assets. The Times article asserts that many Americans give to help people but that the richest appear to favor large gifts to universities, hospitals and the arts. What might the OWS folks think about the Times headline of November 4 announcing the gift to the Stanford Business School: “Couple Donate $150 million to Fight Poverty in Developing Nations.” Giving USA reports that although charitable giving increased in 2010, donations to human needs nonprofits fell 6.6%

Several major donors interviewed in the media have stated that large donations to food banks for instance were not “fulfilling.” The billionaire William E. Conway Jr. told The Washington Post that he has given tens of millions to food banks and such but that had not proven to be satisfying: “Somebody’s hungry, we give money to the food bank. It would be far better if we had a more permanent solution.” To illustrate this point, the old saw is often cited that it is better to teach a man to fish than to give him one.

The etymology of the word philanthropy is from the Greek, roughly “loving mankind.” Warren Buffett has pledged the greatest part of his riches to the Gates Foundation but according to The Times declares that his sister Doris is “the real philanthropist” in the family. For over ten years her Sunshine Lady Foundation has focused exclusively on helping individuals in need. The Foundation responds to letters from people requesting dollars for everything from wheelchairs to refrigerators – funding dental work is often a plea. She regards her philanthropy as investing in people and says: “the best return is when lives change for the better in some way…”

At a recent church service I listened to a reading from Scripture that included this from Isaiah (Ch. 58): “….if you offer your food to the hungry and satisfy the needs of the afflicted then your light shall rise in the darkness and your gloom be like the noonday…”

Don’t misunderstand me, the multimillion dollar generosity from the 1% to large institutions, many of which contribute greatly to our society, are of vital importance. By the same token, in this time of economic peril for so many, let each of us keep firmly in mind the nonprofit organizations who direct their work to helping those who are needy within the 99 %. Those nonprofits, and the thousands of volunteers who support their efforts, are our philanthropists on the ground and they find fulfillment in knowing what a difference their time and money can make.

“T T T; P P P” – Time and Patience – Dogs’ Story

Some years ago in Virginia I was given a piece of good advice by a man who had achieved, over many year, great success in the fields of aviation and real estate. I was expressing my frustration about several building projects in which I was involved at the historic site I managed. He held up his hand, which stopped my griping and said: “Just always remember - T T T, P P P.” I waited for the interpretation and he gave it: “Things Take Time; Patience Patience Patience.”

I was reminded of this recently watching a remarkable event, the 2011 National Sheepdog Trials held at the Strang Ranch in Carbondale CO. This was a new experience for me and had to be reminded these sheep dogs were not of those big shaggy English variety but rather Border Collies, bred and trained for working sheep. Over 200 dogs and their handlers competed for four days. They came from all over the U.S. and Canada. Their subjects were 800 sheep brought down from high country range. The last day competition narrowed down to 14 finalists and involved the following trial, which had to be completed in 30 minutes.

There are two groups of 10 sheep, some distance apart, over 450 yards from the handler and the dog. When the clock starts, the dog speeds off to first the one, then the other of the groups. The object is to bring them together. It is important to understand that the dog’s movements are directed by the handler’s high-pitched whistle and sometimes vocal commands. The handler has to remain at his/her original post. The dog is disqualified by any physical contact with a sheep, such as nipping. Once the flock is gathered the dog must then move it through a number of gates until finally it is pushed into an open circle close to the handler and the spectators.

Here is where the skill and of dog and handler are truly put to the test. Of the 20 sheep, 5 are wearing red collars. The un-collared must be cut out and persuaded to leave the circle, and stay outside, while the handler and dog move the collared sheep into a pen. The handler carries a staff but cannot touch sheep with it. By this time, the clock had ticked down to about, at the most, 14 minutes.

Sheep, especially from the range (as opposed to farm sheep) are not disposed to be moved around. It disrupts their snacking on grass. And to be separated from the others is not the natural state – flocking is. So during this time in the circle sheep want to be either back in the circle or out, and the collared ones don’t like the idea of the pen. In fact, only four of the 17 finalists managed to pen their sheep.

Aside from the amazing talent and training required to reach the level of teamwork dog and handler displayed at these trials, it occurred to me that they both need deep reserves of patience. After all, they are working to get animals to do what they instinctively don’t want to do under constraints of contact rules and a timer.

I won’t go into a metaphorical assignment of roles of the participants of these trials within the context of nonprofits – who are the sheep, dogs, and handlers among nonprofits boards, staffs, CEOs, donors and audience/clients? I will leave that to the reader.

These are the days of instant gratification and demand for quick turnarounds created by e-mail, texting and button-pushing. I am no Luddite ( I do have a Smartphone), but sometimes I miss the rotary dial phone where in the course of dialing, you had time to think about whether you wanted to make the call in the first place. Coca Cola used to have a slogan “the pause that refreshes.” Even in the sheepdog trials, if things were getting very intense, the handler might instruct his dog to break off and lie down for a bit or, if it was hot, jump in a nearby tub. The purpose presumably was to re-group and gain perspective. They both appreciated T T T ; P P P – Things Take Time; Patience Patience Patience, and so should we.

Clinging to the Wreckage

I am writing this as Hurricane Irene has finished her rampage up the east coast, causing great loss of property and more than 40 lives. This major meteorological event ironically coincides with a topic I had intended to address at this time in any event: nonprofits coping with adversity, even disaster.

Fifteen years ago I contributed to a Museum News cover article “Fixing it, Repair and Revival of the National Endowment for the Arts.” At that time (FY 96) the NEA’s appropriation had been cut over 38% from the previous year - a residue from the “culture wars”- and there was talk of restructuring the agency, adding private fundraising, etc.

I opened my piece by recounting the anecdote that inspired the title of John Mortimer’s (of Rumpole fame) charming memoir about his father entitled Clinging to the Wreckage. A venerable British yachtsman was asked the secret to his longevity despite years of dangerous voyage. Of a shipwreck, he counseled “clinging to the wreckage” and waiting for rescue rather than trying to swim to shore and surely drowning. I used that as a metaphor for a survival strategy for the NEA (it did).

In 2011, in a deep recession and feeble economy we see around us evidence of roiling seas for nonprofits. In the arts world, the Philadelphia Orchestra declared bankruptcy, the American Folk Art Museum is on the verge of collapse, and a number of orchestras have folded or foundered, as have some theatre companies. The New York City Opera has announced it will abandon its long-time Lincoln Center home just two years after a $ 127 million renovation. Last April the renowned Tony-awarding winning Intiman Theatre in Seattle was forced to cancel the remainder of its season and lay off its entire staff.

There are a number of reasons cited for such dire actions, ranging from the effects of the economy on fundraising – a neutral view - to the more confrontational charges of mismanagement, sloppy financial stewardship and even a nefarious attempt to renege on pension obligations through bankruptcy procedure. In the case of the American Museum of Folk Arts the culprit would appear to be, alas, the not uncommon “reach extending grasp” effect regarding a sexy and expensive new building and the difficulties of sustaining it on an annual basis.

Reasons aside, the question remains is: what to do? Here is where I return, somewhat loosely, to the “clinging to the wreckage” metaphor. Several of the organizations I have mentioned are struggling to retain their core expertise but within a new, slimmer model. The board of the Syracuse Symphony Orchestra declared Chapter 7 bankruptcy (liquidation) last spring. But now its musicians have created a new organization “Symphony Syracuse,” which its leader called a “lifeboat organization” (thanks for the nautical reference) for the 77 unemployed musicians and is working to create a performance season. The New York City Opera announced it would be staging operas at a number of smaller venues throughout the city and although facing harsh criticism will at least keep to its mission of producing opera and hope to re-build from there. The Intiman Theatre, thought to be lost, recently laid out a blueprint to re-open, with a “micro season” that returns to the theatre’s “core impulse” of an artist-based organization, with a new director and business plan.

Only time will tell if these initiatives will work. But in resisting the option of going under and electing a form of re-invention they show fortitude and imagination – and a determination to survive. They await rescue, most desirably in the form of a sturdier economy. If history offers any clue, that will come. When is anyone’s guess but in the meantime one hopes the power of core mission will keep these organizations, and other non-profits, afloat.

Comments on this or any other blog are welcome at: info@geoffreyplattconsulting.com

This and that for a blistering summer

In most parts of the country late July proved to be a time of oppressive heat, so in this post before I decamp for some time in cooler coastal Maine, I thought I would lighten up a bit and present some rambling tidbits I have picked up along the way. It’s been way too hot for deep thinking – or attempts at it.

New Award concept. Inc. Magazine (for growing companies) had a short entry in its July/August issue entitled “Rethinking Annual Honors.” It seems a payroll processing company in Illinois, SurePayroll , has a yearly employee event called the SureChoice Awards, the highlight of which is the Best New Mistake honor. Employees nominate themselves and their admissions of error. Competition is lively battling for the top prize of $400, twice the company’s more traditional prize amount. Last year there were 40 entries. The magazine reports that the company president Michel Alter, who conceived of the award, did so “to remind staff that in a culture of innovation, failure is always an option.”

I like this counter intuitive idea. It’s fun and at the same time instructive. Non-profits and their employees take their missions very seriously and sometimes so much so they become rigid and unwilling to take any sort of risk, for fear of making a mistake. Mr. Alter states “mistakes are the tuition you pay for success.” Lest you think it’s all fun and games at SurePayroll, its president makes clear there is no award for making the same mistake twice.

Warning for struggling institutions (esp. house museums) From the Harvard Business Review blog 6/30/11, by Stephen Wunker .

“A company in a turbulent industry often seems like a dairy farmer whose herd has been reduced to just one cow, whose only adaptation of his business plan is to milk that heifer extra-hard. The story cannot end happily.”

Mr. Wunker was writing about Barnes & Noble which met falling print book sales and the e-book challenge with its Nook, leaving Borders behind, literally in the dust. I think of the house museums that still overly rely on the guided tour model – as well as other non-profit institutions who haven’t re-tooled their business plans to reflect changing tastes and audience/client preferences. I like Mr. Wunker’s analogy. It is perhaps unwittingly buoyed by the fact that heifers (cows that haven’t been bred yet) are unlikely to produce much milk anyway.

Cross-reference across the centuries

Another Harvard Business Review blog (6/24/11) I have admired is by Umair Haque, a business writer and founder of a “agenda-setting advisory boutique” (now that has to be classier than “consultancy”). He is a humanist and argues in a piece entitled “The Best investment you can Make” that a way of turning around our economy is by investing in “living a life that matters” -your own or that of someone you love. In these times, he cites the capital flight to safer investments, such as gold, bonds and stocks. But he suggests: “perhaps the safest investments of all are the human, social and emotional ones. They’re what give human life texture, depth, resonance and meaning.”

By extension I would propose that such is a good argument for supporting the work of non-profits, which exist to serve and support our society, rather than to produce monetary profit, The return to its supporters is to move a step closer to what Haque lays out as a personal goal: the ancient Greek philosophical concept of “eudaimonia” – happiness or in another translation, “human flourishing.”

When I saw this citation, I went immediately to a book I have been reading - Sarah Bakewell’s “How to Live – or- A Life of Montaigne” - the 16th century philosopher whose Essays are still being read and pondered today. There it is -“eudaimonia” – the aspiration Montaigne seeks personally and for his readers, which he wrote about 430 years ago and which a modern writer asks us to consider again. May you find the same, the remainder of this summer and beyond.