Non-Profit – Stephen Shu, PhD

June 13, 2005

When Collaboration And Leadership Are More Important In Non-Profits Versus For-Profits

Ventures or new organizational initiatives, whether in the profit or non-profit sector, face tough mortality rates early on. Luck clearly plays a role in the success of new initiatives, but I find that many times it has to do with a combination of tackling too many items, lacking organizational skills or resources, and not working out important issues of collaboration and leadership.

Non-profits bear a bigger brunt in my opinion:

People tend to be naturally (and rightfully) more altruistic in non-profit endeavors – This creates a large appetite, but it must be tapered with some discipline and a devil’s advocate mentality to say that "we should first bite off a smaller goal".
Non-profits may have greater tendencies to lack optimum organizational structures – As I mentioned in a prior post outlining how MBAs can apply skills in a non-profit environment, many non-profits I’ve seen have more diverse demographics than corporations. This is great, but it may also mean that a non-profit is getting contributed (pro-bono) support where one can’t control the quality or goals of the resource as one would with an employee of a commercial entity. Non-profits may also lack resources in the way of $$ or specialized help on-staff.
Non-profits may lack collaboration mechanisms more widely used in the high-tech space – Some of the team members may be working virtually from the organization (e.g., if contributed pro-bono work). Given that virtual teams have "amplified collaboration needs" (term coined here by Arienna Foley), it is worthwhile to figure out how to get the people to actively collaborate and get quick wins. Some bootstrap tools that may help in the greater effort of getting the team to work together include things like free conference calling (www.freeconferencecall.com), instant organizational intranet (note whitepaper PDF file) and communication platform (e.g., using free configuration of 21Publish group publishing service), and Skype (free voice over IP, e.g., for international team members).

In any case, I hope that these items and pointers above may help give some ideas to those working for non-profits. This post was motivated by a portion of a broader discussion I had with Dr. Saraiya regarding the South Asian Health Research Institute (SAHRI). Dr. Saraiya asked me to write down some of my thoughts in starting a new endeavor.

Steve Shu

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April 2, 2005

Free Version of Software For Small Blogging Communities

According to Stefan Wiskemann, 21Publish will introduce a free version of its software for small blogging communities.

Although the details of the pricing plan and the version of the software have not been announced yet, the currently available 21Publish platform has a number of unique
features ranging from secure intranet, comment tracking
(unique for those that post comments across blogs), and an administrative "workbench" covering all bloggers
within the community. As a number of readers have enjoyed my post about the value of MBAs working with non-profits, perhaps this will serve as a good opportunity for non-profits.

In the interest of disclosure, I am a consultant to 21Publish.

Steve Shu

March 30, 2005

Personal Experience: How MBAs and Non-Profits Can “Profit” From One Another

Prior to my move to Dallas last year, I spent three years (voluntary work) in the capacity of the finance officer on the board of a non-profit organization (that provided child care). My experience at the non-profit was post-MBA and post management consulting with PRTM. I got a lot out of the experience, and I was honored to be able to contribute to the organization.

What I got out of it:

I found that non-profit boards tend to be more diverse than corporate boards – the experience forced me to learn how to minimize MBA jargon talk and the like.
The board size was much larger and decoupled than one might find with boards of many corporate organizations (twelve people versus three to five) – the experience forced me to continue to refine facilitation skills because large boards can be cumbersome.
It was often easier to connect finance with both the human policy and vision of the organization – governance at the board-level directly affected children and families (some of which are very disadvantaged [e.g., single moms, low income]), and it was gratifying to get the organization to points of commitment and resolve.
I learned to appreciate the need for a separate operating board versus a fund raising board (something more typical of non-profit organizations).

There many things that one can bring to table for non-profits. As examples of some MBA concepts that I applied:

Operations background – Assume that many manufacturing facilities operate at a normal load of 70% utilization. Now consider an organization like a child care organization that is make or break based on child enrollment numbers and where the budgeted numbers for the organization require breakeven to be 95% of capacity. Does this raise a warning flag that a correction is needed somewhere?
Operations and competitive strategy – Suppose there are long waiting lists (queues) for the two-year old rooms in the facility and that capacity in the surrounding, competitive facilities is scarce. What does this like say about the price sensitivity of the market (i.e., how much the organization can raise enrollment prices)? Probably one can raise prices more than one thinks.
Marketing – Other organizations are marketing lower prices yet they hide the fact that their coverage hours are shorter. How does your organization want to position itself in the market from a competitive viewpoint, and what concrete tactical things could be improved to make sure that people are educated about comparing apples to apples? Perhaps the organization should market itself as value-based, full-service and draw out the differences in a nice chart.
Finance and Controller – When the financial situation gets tough, it becomes easy to want to take out small things (like water coolers), but where the dollar impact is small. Attack the problem from a different angle – first attack the problem from a "required hurdle perspective" as opposed to "a triage perspective". Use MBA spreadsheet, multimedia projector, and meeting facilitation skills to get the group on the same page as to how many dollars actually need to be cut out of the budget to affect the monthly enrollment fee for each family. Then come back and triage the budget at the line-level.
Board governance – Non-profit boards can frequently benefit from practices used at the board-level in for-profit companies. Things like knowing about by-laws, employment laws, handling conflict of interest, etc. in the commercial sector can be adapted to the non-profit world.

For what it’s worth, I would highly recommend that MBAs look for ways to apply their skills to non-profit organizations to whatever extent they can. Some business schools like Yale have reputations for being strong in the non-profit sector, but straight-up MBAs are also good. The relationship with non-profit boards can be as little or as much as you want in many cases. The upside is good for all parties involved. You can’t always find that in the commercial sector.

Steve Shu

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