Operating Like a Business, Versus Using Good Business Principles

I have worked in and around nonprofit organizations for over 40 years. During this time I have learned that Boards of Directors and leadership of nonprofit organizations have many challenges, and keeping even the best nonprofits going is becoming more and more challenging. I have watched some very small nonprofits grow into excellent, stable programs, only to be destroyed from within by Boards who made naive decisions which eventually destroyed their organizations.

One of the most damaging things I have seen is a Board of Directors deciding their organization needs to operate more like a for profit business. This is a tempting thing for nonprofit Board members to do, because many of them come from corporate backgrounds and cultures, and their skill sets were developed and honed in those cultures If they can transform the nonprofit they serve into being more like the businesses they know, they can operate more comfortably, and under the delusion that they can do a good job without doing the very difficult job of learning about the clients they serve and about the stakeholders who fund them. Unfortunately, this isn’t usually good for nonprofits or their customers.

So, what happens when a Board gets obsessed with the idea that a NonProfit should operate like a business? There are generally two patterns of failure. The first type of failure is that nonprofits become so focused on the bottom line that they lose focus on their customers, lose their best staff, destroy their reputation and end up either being broken up, or shutting the doors. So they fail formally, and everyone knows it. This is actually the best outcome for a nonprofit that lost it’s purpose. Communities shouldn’t be asked to support nonprofits who offer little or no value to their customers.

The second type of failure is that they succeed in becoming a business, but fail in being a good nonprofit. A good nonprofit either has a time of financial challenge, or the Board or other leadership responds to gloom and doom prognostications and the decision is made to become more like a business. They then hire a CEO with a business only background, begin to focus on acquisitions, marketing, fund development, reducing costs, and public relations. All the time this is happening, they actual quality of the service delivery atrophies, and the people who care about the clients and worked at the agency because of the impact it made begin to feel disconnected, and either stay and burn out, or leave, taking their talents to the competition.

What remains after a few years is an organization that may be respected by those who donate money, and may even be considered an excellent organization by the community at large, but offers marginal to very poor quality of services. This happens because those who know no better tend to judge nonprofits by the same growth standards they judge businesses, rather than by the impact an organization actually makes.

If the story is good, and the damage control team skilled, a nonprofit can go on for years skimming the money that people donate intending to help people, while offering little value. These nonprofits usually look very corporate, have CEOs with exorbitant salaries, and have very high turnover rates. They also make claims like “we have a 100% high school graduation rate among our teens” without disclosing that teens can’t be in the programs unless they stay in high school and graduate. In short, they do the same type of spin doctoring and misleading as most for profit corporations.

The major problem with the idea of nonprofits becoming like a business is that for profit businesses and nonprofit organizations have different goals, and when you have different goals, you must have different strategies to achieve those goals. Simple. When we want to go to California from Illinois, we don’t head East. When we want to serve people as a primary purpose, we don’t model ourselves after GE.

A for profit business, for better and worse, has the primary goal of making money for those who own the business. The business might operate in very ethical, well-managed ways, but it’s goal is to generate income and distribute that income to those at the top. So income goes upward to the Board or other owners.

A nonprofit has the primary goal of raising money to maintain an organization that invests, in various ways, in those who need its services. In this situation, income should flow downward from the Board. A nonprofit should have a Mission, Vision, and Values which communicate the impact it is trying to make, and the dollars should be invested in bringing the Mission and Vision to fruition.

Therefore, when a nonprofit begins to operate like a for profit business, overhead usually increases to management, development and public relations functions, and investment in service delivery is reduced. The organization begins to talk, walk, and act like a corporation, and one of the two scenarios I described earlier often happens.

Having said all this, nonprofits need to implement good fiscal practices. They need money in savings, and perhaps even their own endowments to weather hard times. They need to hire qualified people who know their area of service to lead the organization, and they need to pay them fairly. They need accountants, but usually not as CEOs. They need Lawyers, but usually not as CEOs. They need marketing and public relations functions. However, these functions need to have different strategies than the same functions in for profits. These departments need to be focuses on creating and maintaining an excellent organization that raises money and distributes that money, through services, supports, and sometime actual dollars to the people the organization serves.

Most importantly, nonprofits need to consistently provide excellent services that benefit their customers and make a positive impact on their communities. They need clear Missions, Visions, Values, Goals, and Strategies for making these impacts. They need excellent well-trained stable staff who are committed to these.They need strong evaluation and research functions, if not on staff, then through collaborations with Universities, having researchers on the Board or other means. They need to offer great service, know they offer great service, and be able to prove they offer great service. When all these things happen nonprofits usually get better and offer value to the community.

Unfortunately, when the organization becomes too distracted by attempting to be like GE, it has been my observation that the actual quality of service usually decreases over time and all of the components of excellent service suffer and then fall by the wayside in pursuit of the wrong goal.

Leadership Assessment and Advising

Ray Hoskins and Assessments is now a Channel Partner with The Lions Lead.  Through this partnership, we offer a wide range of competency-based assessments that help organizations and individuals assess leadership competencies.  The assessments are paired with our Leadership Advising Services to help individual leaders and leadership teams improve their performance.

  • Do you have a clear awareness of your leadership strengths and challenges?

  • If not in a leadership/management position now, do you want to be?

  • If you are currently an organizational leader are you achieving the results you want?

  • Is leading stressful for you?

  • Do you aspire to be a great leader?

Contact Us to begin improving your individual and/or team leadership competencies.

So You Got That Promotion, Now What?

Some of us really want to be leaders. We work hard in our positions, hoping to be noticed as stellar performers in our area of work so we can be promoted. When the opportunity comes, we apply for that management job, secure in our knowledge of our area of work, and we get hired.
For many of us, it doesn’t take long to realize that expertise in our previous position, while useful isn’t enough. Being a good doer, can actually be a handicap in becoming a good leader and manager. What are your options:
1. Put our heads down and “fake it till we make it”. Perhaps we watch our own manager (who may not be the greatest) hoping to learn by osmosis what we need to do.
2. Begin to study, read leadership books, watch TED talks, perhaps even take a course or two on leadership and management.
3. Be systematic in our strategy. Working with Ray Hoskins and Associates, you
⁃ Assess your existing strengths and challenges using a competency-based assessment.
⁃ Assess priorities for immediate change.
⁃ Develop a leadership development plan.
⁃ Work with an experienced Leadership Advisor to help you make best use while developing and following a plan to become the leader you want to be.

Ray Hoskins and Associates can help new and existing leaders become stronger and succeed in their leadership positions.  Contact Us

Self-Awareness-Where Leading Begins

There are many cultural expressions of the importance of Self-Awareness. Statements such as Know Thyself and To Thine Own Self Be True have been around for centuries. Most of us have been exposed to the idea that we need to understand ourselves in order to have a better life. This idea forms the bedrock of most forms of counseling psychology and other personal change approaches.

What might not be as clear to most of us is how important self-awareness is in leading others. In fact, the research shows that an accurate knowledge and understanding of oneself is the most important skill of leadership.

Self-awareness is just what it sounds like—the ability to know oneself, to be aware of one’s own strengths and areas for improvement. Leaders and managers who have strong self-awareness understand their goals, values, beliefs, feelings, strengths, and limitations. They are able to use this information to guide decision-making.

When people lack self-awareness, they are unable to express the clear vision necessary to lead. If one’s self-perception differs greatly from the perception of others around them, it leads to feeling like others don’t understand them.

Also, when someone has poor self-awareness, others may see the resulting confusion acted out in the leadership setting. Poor self-understanding also leads to inconsistent behavior which confuses those we lead.

Take a moment and ask yourself, how well do you:
• Understand your personal abilities and competencies
• Understand what affects your performance
• Know your values, goals and beliefs and use them well to guide your decisions and actions
• Take time to think about important issues quietly and alone
• Strike a balance between self-criticism and hopefulness?

These are some of the attributes of leadership included in The Lions Leader Manager Assessment. Ray Hoskins and Associates use this assessment. It helps our clients assess their leadership competencies. We then work with clients to help them identify which changes they can make to lead, and indeed, live more effectively. It does all begin with knowing yourself.

Contact Us to learn more about our Assessment and Leadership Advising Services. Visit our site at rayhoskins.net to see more posts about leadership and our other areas of interest.


Managing Your Emotions-Another Critical Leadership Competency

While Self Awareness is the most important competency for leaders, Managing Emotions is a close second. Many of us have worked in situations where one or more of the key leaders were poor at managing emotions. This is most often thought of as simply controlling anger. Yet, controlling fear, anxiety and other disruptive emotions can be equally important. Uncontrolled anger can lead to a very unhealthy culture. Anxiety and fear of failure can paralyze leaders who need to make critical decisions.

Dr. Dan Snively, in his Leader/Manager Assessment,  states: “Managing emotions refers to the ability to understand one’s own thoughts and feelings and how they affect the person and everyone around them. Leaders and managers who are able to effectively manage their emotions are able to understand how feelings affect behavior. They are able to behave or act appropriately in response to their feelings.” This definition isn’t about just controlling emotions. It is instead about the appropriate and effective use of emotions in leadership.

Being able to choose how to show up in every circumstance is very important to a leader’s effectiveness. Excellent leaders who manage their emotions are stable, predictable, and trusted. Leaders and managers who mismanage their emotions sabotage themselves and their environments. Without self-awareness and self-management most other personal and leadership attributes lose effectiveness.

So let’s take a moment and consider:

  • How well do you understand your moods and emotions and their effect on your behavior?

  • How well do you balance your positive emotions and control your reactions in a leadership situation?

  • How well do you identify personal irritations to yourself and select appropriate responses?

  • How well do you Balance private and public pressures and challenges?

  • How able are you to think clearly and stays composed under pressure?

These are key behaviors involved in managing emotions. As you master skills in these areas, you can expect to be more effective in leadership situations.

These are some of the attributes of leadership included in The Lions Leader Manager Assessment. Ray Hoskins and Associates use this assessment. It helps our clients assess their leadership competencies. We then work with clients to help them identify which changes they can make to lead, and indeed, live more effectively. It does all begin with knowing yourself.

Contact Us to learn more about our Assessment and Leadership Advising Services. Visit our site at rayhoskins.net to see more posts about leadership and our other areas of interest.

Rational Leadership

My last two articles were about Self-Awareness and Managing emotions. These are both critical attributes of strong leaders. This article address Rationality, another critical attribute. Rationality is a very important attribute for those who lead.

Rationality is how well someone analyzes situations, processes information, and their emotions. Rationality allows us to make logical and thoughtful decisions.

Of course, if one is to show rationality, he/she must also have self-awareness and be able to identify and manage emotions.

Why is it important? Leaders and managers need to process information thoughtfully, reflectively, and logically. This includes processing and understanding their own emotions and the emotions of others. Leaders need to recognize that emotions are an important source of information. Leaders who lack rationality sabotage their own goals. They also sabotage the mission and vision of their organizations.

Poor rationality leads to a deterioration in team performance. it also creates increased turnover and poor morale. Many of us have experienced this firsthand.

Someone with strong Rationality:

  • Gathers all the necessary facts to make well thought out decisions.

  • Tests their ideas and viewpoints for consistency.

  • Considers that the full range of options and actions before deciding.

  • Checks the logic of their thinking and evaluates if their ideas and viewpoints are believable.

  • Carefully measures their emotions and reactions before expressing them.

These are some of the attributes of leadership included in The Lions Leader Manager Assessment. Ray Hoskins and Associates uses this assessment. It helps our clients assess their leadership competencies. We then work with clients to help them identify which changes they can make to lead, and indeed, live more effectively. It does all begin with knowing yourself.

Managing Stress-Keeping Yourself and the Environment Stable

A few years ago I worked in an environment where a key leader carried a constant load of high stress due to both historical life events and being in an environment where the CEO believed keeping people a bit nervous about their jobs was a useful motivational tool.

The CEO actually managed personal stress well, but her supervision of this leader led to a high level of anxiety and stress whenever staff knew they would have to meet one on one with her.

Ironically, the intent was to keep staff mission-focused, but the fear and decisions she made created unnecessary turnover and high stress

It was very uncomfortable for me, as I was training and trying to help staff be competent and feel confident. I couldn’t succeed as everyone knew the other leader was more directly connected with the CEO. The team was constantly stressed due to the work dynamic.

This leader and the CEO didn’t understand how stress impacts keeping everyone focused on the mission and performing. People under unnecessary stress do not perform optLeaders need to skills to manage their stress in order to do this. Leaders who are unable to manage stress create cultures in which stress is a constant, and in which self-care is not valued, or actually frowned upon.

Managing stress refers to a leader’s ability to deal constructively and effectively with the pressures and challenges that life throws at him or her. It also includes the ability to maintain a healthy work/life balance.

Why is it important? Stress, setbacks, and emergencies are a part of life. Understanding the cause of personal stress and developing effective coping behaviors is critical for leading and living healthily and effectively. A leader with this skill: • Controls personal negative reactions to stress and coaches others to do the same. • Stays positive and learns from mistakes and setbacks and creates a culture in which this is the norm. • Says no to unreasonable work demands and avoids making unreasonable demands of others. • Maintains a healthy work-life balance and encourages it in the culture. • Practices healthy physical and mental activities to remain in balance.

If you have trouble with this skill, then your leadership success and the performance of your organization will suffer. If you want to be a great or even good leader, you need to be skilled in this area.

This is one of the attributes of leadership included in The Lions Leader Manager Assessment. Ray Hoskins and Associates uses this assessment. It helps our clients assess their leadership competencies. We then work with clients to help them identify which changes they can make to lead, and indeed, live more effectively. It does all begin with knowing yourself.

Apprehension-Creating a Comfortable Environment

Have you ever worked for or tried to lead with someone who maintains high levels of apprehension? Perhaps you have had the experience of a paralyzed team because of one or more people who worried. I know I have. I remember situations where stayed stuck because of members who were constantly apprehensive.

Apprehension is the amount of worrying, fretting, strain, and uneasiness leaders take in. It is about the amount to which they beat themselves up over things they cannot control. It is the fear of uncertainty. Successful leaders and managers keep their levels of apprehension low.

Apprehension is also about how leaders identify and respond to issues that could cause them to worry and fret. Good leaders have the ability to see issues and challenges in perspective. They are able to lose too much sleep over things they cannot control.

Why is it important? Too much apprehension and worry disrupt a leader’s effectiveness. Effective leaders and managers keep issues and challenges in perspective. They do not lose too much sleep over things that they cannot control. Their apprehension also affects others in the environment. High levels of apprehension are contagious and spread throughout the team.

Effective leaders also worry little about what others think or say. This is not helpful or productive and it drains one’s physical and emotional energy.

Leaders with low apprehension levels:

  • Handle criticism and challenges without becoming defensive or protective.

  • Stay aware of what others are saying, but, pursue the consistent priorities in line with goals.

  • Focus energy on achieving goals and avoid distractions from things they cannot control.

  • Stay open and honest rather than jumping to being protective or defensive.

If you have trouble with this skill, then your leadership success and the performance of your organization will suffer. If you want to be a great or even good leader, you need to be skilled in this area.

This is one of the attributes of leadership included in The Lions Leader Manager Assessment. Ray Hoskins and Associates uses this assessment. It helps our clients assess their leadership competencies. We then work with clients to help them identify which changes they can make to lead, and indeed, live more effectively. It does all begin with knowing yourself.

Leadership Presence-Do You Have It?

Have you ever tried to follow someone who lacked a sense of authority and direction and needed to fit in with everyone else? Perhaps you have had leaders who shied away from the risks and challenges of leading. It is difficult to follow someone who does not want the responsibilities of leadership and is not inspiring. 

One of the attributes of a strong leader that we usually recognize right away is what we call “leadership presence”. Leadership presence is someones:

  • self-confidence

  • sense of authority

  • appearance of competence

  • ability to enjoy being in charge

These leaders inspire people to follow them and they lead by example. This attribute is important.  People in positions of influence need to own and show a presence of competence and confidence. When other leaders and followers do not see these traits, it can lead to mistrust, fear, frustration, and confusion.

To develop into a strong leader, there are some desired Behaviors. Strong leaders:

  • Possess and show a sense of authority and direction

  • Attract and inspire people to follow them

  • Like the risks and challenges of leading

  • Understand and own the responsibility of leading well

  • Have a way about them that others recognize as leadership

These are all attributes that we can and need to develop if we either want to lead. They are important if we want the kind of success in life that requires being able to lead.

If you have low levels of this skill, then your leadership success will suffer. So will and the performance of any group you lead. If you want to be a great or even good leader, you need to be skilled in this area.

Leadership presence is one of the attributes included in The Lions Leader Manager Assessment. Ray Hoskins and Associates uses this assessment. It helps our clients assess their leadership competencies. We then work with clients to help them identify which changes they can make to lead, and indeed, live more effectively.

Hiring the Right Leadership

I have recently observed the struggles of two nonprofits. While they work in two different service areas, they have similar struggles. Both agencies have hired, for leadership positions, people who lack crucial leadership skills.

In over 20 years of consulting to nonprofits, I find this to be a recurring and all too frequent issue. As a friend of mine is fond of saying, “there are lots of people in leadership positions, but there are few leaders in leadership positions.” That is true in both of these agencies. It is an area in which improvement is relatively simple. Here are some guidelines for nonprofits in addressing this issue.

First, develop a set of standardized interview questions about how people lead. Include how they handle leadership scenarios. Work with your best existing leadership to develop the questions and scenarios. This will make the interview more realistic.

Second, develop a series of leadership-related questions to send to references. The fact that someone is a reliable worker in one situation doesn’t mean they can lead in another.

Third, have final interviews be with a team of existing leaders, who need to have a consensus before you hire.

Finally, use a leadership assessment like those used by Ray Hoskins and Associates. Our behavior and competency-based assessments can help you identify leadership strengths and challenges. Then you can develop custom staff development strategies to develop your best leaders.

So You Want to Have Your Own Company-Learn to Lead First!

We have frequent conversations with people who want to own their own companies.  Younger generations have a high percentage of people for whom this is a dream.

Regardless of the practicality or viability of a business idea, one of the best pieces of advice we can give to aspiring entrepreneurs is to learn to lead first.  We frequently consult to small business owners who are incredibly frustrated with trying to go from being the business to owning a business in which others deliver the services, sell products, and make money for the enterprise in a number of ways.  Most of the time, when we ask them about their preparation for leadership, they look puzzled.

They might have studied their craft, accounting, marketing, sales, and other skills they needed to succeed.  But they were facing difficulties primarily because people didn’t want to work for them.  Sadly, they usually believe the problem was in others, rather in themselves.  Our Leadership Advising helps with accurate assessment and skill development.

We frequently help people start identifying their leadership competencies starting in the ninth grade.  We help educators and youth programs develop basic skills, and work with adults to refine their skills to succeed even at the highest leadership levels.

So, if you ever think you want to be in a leadership position, whether as an entrepreneur or leading in an established organization, let us help you assess and develop the competencies you will need.