Tim's Library

This is the 9^th in a series of 12 articles about mistakes I’ve made and lessons I’ve learned building a non-profit foundation since 1997.

Leadership is the most written about subject in business.  I’ve read twenty or more books on it, attended dozens of classes and seminars and read hundreds of articles.

And it’s still not easy for me to put a finger on leadership.

Of all the books, I still recommend “On Becoming a Leader,” by Warren Bennis, written more than twenty years ago.  For classes, I score Collins “Level 5 Leadership” above all others.  And you can find several of my favorite leadership articles in the library on this website.

Lately, I’ve been trying to add my own empirical data to the learning.  Who has led me?  What characteristics did they demonstrate?  What made me want to invest my time and resources in their organizations?

I still think of myself as 40, not 60, so it still surprises me when I realize I have a lot of data to work from:

·         Our foundation has invested in over 100 organizations so far

·         Our non-profit and for-profit lending companies have served over 30 small and large organizations

·         For 17 years I’ve met for a full day each month with 15 other CEO/owners in a peer group called Vistage (formerly TEC).

My summary view is that every business and non-profit can easily trace its success or failure in some manner to leadership.  Effective organizations are people-motivated and aligned by a good leader.

So below, I’ll list the characteristics I’ve most consistently seen in the successful entrepreneurs, CEOs and non-profit organization leaders who I’ve worked with.

1.      Acquisitive…..good leaders I’ve worked with crave learning and strive to acquire more knowledge.   The most effective acquisitive leaders get most of their learning from others who have faced similar situations and issues.  So, great leaders are not necessarily inventors, yet always they are builders of knowledge.

2.      Risk managers…..not risk takers.  The best leaders measure risk and reward dispassionately.  They calculate the “best case-worst case” before acting.  Prominent in their calculation is each decision’s effect on the people they lead.

3.      Realistic……..a consistent leadership vacuum is the avoidance of reality.  All of us face one or more overwhelming issues.  Poor leaders avoid seemingly insurmountable issues.  Good leaders accept them, face them down and try to pull that issue apart piece by piece.  Whether successful in overcoming them or not, these folks are more fun to follow.

4.      Planners…….my first question of anyone we might work with is: “Do you have a written plan?”  The second question is “May I see it and critique it?”  Poor leaders answer “no” to one of these questions.  Good leaders have a clear, written plan.  Great leaders have an open plan, welcoming all who are willing to help make the plan better.  NOTE: Many poor leaders hide behind a voluminous “strategic plan,” knowing that if they can’t fully understand it, no one else will either.  J

5.      Customer focused………..the most consistent quality of a poor leader is one who focuses internally.  “Dilbert” and TV’s “Office” demonstrate my point – strategy makes little sense.  Any organization that focuses, even benevolently, from the inside out do worse than ones who build from outside, in.  All success – profit and non – begins with a customer.  

6.      Numbers driven……the most effective non-profit leaders know that they cannot create, maintain or grow their mission without making the numbers work.  I majored in political science so by definition I hate numbers.  But I’ve learned the hard way that both my social venture and business interests can only be served effectively if I first measure decisions mathematically.

7.      Humble…..the surprise of Collins’ Level 5 leadership theory.  Humble people make the best leaders because we find them easy to follow.  Humble leaders don’t care who gets the credit (in fact they know success has many parents) and so they find it easy to encourage others.  Therein lies their power.

8.      Resourceful………….whether working with plentiful resource or none, great leaders know how to leverage whatever they have.  When it’s a lot, they use what they have wisely.  When little is available, they get resourceful.  The great start-ups I’ve worked with take the approach of “who can we borrow resources from?”

9.      Authentic………..I save this for last because it’s the final litmus test of great leadership, in my view.  It’s been said that “people with great strengths have great weaknesses.”  Authentic leaders recognize their weaknesses as well as their strengths.  They allow people to see both and can openly discuss them.  Who follows a phony?  Other phonies. 

Is there one leader I work with who encompasses all these qualities?  Yes, actually there is more than one.  Maybe I’ll feature them in later articles.  These articles would lend reality for my points by citing real leaders I know and follow.

“Do-gooders” fool themselves just like all business people do.  And those willing to fool themselves and others, consciously or unconsciously, waste time and money.    

How do I know?

I’ve done it – repeatedly.

It was only after I got a headache that I stopped beating my head against the wall of non-leadership.

Peace. 

Tim McCarthy

http://www.capitalidea.org/downloads/pdfs/CI_one_page.pdf

Editor’s note: The attached overview of a cool non-profit in Austin, TX, intrigues me for two reasons – 1. It’s a great mission we’re working on too and 2. It’s one of the best simple overviews I’ve ever seen of a social mission.    

Editor’s note:  Thanks to my good friend and article-watcher, Ron Dimattia, for passing this onto me.  I’ve never been a big Clinton fan and yet his point of “charity” alone no longer making sense is one I subscribe to wholeheartedly.  And the article is well-written and to the point.  

http://www.ft.com/intl/cms/s/0/544c317a-42a2-11e1-93ea-00144feab49a.html#axzz1lAhNPWnC

“Simplicity is the ultimate sophistication…nature loves simplicity and unity.” Steve Jobs

Editor's Note: Seems like a good month for a love song. My son and his wife played this at their wedding and I liked it but for reasons that are even a bit deeper. To me, the greatest service to others is without words and the most effective evangelism is non-verbal. How nice that Krauss finds a way to say the same thing about love.

Favorite lyric: "I could never explain what I hear when you don't say a thing"

Author’s Note: This is the 7th in a series of 12 articles I’m writing on mistakes and learning in building our foundation since 1997.

Last month, I wrote about the foundation’s mistakes in enabling the charities we supported in our fledgling years. Called “Roots and Wings” I described how we shifted from investing increasingly more each year into our non-profit partners to a strategy of “moving in, and moving out” over a five year period.

This month, as a follow up, it seems appropriate to speak of how we have learned to measure impact.

In a word: Leverage.

In our early efforts, we measured our impact on the organizations we served by keeping track of the amount of money and time we put in. Our intent was to build the organization’s staffing and financial commitments.

Simply put, building an organization is no measure. Instead of adding impact, we added people and grants. Our early days were focused on operations. In 2009, we decided to target the ratio of operations-to-grants and found, dollar for dollar, we invested almost 2:1 in administration versus grants!

So we decided to target a 1:1 ratio for our ops/grants ratio and today, only two years later, we’ve achieved our first milestone. In 2012 we plan to continue our progress with a 1:2 ratio. The chart below summarizes the point:

Leverage to me means “return on investment.” In the case of measuring ops money over grant money, it was fairly easy. We no longer have lots of people and office space to make grants.

Our next task is tougher. In fact, the two most difficult words in social change are “impact and scale.”

Ultimately we’d like to see leverage of $5 returned for each $1 we invest. Although it will never be fully scientific, we believe it to be a noble goal. And while we’re just getting started on our overall measurement system, Revenue University provides a good example of what we’re after now.

Revenue U. is a pilot with a few partners we are starting in the first quarter of 2012. BVU: The Center for Nonprofit Excellence and Nancy Osgood of The Osgood Group have attracted 11 major organizations who serve the poor of Northeast Ohio to take a three month course in building revenue streams. Identifying and building revenue streams is work we've done consistently over the years since it's a universally needed element to building and maintaining a great mission. But we have only been able to do this work one organization at a time.

Enter RevU@BVU.

Here’s how it works:

1. Organizations will take a retrospective look at their own revenue mix.

2. They will learn how to develop ideas that leverage their organization’s assets.

3. They will create a customized set of evaluation criteria to determine which revenue stream best serves their organization’s mission and financial needs.

4. Organizations will leave with a set of next steps toward monetizing their idea.

So, now 11 organizations will receive in three months what usually takes us even longer to provide just one organization.

That’s leverage. And here’s the kicker.

We intend to enlist the graduates in a network where they will report quarterly on progress and plans in the programs developed so they can continue to build more revenue over time. Perhaps this will someday build into a network of organizations who serve the poor who can count on ongoing revenue building training.

It would certainly be easier to just review proposals and donate money, as most foundations do.

But in our foundation, we are seeking impact and change through leverage and scale.

Therefore, we’re learning that “you can’t change what you can’t measure.”

Peace,

Tim McCarthy

Editor’s note: You’ll have to register on the McKinsey site to finish reading this but it’s free and well worth the read. Every single person I know faces information overload in one way or another. I hope you are working your way out of it, just as I have been. Getting out of the slow-down that multi-tasking can cause in your work is as difficult yet simple as meditation. That is, as the article states: “find time to focus, filter out the unimportant, forget about work every now and then. The holy grail, of course, is to retain the benefits of connectivity without letting it distract us too much.”

http://www.mckinseyquarterly.com/Organization/Talent/Recovering_from_information_overload_2735