Category: planning

messaging, planning, rationale, strategy, theory of change

How a theory of change should inform your mission

Many of my clients have difficulty articulating their work in a clear, concise, and compelling way. In my initial conversations with these potential clients, it quickly becomes clear that they do not fully understand the rationale behind their work, or how their work has broader, longer-term impacts on the problem they’re trying to solve. This isn’t unusual, but it is a problem for the organization. This lack of understanding leads to a lack of focus, a lack of clarity among staff and Board members, and a resulting lack of collective purpose and drive. And so inevitably I end up working with these clients on developing a theory of change, one that brings greater clarity, greater focus, and greater cohesion to the organization.

Working with one organization, I was approached by a Board member who was brought in to participate in the process. She asked me a keen question: how might developing a theory of change affect the organization’s mission?

To answer this, let me back up a bit. When an organization is created, it is created with a purpose (hopefully a singular one). The organization’s statement of purpose is what we call a mission statement. It defines what an organization does and what problem it aims to solve. The mission may evolve over time, but the essence of the mission generally remains consistent for the organization.

Most founders of nonprofits have a clear purpose in mind – they know what the organization will do and what it hopes to achieve – but they may not understand the bigger picture. They don’t consider much outside the scope of their own organization’s work, or worse yet, they believe they can solve the whole problem by themselves. But the truth is this: every organization works within a larger system of actors who are working on the same issue.

Some of these actors are working on the same issue from a different angle, but some are taking the very same approach, though they may not be aware of each other. In fact, some organizations aren’t even aware of other groups working in the same geographic area on the same issue with the same partners or constituents! And when this happens, and there are redundant and even competing organizations, it becomes difficult to define an organization’s unique value proposition – what does it offer in solving the problem that no one else can or does?

In other cases, organizations have been doing the same work for years and years with no seeming reduction of the problem. In this situation, they fail to understand the larger system and how their organizations are actually creating impact. How does your organization’s work actually solve the problem in the long-term? Systems are complex, with many different interacting parts. Transformation of the system will require thoughtful planning, clear focus, and working with others who are tackling the same issue. Without knowing the system and its different points of leverage, how can you truly understand what is needed to create lasting change?

This is where a theory of change comes in. A theory of change is not a statement of what will happen when your organization achieves its mission. A theory of change describes what is needed to transform the entire system in which your organization works. It goes beyond the work of your organization because your organization alone cannot solve the problem (despite what you may think). In fact, the vision of the system is your organization’s vision statement, but hopefully it is not unique to your organization and instead is shared by the other actors working in the system. Because you are all working in the same system towards solving the same problem. A theory of change not only provides a view of the system but also where your organization fits within it.

I think of the theory of change as the nonprofit equivalent of a business plan. A business plan is used by for-profit companies to define what the company is about – its product, its customers, and its operations – but it also describes the market it will enter. This way the business owners (and potential investors) will understand how the new business will compete and survive in the long term by providing a unique value to the marketplace. Similarly, a theory of change describes the system an organization is entering and what unique value the organization contributes to the system.

So will a theory of change alter an organization’s mission statement? Actually, yes, it might. Ideally, a theory of change is done as part of the organization’s formation – like with business planning – so its mission statement accurately reflects its unique role in the system. But since most if not all organizations do the theory of change after their mission statement, the theory of change will likely alter the mission somewhat. Not usually in its essence, but in its focus and how it is articulated.

(Side note: It’s backwards to do a mission statement or strategic plan before doing a theory of change – like planning your route to a destination without first looking at a map of the region – but most people don’t know of a theory of change until after they form an organization and a funder asks them what their theory of change is….)

For instance, in understanding the system, your organization may realize that there is a particular need that you alone can fill, and that may become a more important element of your organization’s work. Conversely, there may be areas of your work that overlap with other organizations’ work, and you may cease those programs or at least spend less resources on them, focusing your mission on what is unique to your organization. If parts of your organization’s work tackle different aspects of the system, you may decide to focus on just one, narrowing your mission. Or through the theory of change development process, you simply may gain greater clarity on the true value that your organization can provide, and reframe your work through that lens.

The particular Board member who asked me the question got to experience some shifts to her own organization’s mission. Again, the essence was the same but the focus and purpose was more specific and focused. The organization understood what needed to get done, where it could add the most value, and how it could best solve the problem, and that led to greater articulation of its mission.

I’ve seen organizations shift their missions in light of a new theory of change, but in the end, the organization benefits from a greater comprehension of what needs to get done and how it can best add value to transforming the system into their vision.

Does your theory of change bring greater clarity to your organization’s mission? Does it take a broader view of the system and identify your organization’s unique value within it? Does it help you articulate your organization’s work and purpose?

If you’re interested in developing a theory of change that does all of the above, check out The ToC Workshop, a special eight-week program designed to help you get the most out of a theory of change for your organization.

management, personal development, planning, productivity

3 steps to greater productivity

As the new year gets underway, I’ve been doing a lot of reading about how to improve my clients’ productivity – and my own. After all, we have things we need to achieve this year, and plenty of things we aspire to achieve if only we could get more done.

I’ve read plenty of articles on the subject, and most provide information that is already pretty obvious or just not for me. Sometimes the best articles are the ones where other CEOs and business leaders give more practical advice. These articles spark new ideas for me to try.

But after reading up on the subject, I’ve realized that productivity boils down to three things:

  • planning
  • prioritization
  • focus

Let’s take a look at how these three things can be practically applied to improve your productivity on a daily basis.

Planning. The most productive people plan their work and organize their time. These people set goals – long-term (yearly) as well as the short-term (daily) – and use tools like checklists, task lists, and time blocking. Without planning, people are more likely to get sucked into distractions, have deadlines sneak up on them, or lose sight of what matters. So think about what you want to achieve in the long-term and what needs to get done in the short-term to be successful. Then block your time accordingly.

I use a five-tier system. I set annual goals for myself – professional and personal – and I try to balance aspiration with pragmatism. I do this at the start of the year, setting 2-3 goals for each of the different areas of my life. Then, I look at each quarter and what I want to achieve in that time towards my annual goals. I know some quarters may be busier with travel or family time or other special events, so this helps me spot any potential bottlenecks and I adjust my plans as needed. Then I break down my quarterly goals into months, again to spot any bottlenecks and to also see if my plans can realistically be achieved in that time frame. I then plot out each week’s goals in a table sorted by category. I limit myself to 2-3 weekly goals for each category, so I have less than ten for any given week. Finally, I keep a task list for each day, using my weekly goals as a guide and adding any more immediate tasks (responding to emails, administrative tasks, running errands, etc.). And of course, I use my task list to block time in my calendar, so that I ensure I have time for all my tasks and other activities (working out, eating, writing, etc.). Each week I review my progress on my weekly goals, each month I review my progress on monthly goals, and each quarter I review my progress on quarterly goals. This keeps me moving forward and adjusting as needed to be successful. (After all, plans are just that – plans.)

Prioritization. Many leaders will warn you that there will always be more to do than you can handle. Knowing what is most important to tackle is critical, so you don’t get bogged down by things that keep you from making progress towards the big picture goals. There are lots of methods for determining something’s priority level – decision criteria and threshold measurements that quickly evaluate whether or not something deserves your time and effort. The general approach is to figure out whether or not the task before you will advance your long-term goals or add value to your business. And then all the rest should be either be delegated to someone else, set aside for when you have time, or rejected altogether. Remember: being strategic means knowing what not to do as much as it means knowing what to do.

I keep my priorities straight through planning and organization. For each week, I know what I need to achieve, and when I make my daily task lists, I highlight the things that must get done that day. Then I tackle those things first, saving less important things for later in the day. That way, if something comes up and I don’t get to the less important items on my list, I can push them to the next day or later in the week. I also front-load my week, putting all the priority objectives in the first couple of days and leaving more unplanned time later in the week, so I have spare time to achieve objectives or else extra time to either get ahead or work on side projects. When new opportunities come up, I  use the lift-risk-reward method to assess its importance and urgency. If I decide to take on something that requires more effort, I adjust my planning to make sure I stay on track and use my time to achieve my long-term goals. Some deadlines are fixed and will take priority while flexible deadlines can be shifted to accommodate new clients and projects.

Focus. All this planning and prioritization is useless if at the end of the day you don’t actually sit down and get things done. Just because you blocked time on your calendar doesn’t mean you will actually use that time as planned. You need to commit to the plan and follow through.

There are several different techniques for staying focused. The most basic one is to eliminate distractions of modern technology: leave your phone on silent in the other room, turn off your internet connection, turn off alerts from your mail application, and close any social media sites or applications. Another is to tell others that you are blocking off time and should not be disturbed, and along with this could be a change in environment – closing your office door or even moving to a quiet conference room away from your coworkers. Speaking of which, create the right conditions for focus: silence or music you can ignore, something to eat or drink (stay hydrated), a comfortable place to sit (but not too comfortable), the right temperature (do you work better in cold or warm environments), etc. Sometimes changing your environment periodically keeps you focused too. Try taking short walks every couple of hours, especially if you can get outdoors and walk around somewhere with some greenery. And pay attention to your natural circadian rhythm. Always get a good night’s rest and then see where you have more energy in the day, using those times for harder tasks and lower energy periods for more mindless tasks.

I’ll be honest: I personally struggle with focus. My brain is isn’t wired to sit still and pay attention to just one thought at a time, and I’ve struggled for years with staying focused and not multitasking. But lately I’m trying some approaches that are working for me. First of all, I make sure to get a full night’s sleep, and then my morning routine consists of a quick workout, drinking a full glass or two of water, eating a light healthy breakfast, and jumping right into my first big task of the day. I use the Pomodoro technique to keep myself engaged, and I don’t keep any social media websites or my mail application open during these periods. (It takes a lot of discipline to ignore that email or message but if you use Pomodoro then it’s no more than 25 minutes before you respond – not a long time at all.) I work at home but I sit myself at the dining room table with some tea or water and I put on some music that I usually tune out (sometimes I don’t put on any music at all and just work in silence). And after each task accomplished I will reward myself with a visit to social media, a snack, some small task that I’ve been itching to take care of, or playing with the cats (amazing what some feline companionship and purring can do for the soul). And I keep in mind how good it felt the day before to get my work done. The visualization of success – how it feels to achieve my goals and not have any work lingering when I relax at the end of the day – keeps me moving forward.

Success is not something we dream of, it’s something we do. We achieve the long-term by focusing in the short-term and accomplishing daily tasks. Planning helps us tie the immediate work before us to bigger aspirations, as well as allocating our time in a way that sets us up for achievement. Prioritization ensures that the most critical tasks get done while preventing us from expending time and energy on things that don’t matter. And focus keeps us moving forward, step by step, task by task, minute by minute, towards improving our work, our businesses, and ourselves.

So what are you waiting for? Start being more productive today!

board, case for support, communications, fundraising, invaluable, leadership, management, planning, strategy, theory of change

Want big money? Inspire confidence

Over the holidays, I got around to reading Vu Le’s blog entitled “Hey, you want nonprofits to act more like businesses? Then treat us like businesses” in which he points out that while funders demand nonprofits act more like for-profit businesses, they don’t invest in them like they do for-profits.

While I wholeheartedly and passionately agree with Vu’s requests from funders – more money, more overhead, faster decision-making, more risk-taking, less micro-managing – I think he fails to fully consider the funders’ criticism.

His blog begins with the inciting incident – funders once again asking nonprofits to behave like for-profit businesses. Vu’s title states his viewpoint – if you want nonprofits to behave like businesses then you have to treat us that way – but I think that’s confusing the chicken with the egg.

Yes, to a large extent, nonprofits are backed into a very tight corner because of the way funders invest in them. And yes, I personally believe that if change is going to happen on this front, that funders will be the ones to truly make it happen.

However, you don’t treat a child like an adult just because the child says that’s the only way he’ll grow up and act like one.

Let’s first clarify something: Yes, nonprofits are businesses. Like for-profit businesses, they strive to produce enough goods and services to meet demand; they need to advertise and promote their work; they need to raise enough revenues to cover the full cost of doing business; and they need to reinvest in improving the efficiency and effectiveness of their businesses. The differences are that

  1. nonprofits exist for the public good, to better society or the world in some way, and as such
  2. their “customers” (or constituents) usually cannot pay enough to cover the full cost of business, which means nonprofits are dependent on a third-party donor or funder to subsidize their work; and
  3. they do not distribute their profits to their investors (as Vu rightly points out in his blog).

But when people say that nonprofits should behave like for-profit businesses, well, I think they’re right. Some people who say this are misguided and don’t understand how nonprofits operate (the three points above). But what many are talking about is the way nonprofits manage their organization, from leadership and planning to operations and revenue generation. Nonprofits are often started or run by smart, passionate people who identify a societal need and take action, but few of them have any business or management experience. And I’ll be honest: it usually shows.

Take this one client I worked with last year. He fit this description – a university professor with a sharp mind, a keen understanding of his work, a vision of how to solve a problem. But when I asked him what his business is, he responded, “Well, I don’t have a business. I run a nonprofit.” And this kind of thinking is why he had no strategic plan, no fundraising plan… and a fully volunteer-run operation without enough funding to pay for staff or expand his efforts.

Here’s the thing: if you want funders to invest in you like they do for-profit companies, you need to inspire confidence. When you come to a me as a funder with a good idea, I’m interested in hearing more. But when you fail to present a clear, thoughtful plan for executing the plan, financing the work, and producing concrete, measurable results, what makes you think I’m going to just throw a large sum of money at you?

Do you think for-profit businesses just walk up to venture capital firms without a business plan? Without proof of concept? Without projected financials and results? Of course not. Start-ups work hard to put forth a solid, convincing plan based on numbers and hard evidence. (And they are more open and up-front about the risk, which makes it easier for investors to take a risk, because it is known and calculated.)

If you want to be treated like a for-profit company, you need to inspire the same kind of confidence that for-profit businesses do. To do this you should have a handle on basic business principles, including:

  • Planning. Most organizations have a strategic plan, but does that plan provide a convincing picture of how you will create impact? Does it show how you will strengthen and grow your organization to achieve that impact? Does it include concrete measurements and evaluation of progress and success? Do you have a financial plan that illustrates how you will raise enough revenue to cover the full cost of doing business (not just program expenses)? Does it consider what will happen in the event you don’t raise enough funds? Do you have a budget that not only shows how you will allocate your resources but that also reflects your strategic goals? And do you have a thoughtful theory of change (the equivalent of a business plan) that describes the system you work in, what it will realistically take to achieve change, and your organization’s unique role in creating that change?
  • Finance. Do you have a system to properly manage revenues and expenses? Do you conduct thorough financial reporting on a regular basis? Are you allocating your resources to maximize your impact and improve your cost effectiveness? Do you have a diversified revenue portfolio that covers the full cost of doing business? Do your financial reports show that you have learned from the past to improve your financial standing? Are you able to adapt to changing financial circumstances (a big grant you didn’t get, an economic recession, insufficient overhead, etc.)?
  • Management. Does your leadership inspire confidence? Are they organized, thoughtful, compassionate, and focused on the mission? Does your nonprofit have a high turnover rate or high retention rate? Does the organization have a clear and logical structure to achieve its goals? Does the organization have a culture that is positive, cohesive, evidence-driven, and supportive of learning and development? Does the organization have a human resources function, with clear policies and infrastructure to effectively manage staff? Do different people and teams within your organization communicate and collaborate effectively? Has your organization successfully navigated through a period of rapid growth?

There are other aspects of an organization that can inspire confidence – a strong brand, solid partnerships, compelling communications, an honest risk assessment and a realistic risk mitigation plan, a history of success or proof of concept, etc. – but the three listed above are critical aspects of an organization that funders will question when making decisions about whether to fund your work or not.

And sure, you can say, “Well, if funders only invest in our program work, how will we ever have the time and money to invest in all this other stuff?” To which my response is: ask for it. If you can demonstrate a need for these things, and the benefits they’ll bring to your organization, it’s not a hard case to make. Most funders know the importance of supporting the nonprofit enterprise and will at least add some funding to a project grant to help you build out those competencies. Program Officers are real people with real feelings, and they genuinely care about helping your organization succeed (even if their bosses and the decision-makers are more interested in a return on investment). Especially if you have solid relationships with existing funders, ask for what you need.

I am passionate about nonprofits and I admit I am as frustrated as anyone with the way the sector is held back and inhibited by current funding practices. And again, it’s a chicken-and-egg scenario: if we want funding practices to change, we need to inspire more confidence, which might mean asking for funding to do it.

In the end, though, it does no good to play the whiny child, complaining that we won’t grow up until we’re treated like grown ups. Demonstrate that you deserve to be treated like one, and it will be much easier to get the respect and support you deserve.