By June 2, 2012 Leave a comment Read More →

The Non Nonprofit: For-Profit Thinking for Nonprofit Success (Book Review)

The Non Nonprofit

“He who has a why to live can bear any now.” — Friedrich Nietzche

One of the books I’m reading now is, The Non Nonprofit: For-Profit Thinking for Nonprofit Success, by Steve Rothschild.   It was submitted to me for review, but I agreed to write about it only if I found it useful for readers of Sources of Insight.   Since it’s very much about personal empowerment, and about how to apply business lessons to life, I think it’s a great fit.

The heart of the book revolves around seven principles. The seven principles represent “proven for-profit thinking that an help any enterprise, for-profit or non-profit, improve its results and achieve its purpose.”

What I like about the book is that Steve shows how to apply the best lessons from the business world to improve and amplify non-profit success.  What I also like is that the author is a time-tested business leader.  Steve was an executive vice president of General Mills.  Now he uses his experience and lessons learned from driving business success to drive success for the greater good.  It’s social entrepreneurism in action.

What I like most about the book is that it’s  anchored to RISE!  RISE! is a social program focused on breaking the cycle of generational poverty.  It creates a sustainable model by training people in personal empowerment.   RISE! lifts people from a downward spiral of inner-city crime, unemployment, and poverty, to an upward spiral of empowered people with skills, that find jobs that start above the poverty line.  It breaks the chain.

Chapters at a Glance

Here are the chapters at a glance:

  • Chapter 1 – Principle #1 – Have a Clear and Appropriate Purpose
  • Chapter 2 – Principle #2 – Measure What Counts
  • Chapter 3 – Principle #3 – Be Market Driven
  • Chapter 4 – Principle #4 – Create Mutual Accountability
  • Chapter 5 – Principle #5 – Support Personal Empowerment
  • Chapter 6 – Principle #6 – Create Economic Value from Social Benefit
  • Chapter 7 – Principle #7 – Be Learning Driven
  • Chapter 8 – The Principles in Practice

Problems Addressed

Here is a sampling of the problems addressed by the book:

  • How to use your purpose and mission to drive great outcomes
  • How to communicate your purpose to your stakeholders
  • How to measure the right things to drive great results versus meaningless activity
  • How to identify who your true customers really are
  • How to find the right metaphor to help potential funders get your point
  • How to apply a market driven approach to stay relevant, flexible, and profitable

Key Features

I like the book design.  Here are some of the key features:

  • Principle-based.   Using principles simplifies the book.  Using principles to organize the content of the book makes it easy to relate to, easy to remember, and easy to apply across a wide variety of situations and circumstances.
  • Cutting questions.  Steve includes great questions throughout the book.  You can see his executive thinking skills in action.   The beauty is that questions are a short-cut to great results.  We can often find the right answer, if we can start with the right question.   The right questions are gold.  Key questions help organize our thoughts into more meaningful and effective action.
  • Stories and real-world examples.  Steve shares stories from real people and real situations to help light up his points and show the impact in a way that’s easy to relate to.
  • Plain English.  Steve uses plain English and down to Earth language so that it’s easy to follow along and easily absorb the wealth of wisdom that he shares.
  • Frames and Models.  Steve includes mental models and frames for thinking about business.  for example, when he explains the continuum of social purpose funding, he breaks it down into three buckets:  “No financial return expected.”,  “Below-market return expected.”, and “Market rate return expected.”   He uses this frame to help explain the ROI models so that you can make more informed choices about how you seek your funding.

Purpose and Mission

One of my favorite nuggets from the book is Steve’s insight on purpose and mission.  He clarifies that purpose is the value an organization will bring to the world, and the mission is how the organization will do so.  Purpose is also what will help you stay the course when times get rough and deal with the obstacles along the way.

Steve argues that focusing on purpose and mission are the keys to success, and that profit is an outcome.  He points out that many organizations fail to reach their potential because they focus on profit instead of purpose and mission.  A clear and compelling mission guides your actions, helps ensure clear goals, and focuses valuable resources during the journey.

Steve shares an example of how RISE! uses the purpose and mission to guide decisions.  At RISE!, the purpose is to reduce concentrated effort.  The mission is to provide employers with skilled workers, primarily men of color.   Rather than just place people in jobs, it’s more targeted.  RISE! places people in jobs that start above the poverty line — jobs that pay no less than twenty thousand dollars a year plus benefits.   This distinction is important because it’s part of how RISE! breaks the cycle of poverty to reduce concentrated poverty.  If they just placed people in jobs at minimum wage, they would not break the cycle or create a sustainable system.

Measuring What Counts

This is another example of a key insight that Steve shares.  Too many businesses, and non-profits, fall into the trap of measuring activity instead of outcomes.  The problem is that you get what you focus on.   If you measure activity, you get more activity, but that doesn’t necessarily translate to results.  Steve shares the following questions to shift fro measuring activity to measuring outcomes:

“Are your current metrics inputs, outputs, or outcomes?  Inputs and outputs can be very useful in evaluating day-to-day operations and satisfying some stakeholders, but they aren’t effective for determining whether you are achieving your purpose and your mission.”

Stories of Empowerment

One of my favorite parts of the book is the stories of the transformative power of empowerment training.  Here is an example:

“Empower has helped me find hope.  It has helped strengthen me. … Empowerment has made me a better father because I’m not angry anymore, and I’m not hurt anymore.  So I am able to spend real quality time with my children without interruptions of negative thoughts popping in my head … In just over a year, I went from depression to a place of peace.  I went from being homeless to living in a house with my name on the lease.  I went from being underemployed to having a full-time job with medical, dental, and a 401K plan.”

Scale Up and Become Self-Sustaining

I think one of the most important take aways from the book is that if you want to last, you have to develop sustainable solutions based on economic value.  Steve writes:

“Start-up capital is somewhat available, as is capital for expanding beyond pilot programs.  But an organization that wants to make a meaningful contribution to achieving its broader purpose needs to scale up and become self-sustaining.  The key to obtaining capital for that stage of your organization’s development lies in measuring outcomes, establishing economic value, and developing mechanisms that recognize the organization’s return on investment.  For the value you create (Local, state, or federal government; insurance companies; foundations)?  Can you make the economic case to them now?  If not, what more information or analysis would you need?

Whether you’re on the profit side or the non-profit side, I think you’ll enjoy the crisp thinking and clarity around purpose, mission, and metrics.   I’m already using some of the questions Steve shares to do a rethink of how I measure against outcomes.

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