by Molly Penn
It’s a provocative question, we admit. Yet this is a time when organizations must be wrestling with this question actively. There are three pillars of organizational health:
Pillars of Organizational Health
- Social Capital
When organizations have all three pillars in place, they thrive. With only two of the three, they may start to falter. With none of them in place, it is time to question the survival of the organization.
Our world is going through more political discord and divide than we have ever seen before, we are living through an unprecedented pandemic, and a racial justice reckoning that is long overdue. In short, the world around us is changing dramatically. If we choose to hold still in the face of this change, we will become irrelevant. In this period of economic hardship for many organizations, we believe these are bell-weathers that help us predict which organizations may not survive this crisis and may need to merge with others.
When we are engaged to work with organizations, we are grounded by these three lenses. We assess the organization’s ability to adapt its mission to remain relevant in the world, we take stock of the organization’s social capital – its connection to a systems approach to change, and we evaluate whether it has found an innovative way to deliver mission services. This analysis helps us evaluate the most promising levers of change – the areas outlined in the above infographic. Let’s look at each of these lenses in more detail:
For organizations to remain relevant, they must continually reassess and adapt their mission (what they do) so it relates to the issues most on people’s minds. This is crucial for constituent engagement – so the issues constituents face are well understood by the organizations that serve them. It is vital for donor engagement – so they know the organization is keeping pace with changes in the world that affect them. Together these two constituencies account for (i) the organization’s potential for impact; and (ii) the health and vitality of the organization’s finances. When relevance begins to falter, we see both donors and constituents disengage.
No organization exists as an island. Organizations exist to serve a public good – and that good is defined, in part, by addressing the needs of an organization’s “community” – however that word is interpreted (there are geographic communities or issue communities). Each organization must be in active relationship with its community – through deep involvement in issues of importance to the community, through strong connections to leaders in the community, and through alliances with others who exist to serve that same community. In this way, organizations take a systems approach to serving the needs of their community – understanding that they alone can do little, but as an active member of the community, they can identify a unique role that plays a strong part in serving community needs.
Just because nonprofit organizations exist to serve a social good, that is no excuse for going about their work in the same old way they’ve always done it. It is incumbent upon all organizations to reinvent their approach to keep pace with the way the issues they exist to address are evolving. One of the questions we routinely ask when interviewing stakeholders is, “have you seen an approach to this issue that you think is truly innovative?” In this way we seek to crowdsource great examples of innovation to help our clients jumpstart their own.
Levers of Change
As change agents, we are hired to help organizations in a variety of ways – and we bring these three lenses to every lever of organizational change we can engage:
Strategy is an opportunity to deeply engage your constituents and the influences at play in our society that will shape the future directions of every organization. For example, we believe powerful strategy can disrupt and rebalance existing systems of power and access in the world.
Values are the harbingers of organizational culture. How current to do they feel? How much do they guide behavior in the organization? How does the organization hold itself accountable for living by its values? Consider the way we feel about this presidential election – that is causing many of us to recommit to our own personal values, no matter what they are. Organizations must do the same.
An organization’s business model, as we pointed out above, has a direct connection to both its relevance and its social capital. The business model is an important opportunity to get crystal clear about how to mobilize both revenues and expenses in service of these three pillars: as organizations increase their relevance and social capital, that tends to unlock greater revenue; as organizations focus on innovation, they have increasing control over their business model.
Ironically, board are often the holders of “the way things have always been done.” Unless there is healthy turnover on the board, organizations can get bogged down by boards with outdated ideas and perspectives. Governance offers an opportunity to embrace diverse voices and perspectives, to spur innovation and to apply social capital for the organization’s benefit.
Examining and addressing your internal equity and the status of your constituents in the world is entirely an issue of relevance. Given the overdue social justice movement’s momentum, ensuring your internal equity and inclusiveness is paramount. In terms of your program work, it is imperative that organizations bring their social capital (systems approach and community connections) to bear for the benefit of those they serve.
How your organization is designed has a huge impact on how work gets done. If you want to avoid the “this is how we’ve always done it” mentality, the time may be ripe to reexamine or redesign your organization’s structure to support more inclusive and transparent decision making and processes.
We use this word broadly, to encompass the board and senior staff team. Leadership should ultimately reflect the communities your organization serves and have strong ties to that community. Leadership holds the ultimate responsibility for ensuring the relevance of your organization’s work to the issues at play for your constituents.
Last but not least, the health of your funding investments depends on your relevance and on embracing innovation in your programs. Donors want to know what makes you important, how they can trust that you know the issues well, and they want to get excited about new ideas for solving challenging issues.
Which Lever of Change Holds Potential for Your Organization?
Which of these change levers holds the most promise for your organization, given where you are today? If you are not sure, you can do an organizational assessment and engage us to talk through the findings with you to help you prioritize how best to build your capacity from here. Ask us if you are interested to discuss any of these options. We are here to help.