Successful strategy is based on having the right people, people who have the skillset, mindset and toolset to align with your organization. Our assessment approach begins with understanding what it takes to be successful within your organization and within a specific mandate. This approach finds your candidates hitting the ground running and delivering results sooner. Key steps in strategic planning models include enterprise assessment and alignment, organizational  change management examples, vision, values, mission statements, and SWOT analysis. LXConsultants: Europe, North America, USA, Canada, Caribbean, Australia, Asia, Texas, Georgia, Ohio. In this article, we present our survey results in more detail and offer concrete managerial advice for strengthening the five core organizational elements in pursuit of becoming a more effective organization.
The lack of a common measurement of performance in the nonprofit sector makes it difficult to prove the link between organizational effectiveness and results quantitatively.
In 2003, Bain surveyed more than 500 companies about their organizational effectiveness and also measured the market performance of those companies. The link between organizational effectiveness and results puts a premium on understanding how nonprofits function organizationally. Our analysis indicates that while nonprofits have some tremendous organizational assets, weaknesses in other areas hold them back from achieving their full potential for impact. Decision making and structure: The ability of people to coordinate and work well together across organizational boundaries is an area where nonprofits tend to run into difficulties.
People: Nonprofits appear to attract good talent and do well placing the right people in the right jobs. Work processes and systems: Nonprofit employees, on both the program and administrative sides, appear to be skilled and motivated.
These findings are consistent with our experience working with and observing many nonprofits: namely, for the most part, they are strongly led but under-managed. The key to becoming more effective, then, is to invest in management capabilities—in short, to move to a place where the nonprofit is not only strongly led, but also strongly managed. Take, for example, an organization that serves students who are at-risk for dropping out of high school. One way to determine if your organization has clear priorities is to ask each member of the senior management team to make a list of its top five priorities for the next one to three years. With clearly communicated priorities come more consistent decisions, given that decision makers throughout the organization are guiding their choices with the same compass.
Establishing and implementing a strong decision-making process is a complex endeavor—one that is hard to do well.
With input from managers throughout the organization, an internal project team worked with national office management to draft a matrix that classified the types of decisions Boys Town site-based leaders faced, and set boundaries of authority and responsibility for decision making going forward. To help people work together more effectively across departments or groups, start by identifying critical areas where such work takes place. One way to assess and improve the effectiveness of your people is to determine how they are aligned against the organization's priorities.
Time spent clarifying and honing work processes, and making them explicit and accessible to employees can reduce rework and reinvention.
Consider the experience of KIPP, a charter management organization currently operating schools in 19 states and the District of Columbia. In addition to getting the processes right, deploying tools and technology can also increase organizational effectiveness. Progress towards becoming a more effective organization means progress towards increasing your impact.
This work by The Bridgespan Group is licensed under a Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 United States License. And they come with a high cost: lower potential for making progress toward the important societal challenges and opportunities nonprofits seek to address. This connection has been well-documented in the for-profit sector, with highly effective organizations demonstrating superior market performance to their less effective peers. Organizations need to establish and communicate clear priorities, make roles and responsibilities explicit, create clear connections across organizational silos, and develop the talented people they attract, or they will fall short of their full potential for impact. In the for-profit world, however, barometers such as profitability and shareholder value make this assessment possible. These same leaders, however, seem to be less effective at translating a compelling vision into a set of explicit goals and corresponding priorities.


However, these employees do not feel that their work is well aligned to the priorities of the organization. Many nonprofits have inspirational and visionary leaders who attract hard-working people with great passion for the cause at hand. As noted, our research suggests that nonprofits need to take a holistic approach towards improving effectiveness, shoring up management capabilities across the board. Are we clear on the strategic priorities that will enable our organization to achieve our desired impact over the next several years?
So it may be valuable to use a management tool specifically designed to help an organization's leaders unravel the decision-making process, clarify roles and responsibilities, and set clear expectations for decision making going forward. As Boys Town continued to expand its services, though, that approach no longer worked well. This process helped the organization push decision making down to the right level and clarify when and how the national office should be involved. Who in our organization must work closely together to achieve these priorities, and does our structure enable them to do so? They find that most leadership teams pay a lot of attention to how work is grouped: around geographies, for example, or product lines or functional areas such as finance or human resources.
Then narrow that list to the areas that link back to the organization's top priorities. Do we have the right people and capabilities to achieve our priorities, and do our people feel that their goals and measures align with these priorities? For each priority, identify who is working on it and compare it to items that are of lower priority. Have we defined the work processes and tools to enable our people to be effective as they address our top priorities?
In 2000, when KIPP had only two schools (both high performing), the organization received a large grant to replicate its efforts across the country. With limited funds available, many nonprofits are hesitant to make these kinds of investments, but they can have a huge payoff. Bain categorized the companies by their financial success based on total shareholder return relative to a peer index.
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We have observed the same connection between effectiveness and performance time and time again in our work with over 200 nonprofit organizations.
The bulk of respondents from the smaller, high-performing group gave their companies much better marks across the board than did their more average-performing peers.
As of this writing, we have administered our diagnostic to more than 40 nonprofits with annual budgets ranging in size from less than $5 million to about $200 million. They're even less effective at communicating priorities throughout their organizations. This finding may also correlate to the relatively low leadership score in setting priorities.
However, these same leaders often find it difficult to implement and codify the kinds of mechanisms that would help these highly motivated people be as productive as possible. A good place to start is with the areas our research has shown to be most prone to weakness.
Have we communicated our strategy clearly enough that everyone within the organization understands where we are going, why, and how we will get there?
Against that goal, it becomes easier to determine which programs or initiatives are essential, and which are not, and to allocate resources accordingly.
If they are, you'll next want to determine whether the priorities are well communicated throughout the organization. A well-defined decision-making process leads to more efficient, responsive, and transparent decisions, with less role confusion and therefore less conflict. The process of using such a tool can help leaders get past preconceived notions of structure and more fully engage in a holistic approach to their organization.
Most, however, pay less attention to how people need to work together across these groups, and thus fail to put in place the kinds of structural mechanisms that can make such coordination easier.
Armed with this information, creating explicit linking mechanisms becomes a more manageable endeavor. This is gold to any nonprofit, but it's particularly valuable when an organization is struggling to increase impact on a tight budget or embarking on an expansion plan.


Consider one large youth-serving organization whose leaders discovered that completing essential documentation after each case interaction was a major source of stress for staff members. Bain's latest thinking on this topic is captured in the upcoming book by Paul Rogers, Marcia Blenko, and Michael Mankins, due to be published in September 2010 by Harvard Business Press. Given the link, it is critically important for nonprofit leaders to assess their organizations' effectiveness and become more purposeful about improving it. This finding is not surprising, given leadership scores on setting and communicating priorities. While this last point did not emerge strongly in the survey data, in our work with nonprofit organizations working conditions crop up repeatedly as a major impediment. Nonprofit leaders cannot effectively change the direction of their organizations if they do not know what their priorities are and what they want the change to accomplish.
Good managers know how to bring discipline, structure, and process to bear, and this is where nonprofits seem to be most lacking. The following five sets of questions can help an organization's leadership team assess those areas and set a purposeful course towards improvement.
Or to help younger students move out of the "at-risk" category before they enter high school?
To begin to find out, ask a representative sample of managers at the next level down to engage in the same exercise. Performance reviews also should lead to action, influencing skill development plans, future job assignments, promotions, and rewards.
These processes included, for example, how to build a strong local board, budget for a new school, and hire the right teachers. Further, nonprofits in general do not appear to prepare adequately for leadership transitions and succession; this area emerged as the biggest weakness overall. Given that many of the issues illuminated by our survey data link to unclear or poorly communicated strategic priorities, we recommend beginning with that challenge. These simple exercises will help you determine if your challenge is clarifying priorities or if you need to work to on communicating the priorities to enable alignment to them.
Others tap staff members to serve as liaisons between departments—for example, asking a finance manager to work with a specific program. Have I taken lower priority work away from these people so that I am sure they will succeed? To codify these processes, the organization's leaders documented the steps they had taken to set up their first two schools. As a first step towards addressing the problem, the organization tested voice-recognition software that allowed staff to dictate their notes, which were then automatically transcribed. Unless the leadership team has established and communicated what matters most it can be difficult to chart a course in the face of such options. Doing this can be especially critical in times of change, be it regrouping after layoffs or embarking on a growth trajectory.
Leaders had told staff members that the organization's priorities included increasing the number of mentoring matches each staff member set up, maintaining the quality of the matches, and balancing matches across easy- and hard-to-serve communities.
By doing this, they ensured that the principals in each new KIPP school did not have to spend time reinventing the fundamentals of the model and could, therefore, spend more time focusing on educating the students. Not only did the software cut documentation time in half, but staff members also began to find the task much less onerous.
These are the times when management team members tend to take on new responsibilities, sometimes overextending themselves and under-resourcing critically important areas.
During performance reviews, however, staff were assessed and rewarded only on the number of matches—the easily quantifiable metric. In fact, the organization's leaders believe that adopting this technology has been a major contributor to improved staff retention, increasing quality while reducing hiring and training costs. They also began to reward employees who had performed well against all of the organization's priorities. This change has contributed to improved employee morale, and it is expected to drive more balanced performance across the organization's priorities.



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