Learning to Read the Road Signs

Detour sign, stop sign and road closed sign as a background

Some would say this is a tough time to be a leader. Budgets are tight and getting tighter. Those who purchase your services may very well be changing the ground rules on a regular basis. The task of recruiting, and keeping, the best employees is more competitive than ever before. All the signs seem to indicate that the road ahead will be a bumpy one . . . that is, of course, if you take the signs at face value. The best leaders tend to see things a little differently.

Take, for example, an agency that starts down the road to develop a new program. They are excited about the potential, and yet when proposing the program to different funding sources, they consistently hear, “That sounds great, but we aren’t set up to fund a program like that.” At that point, many people see a stop sign. Great idea, but the money just isn’t there. Visionary leaders don’t allow current funding frameworks to derail an opportunity to extend their mission reach. They don’t see the “no” as a stop sign, they see it as a detour sign that simply means “not yet,” and then look for a path around the barrier in the road. It may take a little longer than planned, but more often than not they will find a way to the other side.

Or what about the talented employee who has so much potential, but who is restless in his or her current role? Talk of new titles or salary adjustments seem to do little to spark the employee’s interest, and the supervisor fears there will be an exit sign just over the next hill. The strategic leader, however, takes note of the scenic overlook sign, and invites the employee to pull over and view the panoramic vistas — which might include more flexibility, or stretch projects, or something as simple as helping them identify a sounding board or confidant so they don’t feel like they’re stuck at the end of a path all by themselves. The scenic overlook may include a glimpse of something the agency has never seen before, and the leader brave enough to take a look may see the path that will keep their most promising staff engaged.

And then there is the funder intent on placing “blind curve” signs at every turn. While many organizations would ride their brakes in the wake of such warnings, the nimble leader finds a steady pace that enables them to maneuver the winding road with a minimum of wear and tear on the organizational machine, allowing for quicker acceleration when the road finally straightens out.

So what is the key to seeing the signs that will take you to the high road of effective leadership? First and foremost, wear your mission glasses to minimize the glare of money, or tradition, or someone else’s goals. The sharper the focus on your strategic direction, the easier it is to spot the signs that will lead you astray. When you know exactly where you are going, you are much less likely to be swayed by the colorful billboard promising an exciting attraction just five miles to the east. Mission glasses also help you realize that money isn’t the goal (and when you start chasing the money, it’s amazing how quickly the mission can drift away.) Money, while critical, is a moving target that shifts depending on which way the wind is blowing. It is the mission that keeps you moving forward on the right road. And when the leader is clear on the destination, the entire organization begins to function like a high-performance machine, hugging the road around every curve, and gliding over the bumps that throw others off course.

Tough time to be a leader? It all depends how you read the signs.

It’s okay, take advantage of me . . .

Contract Surprise

In effect, that’s what many non-profit organizations do when they simply accept contracts where you could drive a semi through the gap between the cost to fulfill the expectations of the contract and the reimbursement being offered.  Somehow we get accepting an unsustainable funding model all tangled up with our sense of mission. (For more than 100 years, our mission has been to serve “the least of these” and since this is all the funder is willing to pay for this service, I don’t have a choice).

 You always have a choice.

 Now, I am not saying that you shouldn’t accept a contract unless it is fully funded. Many of the programs at our agency are underwritten in part by charitable dollars. That has been a conscious decision on our part, and our Board and staff see how that decision is carried out through an annual break-out of where our charitable dollars are going.  The choice you have is whether or not you are going to allow a single funding source to become such a dominant part of your revenue stream that they begin to dictate who you are and what you do.

 For example, a number of years ago we were in the same boat that many nonprofits remain in today, where one funder — usually a government agency — makes up such as huge percentage of your revenue (say 80 – 90%) that you don’t feel like you can push back when they start making totally unreasonable requests.  It’s easy to see how this happens . . . it is more efficient to work with one set of rules and expectations, one oversight body, one billing mechanism . . . right up to the point when you realize that your hands are tied. And when that happens, and said funding source then says, “By the way, we now have these 8 new requirements and we aren’t going to cover your costs to carry them out. In fact, times are tight so we are going to cut your reimbursement by 11%,” you really do have not options AT THE MOMENT, other than to begrudgingly say “Okay.”

 But not having options at the moment is not the same as not having options.

From my perspective, it is a stewardship responsibility to come up with viable options, and start laying the groundwork to make those options a reality. As I mentioned earlier, a number of years ago, one referral source accounted for approximately 85% of our fee-for-service revenue. Today, our largest referral source comprises less than 30% of our fee for service revenue. Our path to getting there wouldn’t be the right path for everyone. You have to consider the resources and opportunities that are unique to your organization. In this case, the how is less important that the what, with “the what” being revenue diversification.

 You and your board are the guardians of your mission, and the only way you can truly make decisions that are in the best interest of your mission is to ensure that no single funding source — government agency, donor, or otherwise —has so much control over your resources that you feel helpless to push back if necessary. Challenging those who help pay the bills takes courage, and you have to be willing to face the consequences  . . . but really, when you think about it, there are consequences for not pushing back too.

No one ever said non-profit work was for the faint of heart.  And personally, I’ve always preferred offense to defense. How about you?