This post is related to non-profits and has been reproduced from a post in March 2005 from my other blog.
Prior to my move to Dallas last year, I spent three years (voluntary
work) in the capacity of the finance officer on the board of a
non-profit organization (that provided child care). My experience at
the non-profit was post-MBA and post management consulting with PRTM. I
got a lot out of the experience, and I was honored to be able to
contribute to the organization.
What I got out of it:
- I found that non-profit boards tend to be more diverse than
corporate boards - the experience forced me to learn how to minimize
MBA jargon talk and the like.
- The board size was much larger and decoupled than one might find
with boards of many corporate organizations (twelve people versus three
to five) - the experience forced me to continue to refine facilitation
skills because large boards can be cumbersome.
- It was often easier to connect finance with both the human policy
and vision of the organization - governance at the board-level directly
affected children and families (some of which are very disadvantaged
[e.g., single moms, low income]), and it was gratifying to get the
organization to points of commitment and resolve.
- I learned to appreciate the need for a separate operating board
versus a fund raising board (something more typical of non-profit
organizations).
There many things that one can bring to table for non-profits. As examples of some MBA concepts that I applied:
- Operations background - Assume that many manufacturing
facilities operate at a normal load of 70% utilization. Now consider an
organization like a child care organization that is make or break based
on child enrollment numbers and where the budgeted numbers for the
organization require breakeven to be 95% of capacity. Does this raise a
warning flag that a correction is needed somewhere?
- Operations and competitive strategy - Suppose there are long
waiting lists (queues) for the two-year old rooms in the facility and
that capacity in the surrounding, competitive facilities is scarce.
What does this like say about the price sensitivity of the market
(i.e., how much the organization can raise enrollment prices)? Probably
one can raise prices more than one thinks.
- Marketing - Other organizations are marketing lower prices yet they
hide the fact that their coverage hours are shorter. How does your
organization want to position itself in the market from a competitive
viewpoint, and what concrete tactical things could be improved to make
sure that people are educated about comparing apples to apples? Perhaps
the organization should market itself as value-based, full-service and
draw out the differences in a nice chart.
- Finance and Controller - When the financial situation gets tough,
it becomes easy to want to take out small things (like water coolers),
but where the dollar impact is small. Attack the problem from a
different angle - first attack the problem from a "required hurdle
perspective" as opposed to "a triage perspective". Use MBA spreadsheet,
multimedia projector, and meeting facilitation skills to get the group
on the same page as to how many dollars actually need to be cut out of
the budget to affect the monthly enrollment fee for each family. Then
come back and triage the budget at the line-level.
- Board governance - Non-profit boards can frequently benefit from
practices used at the board-level in for-profit companies. Things like
knowing about by-laws, employment laws, handling conflict of interest,
etc. in the commercial sector can be adapted to the non-profit world.
For what it's worth, I would highly recommend that MBAs look for
ways to apply their skills to non-profit organizations to whatever
extent they can. Some business schools like Yale have reputations for
being strong in the non-profit sector, but straight-up MBAs are also
good. The relationship with non-profit boards can be as little or as
much as you want in many cases. The upside is good for all parties
involved. You can't always find that in the commercial sector.
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