Improving Your ROF: “Return on Failure”

The cover of the new May issue of Harvard Business Review is titled “How to Really Learn From Failure.”  In the article, the authors suggest three disciplines of making sure that you can “Increase Your Return on Failure.”*

Do you do an “After Action Review” at the conclusion of every project?  This is highly recommended.  When you do it, make sure to point out the positive aspects of the project and the things that could have been done better.  Don’t fall into the trap of just ignoring failures or being embarrassed about them.  Here are the three tips from the HBR authors:

1.  Learn from Every Failure.  While it can be painful to look back, we need to discipline ourselves to do this even if we are very disappointed.  Pixar’s President, Ed Catmull, is quoted in the article: “Mistakes aren’t a necessary evil.  They aren’t evil at all.  They are the inevitable consequence of doing something new . . . and should be seen as valuable.”

2.  Share the Lessons.  Get over the embarrassment factor.  Set aside a time at staff meetings to share what people have learned from failures or setbacks.  If you are a larger organization, perhaps consider a place to post these electronically or on an intranet.  The HBR authors suggest Triple F Reviews: do them Fast, Frequently, with a Forward-looking focus on learning.

3.  Review Your Pattern of Failure.  Every now and then sit back and review at your list of failures as a whole and look for patterns.  Are there flaws in your decision-making processes?  Consider whether your failure rate is too high or too low?  If it is too high then maybe you need to add some more conservative team members who will help critically review options.  Or maybe you need to add more risk-takers if your failure rate is too low.  Without some failure, there will be limited learning and innovation.

If you practice these disciplines of engaging failure from a positive perspective you will improve your “Return on Failure” and make even more of a Mission Impact.

*J. Birkinshaw & M. Hass, “Increase Your Return on Failure,” Harvard Business Review, May 2016, pp. 90-93.

For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at www.SheehanNonprofitConsulting.com   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting on Facebook.

Perceptions, Reality, & Wounded Warriors

Many of us were very pleased in 2013 when the BBB Wise Giving Alliance, GuideStar, and Charity Navigator launched The Overhead Myth campaign – their effort to dispel the notion that nonprofits should operate with very low staff and infrastructure expenses.  I believe that slow progress is being made in this arena.  But now the Wounded Warrior Project controversy has come along to muddy the waters for the general public.

In late January, both CBS news and The New York Times published stories that criticized WWP for exorbitant spending on staff conferences/travel and that overhead that is too high.

I don’t know about you, but my Facebook page was on fire with so many people declaring they would never again give to WWP.  Even Gary Trudeau trounced WWP in his weekly Doonesbury cartoon. (And when he takes time away from mocking his favorite target, Donald Trump, you know you are in trouble.)

The WWP Board fought back by conducting its own internal investigation into the allegations.  They found that many of the accusations were not true.  However, they did report a need to improve staff travel policies.  And they announced that “the Board determined the organization would benefit from new leadership.”  The CEO and COO were removed from office.  But no further explanation was given.  Hmmm.

Soon thereafter, a report from The Charity Defense Council – a group which seeks to educate the public on the realities of nonprofit finances – issued a report that is critical of the news media coverage and also of the WWP Board not giving a full explanation of why the CEO & COO were fired.

But then, a few days after the CDC report, Nonprofit Quarterly reported in an investigation that WWP made a $150,000 grant to CDC in 2013-14 that was 85% of CDC’s revenue for the year.  And that the now former WWP CEO is on its advisory board.  What?!?

What is going on here!?!

First, there is clearly a lack of transparency, full disclosure, and accuracy on the part of a lot of people – the news organizations, WWP, and CDC.

Next, if you read all of the news accounts, there is a smack of arrogance from both the WWP Board and former CEO as they defend themselves.

This is not the way to build public trust!

The Point: as we seek to educate the public about the importance of adequate infrastructure (not overhead) and staffing, we need to understand and appreciate the general public perception that expenses in nonprofits need to be kept low.  We need to respect the view even as we engage it and work to change it.  We need to be transparent and cannot be tone deaf to public perception.  

It is going to take patience and time and lots of work for us to educate the public on the value of appropriate salaries for quality staff and solid infrastructure for nonprofits.  If we do it with candor and transparency I believe we will get there.

Meanwhile, we shall see what comes of WWP.  All I know is that there are many, many wounded veterans in our country who need assistance. And we need to figure out how to appropriately serve them as they served us.

For more ideas on how you can lead breakthroughs in your organization, follow this blog and check out my web site at www.SheehanNonprofitConsulting.com   You will find free resources you can download, including a Breakthrough Strategy Workbook that you can download at no cost.  You can also check out my book, Mission Impact:  Breakthrough Strategies for Nonprofits, and buy it if you are interested.  And you can follow Sheehan Nonprofit Consulting on Facebook.