Funding Web Projects from Reserves

Should financial reserves be used to fund the development of a website instead of from current revenues? The answer lies largely in the strategic value of the project in question.

Financial reserves are the funds that many non-profit organizations literally hold in a reserve. Since they don’t pay out profits to owners or shareholders, bottom line revenue goes into the bank and is typically invested. These reserves may serve different purposes but they have a role in providing financial security, rainy day resources, and in some cases capital for new ventures within the organization. Funding a website project would qualify under the latter.

My grandfather, a serial entrepreneur in his day, said this: “You can borrow money to make money but you should never borrow to pay for the groceries.” Wise advice all around and it definitely applies to funding your website development and operations.

Delving into reserves to create new capacity, to expand your website infrastructure, with the expectation of significant returns over several years is often a good thing to do. Using reserves to pay for staff or one-off projects is almost always not. The decision to invest reserve capital should always have a tremendous focus on creating significant and sustained new value. It should not be used to cover spot costs or very short-term needs.

This is why web strategy is so critical in a large development project: it gives you and your organization the greatest chance of creating significant returns online when reserve funds are in play.

A Lone Wolf is a Dead Wolf: Why You Need a Pack

Wolves are pack animals. A lone wolf quickly dies because only with the support of a unified pack can they bring down animals with which to feed themselves.

Likewise, the lone wolf in an organization may have some limited success but it will be the exception rather than a consistent pattern.

You need your own wolf pack within and outside the organization. Who do you rely on? Who can help you to get things done, to get that new product or campaign out the door? Extend this to external providers as well. The more useful people with whom you have relationships the better you’ll able to put together a team that cannot be beat.

And always remember that it should be a reciprocal relationship. No pack will have you long if you only take from others. Be generous with your assistance, advice and aid when needed.

Organizational Politics is a Means, Not an End

When I worked on staff at associations, I was quite good at navigating organizational politics, particularly later in my career. What I realized was that organizational politics is simply a means to an end rather than the point of work. Once I figured that out, it was quite liberating and actually allowed me to engage in less politics while being more effective.

A critical part of managing organizational politics is understanding whether you are arguing about goals or about methods. Make this part of the conversation. Do we agree on what we are trying to achieve? If not, resolve that before moving on to determining how you will achieve it.

I have personally seen groups arguing about methodology when they had no agrement on what they were attempting to achieve. Going back to resolve the goal would often evaporate the original conflict because it was suddenly and obviously irrelevant to the clarified goal.

If you don’t clarify the core of the argument like this the only way to ‘win’ is by retaining your turf. This rarely creates value for the organization nor your mission.

The Two Tremendous Advantages NPOs Have Over Business

Non-profit organizations of all types typically have two advantages over for-profit competitors: trust and data.

NPOs are trusted more than businesses quite often. The trust comes from being a mission-focused organization as well as knowing that profits are reinvested to support the mission rather than paid out to owners or shareholders.

Many organizations also have a tremendous amount of data about their market already on hand. You know who the big givers are, you know who is in your profession, you know who comes to more meetings and events than others. This data is priceless.

Businesses would give a lot to have the same advantages.

Use the trust you have been given to offer value to your members, volunteers, donors, and others. Use that data to make highly relevant offers and communications to these same people.

Fulfilling your mission as an NPO doesn’t mean you have to be a doormat. Embrace your advantages! Put them to work. You owe it to your mission and your constituents.

Goals That Matter

My very first job when I moved to Washington DC in the early 90s was as a temp mailing sugar propaganda to schools across the country.

The goal of the organization at the time was to promote the health benefits of natural sugar. While I found the idea of mailing sugar information to schools pretty amusing, especially the Spanish-language version titled “El Diente,” it wasn’t a goal I cared about at all. I actually felt somewhat guilty about it. Combined with the mind-numbing work, it was hard to stay motivated and I did precisely what was expected of me and no more.

(I’m experiencing karmic payback now that I have two young children who love sugar!)

My next temp gig was filing paper event registration forms for an organization that helped companies relocate their employees more effectively. There was an international component to this, which I was very interested in since I had studied abroad in high school and college. The goal of relocation is to move people efficiently but also to do so in a way that enabled the employee to become effective in the job as soon as possible. Much of this work actually focuses on supporting their family more than the employee.

This was something that I could get behind. I had personal experience with it and knew how valuable it was to people uprooting their lives to move across the world.

It was a goal that mattered to me. I worked hard, was offered a permanent position and spent the next seven years moving through a half-dozen positions of increasing responsibility, constantly pushing to create new ways to achieve that goal.

What a difference a goal that mattered made to my career. I’m still exploring the path that those seven years opened up for me.

This is why goals that matter are critical if you want to be an orgpreneur. You need an evil plan. You need goals that will make you fail on the way to success.

You will actually harm your career if you take a job somewhere that does not pursue a goal that matters to you in some fashion. You will languish. You will not make exciting things happen.

Nothing other than a goal that matters will maintain your motivation and energy consistently over time.

You need a goal that matters. If you don’t have one, make one. Or find someone who has one you can get behind and work with them.

Life is short! Go for it.

Link of the Week: Interview with Steve Denning by Seth Kahan

I really liked this mini-interview with Steve Denning about how to create dramatic change without budget or authority. The interview is part of Seth Kahan’s up-coming book, Getting Change Right.

One of key comments by Steve is that he felt his knowledge initiative at the World Bank was better off starting out starved for resources. They had to prove the value of it and as they did so they found the resources they needed.

Being hungry can be a boon rather than an obstacle.

Big Shots Who Failed Big Time

Failure is key part of entrepreneurship. As my mentor, Alan Weiss says, “If you’re not failing, you’re not trying hard enough.”

This article in the Wall Street Journal points out some rather well known, successful, people who failed right out of high school by not getting into their choice of college. Warren Buffet, Tom Brokaw, Ted Turner, Scott McNealy, the list goes on. A comment from Mr. Buffett:

“The truth is, everything that has happened in my life…that I thought was a crushing event at the time, has turned out for the better,” Mr. Buffett says. With the exception of health problems, he says, setbacks teach “lessons that carry you along. You learn that a temporary defeat is not a permanent one. In the end, it can be an opportunity.”

Mr. Buffett regards his rejection at age 19 by Harvard Business School as a pivotal episode in his life. Looking back, he says Harvard wouldn’t have been a good fit. But at the time, he “had this feeling of dread” after being rejected in an admissions interview in Chicago, and a fear of disappointing his father.

You are in excellent company when you fail at something. No failure, no progress.

Why Not My Job?

This is a great question that orgpreneurs ask of themselves all the time. They see an opportunity to fill a gap or create something new and think, “Why not my job?”

Why not make it part of what you do?

Why not suggest the new program and then embrace making it happen when you get the green light? Or just go for it and scrounge the resources?

If you don’t, then you fall into thinking ‘not my job’ instead, which is deadly to your career, organization and, ultimately, your mission.

In my experience working with associations and non-profits, the people whose job descriptions are always playing catch up are the true orgpreneurs. They don’t let their job description limit what they will tackle in order to pursue a goal that matters. The job description of these staff shows where they were, not where they will be.

Next time you face a challenge or an opportunity, try thinking ‘why not my job’ and see where it takes you.

Announcing a new blog from David Gammel:

I am very pleased to announce a new blog I am writing for those who embrace entrepreneurship in the pursuit of goals that matter: Orgpreneur.

The first few posts include:

Why You Must Make a Buck to Make a Difference
Why Entrepreneurship Matters to NPOs
Why You Must Put the Hairy Baby on the Table (one of my favorite stories from early in my career)

I hope you’ll check it out and subscribe!

The Hairy Baby on the Table

Early in my career I was in a staff meeting and felt that a critical issue was being danced around without anyone addressing it. I got more and more agitated until I finally interrupted and pointed out the elephant in the room.

However, I must have had my metaphor wires crossed that day because what I came out with was something like:

There’s a big hairy baby in the middle of the table and none of us are talking about it!

As you might guess, this caused great hilarity and I think my face turned purple. It did get the issue out there, though, and we dealt with it.

You have to put the hairy baby on the table and talk about it if you really want to make a difference. Ignoring these tough issues is often what gets an organization into deep trouble over time.

In my previous post on entrepreneurship, the Drucker quote starts with ‘everyone who can face up to decision making.’ Making decisions is critical to actually creating value. No decision, no action. A tremendous amount of my work in consulting and coaching essentially boils to down to helping my clients identify and make important decisions.

Point out those hairy babies, talk them through, and make sure a decision is made. It is one of the most valuable things you can do in a meeting or planning session.