Okay, fellow nonprofits, it’s time for us to stop whining and start doing what everyone’s been telling us to do – Act like a business!

We’ve been hearing this for years, now. “Nonprofits need to be run like businesses.” Our donors tell us that, government agencies tell us that, foundations tell us that, academics and businesspeople tell us that, the watchdog groups tell us that, even experts on nonprofit management and service delivery like Bill O’Reilly tell us that. So, if everybody thinks so, we need to stop fighting it. These are toughnowhining economic times; our missions and our survival demand that we step up and do the right thing.

To begin with, let’s look at regulation. We keep resisting it. “We’re good people,” we plead. “We’re mission-driven. We can monitor ourselves.” And so, we manage to duck out from under Sarbanes-Oxley and slip away with the leniency of the new 990. Enough! We need to be regulated just like businesses. Our corruption cannot continue unchecked. So, let’s be proactive. Let’s go to Congress and demand our own regulatory agency that imposes the same rigor on us that the SEC requires of the hedge fund industry and the Federal Reserve has used to prevent excesses among financial service businesses.

Then there’s the question of outcomes. It’s time to stop complaining that our results are too hard to measure and own up to the fact that, if we are to be viewed as professionals on a par with any other business leaders, we need to be held accountable for our results just like they are. If we fail, we fail, and we should pay the price. Why should our consequences for poor performance be any different from those for Citigroup or General Motors?

Executive compensation is another area where we need to start acting like business grown-ups. The new 990 requires detailed disclosure of how executive compensation is determined and what comparisons have been made to compensation in other organizations. This is as it should be. Businesses compare compensation to arrive at their packages all the time. When big corporate executives negotiate their salaries, they always review what their peers are getting in order to demand more. Otherwise, they just go somewhere else. Why should we be different?

And, finally, there’s the question of our role in the crumbling economy. It’s time to go to our funders and legislators and explain to them that they need us. Do they want the 15 or so million people that we employ to be out on the streets? And if we are, who’s going to take care of us since we nonprofits won’t be around anymore to do it for ourselves?

Paint a picture of life without us. The homeless sleeping on their fairways, after-school programs abandoned and vacant-eyed third graders marauding the streets like zombies, empty concert halls and no entertainment left but reruns of “My Mother the Car.” Is this the world they want to live in? Quite simply, the nonprofit sector is too big to fail!

So, let’s be like business. We need bail-out money. We need a lot, and we need it fast. Then, when you get it, pay yourself a big bonus and quit. This will have many beneficial results:

  • Some of the money will go to buy stuff. Good for the economy.
  • Some of the money will go into banks. We’ll jump-start the stalled credit system!
  • Some of the money will be invested. We can save the stock market!
  • And, when we retire, new people will have to replace us. Unemployment solved!

So step up, nonprofits. Embrace your business side. It’s our civic duty.

I am a mother of three young children, 7, 5 & 2.  As the day goes by I’m often left with few things crossed off my to do list.  Today was no exception.  Will (2) woke up at 4:30, and although I didn’t get him up until 6:00 a.m., I don’t think I slept much past that.  There were assignment books to be signed, homework to be gathered, pizza money to be turned in, and library books to be returned.

Tantrums were easy come, hard to go for my early riser.  So getting the errands done was not pleasant.  There were cell phone calls from the special event silent auction I’m volunteering to run.  By the time I picked up the older two and got them to gymnastics, I was wiped out.  And there was dinner to make.

I’m sure that this is a familiar experience for other parents of young children, but actually it is not unlike the pace and frequent interruptions of many nonprofit employees and executives.  Sometimes better planning can decrease the chaos in the day, and sometimes it is better to remember that being in control is just an illusion.  Far too infrequently, my husband and I discuss how we think our children are developing and what character traits and behaviors we want to encourage and discourage.  But often, the days go by without awareness of the big picture.

I’ve been reading the 2001 classic “Good to Great” by Jim Collins, as a group with a board that I serve on.  One of the key discoveries of the book is that companies that made the leap to great companies figured out what their “one big thing” was.  He calls it a Hedgehog Concept. 

In the essay “The Hedgehog and the Fox”, Isaiah Berin devided the world into hedgehogs and foxes. The fox is a cunning creature and knows many things, but the hedgehog knows one big thing.

Hedgehogs know how to roll in a ball and protect itself with its  porcupine-like quills.  Hedgehogs are small, slower creatures that have a simple life but know how to stay safe.  “Hedgehogs see what is essential and ignore all the rest.” Collins says that if your business or nonprofit or family life can figure out what your Hedgehog Concept is, you will become great.  The intersection of three things–what you are deeply passionate about; what you can be the best in the world at; and what drives your economic engine– is your hedgehog concept.

This concept of focus is not new.  Peter Drucker also says you need to focus on where your competence, commitment, and opportunity meet, and that your stop-doing list should be larger than your to do list.

Nonprofits have a more difficult time defining a clear economic engine. To his credit, in his companion “Good to Great in the Social Sector”  Collins says that “the inherent complexity [of social sector economic structures] requires deeper, more penetrating insight and rigorous clarity than in your average business entity.”

In these difficult times it is even more essential to spend the energy discerning your Hedgehog Concept and focusing your energies and attentions there.  It is so easy to get caught up in keeping all the plates spinning at once.  But we may need to take some of the plates down.  Collins says the way to find your hedgehog concept is to:

Form a “Council”– a group of the right people who participate in dialogue and debate guided by the three circles. This group must ask the right questions, engage in vigorous debate, make decisions, autopsy the results, and learn. 

I need to think more about what our hedgehog concept is with raising children, but I know that I care much more deeply about their character development than about how well decorated their room is.  Now if I can just figure out how to dodge some of that popcorn…