‘This is the new normal,’ says Jan Masaoka

As a nonprofit leader today, “you should think to yourself: This is the new normal,” Jan Masaoka told some 150 HANO members and supporters gathered for its annual meeting and mini-conference on Wednesday, Dec. 9, at the Koolau Ballrooms Conference Center in Kaneohe.

“We don’t recover from a global economic crisis in just a couple of years,” she said. We’re experiencing a change in economic structure and how people think about money and the role of government. “It’s a 10 to 12 year problem. … Declaring ‘this is the new normal’ gives you license to make changes, think differently, put old decisions back on the table and consider new options,” she said.

Masaoka is the director and editor in chief of Blue Avocado, a monthly newsletter for nonprofit professionals and board members with some 50,000 subscribers, which succeeded the Board Café newsletter. She is also the former executive director of CompassPoint Nonprofit Services, a Bay Area consulting and training firm. Among other honors, she has been selected eight times as one of the 50 most influential nonprofit leaders in the nation. The title of Masaoka’s conference keynote was “Best Practices in Challenging Times.”

“At the risk of sounding rude I’d challenge the phrase ‘best practices,’” she said. “Remember as a kid – if everybody else jumped off the bridge, would you? … Don’t do something because it’s a best practice but because it is the right thing to do.

“Tolstoy wrote, ‘Every happy family is the same but every unhappy family is unique.’ Nonprofits are the other way around,” she said. “We are unafraid to be innovative on the big things, but we’re afraid to be innovative when it comes to management. … For example, board terms. Some organizations now say you can pick your term when you sign up.”

Today’s economic pressures beg the question: How do you make the hard decisions? “How many of you have had to make hard decisions in the last year?” Masaoka asked. “Almost everybody. Should we do furloughs? How many days? Should we have layoffs or should we invest in new revenue strategies?

“What does it mean to make a hard decision? What is a hard decision?” she asked. “It’s not something that’s difficult, like a math problem. It’s not like calculus. It’s something you lose sleep over ... a choice between two bad options. It’s when people are hurt, when most people won’t like it, when there’s a downside to it. … It’s a judgment call where we don’t have enough information – like ‘will that grant come through?’

“Remember word problems we had in school?” she asked. “For example, there’s a train coming but we have no idea how fast it’s going and yet we have to decide when it’s going to meet another train. Plus, we have all kinds of information that isn’t useful at all – like the Social Security numbers of everybody on the train.”

Hard decisions are win-lose, not win-win-win, she said. They are when people don’t agree. “Even hard decisions aren’t that bad if everybody agrees,” she said, “even if it’s that everybody agrees to close down the organization.” Hard decisions are those that are unpopular, that people disagree on. They involve making decisions where there are risks and unknowns.

She presented 10 ideas about how to think about nonprofit organizations in the next few years:

1. Think to yourself “this is the new normal.”
2. “Do less with less.” We’re used to doing more with less; doing less with less doesn’t have the same inspirational tone. However, when her church ran out of turkeys, it didn’t ask staff to go out and buy turkeys to give away. Likewise, nonprofits shouldn’t ask staffs to work more overtime if they can’t afford to pay them. “I don’t know anyone here who is going to fulfill their missions next year. We’re not on one-mile hikes; we’re on 100-mile hikes,” Masaoka said. “And it’s not like last year we were meeting the need. … We actually know how to operate in a situation where we aren’t meeting needs. We have all that learning we can draw on. We do the best we can.”
3. “Get over the idea that bigger is better, growth is good.” Masaoka said the budget at CompassPoint increased from $600,000 to $6 million while she was ED, “and people thought I did a great job. But we need to find better ways to be proud of, such as being proud of having the ability to grow and shrink, not just grow and grow. … If you’re going down a river it’s better to be in a small boat than in an ocean liner.” She suggested organizations create some jobs that are just-in-time and intentionally short-term. “We should pride ourselves on having the ability to throw away plans when necessary. We can’t ever be proud that we’ve laid people off, having a deficit or three-days of reserves, but we can be proud of putting long-term needs of the community ahead of the needs of staff. Proud that we can make tough decisions. Changing what we are proud of is important.”
4. “Professionalized organizations are good, but there is value in nurturing grass-roots organizations.” Nonprofits can create networks of volunteers and be symbols of hope. “Funders focus on deliverables, such as unduplicated service hours. But our organizations do so much more. We’ve forgotten the extras we must claim. … Ask your board members ‘Why is this organization meaningful enough for you to volunteer for it?’ They don’t say ‘Because we had 3,500 unduplicated service hours.’ They will give you the parts of the mission that staff and funders don’t ask about. Our board members know what we need to claim.”
5. Change your focus from survival to “We are here to prevail.” Consider all the parts of your mission and value your organization adds. “Some services might be cut, but regardless of the size of our budgets we can prevail in many ways other than our specific deliverables. … HANO is a good example. What makes HANO meaningful enough for you to be here today?” It isn’t the size of the organization’s budget that counts, but what it stands for. “We should be thinking how could our organization work with HANO to make things happen.”
6. We have no training in managing information. “We had 20 minutes in third grade when they taught us how to use the Dewey Decimal system,” she said. When we have to make a decision, nonprofits brainstorm until a decision emerges. “We should ask, what would constitute success in making this decision? Is success not laying off staff or is it raising more money? Could our financial goal be to lose $30,000 or less. Or could it be an additional net fundraising gain of some small amount that positions us for a larger amount next year.”
7. Make better decisions by gathering more information. “Hiring people we spend energy sorting through the pool rather than getting better people into the pool,” she said. “We tend to do the same with decisions. We need to spend more time generating alternatives. Hold each of the alternatives up to the criteria. Don’t just fall in love with one of the options. Will each alternative meet the same criterion?’ When making tough decisions without consensus, leaders tend to step back waiting for people to say what they like. However, the role of leaders is to signal the direction and open up the options not step back and wait for consensus to emerge.
8. “Focus on making it work. Once a decision is made, despite having made a decision without sufficient information, we have to make it work. However, we can reconsider whether the decision was a good one. Just because things turn out badly doesn’t necessarily mean we made a bad decision. Think, did we gather enough information? Should we have waited for more? Did we wait long enough for a consensus to emerge? Did we make the decision appropriately?
9. Making a choice is more important than the course of action we choose. There are many options, but not choosing is worse than not making the absolute best choice. Studies have compared organizations making different decisions and the organizations that acted decisively all succeeded more than those that didn’t choose a course, regardless of the choices they made.
10. “People aren’t our most important asset, they are our only asset.” People with a vision use the organization to materialize their visions. This is the time to get back to our personal visions of what we need to do.

An audience member asked, “What is your answer when people say we don’t need to change?”

Masaoka raised her eyebrows. “You’re fired?” she said, smiling.

“I’m writing a book about business strategies. What might have been a good idea 29 years ago might not be now,” she said. “The hardest thing about being a leader is making a decision that people don’t agree with. … We have to do what constituents need, but they confuse us because [when we ask them what they need] they always just want more.

“An organization’s most precious resource is the full attention of its leadership,” she said “We need to invest that resource in something that is really making a difference and is sustainable. We can’t do that by keeping things going that are just half good. We have to focus attention on high impact programs, not low-impact, and be willing to take the heat. … We have to fire more people.”

Click here for another story from the HANO conference. Scroll down for more photos.