Thursday, March 10, 2011

Share Our Strength's unprecedented growth: secrets of success, lesson #3

I recently used a Community Wealth Ventures convening of leading nonprofits in Cincinnati, and then a lecture at the Kennedy School in Boston, as an opportunity to discuss Share Our Strength’s unprecedented growth over the past two years. Specifically I sought to tease out and understand the key ingredients of that growth, almost as if presenting a case study. This is a unique moment in our 25 year history. And our recent experience is all but unique across the broader nonprofit sector. That makes it a valuable learning opportunity that could help others, whether within or outside the hunger field.

At Share Our Strength our revenues hovered around $13 million annually in the years between 2004-2008. We were a classic case of the nonprofit whose growth had reached a plateau. We were stuck. Then we sharpened our strategy and made investments in capacity – including a few we could not afford. Our revenues grew to about $19 million in 2009, $26 million in 2010 and they will be $34 million this year. We added 30 staff to a base of 65 in 2010 and we are hiring for 20 more now. Though improbable it was not accidental or coincidental. The specific reasons follow below.

Lesson # 3: Talent trumps all else. Invest in talent first. Everything flows from it. Great ideas, great strategy, and great execution will not flow from a less than great team. Such talent is expensive and must be searched for in places that nonprofits do not always search. There are infinite rationalizations for not paying higher salaries, not replacing loyal but low performing team members, not investing in seasoned managers when you need them. Those rationalizations will save you money but they will not enable you to achieve your mission.

The challenge is not only financial. It can be cultural as well. Top talent wants to work with other top talent. So at first there is a Catch-22 that must be overcome, a tipping point that must be reached, until you’ve not just got a few great people but built a culture that reflects so much talent that it shines like a beacon to attract others.

And talent is not easy to manage. Any NBA coach will tell you that a team of superstars is more challenging to coach than a team of average players. It requires more and better management rather than less. Rapid growth can fray the parts of your culture that you cherish the most, and keeping that culture, not for sentimental reasons but because it serves to advance your mission, requires being intentional and explicit in sharing what styles and behaviors are acceptable and what aren’t.

Tomorrow: Lesson #4: Surplus (playing offense) is better than debt (playing defense)

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