Spring break came and went since my last blog post.

Table of contents

• Notes from IDSC
• Notes from MGNPO

It didn’t feel like much of a break. I used my extra time to dig in on the conference presentation and work hard scrubbing data for the conversion at work. We also battled through some illness at home as our toddler got a mild case of pneumonia and I felt a bit under the weather too. Everyone was thankfully feeling better in time for a fun family weekend, we went to see The Wiz at Children’s Theatre on Saturday and had brunch with extended family on Sunday.

Coming back from the break on Monday, I attended the first session of the Carlson School IT Management class that I petitioned to get in to. I wrote in my notes at the beginning that I’m not in Kansas anymore. Just walking in to that room I felt a very different vibe compared to taking classes at Humphrey. There wasn’t a single familiar face and the students seemed a lot more buttoned up (for lack of a better term). As the class went on the difference became apparent, this is a required class for the part time MBA program and most of my classmates are professionals working in giant corporations. Some of them work for less well known but still pretty big companies. I think I’m the only one in the room who works for a nonprofit organization, and likely have the smallest employer of any of my classmates. So I definitely felt a bit like a fish out of water, but then I also felt that way last year when I walked back into a U of MN classroom for the first time in 14 years. Also, the specific reason I wanted to take this class is to gain some education on how IT management scales up beyond the smaller environments I have experience with. Working through the feeling of being out of place will be a necessary part of pursuing that goal.

I’m really proud of how the conference presentation on Wednesday went, and especially of the resources put together for it. My friend Autumn joined as a co-presenter and helped make it really engaging and successful. We didn’t draw a huge audience, but the people who showed up were highly engaged and we had a great discussion. And now we’re well positioned to present this session again three weeks from now in New Orleans. I hope to weave a bit more of what I’ve been learning in grad school into the presentation by that point. For this round I just didn’t have enough time to do that. The most time consuming part of this over the past few weeks was creating the TechBook, Tech Plan, and Budget Spreadsheet sample documents. Now that those been stripped down to generic example information, they’re posted publicly as models for others to download and repurpose at their own organizations. My sincere hope is that they live on beyond the conferences as toolkits that people find helpful and put to good use.

By mid-week I was worn down and tired, and chose a full night’s sleep over staying up late to complete the readings in time for Thursday night’s class. I did wake up early that morning to skim them though, so at least I had an idea of what was in there, even if I didn’t live up to my standard of reading it all thoroughly and then taking another pass through to summarize them on the blog here. But I’m planning to catch up on that this weekend along with the readings for next week.

Right now it’s Saturday morning. I’m getting a little time to drink coffee and write as the kiddo happily watches some videos on a tablet (this generation’s version of Saturday morning cartoons, I guess). Her mom is working both days this weekend so today is a papa and kiddo day. Once I wrap this up I’ll get breakfast served and maybe get us over to the Children’s Museum to have some fun. Her grandpa is coming over tomorrow to hang out and give me a bit more time to study. Balancing homework and family time has become a familiar weekend routine over the past year. It’s ramping up again now that I’m back to two classes, but I’m confident I can handle it. Just six weeks from now the semester will be done and my certificate program will be complete.

Notes from IDSC

As the professor introduced himself, he explained that his research area is in how IT is involved in the creation of intangible assets. As he explained how competitive advantage stems from how businesses utilize IT and the unique mix of complements around the technology, I was reminded a this reading from last semester on the concept of Human Capital Resources.

• We’re in the middle of a very complex set of changes, much of which has to do with IT and with globalization.
• A lot of things are changing with no clear recipes about what firms need to do about it
• The class is about the strategic role of IT in firms. Goal is to build a managerial toolkit to participate in planning and utilizing IT.
• Increasingly, the core of many types of businesses is being driven by IT.
• What differentiates firms is not how much money firms invest in IT. Firms where managers are more engaged in IT tend to get more bang for the buck from their IT investments.
• We used to think that if you teach IT people the business well enough they would interface well, but the thinking has changed. Approach now emphasizes the importance of teaching business managers about the value of technology.
• Companies are increasingly in platform based competition, as products turn into platforms
• The role of technology is to solve business problems. Those problems come in all shapes and colors. So make sure you bring in learnings from other classes and experiences.
• To be effective as a manager you have to take personal experience and refine it in your head to turn it into something really powerful
• Management is a specific kind of education where the class asks a lot of you. Analogy: you bring in a bunch of rocks (personal experience), use the concepts to refine and polish them, and leave with shiny diamonds
• What you are doing is really valuable if you use the concepts, plus what’s happening at work, to get a lot more intelligent about what’s going on around you. Build your toolkit and leverage the experience
• Final individual project will evaluate the questions, how does your firm derive value from its information technology?
• Question about the scope of what constitutes IT
  • Some industries have become IT intensive, software is embedded into the product. (Example: Nest thermostat) So the line between what is and is not IT types of technology is disintegrating
  • Not necessarily as important to draw that line as to recognize that once there’s some bleed over it’s important to keep track of and manage it according to IT management principles
• In large firms there’s a certain cycle in which things get done. The cycle for large IT projects is roughly 2-3 years. Prototypes being worked on right now won’t be deployed until 2020
• Performance spread between winners and losers has grown dramatically. IT has helped drive winner-take-all markets. Dominant players have outsized competitive advantages which lead to only one or two dominant players controlling a market.
• As information intensity increases, it’s shaking some of the foundations
• To understand the concept of big bang disruption, take a step back and examine what disruption means
• Theory is that the incumbent continuously moves up market to address higher end segments. The disruptor targets the low end of the market that the incumbent has taken their eye off
• Anecdotes are still not adding up to clear patterns for action
• These are so new that it’s hard to tell where it’s going. We’re only seeing the first centimeter of the graph so far
• Keep your eye on this ball. Something is happening in the space which may upend a lot of established theories, and the future may look a lot different than the past
• Non-linear progression in software is part of what we see today in self-driving cars and other futuristic technologies. Since 1988 (?) we’ve seen hardware capabilities increase 1,000x, but have seen software/algorithm capabilities increase 4.3 million fold
• The big notion in the Three Worlds of IT article is the notion of compliments. What is a complement? It’s a principle that’s all around us in life
  • The notion of a complement in economics is when value of A + B is far more than the sum of their parts
  • The notion of complements is having something that gives something else a push
  • Peanut butter and jelly = classic example
  • Software and smart, trained people are a complement
• In the context of IT, there’s been a lot of study around how organizations put in systems and they fail. Track record of IT is only about 30-40% payoff.
• Special characteristics of IT:
  • Some don’t need compliments
  • Some won’t work without compliments
  • Some allow compliments to emerge
• Three varieties of IT (Functional, Network, Enterprise) have fundamentally different characteristics
  • Function IT is straightforward. Can force things to speed up, easy to measure increases. Complements help but not necessary for success.
  • Enterprise IT imposes complements, and if they’re not well adopted then the product won’t be used and deployment may fail. Complement for the payoff may be process change across the organization. Can needs to be a very top-down process. (I disagree with this, believe that while it’s important to have executive sponsorship and a mandate it’s just as important to run an inclusive process where people’s concerns are heard and incorporated into system design to foster buy in and improve product quality)
  • Network IT doesn’t impose complements, but lets them emerge and over time and payoffs increase when they do
• Governance question around IT is what needs to be company-wide, versus what needs to be department-by-department?

Notes from MGNPO

MGNPO, Week 8

• It takes money to make money. The intent of a social enterprise is to support the mission. It’s not your mission, it’s your means
• There is no formal definition of social enterprise
• Social enterprise needs to generate economic returns that feed the mission size
• Much of the nonprofit world terminology borrows from the business world. I.e. “social return on investment”
• Commercial income activities unrelated to the mission of the organization may be subject to UBIT
• The nonprofit sector is going to have to do some sort of reinvention. Reliance on government and foundation financing are not sustainable
• Core competencies - you need some people who know how to run a business, and some who further the mission. There are some inherent conflicts but all perspectives are valuable
• You need to have an exit strategy for every business you start. Nonprofits are not accustomed to this. The merger/acquisition process for nonprofits is borrowed from the business world
• Existing customers or markets - need to identify them. Who is in our network?
• Capital requirements - nonprofits often don’t have access to capital, and this is a big problem for the sector.
• Community perception - cynicism exists that social enterprise means you’re a for profit or that you’re taking advantage of the constituency. Need to closely watch and manage perception to maintain public trust.
• Knowing your demographic - on the planning side that’s called understanding your stakeholders and knowing what they need
• Individual donations and volunteerism can be litmus tests of community support, very important for demonstrating legitimacy in the eyes of donors and regulators.
• Some institutional donors want to see a diversified revenue portfolio as a qualifier for support
• When you find individuals who are passionate about your mission, they will be your champions and repeat donors, can have a multiplier effect activating their social circles to support you
• In philanthropy, need to know what motivates the funder. Ask the question, what’s your legacy?
• Fundraising is a group activity. Need to connect donors to program people, build relationships. Especially important when your development staff leave the organization.
• Terminology is confusing - differences between philanthropy, charity, development. But an operative word is love. It’s not about pity, it’s about the power this will bring to somebody and the love of your society and community. Don’t structure a donor pitch to make them cry, make them proud and inspired instead
• What is money? Money is trust in nonprofits. Individuals are entrusting you with resources to do good in the world
• Givers now want to be more involved than previous generations, want to see the results first hand
• When the donor is a foundation or corporation, ask for a meeting with them when you don’t receive the funds. Use that to ask them what you could have done differently, then adjust and try again
• Focus on the positive - on the ability not the disability, on the opportunity not the tragedy
• Takeaways:
  • Philanthropy, Charity, Welfare all come from different motivators
    • Philanthropy - A desire to help humanity
    • Charity - Love for one’s fellows
    • Welfare - State of well being
  • Answer the questions:
    • Why us?
    • Why now? Urgency!
    • Why you?
  • It’s not just do the ask, have to do your homework before the ask
  • What is your promise (…Why Us?)
    • What can you offer
    • Your history
    • Your ability
    • Your stability
    • Your connections
    • Your effectiveness
    • Your efficiency
    • Your impact

MGNPO, Week 10

• What is the function of a board of directors?
  • Fiduciary responsibility
  • Sets strategy
  • Hires the executive director
  • Accountability
  • Ensures that the organization is meeting its mission/staying on track
  • Stewardship
• Why do we need a board?
  • Legally mandated
  • Board acts as the owner (in lieu of the real owner of the nonprofit - the public)
• Sometimes racism, sexism needs to be challenged in the context of board service
• If you’re highly dependent on fundraising, might need someone with a fundraising background on the board
• Sometimes, marquee names are attractive to have on the board for prestige, but will they actually show up? If they’re not going to be actively engaged could be detrimental
• Boards help answer the question, what are we doing and why are we doing it?
• Oftentimes the people who serve a need (wealthy or connected to fundraising or representative of constituency) aren’t also great with governance. A way to get around this is to put together an advisory board.
• When you select board members, go beyond their demographic traits - find out about their skills and cultural competencies. Choosing people solely based on their color or gender smacks of tokenism.
• Founder’s syndrome can also affect board composition. When a board is composed of the ED’s friends and acquaintances, who do you turn to if there are issues with the ED? Classic dysfunctional board issue
• Groupthink is unhealthy for organizations. Boards need to have a variety of perspectives and healthy debates
• Fiduciary questions are often backwards looking - how did we do in the past? Forward looking questions examine where we’re going and do we have the right people?
• Strategic re-framing, instead of looking at “we have a lot of turnover” look at “why do we have a lot of turnover, and what do we need to change?”
• Board members often have to be coached to ask those forward looking questions
  • You have to ask those bigger questions about what will it take for our organization to succeed and grow. Develop your strategy based on the answers to those questions
• If a board doesn’t know what their work is, they’ll do management’s job
• Board structure - at the outset (startup), usually a working board and only a few members (3-5). As you grow and need more members, develop committees
• The structure of the board follows the functions needed from it
• The board chair often acts as the conduit to the CEO
• Audit committees are sometimes an exception, separate from the composition for the board, has specific powers (such as selecting the audit firm). IRS regulations that orgs of a certain size required to have an audit by an independent entity.
• Audit committee can also provide oversight of compliance (variety of issues), can also handle whistleblower complaints
• The structure of your board and the members of your board should be aligned with advancing your strategic plan. Look at those goals 2-3 years out and ask if you have people on the board with expertise in the areas that will be important
• Boards that don’t address structural issues over time will start to break down because they’re hindered in their function as a result
• One of the questions you can ask in terms of how your board is functioning - if your board didn’t meet for a year, what would be different? If the answer is nothing, that’s a symptom of not understanding what the board’s value is
• Once you figure out what the board’s value is, somebody needs to tell them. Telling them their value goes a long way, but it also needs to be genuine. Also need to have the hard conversations with underperforming board members
• We have to be careful about how we paint boards and how we track their effectiveness
• Too many boards perform below par - they could do better
• Individual board members are underplayed. If you’re planning to become an ED, take a facilitation course and conflict management training
• Increased diversity is a challenge for boards to face
• State policies vary, but generally boards are held to three standards:
  • Duty of obedience
  • Duty of care
  • Duty of loyalty
• Not showing up to a meeting or not reading the materials is a violation of the duty of care. Having no voice means you’ve gone with the majority
• The board speaks with one voice. Even if you disagreed during the process, once it’s decided need to be united
• Boards can be sued for not performing these duties
• Ask your board members:
  • who are your stakeholders?
  • what would happen if our organization went away?
• The notion that the CEO is simply an agent of the board cannot be supported. It sometimes shows up in job descriptions - the CEO acts as the agent of the board in… The world is changing and it’s much more of a partnership. But while changing, it’s still the dominant theory for most nonprofits
• The ED is an employee of the board and subordinate in some ways, but when crafting strategy for where the organization needs to go they’re partners
• What makes an organization work well is when the board and CEO know their roles and play them strongly
• As CEO, you have a voice but not a vote
• Integrating mission, money, and other resources is another challenge
• If boards just sit around in generative mode, nothing will happen. Need all three modes to make them go (fiduciary, strategic, generative)
• The cyclical nature of boards - empirical model that’s been followed for a long time. Boards typically progress through a sequence of 3 distinct operating phases, then experience a crisis that indicates the whole cycle over again. During each cycle, board members become progressively less interested in the details. Stages are predictable, but timing is not
• 5 identifiable operating styles:
  • Collective
  • Sustaining
  • Super-managing
  • Corporate
  • Ratifying
• You have to give the board some social time. It’s key to a board building chemistry and working well together.
• Candor at board meetings is important, as long as we talk about the issue and not the person. (Don’t start the conversation with “that person is wrong”)