Drucker Mondays

Week 26: Centralization, Confederation, and Decentralization

Week 26 of 52. Welcome to Drucker Mondays, a 52-week journey through the new book, A Year with Peter Drucker: 52 Weeks of Coaching for Leadership Effectiveness, by Joseph A. Maciariello. Each Monday, we'll feature a Drucker fan and his or her favorite snippet from the week's topic. (Subscribe on this page.) John Walling is our guest writer today. 

Week 26: Centralization, Confederation, and Decentralization

THE BIG IDEA FROM THE BOOK: Peter Drucker, a keen student of history, encouraged organizations and companies to organize their work around the right structure. In this chapter, Joseph Maciariello notes three options: centralized (the King of England’s authority over the American colonies), confederation (Continental Congress giving maximum autonomy to the colonies), and federal decentralization (U.S. Constitution granting significant powers to the states).

The examples are insightful: Rick Warren’s Saddleback Church (the Cinemax movie theater model), General Motors (federal decentralization), and Toyota (confederation). 

JOHN WALLING'S FAVORITE DRUCKER INSIGHTS from Week 26, pages 203-208:
• Peter Drucker: “I just know that the more control there is, the less growth there is. The great lesson of the twentieth century is that central planning doesn’t work.”
• Rick Warren: “I have a staff pastor that I send out to visit other purpose-driven churches in the field and report to me. I’m always thinking about who we’re not reaching.”

JOHN WALLING'S COLOR COMMENTARY:
Because Christian Community Credit Union partners with churches and ministries with loans for new church construction and expansion, I appreciated the dialogue in this chapter between Peter Drucker and Rick Warren on organizational structure and vision.

Warren noted, “Our model is the movie theater Cineplex—that offers different venues, styles, and times on the same campus. I don’t like the arena/stadium-size church buildings for several reasons. First, the larger the service, the more the attendees become passive spectators.

“Second, history shows that the next generation never fills the giant temples built by the previous generation. Spurgeon’s Tabernacle in London is now one fourth the size it was in its heyday.

“Third, it’s wasteful stewardship to build a 7,000-seat building that can only be filed once a week and sits empty the rest of the week.”

As we look for opportunities to partner with churches and ministries, we’re helping pastors and board members think both short-term and long-term. Will this investment in property and building reach more people—and will it be sustainable? And, as Drucker pointed out, what’s the best organizational structure for each unique organization?

THIS WEEK'S QUOTES & COMMENTARY BY JOHN WALLING:

John Walling is the president and CEO of Christian Community Credit Union where he has served since 1972. He has grown this leading financial institution from assets of $7 million and 5,700 members to more than $600 million in assets and nearly 30,000 members in over 100 countries.

         

TO-DO TODAY: 
• Maciariello asks, what’s the best structure for your unique mission? “Is your organization held together by information or by power?”
• “Is there any one person in your organization who is responsible for maintaining spontaneity and growth? If not, should there be?”

           

NEXT MONDAY:
On July 6, 2015, Bob Andringa, consultant/coach to CEOs and Boards, will share his color commentary on Week 27’s topic, “The Networked Organization: A Model for the 21st Century,” the second in this two-week series, “Structuring Your Organization.” 

Week 25: Phase Changes as Organizations Grow and Change

Week 25 of 52. Welcome to Drucker Mondays, a 52-week journey through the new book, A Year with Peter Drucker: 52 Weeks of Coaching for Leadership Effectiveness, by Joseph A. Maciariello. Each Monday, we'll feature a Drucker fan and his or her favorite snippet from the week's topic. (Subscribe on this page.) Shannon Barnes is our guest writer today. 

Week 25: Phase Changes as Organizations Grow and Change

THE BIG IDEA FROM THE BOOK: In both our personal lives and the “lives” of our organizations, change is a constant. We likely expect (or better said, allow) change to come from outside the organization (environment, circumstances, etc.).

But one of the often unforeseen and unwelcomed “fruits” of any level of organizational growth/success is the internal changes it demands. These “phase changes,” as Drucker describes them, require a correlating change in the leadership’s skill set and focus.

Leaders must resist holding onto outdated or inadequate organizational forms/norms and recognize that the leadership role (or the executive him/herself) must change. If they won’t or don’t, they risk significantly undermining the organization’s effectiveness or destroying it entirely.

SHANNON BARNES' FAVORITE DRUCKER INSIGHTS from Week 25, pages 191-199:
• “It is not uncommon to see organizations lose their vitality as they grow and age; this loss can be fatal, especially during periods of rapid changes in the environment and in the behavior of their customers.” (page 196)
• “At some point there is a need for a ‘phase change’ in management: the founder either has to become an executive or bring in someone else to run the organization.” (page 192)
• “In my experience with both profit and nonprofit organizations, there are really two problems. One is that the founder refuses to accept the fact that the organization is different. And the other one is that [founders] reject, almost fear, any capable successor.” (page 194)

SHANNON BARNES' COLOR COMMENTARY:
Most of my professional life has been spent in the messy midst of various organizational “phase changes”—planting and establishing a church after college, joining the launch team of a “dot com” in the first booming round of that industry, jumping back into ministry to help a modest church release its gifts and grow (in every way) into its Godly potential, and leading the restructuring of a disorganized manufacturing company.

I have experienced firsthand how radically the leadership needs change as the scale, scope, and maturity of the organization changes.

Now, as a coach and consultant to church/nonprofit leaders engaged in significant mission-driven pursuits, I regularly witness both the leadership challenges faced by executives and boards. Far too many leadership teams fail to develop themselves for “what’s ahead”—choosing instead to remain adequate for “what is” even as the environment changes and, slowly but surely, their effectiveness wanes.

Impacting and effective leaders recognize the need to always be developing their leadership capacities, adjusting their focus, and redefining their roles to meet the future-leaning needs of the organization. And self-aware executives (and pastors, too!) also know when those needs depart from their strengths and abilities, and take action to either strengthen their teams/boards or identify another leader with the skills necessary for the organization’s successful future.

THIS WEEK'S QUOTES & COMMENTARY BY SHANNON BARNES:

Shannon D. Barnes is the managing principal of The EDGE Group. He enjoys a long hike, a long dinner, a good book, a great friend, any activity with his five beautiful kids, and every opportunity to help leaders/boards successfully navigate significant periods of mission-driven growth. Follow him on Twitter @ShannonDBarnes. 

        

TO-DO TODAY: 
• Look at your organization’s trends and real outcomes. Is the organization achieving what it should be achieving? Have its work, efficacy, and mission-defined outcomes slowed, flat-lined, or diminished? Does your vision of the future compel changes today?
• Self-assess your leadership capacity and fit. Are you offering the organization the leadership it needs at this time? Are your strengths fully employed? Are you ready to embrace change and willing to offer the leadership the organization needs in the season ahead?
• Find the right tools. Determine action steps. What do you need to read? Who do you need to talk to? Do you need a coach/consultant to help you better focus your role or develop your leadership skill-set? Or do you believe it’s time to use your strengths and skills somewhere else and to allow another godly leader to lead the organization you serve now? If so, who do you need to discuss this with?

          

NEXT MONDAY:
On June 29, 2015, John Walling, president and CEO of Christian Community Credit Union, will share his color commentary on Week 26’s topic, “Centralization, Confederation, and Decentralization,” the first of two weeks on “Structuring Your Organization.” (Learn why Rick Warren is not a big fan of "arena-size" churches!)

Week 24: A Primer on Market Research of Noncustomers

Week 24 of 52. Welcome to Drucker Mondays, a 52-week journey through the new book, A Year with Peter Drucker: 52 Weeks of Coaching for Leadership Effectiveness, by Joseph A. Maciariello. Each Monday, we'll feature a Drucker fan and his or her favorite snippet from the week's topic. (Subscribe on this page.) David Schmidt is our guest writer today. 

Week 24: A Primer on Market Research of Noncustomers

THE BIG IDEA FROM THE BOOK: Effective leaders don’t decide unilaterally for non-customers what they need. Instead they base their strategy on very extensive, in-depth market research of the people who should be customers—but aren’t.

DAVID SCHMIDT'S FAVORITE DRUCKER INSIGHTS from Week 24, pages 184-191:
• “What the people in the business think they know about customer and market is more likely wrong than right. There is only one person who really knows: the customer.”
• “It is a mistake to assume that a prospective customer is irrational if he or she is not enthusiastic about a producer’s logic. Rather, it is the producer’s duty to determine what the customer will find valuable.” 

DAVID SCHMIDT'S COLOR COMMENTARY:
One of the sad, even painful, behaviors I see in too many nonprofit leaders is an almost willful disregard for their audience—demonstrated by a lack of non-customer research Peter Drucker advocates here. 

Our agency had the privilege and responsibility of executing nearly all of the early congregational research used at Willow Creek Community Church to make more informed ministry decisions. Compassion was the driver—not numbers. Willow Creek was motivated to lower the artificial barriers people encountered in making an authentic connection to Jesus Christ. 

It’s my experience that the Christian non-profit leaders who love their constituents the most, demonstrate that in their research budgets. They care enough to get to know their non-customers and other key stakeholder groups and then act on the insights they get. 

THIS WEEK'S QUOTES & COMMENTARY BY DAVID SCHMIDT:

David Schmidt is the president of J. David Schmidt & Associates, Wheaton, Ill. He notes, “We are all about helping our clients explore ‘off the map’ they follow—so they can better achieve greater impact and results. Email him at [email protected] or visit his website.

        

TO-DO TODAY: 
Ask yourself:  Who are the next 1,000 attenders, students, ministry recipients, campers, listeners, viewers or buyers we seek to impact with our mission?  Now go look at your research budget that is designated to get to know your non-customers.  Then listen to what your heart says about what you see in that line item. That dollar amount speaks volumes.

         

NEXT MONDAY:
On June 22, 2015, Shannon Barnes,  managing principal of The EDGE Group, will share his color commentary on Week 25’s topic, “Phase Changes as Organizations Grow and Change,” the final chapter of five weeks on “Maintaining Your Organization Through Change.”

Week 23: Using the Mission Statement to Create Unity in the Organization

Week 23 of 52. Welcome to Drucker Mondays, a 52-week journey through the new book, A Year with Peter Drucker: 52 Weeks of Coaching for Leadership Effectiveness, by Joseph A. Maciariello. Each Monday, we'll feature a Drucker fan and his or her favorite snippet from the week's topic. (Subscribe on this page.) Tami Heim is our guest writer today. 

Week 23: Using the Mission Statement to Create Unity in the Organization

THE BIG IDEA FROM THE BOOK: An organization’s mission statement can create strong unity and sense of purpose for all those who serve in the organization.  It’s most effective when it is fully vetted and universally agreed upon so that it becomes the guiding force for decisions, behaviors, and tangible outcomes. 

TAMI HEIM'S FAVORITE DRUCKER INSIGHTS from Week 23, pages 177-183:
• Developing a mission statement to actually guide the work of the organization is a high-stakes decision that deserves care and constructive conflict.
• The assumptions embedded in any mission statement must fit reality.
• You need three things for a good mission statement: opportunities, competence, and commitment. 

TAMI HEIM'S COLOR COMMENTARY:
There are many different frameworks for creating an effective mission statement. Getting them right has become so critical for organizations that consultants have successfully discovered how to make a profitable business out of simply assisting in their development.

For the past three decades, I have worked in both for-profit and nonprofit organizations. In all of them I have been part of the hard work it takes to redefine the mission statement. It does require great intentionality and flourishes when every level of the organization has a way to contribute to it. Enrollment and alignment, in addition to identifying the call to something bigger than the organization itself, are keys to creating a mission statement that will ultimately influence behaviors, decision-making, and outcomes.

A leader’s passion for the mission must breathe life into it every day. An organization’s mission statement is most transformational when its stewards give it the center stage it deserves. The CEO and senior leadership teams must reinforce and model the mission’s significance, demonstrate how it guides decisions, and emphasize how it inspires whatever action is taken to achieve it. 

In a 2013 interview I conducted with Wess Stafford, former CEO of Compassion International, we talked about Compassion’s mission. Wess explained, “When you share your mission and it doesn’t move you to tears in the first 90 seconds, you need to get out of the way. You need to resign. Yes resign, so the organization can find a leader who has a passion worthy of the call.”

I have never heard the importance of mission so elegantly articulated as Wess did that day. It was a challenge I took to heart in my own personal commitment to the mission of the ministry I serve.

THIS WEEK'S QUOTES & COMMENTARY BY TAMI HEIM:

Tami Heim is the president and CEO of Christian Leadership Alliance which exists to equip and unite leaders to transform the world for Christ.

       

TO-DO TODAY: 
1. Revisit your mission statement with fresh eyes. What is it about the mission that truly inspires you?
2. Assess your schedule and your activity for the day—and then identify exactly how what you have planned will advance your organization’s mission.
3. Integrate the mission statement into a conversation or written communication each day and evaluate if it moves or inspires action.

         

NEXT MONDAY:
On June 15, 2015, David Schmidt of Wise Planning in Wheaton, Ill., will share his color commentary on Week 24’s topic, “A Primer on Market Research of Noncustomers,” the fourth of five weeks on “Maintaining Your Organization Through Change.” 

Week 22: Systematic Abandonment and Innovation

Week 22 of 52. Welcome to Drucker Mondays, a 52-week journey through the new book, A Year with Peter Drucker: 52 Weeks of Coaching for Leadership Effectiveness, by Joseph A. Maciariello. Each Monday, we'll feature a Drucker fan and his or her favorite snippet from the week's topic. (Subscribe on this page.) Mark Matlock is our guest writer today. 

Week 22: Systematic Abandonment and Innovation

THE BIG IDEA FROM THE BOOK: Every organization needs to have a regular “rummage sale” to determine which products, services and programs are worth keeping and which ones must be abandoned.

MARK MATLOCK'S FAVORITE DRUCKER INSIGHTS from Week 22, pages 170-176:
• “The inability to abandon existing programs reduces resources available to fund new initiatives that are necessary if the U.S. is to remain competitive as a nation.”
• “Abandonment of the old is particularly important for the non-profit service organization because it believes, and must believe, in the righteousness of its cause. That makes innovation very difficult because the first key to innovation is the willingness to abandon the old so that you free yourself for the new.”
• “If we did not do this already, would we go into it now?” If the answer is no, “What do we do now?”
• “Beware of commitment to ego as an excuse for maintaining the status quo.”
• “Developing a process of systematic abandonment, and making it a regular part of the culture of an organization is one of the most effective ways to eliminate the old and make room for the new.”

MARK MATLOCK'S COLOR COMMENTARY:
It seems that every time I am with a group of non-profit executives (my field) everyone is talking about what new things they are adding, but rarely do you hear them discuss what they are letting go. Try sharing what you are subtracting sometime. If it’s true, you’ll get a great reaction because many leaders don’t know how to let things go. They’ll want to know how you did it.

Drucker’s comments about non-profits is spot on. We commit so deeply to what we do rather than “why” we do our programs, they can take on a sacredness regardless of whether they are effective or not. We can often raise funds to paste leaves onto dead limbs rather than pruning back and bearing more fruit. Many of our organizations would benefit from Holy Subtraction.

When Jesus said the harvest was ripe, but laborers were needed in the field, it made clear to me that we do not fundamentally have communication, program, or funding problems—our fundamental issue is one of capacity. I remember a rare moment, as a board member, when we came to the realization that the organization had more funds available than we could implement on the field. When does that ever happen? 

Capacity was our issue, and abandonment of old systems helped make way for innovation. Drucker’s thoughts around systematic abandonment help us manage capacity to make room for the difficult work of innovation.

Simon Sinek’s Ted Talk, “How Great Leaders Inspire Action,” and other resources, like his book, Start With Why, include helpful concepts when coupled with Drucker’s insights—to help us figure out what needs to go.

But be careful of only practicing abandonment once. It’s Drucker’s focus on systematizing abandonment that rings true. Abandonment needs to be part of an organization’s culture, like spring cleaning. Every organization needs a rummage sale to reduce clutter and potentially make space for something new.

(Sometimes managing for capacity is difficult for boards and donors to understand. For more on capacity and non-profits, check out the Venture Philanthropy Partners report prepared by McKinsey & Company.)

THIS WEEK'S QUOTES & COMMENTARY BY MARK MATLOCK:

Mark Matlock, President of Youth Specialties, is the author of several books for teens and parents. In addition to his work in youth ministry, Mark is a member of the Magic Castle in Beverly Hills and enjoys cooking elaborate meals for friends and family. Mark is also a Life Planner with The Paterson Center, and a master trainer in the MCORE motivational assessment. Mark has also served three terms as a board member of The Seed Company. Follow Mark on Twitter: @markmatlock

      

TO-DO TODAY: 
• Ask what products, programs and services are really moving the mission of the organization forward.
• Are there known “sacred cows” that cannot be touched?
• What would be the appropriate rhythm for systematic abandonment in your organization? Who are the key decision makers that need to be involved?
• What leaders do you know that have managed the abandonment of a product, program or service that you could gain wisdom from?

        

NEXT MONDAY:
On June 8, 2015, Tami Heim, President & CEO of Christian Leadership Alliance, will share her color commentary on Week 23’s topic, “Using the Mission Statement to Create Unity in the Organization,” the third of five weeks on “Maintaining Your Organization Through Change.”