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MANAGING THE DEVELOPMENT ORGANIZATION

Dr. David R. Kolzow

TN BEDC 2013

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MANAGING FOR EXCELLENCE IN AN OUTCOME-BASED

ENVIRONMENT

• Who Are We?• Who Do We Want to Be?• How Do We Get There?• How Do We Know If We Got There?

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WHO ARE WE?

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TYPES OF DEVELOPMENT ORGANIZATIONS

• Public/private non-profits• Chambers of Commerce• Local governments• State governments• Port authorities• Local redevelopment corporations• Utility companies• Empowerment & enterprise zones• Certified development corporations• Universities & community colleges

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THE EXCELLENT ORGANIZATION

• Viewed as:• One of the best• First-Class• Highly professional• Working hard at doing most

things well• Always striving to be better

Quality is not an act; it is a habit. Aristotle

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EXCELLENCE“Strive for perfection; be content with

excellence.” Mediocrity is what happens when you quit

striving for “excellence”

MEDIOCRITY

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EXCELLENCEAttitude is ultimately more important than

knowledge and ability in the quest for excellence – true or false?

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MOVING TOWARDS EXCELLENCE

Ability is what you’re capable of doing.

Motivation determines what you do.

Attitude determines how well you do it.

Lou Holtz

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EXCELLENCE

List those “things“ your organization does that is superior to other organizations you are aware of:

• • • •

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MANAGING FOR RESULTS

Being an “excellent” organization is more than mastering certain management techniques

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MANAGING FOR EXCELLENCE

• Who in a organization is involved in its

management?

• How big does an organization have to be to have a concern for management excellence

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“Ninety percent of what we call

‘management’ consists of making it difficult for people to get things done.” – Peter

Drucker

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THE NONPROFIT ORGANIZATION

• The Board governs• The CEO manages• The staff performs• The stakeholders, constituents, and

customers benefit

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WHO ARE WE?SWOT

• Organizational Assessment• Strengths

• Employees with valued skills• Organizational competencies & capabilities• Competitive advantages over other organizations• Unique resources

• Weaknesses – inadequacies in any of the above• Opportunities – new paths to pursue with clear benefits• Threats – External situations that can negatively impact

the organization; they must be actively dealt with to prevent trouble (e.g., economic recession, loss of funding)

• Define org’s “core operations” and functions• E.g., working with prospects, marketing, BR&E

• Measure your org’s current capability in successfully handling your core operations

• Determine what gaps need addressing

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WHAT IS OUR COMPETENCY?

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WHAT IS OUR COMPETENCY?

Operation Core Components

Marketing program

Board support

Strategies and performance measures

Appropriate targets

Promotion material

Website Funding

Core OperationsScoring

1unacceptable

2weak

3basic/

average

4sound / good

practice

5Excellent/

outstanding

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Organizational Capacity Components

Strategic leadership Leadership, strategic planning, innovative thinking

Organizational structure Governance & operational structure

Human resources Planning, staffing, developing, appraising and rewarding, maintaining effective human relations

Financial management Financial planning, financial accountability, financial statements and systems

Infrastructure Facilities & technology management

Program & services mgmt. Planning, implementing, and monitoring programs/projects

Process mgmt. Problem-solving, decision-making, communications, monitoring and evaluation

Inter-org. linkages Planning, implementing, and monitoring networks and partnerships

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8 AREAS OF ORGANIZATIONAL CAPACITY AND THEIR VARIOUS COMPONENTS

• Determine org’s “core competencies” that give it a uniqueness and competitive advantage

• Identify skills and capabilities needed to support core competencies• E.g., sales training, website development

• Measure your org’s current capability• E.g., performance evaluations, input from customers

• Determine what gaps need addressing

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WHAT ARE OUR UNIQUE OR “CORE” COMPETENCIES?

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• Define org’s “core operations” and functions• E.g., working with prospects, marketing, BR&E

• Determine org’s “core competencies” that give it a uniqueness and competitive advantage

• Identify skills and capabilities needed to support core competencies• E.g., sales training, website development

• Measure your org’s current capability• E.g., performance evaluations

• Determine what gaps need addressing20

WHAT IS OUR COMPETENCY?

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ORGANIZATIONAL ASSESSMENT

Sources of assessment:• Staff (least objective)• Board or other stakeholders• Clients/constituents/members• Third-party (most objective)

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WHO ARE YOURSTAKEHOLDERS?

• Stakeholder Identification• Identify existing and potential stakeholders• What is their interest or stake in the organization?• What will it take to get them more effectively involved?• What do they need from the organization?

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WHO ARE WE?THE MISSION STATEMENT

• Brief description of the basic purpose of the organization, including the nature of the work to be carried out

• It guides basic decision-making for the organization, keeping decisions and policies focused on its core purpose

MISSION STATEMENT

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• Who associated with the organization has the primary responsibility for determining its mission?

• How does the mission statement improve accountability?

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MISSION STATEMENT

√ Basic needs to be filled?√ Desired outcomes and achievements?√ Clients and customers?√ Core values?√ Organization’s uniqueness?√ Reason for existence?

How does your organization’s mission statement measure up to these preceding questions?

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MISSION STATEMENT EXAMPLEThe mission of the Kansas Rural Development Council is to provide a framework within which public and private sector resources can be used to promote rural economic development. The Council will serve as a forum for effective collaboration between various entities to meet the needs and identify issues affecting rural Kansas. The Council will provide leadership in making strategic use of available resources to achieve short- and long-term rural economic development. In addition, the Council will serve as a focal point for identifying and addressing interdepartmental barriers to implementing a long-term economic development strategy.

MISSION STATEMENT EXAMPLE

To attract business investment by generating new business leads and building regional capacity through product development and effective regional engagement.

 

What does this mean?

We are an investor-based organization that supports the region’s economic development throughout our member counties. The efforts of the Partnership will:

 

Leads

Establish the identity and promote the brand of our region as one of the most business-friendly, innovative, and attractive regions in the Midwest;

 

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BOARD INVOLVEMENT

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BOARD GOVERNING ROLES

The most important governing role of a Board of Directors is setting policy – true or false?

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KEY POLICY AREAS• Reporting procedures of management to Board• Process for monitoring & approving expenditures• Basic employee policies• Appropriate volunteer involvement in staff or

organization activities• Process for evaluating performance of program &

chief executive• How Board meetings are to be conducted• Who speaks on behalf of organization• Avoiding conflicts of interest or asking for special

favors

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BOARD GOVERNING ROLES

• Establish policy (rules & procedures)• Determine the direction of the

organization• Clarify the mission of the organization• Evaluate performance• Hire the chief executive• Establish the organization’s priorities• Monitor expenditures• Raise the funds

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FACILITATION ROLES OF BOARD

• Establishing contacts that benefit the organization

• Promoting the organization in the community• Providing key advice• Serving as a bridge between the organization and

the community

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BOARD OPTIONS

What is the likely response of Board members when they aren’t clear on their role?

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BOARD ORIENTATION

Discussion of history of organization Meeting staff Touring the office Reviewing the Board manual

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WHO DO WE WANT TO BE?

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VISION

“There is no more powerful engine driving an organization toward excellence and long-range success than an attractive, worthwhile, and achievable vision of the future, widely shared.” (Burt Nanus, Visionary Leadership)

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VISION

• An ideal & unique view of what the organization will be about in the future

• What will the future

require of our

organization?

WHAT IS YOUR ORGANIZATION’S VISION?

Think about your desires for your organization’s future, or its vision:

◦ What would you like to see your organization doing in five years that it isn’t doing now?

◦ What changes would you like to see in how your organization does business?

◦ What future do you see for the funding of your organization?

◦ What impact is an economic downturn likely to have on the future of your organization?

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VISION

What/who should be the primary source of an organization’s vision?

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VISION

• Should be widely shared• Requires strong commitment from

the leadership

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EVOLUTION OF A “SHARED” VISION

PERSONAL VISION

PERSONAL VISION

PERSONALVISION

COMMUNICATION

SHARED VISION

EXAMPLES: ED ORGANIZATION VISIONS

• SEDA will be considered by its peers as the best business solicitation and facility location organization for cities of comparable size in the country. It will be the guardian of Savannah’s diverse economy. SEDA understands that the economy is dynamic and economic development organizations must adjust to changes in order to remain successful. SEDA will always be the first to change.

• Create a diversified, sustainable economy generating wealth, quality jobs and improving quality of life. (Owensboro KY)

• Comment: the majority of ED orgs. don’t have a vision statement

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EXAMPLE: ORGANIZATIONAL VISION

The Partnership is one of the top performing regional economic development organizations in the nation.

 

What does this mean?

NEIRP is recognized as one of the top performing regional economic development organizations in the nation. It is known for its innovative practices, its collaborative approach, its customer service, and its professional excellence. The Partnership is successfully leading the Northeast Indiana region to increased economic prosperity and business investment.

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FROM VISION TO PLAN

Visioning clarifies what the organization wants to become and where it wants to go;

Strategic planning clarifies how the organization is going to get there

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HOW DO WE GET THERE?

• Customer service• Continuous performance

improvement• Teamwork• Organizational planning

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HOW DO WE GET THERE?SERVING THE CUSTOMER

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“EXCELLENT” ORGANIZATIONS &

CUSTOMER SERVICEWhy is “customer service” probably the

most critical component of an “excellent” organization?

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MOMENT OF TRUTH

Customer contact with the organization

Impression of service

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CYCLE OF SERVICE

Awareness of community

Phone contactwith ED org.

Staff answeringphone

Org.’s Response to

inquiry

Follow-upcontact

Quality ofmaterials

Ongoing relationship

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MEASURING CUSTOMER SATISFACTION

• Who are your key customers?• How do you know what your customers really are

looking for?• How do you determine when you’re doing a good

job serving your customers?• How can levels of satisfaction be improved?• What will our customers need in the future?

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MEASURING CUSTOMER SATISFACTION

• Methods for determining customer needs:• One-on-one interviews or surveys of key

customers• Focus groups• Asking systematically for input from staff who

have customer contact• Questionnaires that allow for employee

comments• Feedback from key stakeholders and Board

members

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SETTING CUSTOMER SERVICE STANDARDS

Why is it important to set service “standards” for dealing with prospects, clients, and customers?

Customer service standards:• Completeness – essential vs. unnecessary• Timeliness & responsiveness• Competitive with other organizations• Relationship-building for the long term• Adding value – providing more than expected

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HOW DO WE GET THERE?ORGANIZATIONAL PROGRESS

What key steps can we take to continually improve the effectiveness of our organization?

He who stops being better stops being good. Oliver Cromwell

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CONTINUOUS PERFORMANCE IMPROVEMENT

• Viewing work as a process• Believing the work process can always be

improved• Research and training in better

understanding of the process and how to improve it

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QUALITY WORK PROCESSES

• Effective – output of process meets customer needs & expectations

• Efficient – minimizes use of resources & eliminates waste

• Adaptable – ease of changing processes to meet future customer requirements & reduce processing time and costs

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PURPOSE OF PROCESS IMPROVEMENT

Delivering Customer

Value

Analyzing all “key” org. systems

& processes

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PROJECT MANAGEMENT

• Managing use of staff time and talent on projects• Allocating organizational resources effectively• Expending funds according to budget• Staying within the timing constraints• Knowing where each project is in terms of

progress and achievement

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SAMPLE GANTT CHART

TASK Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Prepare leader survey

Identify local leaders

Email leader survey

Phone follow-up

Tabulate results

Publish results

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“It is not the strongest of the

species that survives, nor the most

intelligent, but the one most responsive

to change.” —Charles Darwin

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CONTINUOUS PERFORMANCE IMPROVEMENT

• Why is training crucial to continuous performance improvement?

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QUALITY TRAINING

• Awareness• Focused on

providing information

• Overview rather than in-depth

• Trying to stimulate interest in further learning

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QUALITY TRAINING

• Quality (“soft”) skills• Communication• Negotiation• Conflict resolution• Problem-solving• Critical thinking• Team-building• Collaboration• Project management• Customer service

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QUALITY TRAINING

• Job specific• Computer skills• Using software• Data management• Brochure

development• Research

techniques

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HOW DO WE GET THERE?BUILDING THE ORGANIZATION’S

TEAM

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COOPERATION > COLLABORATION

Is it important to determine how we get the Board, staff, and other key stakeholders to work together productively?

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CONFLICT

My needs Your needs

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CONFLICT

What are the positive aspects of disagreements and conflict in an organization?

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IMPORTANCE OF CONFLICT

"Strength lies in differences, not in similarities"--Stephen R. Covey

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CONFLICT

If you have a disagreement or conflict with another person in your organization, whose behavior or attitude do you have the power to change?

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MOVING FROM CONFLICT TO COLLABORATION

• Connection – getting people and organizations to communicate

• Cooperation – Various organizations or members within organizations are able to work well with each other; getting along

• Coordination – Working toward some common results and goals; trying to reduce overlap or voids

• Collaboration – Members of organizations attack and resolve problems together, creatively exploring alternatives and possibilities – the mark of an effective “team”

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ECONOMIC DEVELOPMENT PROFESSIONAL

• Why is “collaboration” critical to continuous performance improvement?

• As a CEO or Executive Director, what is the difference between “leading” and “managing” an organization?

• What is the difference between a facilitative leader and a “boss?”

• What should the executive director of the organization be doing to build stronger and better relationships with his/her Board?

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HOW DO WE GET THERE?ORGANIZATIONAL PLANNING

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FROM PRIORITIES TO GOALS

• Who should set the priorities for the organization?

• How is this best accomplished?• If the priorities of the Board and stakeholders are

not in agreement with those of the organization’s executive director and staff, what should be done to remedy the situation?

• Goals should reflect the organization’s priorities

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ORGANIZATIONAL STRATEGIC PLANNING

• Why is a written strategic plan important to the organization?

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MOVING FROM IDEAS TO ACTION PLAN

“Strategies that don’t make use of identified strategic advantages, address key priorities, or resolve major problems aren’t really strategies, just nice ideas.”

What do you thinkwe ought to do?

Measures

Indicators of our progress and achievement

Strategic Goals and Actions How we accomplish our mission and vision

Vision What we aspire to be

Mission What we do

THE STRATEGY-FOCUSED ORGANIZATION

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PUTTING MISSION & VISION IN ACTION

• The Vision and Mission set the general direction for the organization• They are intended to help shareholders,

customers, and employees understand what the organization is about and what it intends to achieve

• But these statements are far too vague to guide day-to-day actions and resource allocation decisions

• Organizations start to make the statements operational when they define a strategy of how the vision and mission will be achieved

• Get down to a set of quantifiable strategic outcomes:

Too vague

More precise

• Make sure your outcomes have a direct relationship to your goals and your goals have a direct relationship to your vision, mission, and values.

Before you can develop your strategies

Improve Customer Service

Improve average customer response times by 30% by year end

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HOW DO WE KNOW IF WE GOT THERE?

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MEASUREMENT: KEY TO PERFORMANCE IMPROVEMENT

What gets measured gets done, and what gets recognized gets done best. Maison Haire

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SOURCE OF DEMAND FOR ACCOUNTABILITY

Who is demanding improved accountability from the typical economic development organization ?

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EVALUATION

• An ongoing process that helps in decision-making

• Should be used to improve projects and programs, not just measure results

• Did we achieve our desired outcomes; if not, why not?

• Are we meeting our

customer’s expectations?

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EVALUATION• Accountability implies evaluation

• Goals define what you want to accomplish

• Outcomes provide measurable results

• Evaluation tells you what you have accomplished

• Activity does not necessarily equal progress

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MEASUREMENT: KEY TO PERFORMANCE IMPROVEMENT

All of us need to know how we perform; the most important thing is to find out what we do well so we can do more of it, and what we do not do well so that we can stop doing it. If we don’t do it well, we must accept that maybe we shouldn’t be doing it. Peter Drucker

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EDO OUTCOMES

An economic development organization ideally seeks to accomplish two sets of outcomes:

• Ability to demonstrate that the region’s economy and quality of life are improving.

• Ability to demonstrate that its actions are leading to improvement in the regional economy and quality of life.

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EDO OUTCOMES

• Why is it important for your stakeholders to know and understand the difference between the desired outcomes for the organization and for those of the community or region?

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Measurements Should:

• Translate customer/stakeholder expectations into measurable outcomes.

• Evaluate the “quality” of organizational processes.

• Track improvement.

• Focus efforts on customers.

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MEASURING PERFORMANCE

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• How does the organization demonstrate what it is accomplishing?• Inputs – allocating our resources (budgeting for

trade shows)• Activities – our tasks and actions (organizing

for and attending trade shows)• Outputs – the level of activity (the number of

trade shows attended)• Results – (the results from trade show activity)

• why we are doing what we are doing; • what kind of impact are we having; • what positive changes occurred as a result of our

work?

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RESULTS-BASED PERFORMANCE

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PERFORMANCE CRITERIA

• “Traditional” economic development criteria are specific values that can be easily measured

• Examples:• Number of companies contacted• Completion of a strategic action by designated

date• Number of volunteers trained• Number of responses from an ad• Number of trade shows attended

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PERFORMANCE CRITERIA

• Traditional performance measures don’t necessarily relate to the desired outcomes, such as higher incomes or increased tax revenues

• Relevant performance measures lead to the achieving of desired outcomes; they measure and quantify progress

• Effective performance measures allow policy-makers to determine the success or failure of a program or activity

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PERFORMANCE CRITERIA

• Examples of performance measures leading to desired outcomes:• Percentage of customers/clients that are

satisfied with the product/service• Number of workers graduating from the

training program that received higher-paying jobs

• Awarding of incentives led to desired number of higher-paying jobs

• Business incubator generates a high rate of successful graduates

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MANAGING FOR RESULTS

If you don’t measure results, you can’t tell success from failure.

If you can’t see success, you can’t reward it.If you can’t reward success, you’re probably

rewarding failure.If you can’t see success, you can’t learn from it.If you can’t recognize failure, you can’t correct it.If you can demonstrate results, you can win public

support.Tom Peters

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CONCLUSION

What will you do different next week in your organization’s management as a result of our session?

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HOW DO YOU CONTACT Team Kolzow?

• Telephone:• 615-972-4801 – Dr. David Kolzow

• E-mail:• drkolzow@bellsouth.net

• Address: Team Kolzow, Inc.505 Leicester Ct.Franklin TN 37067