Winning Archives - TurnAround Executive Coaching

Many nonprofit leaders focus on the problems of their organizations. And yes, we all have problems!

Scaling Up framework focuses on building capabilities. It will change your mood and the mood of the staff team. It leads to the Deep Work that Cal Newport writes about. It brings happiness to doing good things.

Which way do you choose to lead?

If you lead a nonprofit, you already succeed at a harder job than your friend Susan who directs a forprofit company (ABC Motors) of similar size! You may notice that you have unique pressures that Susan does not face at ABC Motors. She seems to have more cash and less regulation while you try to have real impact with less cash and more regulation. Many nonprofit leaders experience unique frustration, disillusionment and loneliness in their work.

Here are ten ways in which your nonprofit is different and harder to direct than ABC Motors.

  1. Nonprofits serve the 5% of the market that forprofits have abandoned

The USA has a $21 trillion market economy. It is very efficient for most of the nation. Unfortunately, a market economy fails for about 5% of the total activity in areas where no one can figure out how to make money. Housing the homeless, feeding the hungry, and other good services are failures of a market economy. The market answer to needed but unprofitable activity is to give the problem to Nonprofit Leaders! Nonprofits make up a unique 5% of the American economy (about 1 trillion dollars) where everyone else has already failed..

  • More dependent on government contracts so revenue does not flow to surplus

The biggest sources of revenue for nonprofits are government, fee for service, gifts and grants. Government contracts are the largest source of nonprofit growth. Most nonprofit leaders struggle with stipulations of government contracts. These often promote equal access over equal results and do not fully express the mission of the nonprofit. Government money is virtually required for growth in any nonprofit over $5 million revenue. There is also no reward (surplus) for excellence or efficiency in a contract.

Forprofit companies commonly use product pricing or fee for service and build in a robust profit target or turnover. Surplus profits from sales can be used without any restriction. Forprofit contracts with government may have rewards for performance. Forprofits may have more capacity for government grants that require strategic and technological innovation. These grants are generous compared to performance grants that nonprofits typically accept. Many nonprofit contracts are where government feels confident of performance expected and wants a highly regulated bargain.

  • Limited access to debt financing for growth

Most forprofit corporations have fixed assets of Property, Plant, and Equipment (PPE). These can be mortgaged or serve as security for a loan for growth. Small forprofits are often required to use personal funds or assets as security for loans. They are willing to do this because they own the company and would never leave the company while still responsible for its debt. Larger forprofits can issue bonds which allow them access to cash while retaining ownership.

Bonds are expensive to issue and 75% of all nonprofits are less than a $1 million in revenue and far too small to afford the cost of the bond issue. Nonprofit corporations can’t write off the interest paid on bonds as a tax deduction and reduce the cost of the issue (in contrast to forprofits).

  • Limited access to equity markets for growth

New ideas and programs require energy – usually cash is required. Forprofit corporations can sell shares based on their past history and future plans. Startups look for angel investors with the same idea of potential future profits to be shared. Nonprofits cannot distribute the surplus from financially successful activities so they do not attract investors. 

  • Revenue ceilings typically much less than forprofit

Without easy access to equity and debt markets, very few nonprofits have grown past $50 million in revenue. Since 1980, less than 50 nonprofits in the USA have increased beyond that level of activity. In addition, retained earnings (another source of growth) tend to grow slowly for nonprofits because government contracts often are performed at a deficit.

  • Agency problem in that clients who receive services often are not the funders

Most forprofit companies are paid by those people who receive the goods or services. Nonprofit financing from charity and government involves double stakeholders – the funding source and the client who receives the services. The workload is double for the nonprofit leader. They must educate the funder on what services are meaningful and also hear the client need and respond appropriately.

  • Hard to have 20 year focus based simply on social impact

Entrepreneurial business has a 20 year focus on the Big Hairy Audacious Goal (BHAG). This makes sense because the owner is accumulating wealth along the way. The path to wealth for many people has been to develop a business, work with passion and long hours and reap a generous reward.

Nonprofit leadership is inspired by mission. The few nonprofits that continue on a long term strategy to succeed pay a leadership team generously. In a study of 990s for nonprofit factors for failure and success, agencies which paid 4 or more leaders $100,000 or above tended to retain leadership and stay on course. Many nonprofit boards undervalue the competence of a long-term leadership team.

  • Boards of directors are present from inception

Boards of Directors are one more management task. Beverly Behan writes that the real management of the Board is with the CEO and less should be expected of the Board Chair. Nonprofit leaders will know this challenge immediately because board formation happens before or in the first days of nonprofit existence. Many nonprofit leaders are foiled completely or weighed down by operating boards who enjoy the nonprofit as a hobby and diversion from their forprofit jobs.

Forprofits are usually started by an owner or by partners. New forms of financing are usually required for growth after revenue tops $100 million. Shares are offered and a board is formed well after the foundation values, and strategic plan are in place.

  1. Nonprofit leaders are paid less to lead agencies of similar size to forprofits

Who are the best paid nonprofit leaders? Usually, presidents of universities and leaders of medical enterprises are paid salaries of which the rest of us can only dream. Those salaries are priced high in place of stock options which cannot be offered to a college president for excellent performance.

At the more normal level of nonprofit leadership, we are never going to be reimbursed fully for the knowledge, wisdom, and networks that we possess. When there is a turnover in the nonprofit C suite, there are less applicants who are highly qualified by experience and connected in networks as the replacement. The lower compensation does change the pool of available leadership.

  • Nonprofit fund raising behavior is constrained by community values

Let’s assume that our nonprofit needs $10 million dollars for a life saving vaccination program. In this example, we have two choices, Choice one – we can hire a fund raiser who will charge $20 million in fees and produce the $10 million that we need in 3 months and save 1,000 lives from premature death. Choice two – we can have some private receptions and raise $2.2 million per year for five years at a cost of $1 million total (a total net income of $10 million). Which will your board choose?

Most nonprofits and most media would opt for the ‘reasonable’ fund raising costs of 10% and react in horror to fund raising costs of 66%. A forprofit perspective would immediately allow the higher costs because the total raised is the same and the 1,000 lives are saved. Some nonprofit ‘best practices’ are unique to this community.

With these disadvantages, one might ask why anyone wants to lead a nonprofit! There are unique opportunities available through the nonprofit structure.

  • Nonprofits support justice, compassion, & the creative spirit of humanity.

Major forprofit companies are discovering the need for values oriented behavior but values find their truest home in the nonprofit world. If nonprofits did not exist, would government, religion, business or military fill the need? Nonprofits add to the social good when other forces fail.

  • Service agencies require little capital to begin

Like nail salons and flea markets, nonprofits don’t require much cash to start. While many articles detail the fragility of nonprofits, they are like a rosebush. Many of the flowers will die quickly but a few will thrive.

  • Nonprofits are more likely to get gifts and foundation grants

People might make one-time contributions to a forprofit toy drive or other visible act of compassion, but nonprofits understand the human need to give as well as receive. They are a natural home for gifts and grants.

  • Difficulty of leadership is not a way to measure value

This article is to help nonprofit leaders understand that they are stronger than they may imagine. It is a very noble cause to lead a nonprofit even though nonprofit leaders need to be smarter and better than their forprofit peers.


Did you come from social service or teaching and now you want to make a real impact with your leadership and legacy? It is very possible to do and many nonprofits are changing lives in every community.

The best way to appreciate and strengthen your leadership is a commitment to lifetime learning. Scaling Up and the Four Decisions are one planning system that equips you to spend less time in the nonprofit problems and more time on the nonprofit results. Choose some planning system and build your skills continuously so that you feel less stress and more satisfaction for all you are giving to the human community.

And contact me for a partner in planning.

A new survey of 2,100 people has found that only 19% of Americans really trust nonprofits and religious groups. The best news that we can take from this report is that they don’t distrust us as much as they distrust other companies and government.

We live in an age of Fake News. We have Wikileaks, Trump, and the Russians pushing out Fake News and accusing mainstream media and others of Fake News. Our nation has caught the Fake News Flu and is now vaccinated against most institutions. hyttalo-souza-1074680-unsplash

Rusty Shelton, author of Authority Marketing says that people trust people more than institutions. We tend to buy from stores where we know someone. We live in an atmosphere of high suspicion.

There is more need than ever for Strategic Planning.  There are 1.5 million nonprofits in the USA. Many are engaged in critical and worthwhile services. With planning, Fake News Flu is just another challenge that can be overcome. If I can help, email me at to get a conversation started.

PS. Here’s the link to the entire report.

What is the effect of a long-term CEO and management team on a nonprofit? What is the effect of a board with relatively little turnover? The 990 reports the name and position of each board member and senior manager annually. Let’s compare the lists over a 4 year period (2013-2016). Unfortunately, the truth is a wise and subtle mix of factors

  1. Effect of Long-Term CEO – The vision of an effective CEO is one of the magic quantities needed to produce success.
      1. One CEO in the study is in the 8th year of service. The nonprofit has more than doubled in revenue during that time to almost $30 million. Positive news articles have been written and many local school districts have signed contracts. These effective managers are rare outside of medicine and higher education (and not common anywhere – just ask Penney’s and S
      2. ears!). He has been able to articulate strategy, keep the leadership moving together, and has grown in his own skills to manage a much larger company.
      3. Unfortunately, another nonprofit with news reports about corruption also has a long-serving management team with board and management retention at 100% over 4 years. One way not to get caught is if you never leave!
      4. Another nonprofit lost its way and the recent audit has a ‘going concern’ paragraph. I had only heard about them! This is a first. The founder stayed for 30 years and did not grow in capacity to match the growth and challenge of the $9 million agency.1019_4231589


  2. Effect of a Long-Term Board – The growth companies in the study had board retention rates in the 80% range.
    1. A nonprofit incubated by people from Harvard has a board retention rate of 94% over 4 years. The annual revenue growth rate for this nonprofit is 127% annually.
    2. Nonprofits in existence over 25 years have more trouble keeping board members. They have a retention rate of about 50%. Many are teetering with ill-planned financing.
    3. New successful nonprofits benefit from a startup with a skilled CEO and Board chair. One promising startup in stress has a board retention rate of about 10%. The Board Chair was inexperienced and could not drive the board to support the agency in networks.


An effective leader and an effective board chair drive success. Effective boards need term limits, additional volunteer committees, and board members committed to learning.

Effective management requires a leader with time to preach a vision, arrange a team for flawless execution, and work with the board for abundant cash to fuel growth. There is often a plan for succession in these nonprofits. One consultant said that successful nonprofits hire management from within. It reduces the shock of succession. Normal succession with an outsider has a management turnover of 50% within 18 months. This is necessary when the nonprofit is stressed.

Note to all: The CEO/ED job is challenging. A business coach can help and contact me if you need support to go through this process.

I’ve never been in a plane that ran out of fuel. Having fuel is such a critical part of travel but airlines plan carefully. I have never heard a pilot announce that we have to land in the wrong city because we need more jet fuel.1118_4634681 (1)

Non profits are having more and more trouble with fuel supplies. A lot of good trips to do good things are being cut short because the money ran out. Some groups have dreams of where they want to go but there is no way to fund the new idea.

Religious non profits are often a sub-group in special pain because they are in decline. It’s a lonely and failing feeling to be in charge but without cash.  How can that be turned around?

One of the 4 Decisions Tools is Cash. When I mentioned to my friend that I help nonprofits find cash, he immediately asked if I lead boards in fund raising campaigns. He took me by surprise since the 4 Decisions doesn’t start there. But in the non profit world – of course – fund raising is the magic wand that gets pointed at leaders of nonprofits as the answer to everything!

Fund raising sounds wonderful, but it cannot be the only method for most organizations. Big gifts can take a long time to cultivate and it takes a lot of $10 gifts to get most nonprofits past their difficult cash moments.

Nonprofit leaders actually have 10 levers to improve their cash. The more powerful levers don’t normally include Fund raising.

Let me give an example. In my own nonprofit, I was surprised by changes in health insurance and so we re bid all of our insurance contracts. To my great surprise, a new broker got us the same policy from the same company and the total quote reduced our costs by $34,000.

What is easier for you? Asking 340 people to give $100 or reducing the insurance bill? Something I like about the 4 Decisions Tools is that you will feel more empowered as a leader as you use them. When you have a cash problem, you are not a victim who is waiting for a million dollar gift. You have multiple tools to solve the problem and your team chooses several levers and keeps that plane in the air.

Scaling Up is the textbook for the 4 Decisions Tools and one section is on Cash. And I also offer a workshop on the 4 Decisions if your team is ready to fly with a full load of fuel 😊

If you want One Minute TurnArounds by email, please sign up!

GDPR – Your email is collected by an automated system so that the One Minute Manager posts can be sent. You will be invited twice a year to a two hour Scaling Up workshop for CEOs and EDs. Annually, you will be offered an Ebook and asked whether the resources of TurnAround Business Coaching are helpful.

A maximum of 10 companies per year develop a relationship for Business Coaching to turn around their company or scale up past a growth barrier.


I had a job search in 1988 and finally got an interview for an executive position at a college. I would be 2nd in command to a leader who planned a five year window for retirement. I was flown to Washington and then Philadelphia for interviews. The interviewers stressed that I would have considerable power. What’s not to like about power?

The interviewers admitted that there was one challenge – their current president was scared of one person who reported to him. The staff member was abrasive, had no support of other staff, and criticized his supervisor and peers without hesitation. They were reluctant to say what they wanted, but an unwritten part of the job description was to handle Jorge.

I understood that new direction was needed. I hated to take a new job and fire a well known staff so I suggested in the 2nd interview that they fire the offender and I could come in with a clean mandate to make things better. They were doubtful because ‘Jorge even knows how to deal with the boiler when it breaks.’ They agreed to think about it. I was sure that I had the job. I started looking for housing.

On my birthday, April 20, I got the call I had been waiting for! …… But the call was to tell me that they had chosen another candidate for the job. There is a copper taste in my mouth even as I write this today.

After much reflection, I realized —  I was scared to fire. The real job that I was offered was to fire Jorge and I turned it down! 

It doesn’t matter how many strategic plans you write. You will fail if you have staff who can’t work the plan or who want the plan to fail. You will fail if you don’t do what it takes to get the right people. How many of your direct reports would you enthusiastically rehire? This post is about what to do with the B and C performing staff.

Sometimes, staff changes are slow because of civil service, unions, elections – things outside the manager’s control. The mayor employs many critics that s/he cannot fire in the Police Department and other union and civil service protected positions.

Scared to fire? For most of us, the big reason that we can’t change things is that we are scared of the people who work for us! “In 2009, U.S. companies spent $3.6 billion on “outplacement services” (figuring out whom to fire and how to do it)” (Rogers, Jenny. “Getting the Ax From George Clooney.” Slate Magazine (2010): n. pag. Web.)

Scared to fire? Staff transitions are difficult. And it’s always tragic to create chaos with someone’s livelihood and career.

If you have staff that can’t or won’t work your plan, you need to analyze job descriptions, and start regular appraisals. Appraisals are a wonderful way to get staff reflecting on whether you can offer the job that they want. Effective appraisals often lead the wrong staff to resign. What’s better than helping an earnest staff member to realize for themselves that you can’t offer the job that they want to do?

Regardless of staff reaction, forge ahead to get the right people. It’s the only way. Start with compassionate candor in appraisals. If that doesn’t work, the fallback is to insist on the standards for the job you have – not the job that fits the staff member. Your coach will help.

Make a plan today for the next step!

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Coaching choices HERE

Contact Ron Tompkins HERE

People tell me that they don’t plan because they have no money. They ask, ‘Why plan if I have no money?’  I normally respond, ‘How do you know that you need money until you plan?’

People don’t like the challenge of planning before finding money. Too many people think that they need money — to think about money.

So here are 10 ideas for Strategic Planning that can reduce or remove the need for cash.

  1. Avoid capital intensive Strategic Plans – Forget your plan to start a new low cost airline from New York to Phnom Penh. You can’t even afford one engine! You also can’t start a luxury clothing store there either. Clothing has to be purchased in quantity in different sizes. Inventory of expensive brands is a large investment and requires cash.
  2. Avoid long term payoff Strategic Plans – You want to find the cure to cancer? You don’t have the time to wait 5 years for drug trials. Do you want to start a new daycare in New York City? It will take a year to update or build and license before it opens. You need to use cash to pay salaries and construction during all that time.
  3. Avoid low cost goods for resale. It’s very hard to buy low cost clothes from Honduras for resale. Walmart got there first and has the power of a volume purchase. They offer to buy $1 million of cheap clothes with only a 1% profit for the manufacturer. It sounds like a bad deal but it actually returns $10,000 in profit to the clothing company.

You come along next and want to buy $5,000 of the same cheap clothing. If you could get the same terms as Walmart, the clothing company would only receive a profit of $5 dollars from your order. They will laugh you out of San Pedro Sula.

Once you pay $6,000 for the same clothing, you will need to raise sale prices back in Phnom Penh. It’s a desperate game that is hard to win.

  1. Build a service based Strategic Plan. Why doesn’t Walmart take over nail salons? Nail salon expenses are mostly labor. Nail polish does not cost much nor does advertising. The playing field is more equal. It’s hard for Walmart to make more money than you in labor intensive business.
  2. Build a materials + labor based Strategic Plan – Since you can’t compete directly with the purchasing power of large companies, add a unique service to the product that you sell. For example, buy cheap clothes in Hionduras and add an identification tag printed with a name and address. The price is no longer comparable to the shirt by itself because you have added a service.
  3. Avoid a Strategic Plan that has a long cash conversion cycle – Dell Computers was an early company that charged customers as soon as the computer order was made. They had the cash before they made the computer! Contrast that to a specialty clothing store that has a large inventory that sells slowly. The store may be quite profitable but requires cash to buy the clothing and then wait a lengthy period of time for the sale.
  4. Avoid a Strategic Plan that requires high fixed costs – Renting a storefront in a mall or on a busy street will require cash even in the slow season. It’s better to sell ice cream from a cart than from a store. There is no rent and the cart can be taken to a warmer climate in winter months or stored. Street fairs are popular because there are no rental costs on the days that you choose not to be open.
  5. Avoid a Strategic Plan in regulated industries – Industries that involve government inspections and licenses take cash and time to learn. The companies that are already in the market have more opportunity. For example, in New York City, there is a great need for the service business of child care. It’s also a business that the City watches closely with inspections, licenses, and regulations. Each of those add to the cost of a service and require cash.
  6. Consider a Strategic Plan that generates loyalty – Let’s assume that you sell ice cream from a cart. You are always on the same corner and you memorize the name of every child who buys a cone. Children love that attention from adults and loyalty will become part of your business model. No cash required for loyalty
  7. Consider a Strategic Plan that assumes one time sales – Tourists often pay outrageous sums of money for trinkets to remember a trip. In Florida, you can pour sand into a bottle and sell Florida sand at the airport. Customers will never return to buy more but they really don’t care if you charge $10 for sand. Cash from a few sales pays for a lot of inventory.

And now, I return to my first point. You don’t need any money until you painfully create the Strategic Plan on how to invest and make more money. A plan that is good and usable is not easy to create. It’s going to take several months and need quarterly review after starting.

Some business ideas require less cash. And no business requires cash until you have a good Strategic Plan.

If you want One Minute TurnArounds by email, please sign up!

GDPR – Your email is collected by an automated system so that the One Minute Manager posts can be sent. You will be invited twice a year to a two hour Scaling Up workshop for CEOs and EDs. Annually, you will be offered an Ebook and asked whether the resources of TurnAround Business Coaching are helpful.

A maximum of 10 companies per year develop a relationship for Business Coaching to turn around their company or scale up past a growth barrier.


Most strategic plans assume a static future where the basic costs and use of labor remain the same. That is a critically false assumption.

Machine learning started in the 1990s. Anthony Goldbloom states that machines were trained to look at credit applications and determine a score. Since then the trend line was arithmetic but recently has climbed more steeply. Now we actually have cars on the road which are one step from being self driving.

The rapid dislocation of labor from human to machine is one major factor in the unusual American election. It’s a global challenge on how to make all humans necessary. At this point, the economy does not need grocery checkers, cab drivers, subway drivers, live telephone reception, farm workers, and a host of other tasks which have been human based for time immemorial.

Will your Strategic Plan survive the onslaught? Only those that account for machine learning and avoid that competition will be here in 15 years.

Machine learning requires tasks which are high volume and have limited causal factors.

  1. High Volume – Machine learning thrives in high volume. For example, one study had volume reports on police in Philadelphia and teachers. The goal was to hire police officers who are productive and not violent and to promote only worthy teachers (Chalfin et al. 2016). Since the variability is significant between exceptional performing teachers and future failures, the machine learning was able to discern patterns which would predict correctly in both scenarios – better, more productive police and teachers.
  2. Limited Causation – checking out groceries involves a group of products with bar codes, passing the scanner, settling the price and payment. Presumable bagging will be computerized too. The causation for the checkout system is simple – a consumer wants to process items one at a time and pay for the results and take them from the store.

Machine learning is not effective in novel situations, or with creativity, or with relationships

  1. Novel – Novel situations occur where original reasoning trumps learning. For example, some of the best American scholarship looks at problems from the perspective of 2 disciplines. Sociobiology looks at sociological problems and traces evolutionary causes. It’s a terrible discipline for machine learning at this stage. There is not a high volume of reports from which to learn.
  2. Creative – Machine learning will never produce the creativity of Mozart, bell hooks, or Monet. Creativity is a unique human fountain that never runs dry, While machine learning can produce copies of the Mona Lisa, it cannot jump ahead and create a new Mona Lisa. It’s work will always be derivative.
  3. Relational – So much of business success depends on 8 socio emotional skills
    1. Goal persistence
    2. Awareness of others
    3. Awareness of Self
    4. Optimistic Thinking
    5. Decision Making
    6. Relationship skills
    7. Self Management
    8. Personal Responsibility

Those skills work together to build teams, invent new solutions to business problems, and consider unique value propositions based on available resources.

So how does your Strategic Plan match up?

Test your vision based on the strengths and weakness of machine learning.

  1. Are you planning to manufacture a product without investing in robotics? It’s likely that robotics locally with lower transportation costs will be cheaper than cheap human labor in other locations.
  2. Is there new infrastructure planned in an area that you exploited? NYC plans to go green in 14 years. Any business that moves quickly can compete with old energy guzzlers that don’t see the problem coming.
  3. Did you create a unique value proposition that uses relationship skills for success? Edith Penrose says that effective teams become the real competitive edge of a company.

The coming and current dislocation will be a time for some Strategic Plans to gain the advantage and many others will collapse. It may be an opportunity for a start up to move shrewdly where a larger company could not change.

Is your Strategic Plan going to be terminated?



Bloom, Anthony.  “Machine+learning+ted+talk”. TED Talks, n.d. Web. 14 Aug. 2016.

Chalfin, Aaron, Oren Danieli, Andrew Hillis, Zubin Jelveh, Michael Luca, Jens Ludwig, and Sendhil Mullainathan. “Productivity and Selection of Human Capital with Machine Learning†.” American Economic Review 106.5 (2016): 124-27. Web. <;.

Nickerson, Amanda B., and Callen Fishman. “Convergent and Divergent Validity of the Devereux Student Strengths Assessment.” School Psychology Quarterly 24.1 (2009): 48-59. Web.


If you want One Minute TurnArounds by email, please sign up!

GDPR – Your email is collected by an automated system so that the One Minute Manager posts can be sent. You will be invited twice a year to a two hour Scaling Up workshop for CEOs and EDs. Annually, you will be offered an Ebook and asked whether the resources of TurnAround Business Coaching are helpful.

A maximum of 10 companies per year develop a relationship for Business Coaching to turn around their company or scale up past a growth barrier.

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