Category Archives: Dave Coffaro

Leading from Zero for Nonprofit Organizations

David Coffaro

These early days of the new decade are the perfect point to consider practicing the concept of Leading from Zero.  Perhaps a more familiar strategy is Zero Based Budgeting – the approach where each new budget cycle starts from a baseline of zero assumed recurring expenses.

No incremental expense increase over the prior period. Every dollar invested for existing or new activities stands on its own, justified in the current time period, not the past. The objective of Zero Based Budgeting is to assure manager accountability for expenses and the activities they fund to create value for the organization.

Leading from Zero is grounded in a similar principle. Every organization – nonprofit or for profit – starts its day from a base of zero. Zero customers. Zero donors. Zero employees. Zero volunteers. Zero revenue. Leaders must influence their organizations and earn relevance with customers, employees, volunteers, donors and other stakeholders daily. Organizations have no entitlement to customers, employees, volunteers, donors or revenue. They recognize that these stakeholders have free will and will only engage with an organization if its mission is relevant, its value proposition is clear and it continually delivers on both the mission and value proposition. Contracts exist, but in the long run, all agents (vendors, contractors, suppliers) are free agents.

Leading from Zero assumes:

  • Competition for the most valuable resources – human, intellectual, physical, economic, non-economic – is strong and will remain so into the foreseeable future
  • Barriers to entry in most sectors are malleable or nonexistent, therefore the potential for new competitors is high
  • Competitive advantages are temporary at best
  • Pricing and cost pressure are constant, coupled with an expectation of continually providing more to stakeholders

These assumptions place leaders in a position that requires a new paradigm for how they view their roles and further their organizations. This paradigm says that an organization must:

  • Differentiate itself as a resource development exemplar
  • Practice self-initiated disruption
  • Exhibit an obsession for continually adding greater value
  • Consistently demonstrate efficiency gains in operations

Each of these pillars represent ongoing processes, not one-time events or special projects. A Leading from Zero mindset informs the organization that effective execution of these processes earns relevance with all stakeholders daily. Failure to re-earn relevance over time opens an organization to suboptimal access to the best resources, weakness relative to competition, and poor economic performance. 

Leading from Zero actions you can take now:

2. Define Cultural Values in Advance of Partnership – In the movie, Ford stressed the importance of a team victory while Shelby was portrayed valuing rugged individualism. These two approaches represent different cultural values.

  1. Identify one resource area to focus upon for developing a differentiation strategy. If you chose the human resource arena, you might begin with developing an employee value proposition which authentically answers the question “why work at this organization”. This is particularly important in the nonprofit and social sectors, where alignment with the mission attracts talent to an organization. With the statement drafted, strategy work may include review of employee development resources, career pathing tools, position descriptions and recruiting practices to assure alignment with the spirit of the value proposition. The goal – Take a first step in the process of differentiating your organization as a resource development exemplar.
  2. Identify one opportunity for self-disruption. Look for candidates by examining processes, products and your stakeholder engagement approach for a candid assessment of elevated exposure to external competitive threats. The goal – Take a first step in the process of proactively identifying and addressing vulnerabilities in processes, products or stakeholder engagement approach.   
  3. Identify one upgrade or enhancement you can offer customers this year. A prerequisite for this action is understanding where beneficiary needs are shifting in order to preemptively address demand. The goal – Take a first step in the process of creating greater value for your beneficiaries by assuring you will meet their future needs.

These actions are a starting point in operationalizing the Leading from Zero paradigm. The benefit to your organization is earning greater relevance from the perspective of your customers, employees and other stakeholders.    

Author: David Coffaro, Executive Coaches of Orange County, www.ECofOC.org

Ford vs. Ferrari Leadership Lessons

David Coffaro

The hit movie, Ford vs. Ferrari, tells the story of a partnership between famed American performance car designer Carroll Shelby and the Ford Motor Company. This joint venture came about to develop a Ford-branded race car for competition in the 24 Hours of Le Mans and beat Ferrari’s entrants – the race’s perennially winners. The story takes place in the mid-1960s when Ford sought to broaden their appeal and engage Baby Boomers, then in their late teens, with products like the new Mustang.

The plot weaves its way through the failed 1963 acquisition attempt of Ferrari by Ford, which fueled a racing rivalry between the two auto manufacturers. Ford Motor Company is portrayed as a traditional company hampered by bureaucracy; Carroll Shelby as an entrepreneurial, fly-by-the-seat-of-your-pants innovator. Though the partnership had plenty of ups and downs, the collaboration led to creation of the Ford GT40, which delivered four Le Mans victories from 1966 – 1969.

Notwithstanding dramatic representations of conflict and egos in the storyline, the movie offers some valuable leadership lessons. Here are my top three:

1. Establish Clear Shared Goals Up-front when beginning a new project. Ford wanted to update their brand image to capture market share with Baby Boomers coming of age in the mid-1960s. Boomers wanted cool, sporty cars and Ford executives knew they had to address demand or lose share to competitors. Ford reasoned victories on the racetrack would translate to an uptick in brand perception. Beating Ferrari in races was important, but taking the checkered flag was part of a bigger goal – attracting new customers. Carroll Shelby wanted to build high-performance race cars that won races. He was innovative and pragmatic, seeking the best design and components to win races. The subtle difference between these two goals – winning car buyers vs. winning races – was the source of great frustration in the partnership.

In your work, you may have collaborated on a project with another department in your organization. Their goal was to get the project done with the lowest price tag possible; yours was to deliver the best possible product to your customers. If you didn’t know you had different goals up-front, divergence may have fed dysfunction. Establishing clear, shared goals as a first step in collaboration increases the likelihood of a successful partnership.

2. Define Cultural Values in Advance of Partnership – In the movie, Ford stressed the importance of a team victory while Shelby was portrayed valuing rugged individualism. These two approaches represent different cultural values.

Some organizations design incentives and rewards that encourage competition among colleagues while others tout sentiment like “there is no ‘I’ in team” to inspire working together. By defining your organization’s cultural values around inclusiveness, team vs. individual, winning at any cost vs. mindful success metrics clarifies what you stand for and what is expected. Consistently living clearly defined cultural values attracts like-minded talent to the organization, which reinforces and strengthens the culture.   

3. Don’t Underestimate your Competition – Ferrari executives are portrayed not taking Ford seriously as a competitor at Le Mans. At one point, Enzo Ferrari refers to Ford as an ugly company that builds ugly cars in an ugly factory. Ferrari underestimated Ford’s resolve to be a bona fide competitor.

How many times have you seen this happen? Out of nowhere, a new entrant comes into a business and conventional wisdom said “They’ll never succeed; they don’t know the business like we do”. Category killers, market disruptors or simply new approaches, unencumbered by legacy thinking, transform an industry. The moral to the story, assume the threat is real until you can prove otherwise!

Author: David Coffaro, Executive Coaches of Orange County, www.ECofOC.org

Navigating the Talent Crunch

David Coffaro

Great news! The headline on CNBC read “Payrolls jump in June well above expectations” https://www.cnbc.com/2019/07/05/jobs-report-june-2019.html. The article highlighted a sharp rebound in hiring in June, as the U.S. economy had the largest gain in jobs since January. The labor force participation rate increased one-tenth of a percent to 62.9%, its best since March, and underemployment was reported at its lowest level since early 2001.

All good news, right? Well, it is wonderful news for people in the market for work. Demand for qualified workers is very strong. But what about the view of the non-profit working to fill open or newly created positions? Here, the story changes.

It’s not a headline to report that many industries are experiencing a challenging time for attracting new and seasoned talent. Today’s college graduates and early career job seekers have more career path options than even a decade ago. According to a recent article in Money magazine (http://money.com/money/5644053/best-jobs-recent-college-graduates-salary/), the most popular jobs for recent college graduates right now include software engineer, registered nurse, salesperson, teacher and accountant. The non profit is not going to make the list.

So what is an organization to do when they need to bring in new talent? Here are three steps to help leaders win the battle for talent:

1. Recognize that we are in a different kind of “seller’s market” for talent than any time in recent memory. Immediately after the 2008-2009 financial crises, there were many more candidates than there were jobs available. That dynamic has changed. Recognition of this shift informs organizational leaders that it is incumbent upon them to consciously define, design and deliver clear and intentional talent acquisition strategies. This means who the organization targets, how they proactively connect with potential candidates, developing and maintaining a talent acquisition pipeline and assuring that all managers co-own the firm’s talent acquisition objectives.

2. Reframe your organization’s talent management strategy. Talent management strategy is as critical as any other aspect of the organization’s operating strategy. It must include an all-out positioning and prioritization of the organization’s approach to creating and living a compelling value proposition about why a candidate would choose to work at your non-profit, clarity around why it’s a great place to work and understandable career development and pathing options.

Today’s job seekers expect more from potential employers than a paycheck. They need to know that they are doing meaningful work that helps enhance peoples’ lives. Consider a recent Harvard Business Review article that says 9 out of 10 people are willing to earn less money to do more meaningful work (https://hbr.org/2018/11/9-out-of-10-people-are-willing-to-earn-less-money-to-do-more-meaningful-work).

3. Position HR as a front-line talent management arm. In the current talent crunch, human resources professionals must have a front-row seat at the organization’s strategy table. HR leaders need to co-create and co-own all aspects of the talent management strategy – the employee value proposition, talent pipeline management and acquisition, learning and development, total benefit and compensation programs, career pathing management and talent retention.

In the words of Jim Morrison of the Doors, the time to hesitate is through! This is the day to develop your organization’s talent management strategy to assure you are effectively positioned to navigate the demand for talent today and into the foreseeable future.

Author: David Coffaro, Executive Coaches of Orange County, www.ECofOC.org

2020 Vision: 3 Conversations to Have About the Future Today

David Coffaro
David Coffaro

Strategy Imagine it’s New Year’s Eve 2020. It’s getting close to midnight and under your breath, you say to yourself “I can’t believe the year went by so fast!”

You have a few quiet moments by yourself before gathering with family and friends to join the countdown to 2021, and you reflect back on highlights of the year that’s quickly coming to a close. You mentally run through some of your personal highlights: family, vacation, social gatherings, exciting events. Then like most leaders, you roll through scenes from your work life that stand out.

As you think back over 2020, what are the top two or three highlights that come to mind? What were the greatest contributions your team made to the success of your organization? Which activities that your team intentionally engaged in had the greatest impact toward fulfilling the company’s vision?

Right now, thinking about the completion of a year that hasn’t yet begun may seem far off in the future. This is the time of year when leaders are fine-tuning their financial plans and budgets for 2020 and generally focused on the question “How will we make our numbers next year?” The numbers question is important; we have to deliver expected financial results.

But numbers in isolation are simply a reflection of what’s already happened. They quantify results of the activities we’ve already completed and how effectively we executed upon them. They are not a picture of what we want to make happen. That’s where the vision thing comes into the conversation.

2020 Vision

As you think about the impact your organization will make in 2020 beyond the financial results you plan to create, consider revisiting the vision. Even if your organization’s vision has been more cosmetic than actionable, this is the perfect time for your team to delve into three strategic questions that can shape accomplishments in the upcoming year. These are three conversations about tomorrow for today:

Conversation No. 1

How well do our actions align with our company’s vision? This conversation requires a candid self-assessment of the vision to make sure it’s real and the team owns it. If there’s any doubt about true buy-in to the vision, an early strategic priority leading into 2020 is to invest leadership team time into redefining where you’re going. Vision sets an organization’s course and informs activities. 

What do we do (mission), why do we do it (purpose), and how do we fulfill our mission (strategy) are essential questions an organization must answer in order to define its place in the world. Taken together, the answers define an organization’s vision.

Conversation No. 2

What are the most important two or three strategic priorities we want to deliver beyond the expected financial results in 2020? With your vision as the guide, this conversation informs specific areas of impact your team will focus upon beginning now. Vision is irrelevant unless it informs priorities and those priorities define actions.

This conversation takes a deductive “if, then” approach: “if our No. 1 priority is acquiring and developing new talent, then we will _________”.  This conversation also leads to rich self-assessment of previously stated strategic priorities. If a team said their No. 1 priority last year was acquiring and developing talent, yet no specific actions were taken, it wasn’t really a priority.

Conversation No. 3

What are the areas in our organization we should be looking at for self-disruption? During the late 1990s tech boom, the concept of disruption grabbed the attention of the business world. New entrants in a market gave birth to novel ways of serving customers, gained share and changed industries. While disruption has become a core strategy, today the question is “where are there opportunities to self-disrupt?” 

This conversation invites your team to temporarily step outside their roles, look at the organization from a third-party observer perspective and ask the question “if we were starting this business from scratch today, how would we do it?” It requires temporarily letting go of legacy constraints and look at your operation the way a potential disruptor would see things, then challenge your organization to initiate self-disruption.

One of the greatest responsibilities we hold as leaders is driving continual evolution of the organization toward a well-defined future state. Today is the right day to begin these conversations about the 2020 vision your team wants to create. Today you can write scenes of the story you’ll look back to with great fulfillment on New Year’s Eve 2020.

Author: David Coffaro, Executive Coaches of Orange County, www.ECofOC.org

Changing Pies

David Coffaro
Dave Coffaro

As nonprofit development professionals know, there are many factors that influence charitable donations. Emotional connection to an organization’s mission, commitment to creating a better community, giving back to a charity that made a difference in someone’s life or tax deductions can all be influencers. Add to these internal motivations the external reality of economic conditions and you have an ever-changing environment informing development strategies.

Strategy as a Process, not an Event

Successful leaders know that their ability to adapt strategy as environments change is fundamental to sustaining a thriving organization. Reading the environment, interpreting temporary and longer-term structural changes and proactively adjusting approach are critical determinants of success.

Today, nonprofit leaders face an environmental shift in terms of fundraising. New preliminary IRS information, reported by MarketWatch this week (https://www.marketwatch.com/story/americans-slashed-their-charitable-deductions-by-54-billion-after-trumps-tax-overhaul-2019-07-09) indicates that as a result of the 2017 Tax Cuts and Jobs Act, taxpayers have itemized $54 billion less in charitable contributions so far this tax season compared to the previous year. These numbers could change as the IRS receives more tax returns (the agency expects a record 14.6 million tax return extension requests this year), but the headline corroborates what many nonprofits have been feeling over the past year of fundraising.

At first blush, this news suggests that nonprofits must now compete for a smaller pie of charitable giving. However, when we dig a little deeper, it may be that there are other pies available to get a bigger slice. Here are three specific ideas to contemplate as your organization considers refining and adapting its’ strategy:

  • Market the mission – Step into the shoes of the donor and ask “why would I contribute to your organization”. Tax benefits are one reason, but for most of your donors, there is some kind of emotional connection to your mission. The work your organization does every day resonates with the donor at some level, or they wouldn’t be one of your donors. This is a perfect time to revisit your mission, how you articulate it, your organization’s value proposition and how you message all of this through every medium to make sure the story is communicated the way it needs to be delivered.
  • Increase focus on corporations and foundations – Concurrent with the 1/1% decline in the dollar amount of donations from individuals, funds from corporations and foundations actually  increased (+5.4% from corporations and +7.3% from foundations). Translation – there’s still a lot of pie available; you just may have to look in different places to get what your organization needs. This is where the role of leaders comes into play in terms of refining strategy based on a changing environment.
  • Explore non-financial gifts – Beyond the 2017 tax law changes, one theory suggests that equity market volatility over the past year may be playing a role in individual giving. This behavioral finance explanation suggests that when capital markets are volatile, investors feel less confident, therefore more cautious about donating from their investment portfolios to charities. As an alternative, developing or expanding your organization’s focus on non-financial gifts – real estate, automobiles, oil, gas or mineral rights, specialty assets or artwork may be a way to enable your donors to support the mission in a manner that is more comfortable in the current market cycle.

Effective nonprofit strategy is on ongoing, dynamic process that continually recalibrates to its environment. This is a perfect time to revisit your organization’s strategy to see how it aligns with current reality, and the pies that are available to you.

Author: David Coffaro, Executive Coaches of Orange County, www.ECofOC.org