The Most Important Thing

Welcome to the impact Consults blog. This blog will attempt to make the following contributions to individual readers and to the broader nonprofit sector:

Comment on current topics of relevance across the nonprofit and social enterprise sectors, particularly those impacting small and medium size organizations, bringing a perspective born of my own background and experience set.

Propose new perspectives and responses to these issues from the perspective of someone who has founded and supported start-ups, built and led nonprofits and is now advising, coaching and consulting.

A regular feature of this blog will be to briefly introduce key business concepts, more traditionally connected to the private sector, and discuss and propose their importance for nonprofit leaders at this time. I hope you will decide to share with colleagues Impact Consult blogs you find valuable.

The Most Important Thing?

What is “the most important thing” for a strong, sustainable, even transformative nonprofit organization, or more boldly – nonprofit sector? There isn’t one. In that way it is a lot like investing. Howard Marks, legendary co-founder and chairman of Oaktree Capital Management and University of Pennsylvania donor, wrote a wonderful book on his investing philosophy called The Most Important Thing. He begins with a few thoughts on investing that are highly applicable to the art of nonprofit leadership and governance.

“What, exactly, is “the most important thing”? As I meet with clients and prospects, I repeatedly hear myself say, ‘The most important thing is X.’ And then ten minutes later it’s, ‘The most important thing is Y.’ And then Z, and so on.”

His book discusses twenty most important things. He continues:

“The fundamental notion is unchanged: they’re all important. Successful investing (as in sustained above average returns) requires thoughtful attention to many separate aspects, all at the same time. Omit any one and the result is likely to be less than satisfactory…It’s not my goal to simplify the act of investing. In fact the thing I most want to make clear is just how complex it is. Those who try to simplify it do their audience a great disservice.”

Einstein had his own version of this thought: “Everything should be made as simple as possible, but not simpler.”

Is it harder to excel in the nonprofit sector? Is it harder to lead and manage effectively? Let’s not make it a contest but instead take a moment to reflect on why the sector exists at all.

  1. There has been a wide spectrum of social and community functions over the course of the last century which government, business and increasingly the “natural fabric of community” are not sufficiently providing.
  2. Why are government, business and the natural fabric of community not sufficiently providing? Because many of these functions or services are hard to make a profit at, others are just plain hard to do in a rapidly evolving society, and it is particularly hard for large governmental entities to meet nuanced local needs in a targeted and adaptive fashion.
  3. Individuals have always and will continue to be inspired to meet needs (social entrepreneurs) which they see around them and to imagine a better, more creative, more alive, and more just social order. Good!

These three factors and others (lower pay, lower status in the heroic American myth, a time of contracting government resources, competition from the private sector) imply that nonprofit leaders, aspiring leaders, boards and funders need to resist the temptation to oversimplify. What makes a nonprofit great (impactful in a sustainable way) vs. hunkering down and just surviving? I maintain “the most important thing” is the ability to simultaneously generate and sustain excellence in a daunting variety of management, leadership and organizational tasks. In upcoming posts I will dig into these areas in more depth and in relationship to ongoing events, trends and challenges important to nonprofit leaders, aspiring leaders, board members and funders. Next post: Shifts Happen – Leadership Transitions