Volume 1 â€˘ Issue 1
IN THIS ISSUE: 3
Nashville's Nonprofit Sector. It provides 1 5 percent of jobs and $21 billion. How?
Social Enterprise: Profitability in an Open Market. Make your social enterprise a business enterprise.
Book Review: Reframing Organizations. Change your mind map of organizational leadership.
Volume 1 | Issue 1
Letter from the CNM President PUBLISHER Susan King
Center for Nonprofit Management
ADVISORY TEAM Brad Gray
Center for Nonprofit Management
The Strategy Group
Tennessee Higher Education Commission
Nelson and Sue Andrews Institue on Civic Leadership at Lipscomb University
CONTRIBUTORS Murat Arik
Business and Economic Research Center, MTSU
Center for Nonprofit Management
Jack C. Massey College ofBusiness, Belmont University
Center for Nonprofit Management
t the Center for Nonprofit Management, we create new knowledge every day.
It can happen during a workshop, in an exchange between a consultant and a nonprofit client, or through the recognition by community leaders that the nonprofit sector is vibrant and vital to our economy.
For nearly 27 years, CNM has been making a difference in Nashville and beyond our regional boundaries. Each year we host the largest and most successful nonprofit awards evening in the country. Our spring conference brings together speakers from around the country. And we conduct survey research for nonprofits in virtually every state. We have now decided it is time to formalize the creation of knowledge with a journal, and we proudly present this first issue. Publishing has changed dramatically in recent years, and we are in step with new technology. The Nashville Nonprofit Review is available in magazine format online. We hope you will find it enlightening and valuable. I would like to thank Susan King on our staff for shepherding this effort. It is her product, and we are grateful for her initiative. I am also indebted to our advisory team that has helped us from the inception of an idea: Rich Rhoda, executive director of the Tennessee Higher Education Commission and our board vice-chair; Linda Schacht, executive director of the Nelson and Sue Andrews Institute on Civic Leadership at Lipscomb University; Keel Hunt, president of The Strategy Group; and Brad Gray, CNM consultant and nonprofit expert. Please give us your feedback and your requests for topics in future issues. And thank you for taking a look at our newest offering.
37 Peabody St. Nashville, TN 37210 (615) 259-0100 cnm.org For content suggestions, contact Susan King at firstname.lastname@example.org or (615) 259-0100 ext. 304
Lewis Lavine President Center for Nonprofit Management
Summer 201 3
Nashville’s Nonprofit Sector It provides 1 5 percent of jobs and $21 billion. How? by Susan King Center for Nonprofit Management
ore than 15 percent of regional employment and $20.9 billion in business revenue is contributed to the Nashville MSA by the nonprofit sector, according to a newly-released economic impact study. The study — produced by the Business and Economic Research Center at the Middle Tennessee State University and sponsored by the Center for Nonprofit Management — is the first local assessment of the sector’s contribution, and shows that Nashville’s nonprofits are vibrant and economically powerful, bringing significant dollars to the region. The
study answered four
clearly defined as the 13-county area that makes up the Nashville 1. What is the scope and size of MSA. It includes: Cannon, the Nashville MSA’s nonprofit Cheatham, Davidson, Dickson, sector? Hickman, Macon, Robertson, 2. Howhas thesectorevolvedover Rutherford, Smith, Sumner, the years? Trousdale, Williamson and 3. How has the sector managed Wilson counties. Where a specific the economic downturn? nonprofit’s revenue comes from 4. How does the sector compare outside the area, the activity is still with that of peer MSAs? defined as net addition to the area’s economy. BERC designed an online survey thatincludeda sample ofthe 2,045 Measuring economic impact nonprofits in the Nashville area and used data and literature from Economic impact is defined as other MSAs across the country to economic activities that are net make comparisons. Churches and new to the local economy, agencies with revenue ofless than according to Murat Arik, director $25,000 in 2011 were omitted ofthis study and associate director from the sample. of BERC. Included in these activities are exporting of goods The geographical scope was and services by local business to 3
Nashville Nonprofit Review
areas outside of the MSA boundaries, out-of-area visitor spending, and recapturing of economic activities sent outside the MSA due to lack of local business services. In the case of Nashville’s nonprofits, the direct economic impact is measured by identifying the amount of monetary flow to Nashville from outside the MSA; this is the net contributions to local economic activities.
induced effects.” As many nonprofit leaders already know, the sector would not be able to accomplish the economic activities it undertakes with the employment numbers alone. Volunteers are critical and this study quantifies the value of total wages associated with volunteer
The report shows that “without these organizations, the local economy would have been smallerin proportion to the net new economic activities associated with the nonprofit sector, as well as their indirect and induced effects.” There is a difference between economic impact and economic contributions. The former is new economic activity whereas the latter refers to the total size ofthe sector and total spending ofthe sector in the local economy. “Because it is a broader concept, any measure of economic contributions includes the economic impact measures.” Arik explains inthe report. “To measure the economic contributions, this study first calculates total expenditure ofthe nonprofitsector and then counter factually removes the sector from the local economy to identify indirect and
labor and adds the total direct wages to the economic contribution estimates. Arik and his team used the IMPLAN model to estimate the indirect and induced effects of economic activities. It is a nationally recognized, commonly used input-output model to measure the economic and fiscal effects of economic development projects. It is important to note that by its
very nature, this study estimates economic contributions of the nonprofit organizations’ spending in the Nashville MSA. This estimate is markedly different from the economic contributions of nonprofit-related economic activities in the Nashville MSA. In the latter case, a study would also estimate any economic activity associated with a nonprofit organization. For example, while this research focuses simply on the impact of a university’s operating expenditure spending, a broader study might also include spending associated with visitors to the campus, students’ spending, capital expenditures, etc. Adding all ofthese components could even double the total impact estimate of an organization’s operating expenditure. For this reason, the results in this study are not directly comparable with studies that deal with all economic activities associated with a nonprofit organization.
The numbers For this study, BERC included 2, 045 non-church nonprofits in the Nashville MSA. These all had revenues exceeding $25,000 in 2011, and they comprised 5.44 percent of all businesses in the area. In terms of nonprofit 4
Summer 201 3
organizations by major segment, the human services segment is by far the largest, representing 34 percent of all nonprofits. Compared with 2008, the number of nonprofit organizations increased by 5.2 percent. In the same period, the total number of businesses in the Nashville MSA decreased by 3 percent. The largest growth occurred in the international segment, with an increase of 39.4 percent to 46 in 2010.[Do you mean an increase from 39.4% in 2008 to 46% in 2010?] In terms of the absolute number, the segments of human services and education added 44 and 31 new organizations, respectively, between 2008 and 2010. Organizations classified under mutual benefit, public and societal benefit and unknown were either stagnant or experienced decline in numbers between 2008 and 2010. According to BERC estimates, the size of the nonprofit sector in the Nashville MSA was $9.4 billion in 2010. In spite of the recession, the nonprofit sector experienced significant growth between 2008 and 2010, with a
10.2 percent increase in revenue in current dollars.
The education segment accounted for nearly half (46.8 percent) of nonprofit revenues with $4.4 billion. The second-largestsegment was health care with $3.1 billion and a 32.9 percent share, followed by human services with $0.94 billion and public and societal benefits with $0.62 billion. What matters for this study is how much money nonprofit organizations spend in the Nashville MSA. The amount of money these organizations spend enters as a direct input into the regional IMPLAN model to measure the economic contributions of these organizations. According to BERC estimates, total expenditure of the nonprofit sector in the Nashville MSA was $8.97 billion in 2010. The nonprofit sectorâ€™s expenditure showed significant growth between 2008 and 2010 with a 10.8 percent increase in expenditures in current dollars.
segment is health care with $3.0 billion and a 33.3 percent share, followed by human services with $0.90 billion and public and societal benefits with $0.51 billion.
The education segment of the nonprofitsector, with $4.3 billion, accounted for nearly half (47.7
Unlike the case of nonprofit revenue, a few nonprofit segments recorded a decline in total expenditures between 2008 and 2010: the mutual benefit segment experienced a 7.51 percent decline and the public and societal benefit (other) a 5.21 percent decline in expenditures. Total decline in these segments amounted to nearly $29 million. On the other hand, the education and health care segments recorded significant expenditure growth (in absolute size) with a combined total growth of $0.79 billion.
percent) of nonprofit expenditures. The second-largest
So what was the true size of Nashvilleâ€™s nonprofit sector? A total of $9.3 billion (in 2011 dollars) in direct spending generated additional revenue of $11.3 billion in the local economy. This means that for every dollar of money spent by the nonprofit 5
Nashville Nonprofit Review
sector, an additional $1.22 was created through the ripple effect. Total contribution ofthe nonprofit sector to the local economy was $20.53 billion, representing 14.7 percent of the Nashville MSA’s total business revenue. Total taxes associated with nonprofit spending were $0.680 billion in the Nashville MSA. When reviewing nonprofits’ contribution to the local economy, keep in mind that Vanderbilt University with its educational and medical components, Meharry Medical College, Belmont University, and several other colleges and hospitals were included in the analysis.
The nonprofit sector is like an export sector, bringing a significant amount of money into the region. Which nonprofit segments contributed most to the local economy? According to BERC estimates, the education, health care, human services, and public and societal benefit segments contributed more than one billion dollars each.
analysis of the 12 largest outlier organizations to get their employment figure separately. According to BERC estimates, nonprofit organizations hade 140,650 full-time and 40,489 part-time employees with a combined full-time equivalent (FTE) of 151,734 employees. Direct employment figures represented nearly 15.3 percent of Nashville MSA employment. Health care segment led all others by 68,218 employees. Education was second with 52,066 and human services a distant third with 20,502 employees. In this context, itis importantto highlight the fact that, unlike many peer MSAs, the education and health care segments in the Nashville MSA nonprofit sector are very much intertwined because of the presence of both Vanderbilt University and Meharry Medical College.
do not include the volunteer force these organizations mobilize when there is an unmet need in society. The estimated value of volunteering was 8,147 FTEs and $307 million in wages and salaries in the Nashville MSA. Many small organizations are simply run by volunteers. Including volunteering resulted in nearly $21 billion in business revenue, 246,000 jobs and $9.3 billion in labor income.
BERC also used its online survey to identify the percentage of nonprofit revenues flowing from sources outside the Nashville MSA. From the survey results it then estimated the total amount of nonprofit expenditure associated with outside sources. This amount was the net new addition to the study region’s economy on which The health care segment economic impact estimates are represented nearly 45 percent of based. nonprofit sector employment, followed by education (34.31 Nearly 20 percent of nonprofit percent) and human services organizations in the Nashville (13.51 percent). Overall, direct MSA received more than 50 employment by the nonprofit percent of their revenues from sector is a major force in the sources outside the study region. Nashville MSA. These estimates By using mid-point values, BERC
Employment and volunteerism BERC directly asked nonprofit organizations for feedback through its online survey. In addition, BERC did a separate 6
Summer 201 3
estimated that $2.7 billion in 2011 flowed to the Nashville MSA economy from outside sources because of nonprofit sector activities. In 2008, the total amount ofthat flow was estimated at $2.5 billion. The amount of money flowing to the Nashville MSA from other regions grew by 8.33 percent between 2008 and 2011.
Nashville MSA. In 2011, an estimated 28.5 percent of all nonprofit revenues flowed from other regions. This figure was about the same in 2008.
polis; Jacksonville, Fla.; Kansas City, Mo.; Louisville, Ky.; Raleigh, N.C. and Richmond, Va.
Given the margin of error in the survey, it would be reasonable to state thatone in every three dollars ofnonprofit revenues comes from other regions.
According to Arik and BERC, the nonprofit sector in the Nashville MSA is a significant force.
What does this figure tell us about the nonprofit’s role in the Nashville MSA economy? The nonprofit sector is like an export sector, bringing a significant amount of money into the region by selling goods and services to individuals both in and out of the
Comparison Overall, Nashville ranks third in terms of strength of the nonprofit sector among 10 peer MSAs, including: Birmingham, Ala.; Charlotte, N.C.; Columbus, Ohio; Indiana
In the report, he notes that both economic impact and economic contributions analysis suggest that the nonprofit sector accounts for a sizeable portion of the Nashville MSA economy, comparable to the largest industries within the for-profit sector.
Economic impact study key findings What this study tells us about Nashville'’s nonprofit sector
onprofits comprise a vibrant and economically powerful sector, bringing significant dollars to our region. Here is what you need to know: The Nashville MSA’s nonprofit sector in 2011: • Includes 2,045 nonprofit organizations • employed 151,734 people, 15.3 percent of all regional employment; • attracted $2.8 billion from sources outside the MSA, or one in every three nonprofit dollars; • contributed $20.9 billion to business revenue in the MSA, nearly 15% of all such revenue
in the area. • The impact of volunteering is immense, accounting for the equivalent of more than 8,147 FTE jobs and $1.01 billion in economic activities.
Weathering the recession In terms of the entire nonprofit sector, revenue growth increased by 10.2% between 2008 and 2010. But the distribution of that growth was clearly not evenly spread. Nearly 50 percent of the nonprofit organizations cited a reduction in revenue because of the 2008 recession, while only 16 percent saw increases. At the same time, nearly 56 percent of the nonprofits surveyed
experienced an increased demand for their services during those two years.
Comparison to other MSAs Overall, Nashville ranks third in terms of the strength of the nonprofit sector among 10 MSAs, including Birmingham, Ala.; Charlotte, N.C.; Columbus, Ohio; Indianapolis; Jacksonville, Fla.; Kansas City, Mo.; Louisville, Ky.; Raleigh, N.C.; and Richmond, Va. “In addition to the vital services performed by nonprofit agencies, they also have a major positive impact on the Nashville economy,” said Lewis Lavine, president of the Center for Nonprofit Management. 7
Nashville Nonprofit Review
Social enterprise: Profitability in an open marketplace Lessons learned from Spring Back Recycling by John Gonas Associate Professor of Finance Jack C. Massey School of Business, Belmont University
I have had the honor and privilege of helping guide a local nonprofit (Isaiah 58) and John Gonas more than 40 Belmont University undergraduate students (Belmont Enactus) in developing and implementing a social enterprise that would ultimately be profitable, sustainable and even scalable. Starting in 2010, the Belmont Enactus team and Isaiah 58 (a Belmont Church ministry) partnership was formed to pilot a business model that would eventually become Spring Back Recycling. Our goal with Spring Backwas to buildamodel thatwas initially dependent on donated capital, but thereafter profitable on its own, while maintaining its primary social mission ofoffering sustainable earned-income to disenfranchised individuals. Spring Back Recycling exists to support organizations that serve the homeless and formerly
incarcerated by providing a sustainable business model that benefits the environment through diverting waste from landfills. This Nashville-based enterprise has already disassembled and recycled more than 30,200 mattresses with 98 percent of the component parts being repurposed. As a result, more than 1.6 million pounds ofmetal, foam, cotton/wool and wood have been diverted from area landfills and reconstituted into carpet padding, paper, mulch and scrap metal. Spring Back Nashville, the flagship location, now receives more than 400 units perweekfrom a consortium of retailers in five surrounding states, a local waste
Our goal was to build a model that was initially depedent on donated capital but thereafter profitable on its own.
management company, Metro Nashville Public Works, regional institutions and local citizens.
Creating the model Prior to 2012 the men from Isaiah 58 and students from Belmont Enactus spent a full year creating the business model for Spring Back by developing production models, accounting processes, marketing materials, legal contracts and safety procedures to generate a scalable business plan and operations manual. In addition, Belmont Enactus located and provided the seed capital for the Isaiah 58 ministry to launch Spring Back Nashville. The capital was used to purchase equipment, rent an 8,000 square footfacility andhelp train its eager and capable workforce for this start-up business. At the base of Spring Backâ€™s economic model are two streams of revenue: collecting a fee from private citizens, mattress retailers and institutions to take the mattresses, and selling the disassembled component parts to scrap buyers. Due to the success and demand for the model, the Belmont Enactus students have recentl 8
Summer 201 3
ly created a 501(c)3 to share the model with similar programs across the country. As a result, the business model has already been licensed in Denver, Takoma, Wash. and Columbus, Ohio.
Social enterprise as a business enterprise Stemming from our work with Spring Back and the past nine years that Belmont Enactus has worked with local, national and international nonprofits, my students and I have continuously arrived at the same question: “Can and should a nonprofit enter a profit-maximizing market with a social enterprise that can independently sustain profitability, without deviating from the non-profit’s social and/or environmental mission?” More
Can a nonprofit's social enterprise maintain a competitive advantage...to exploit unique market opportunities?
Watch this video to learn more about Spring Back
product/service and the general market.
advantage when raising and employing capital. Assuming the initial raise is donated capital, the To frame a discussion of such nonprofit typically is required to characteristics, I typically be accountable for how it uses the structure the nonprofit creation of funds, but does not have to meet a an earned-income, for-profit creditor’s or shareholder’s enterprise around its profitability expected return by way of a and the assumptions therein. A principal payoff and/or dividend capital budgeting decision for or interest periodic payments. As most for-profit firms typically a result, we have found that involves a basic Net Present Value funding agents ofa proposed nonframework and its embedded profit social enterprise have no valuations to gauge market entry return-of-capital expectation with the following calculation: coupled with the philanthropic nature of their monetary gifts.
With regard to the initial fixed where the enterprise’s initial asset and working capital raise capital outlay for equipment and (CF0), we have found that specifically, “Can a nonprofit’s working capital are representedby successful market entry and social enterprise maintain a a negative CF0, its operating cash competitive sustainability of a competitive advantage that will flows (operating earnings + social enterprise are often tied to enable it to exploit unique market depreciation +/- taxes paid) are an industry with a relatively high opportunities?” I believe the represented by CF1 through CFN, barrier to entry. As is the case with answer to these questions is and its cost of capital is Spring Back, the initial complex and potentially unique to represented by its required rate of lease/purchase of an adequate each market, yet we have found return “r.” facility and the necessary working the existence of a number of capital and capital equipment common characteristics Starting with the required rate of purchases can exceed $60,000. embedded in a nonprofit’s return (r), nonprofit-based social We find that a market entry barrier business experience, its enterprises have a distinct can simply be economic, but also 9
Nashville Nonprofit Review
can result from the potential existence ofunique access to (1) a particular raw material sourcing or (2) a distinct marketplace.
with procuring inbound mattresses and box springs are unpredictable. Variances in diesel fuel surcharges and the ability to secure relatively cheap rail service Another important distinguishing or truck lanes are often large characteristic related to market enough to challenge realistic entry and sustainability is the estimates of revenue and cost perceived uncertainty and projections in a pro forma forecast irregularity ofthe Operating Cash of future cash flows. Last, Flows (OCF) that hopefully commodity scrap prices for spawn off of the initial cotton, foam, and metal can also investment. Given that a firm’s be unpredictable, thus presenting OCF’s are primarily a function of a challenge to forecasting future its revenue and cost drivers, the revenue drivers. Specific to market’s anticipated Spring Back, yet not necessarily predictability of its strength and an industry trend, using occurrence can drive competition disenfranchised labor can also and innovation. We find that the create uncertainties; higher more unpredictable a firm’s relative turnover ofits labor force pricing power for generating sales implies lower labor productivity and controlling costs, the more and higher training costs. inconsistent its earnings and ability to maintain profitability. In addition to the requirement that a successful social enterprise Social enterprises like Spring benefit from some or all of the Back can benefit from such aforementioned cash flow irregularilty. In Spring Back’s opportunities and constraints, we case, where the waste diversion also find that one general market market of mattress recycling not characteristic is essential for only offers relatively high initial success. Products or services tied capital requirements as well as to a social benefit need to uncertainty regarding OCFs, we adequately market its benefit and are finding three unique industry value proposition. We are trends related to OCFs. continuously affirmed ofthis with Spring Back as institutions, First, revenue is dependent on municipalities, and consumers are retailers and/or institutions willing to pay a “tipping fee” in incurring a more costly decision excess of the cost to landfill or to divert solid waste from repurpose a used mattress. Their landfills. This decision is typically perceived value of Spring Back’s based on the potential to pass a social and environmental benefits higher recycling cost to a willing marginally outweighs the customer who values such solid economic and social costs waste diversion activity. associated with (1) prior disposal methods and (2) the economic Second, freight costs associated burden on taxpayers to fund
Sustained profitability In summary, our experiences with developing a social entrepreneurial model around waste diversion have allowed us to form several opinions regarding firm and market characteristics that drive the potential for a social enterprise to sustain profitability. On the firm level the management and board of the nonprofit should have the appropriate accounting, operations management, information systems, financial resources, and reporting metrics in place to accommodate the implementation of a for-profit business plan. We find that having the financial, managerial, and human resources fully committed to a more than six-month pilot is essential to successfully entering a profitmaximizing marketplace. On a market level, in addition to the product or service being of consistent value and demand in the marketplace, it should offer economic value that is tied to a significant social and/or environmental benefit. In addition to marketing such value, the product or service should exist in an industry where there is a relatively high barrier to entry and/or the future unpredictability ofits revenue and cost drivers creates uncertainty in mapping pro forma operating cash flows. 10
Summer 201 3 About Spring Back Recycling
Incorporated as 501(c)3 nonprofit organization in April 2012, Spring Back began in the spring of 2010 as a project by the Belmont University Enactus (then Students in Free Enterprise) team who explored mattress recycling as a means of achieving the triple bottom line: people, planet, and profit. After a year of research, financial modeling, and experimentation, the Enactus team partnered with Belmont Church and its Isaiah 58 ministry to enact its model. The Nashville pilot was a great success: both holistically serving its employees and fully recycling thousands of mattresses, all while making economic sense. Today, Spring Back Recycling is expanding to other communities across the United States to multiply its impact as the first and only social enterprise to recycle mattresses fully. Spring Back hopes to change the way businesses and consumers react to the disenfranchised and to used materials. Rather than discarding people and disposing of waste, Spring Back is redefining recycling.
‘Reframing Organizations’ by L.G. Bolman and T.E. Deal
There are so many worthy books written on leadership and organizational culture that it Brad Gray becomes increasingly difficult to choose from among them to write a review. However, there is one that stands out for its timeless quality, the multiple perspectives it enables serious leaders to consider, and the capacity it develops to reframe in order to be effective. Its popularity as a practical tool for leaders and managers, and as a class textbook in some major universities in management and leadership classes, gives credence to why it finds itself on the must read list with classics like “Good to Great” by Jim Collins and Kouse’s and Posner’s “The Leadership Challenge.” Executives, midlevel and emerging leaders in large and small companies, as well as in not for profit organizations, government, and institutions, will find this book memorable for its insight and useful for its tools. Quite frankly during my own career, and now as I consultant, I am
faced daily with my own leadership and organizational challenges like anyone else. I find myself reflecting often how helpful this book has been. I find that it just makes sense. A fairly long book, it is easy to read, and it keeps the reader engaged. This book is about more than organizational culture. To understand how culture matters, a review of the non-cultural elements of the book provides a good backdrop for understanding organizational culture and its particular benefits and landmines. For that reason I will share with you an overview of the book and focus more intently on the “Symbolic Frame” in which organizational culture is nested. “Reframing Organizations” synthesizes respected research on organization and leadership and then takes it further by constructing four organizational filters, or lenses, which Bolman and Deal call “frames.” They suggest good leadership as that which is able to view an organization through the four distinct “frames,” and use them to diagnose the condition of the 11
Nashville Nonprofit Review
organization and determine in which direction to lead. With four lenses from which to understand what is going on, it provides the leader more than one option from which to tackle the simplest and the most difficult organizational challenges. They allow the leader to view the workplace from different images to make judgments, gather information and get things done. The authors label this activity “reframing,” a measure to take in order to achieve optimal mission results.
Four frames Each frame is different, much like the child’s toy viewer with different colored translucent cellophane paper that shows and hides different images when different color cellophane is utilized. In a similar way, the frames are meant to make more clear how we perceive the organizations with which we work, each frame revealing what the others cannot. It takes all four frames to get the whole picture, which is vitally important from a leadership perspective. Most of us have the tendency to look at situations or problems from a narrow perspective and this hinders our ability to understand what is really going on, be effective, and be visionary as leaders. The Structural Frame establishes a bias toward efficiency based on the whole, where the individual and individual
preferences have little or no impact on decision-making. It designates specific roles for employees and groups them into working units. Coordination and control is achieved either vertically or laterally. The best structure depends on the organization's environment, goals and strategies. The frame would espouse “form following function.”
Reframing Organizations” identifies the work environment as one of conflict with a proclivity to negotiation, bargaining, compromise and coercion. Bolman & Deal provide five assumptions to define this frame.
The Symbolic Frame is the most ethereal of the four frames. That is not because it is unrecognizable; it is quite the The Human Resource Frame opposite because it brings into views an organization like a focus the power of the large extended family. From this transcendence of meaning in perspective, an organization organizations. Even the words to values individuals at least as describe the frame give a sense much as other interests or more to the reader of its being outside so. The frame ascribes that the scope of the concrete. The individuals have needs, frame however is what helps prejudices, feelings, limitations individuals and groups (teams) and skills. The goal of the leader make sense out of nonsense, is to mold the organization to make explainable what has meet the needs of its people. The seemingly no explanation. The leader will seek to merge the “meaning” that persons attribute people’s need to feel good about propels individual and collective what they are doing with the motivation, cohesion, synergy, ability to effectively get the job and great satisfaction. The frame done. Bolman & Deal state that is rooted in cultural and social the key to this window is a anthropology which Bolman and "sensitive understanding of Deal point out views people and their symbiotic organizations as theaters, tribes, relationship with organizations." even carnivals. Unlike the Structural Frame that would suggest that the people “An organization is a unique exist for the organization, this culture driven by stories, frame is clear that the ceremonies, rituals and heroes. organization exists for its This is in contrast to an people. organization being driven by rules, authority or policies. The Political Frame views the Much like a theater, workplace as a competitive organizations have various environment or contest in which actors that play their respective different people compete for roles in the drama and the power and limited resources. audience forms its own “ 12
Summer 201 3
impressions of what is seen on the stage.”
devices: rites, rituals, and ceremonies, language systems and metaphors, sagas, stories, and myths, as well as music, physical symbols, heroes and heroines, even organizational irritants and others.
The Symbolic Frame understands teams and teambuilding differently than other frames. It views the development of high-performing teams as a This is important to Reframing spiritual the organizational network organizations is leader as these defined and the kind of book that shared values and supported changes the mind map beliefs create a by its work environment of a leader's rituals, in which people are understanding of an ceremonies committed and and myths. organizational life. share a strong sense The of mission. symbols of organizational meaning are visible everywhere, The benefits of such a dynamic from the annual celebration (and is increased productivity and a ritual) of the Center for reasonably happy work place Nonprofit Management with its where persons feel a sense of “Salute to Excellence” that being a part of something bigger inspires, makes a community than themselves. However, the proud and motivates nonprofits same force of culture can cause in Middle Tennessee, to resistance to change by founders, heroes, and heroines reinforcing a singular view of that anchor the values of that the organization and the organization. The symbols are environment. There is a also artifacts, our flag, logos, common adage “culture eats our strategic plans (our strategy for lunch,” which playbook), and a host of others makes reference to this that essentially bring meaning important force. In “Reframing and identity to the organization. Organizations,” the authors suggest that the organizational Organizational Culture leader has the opportunity to “lead” the culture. In so doing The system of shared beliefs and the many devices (mentioned values that develops within an above) at his/her disposal can be organization best defines leveraged to lead and even organizational culture. Bolman adjust the culture to align it with and Dea, through the the necessary change to ensure assumptions of the Symbolic continued mission success. Frame, identify how culture is developed and reinforced The tremendous advantage that through a series of cultural organizational culture has for
leaders is that when the leader takes care of this seemingly ethereal element of organizational life, he or she is able to summon from employees, volunteers, donors, and the community at large an intrinsic motivation for performance and loyalty to the organization. A salary for an employee is not intrinsic; it is an extrinsic motivator and is finite every month. Intrinsic motivation, on the other hand, delivers selfinitiated and self-monitored initiative that often delivers far more than expectations and seeds synergy in organizational groups.
Wrap Up The central message of “Reframing Organizations” is that the leader can avail himself of a healthy tool-box of options when attempting to understand more broadly what is going on, thereby providing several optional solutions. Bolman and Deal refer to that as “Reframing,” and they strongly suggest that the leader who has this type of flexibility and takes advantage of the options that the enhanced view and understanding present, can indeed lead effectively. “Reframing Organizations” is the kind of book that changes the mind maps of a leader’s understanding of organizational life, a recommended read. 13
Economic Impact Study & Social Enterprise