This is Harvard speak for “hold on to something, we’re going
to turn your brain into carrot soup, but you’ll be able to see things more
clearly.” This was my second exposure to the HBS Executive Education program. The first session I attended about five years ago was in a program that examined Performance Measurement for Effective Management of Nonprofit Organizations. At the end of that intensely focused period of study and learning, my perception of the phrase “you manage what you measure” was changed dramatically, and that change was not salted but poured into Finance Fund.

SPNM (pronounced: “Speenem”) took it up a notch. It included
people from 20 countries in addition to the US representing world class
organizations at the cutting edge of nonprofit management including Greenpeace,
Special Olympics, Big Brothers Big Sisters, YMCA, Boy Scouts of America,
Habitat for Humanity, Goodwill, United Way, and countless others. My living group included
representatives from nonprofits in Singapore, Australia, Canada, California,
Florida and Pennsylvania.

The HBS instruction model is one of discovery
rather than impartation; and boy, did we discover. From 7:30 AM to 10:00 PM we
grappled with finding the lessons and truths by examining case studies of
various nonprofit organizations from around the world. At the end of the week, ideas
were stacked like cordwood in my head and will slowly begin to pour into
Finance Fund. Upon returning, with eyes forward and tail dragging, I have confirmed
the “Harvard speak” declaration of SPNM and my translation

1. Funding authority to catalyze high levels of private investment in distressed communities. The Administration proposes to authorize NMTC at $5 billion in 2010 and 2011.
2. Improving overall competitiveness, attractiveness and effectiveness of the NMTC.
   1. Allowing Alternative Minimum Tax (AMT) taxpayers to claim NMTC.
   2. Review passive activity rules, which is a rule that limits the use of losses and credits for business in which a taxpayer does not materially participate.
   3. Qualification of certain types of investments for the credit, which seeks to clarify what types of loans constitute a qualified investment.
   4. Improvement of NMTC rules to spur additional investment in small business.
      1. Re-examining “substantially all” requirements, which requires an awardee (CDE) to have a specific portion of their funds invested at all times.
      2. Supporting greater investment in institutions that invest in small businesses by supporting new rules to promote more investment in Community Development Financial Institutions (CDFIs).

In addition to the “formal” proclamation of the press release, on the conference call Treasury officials made concerted effort to point out that NMTC has Secretary Geithner’s support and is a high priority for the Administration. Bob Rapoza, representing the NMTC Coalition, expressed the industries appreciation that Treasury is moving aggressively on these issues that will strengthen the program.

It’s good to hear good news once in a while.

PRESS RELEASE and FACT SHEET:

http://treas.gov/press/releases/reports/nmtc%20fact%20sheet.pdf

The Competitive Imperative of Learning (Harvard Business Review July-August 2008), by Amy C. Edmondson

Most executives believe that relentless execution – the efficient, timely, consistent production and delivery of goods or services – is the surefire path to customer satisfaction and financial results. Managers who let up on execution even briefly, the assumption goes, do so at their peril.

                In fact, even flawless execution cannot guarantee enduring success in the knowledge economy. The influx of new knowledge in most fields makes it easy to fall behind.  Look at General Motors which was the largest most profitable company in the world in the 1970. GM remained wedded to a well-developed competency in centralized control and high-volume execution. They have steadily lost ground for decades and are now counted in the ranks of high profile bankruptcies.

                Edmondson’s research identifies a different approach to execution, what she calls “Execution-as-learning ”. The approach maintains that a focus on getting things done, and done right, crowds out the experimentation and reflection vital to sustainable success. By continuing to think about execution as efficiency, which she refers to as old fashioned and narrow, companies fall into predictable self sabotaging traps.

1.       Critical information and ideas fail to rise to the top

2.       People don’t have enough time to learn

3.       Unhealthy internal competition arises

4.       Companies think they can do no wrong

In addition the environment must be made safe. Before an execution-as-learning can occur organizations must foster psychological safety. This means ensuring that no one is penalized if they ask for help or admit a mistake. This safety is not done at the expense of accountability and Edmondson presents a safety/accountability matrix which suggests that effective organizations achieve high levels of both.

        The goal of the approach is to find out what works and what doesn’t; employees must absorb new knowledge while executing, often sacrificing short term efficiency to gain insight into and respond to novel problems. The author reveals four steps to make this happen.

1.       Provide process guidelines

2.       Provide tools that enable employees to collaborate in real time

3.       Collect process data

4.       Institutionalize disciplined reflection

The article presents a valid and viable alternative that strikes a median between hierarchy and self guided teams. Fostering an atmosphere in which trust and respect thrive, and flexibility and innovation flourish, pays off in most settings, even the most deadline driven. When people know their ideas are welcome, they will offer innovative ways to lower costs and improve quality, thus laying a more solid foundation for their organization’s success.

You can read the full article here.

On the radio show hosted by former Sen. Fred Thompson, New York lieutenant governor Betsy McCaughey stated that the House’s proposed health care bill contained a provision that would institute mandatory counseling sessions telling seniors how “to do what’s in society’s best interest…and cut your life short.” Citing page 425 of the bill, McCaughey claimed that “the Congress would make it mandatory … that every five years, people in Medicare have a required counseling session that will tell them how to end their life sooner, how to decline nutrition, how to decline being hydrated, how to go into hospice care … all to do what’s in society’s best interest … and cut your life short.”

Here’s what the bill says, “An explanation by the practitioner of the continuum of end-of-life services and supports available, including palliative care and hospice, and benefits for such services and supports that are available under this title.” The accepted definition of end-of-life planning means thinking ahead about the care you would like to receive at the end of your life – which may include the choice to reject extraordinary measures of life support, or the choice to embrace them.  The section would require Medicare to pay for, not mandate, some end-of-life planning counseling sessions with a health care practitioner once every 5 years. It is clear that McCaughey’s distorted interpretation of the content of page 425 was offered not to stimulate debate but to frame an atmosphere of fear and mistrust.

Several television ads sponsored by Patients United Now claim that Canadian citizens survived serious illness only by leaving the country to get treatment in the U.S. because of the length of their wait for service in the Canadian health care system, claiming “Washington wants to bring Canadian-style health care to the U.S.” The reality is that no one is advocating for a government run health care system. The president and the leaders of both parties resound with the words of Sen. Max Baucus, Chair of Finance Committee, “single-payer (government run health care) is not going to get even to first base.” Yet the ads continue for what purpose? Not to stimulate debate but to frame an atmosphere of fear and mistrust.

There was a time in this country that I can remember when someone or some group publically making a misstatement or an outright lie, the journalistic community would stand up on their hind legs and demand accountability, and there was an American public that had not abdicated their role in the republic and given place to apathy believing everything we are fed. Naked again.

Jim was recently selected to sit on the Board of Directors for the CDFI Coalition, a national organization representing community development institutions across the country. These institutions are certified CDFIs by the U.S. Department of the Treasury’s Community Development Financial Institutions (CDFI) Fund.

The CDFI Coalition is the unified national voice of community development financial institutions (CDFIs). Their mission is to encourage fair access to financial resources for America’s underserved people and communities. Nationwide, over 1000 CDFIs serve economically distressed communities by providing credit, capital and financial services that are often unavailable from mainstream financial institutions. CDFIs have loaned and invested billions in our nation’s most distressed communities and leveraged billions more from the private sector. The CDFI Coalition advocates on behalf of the CDFI industry and educates the public about community development finance. The CDFI Coalition is a primary source of information and knowledge about the CDFI field for the general public, the media, public officials, and private sector lenders.

“I am honored to join this growing Board of Directors as a representative of Finance Fund.’ he said.  “This collaboration of like-minded organizations from across the nation is poised to handle some of the toughest issues facing our communities today. The government is continuing to show its support of CDFIs by funneling stimulus dollars our way and looking to us for help with the economic challenges hitting our urban and rural neighborhoods.”

Well said, and congrats, Jim.