A Quality Advisor Book Review by Richard E. Biehl.
Copyright 1990, Data-Oriented Quality Solutions. All rights reserved.

MANAGING THE NONPROFIT ORGANIZATION
Principles and Practices
by Peter F. Drucker, HarperCollins, 1990


Quality Assurance professionals, to be effective, must be willing to accept ideas and guidance from the most unlikely sources. Peter Drucker's 1990 book, Managing The Nonprofit Organization, is one such source. Not that information from Peter Drucker should be an unlikely source of usable information for managing the QA function. His previous eleven management books already filled a library shelf along with an additional ten written on economics, politics, and society. What is special about this book is the fact that it concentrates on management in the nonprofit sector and yet builds a distinctive vision for managing any internal service function, particularly Quality Assurance.

Drucker begins by attempting to place nonprofits into perspective by challenging our traditional notion of the nonprofit organization. Rather than a negative definition (e.g. NOT for profit) Drucker seeks to define what a nonprofit organization actually is. Businesses supply goods and services, giving a clear positive definition of the business sector. Government furnishes controls. "A business has discharged its task when the customer buys the product, pays for it, and is satisfied with it. Government has discharged its function when its policies are effective."

These business and government paradigms serve as poor models for the role of Quality Assurance in an organization. The business model emphasizes the delivery of standards, checklists, and SDLC (our products) as well as the reviews, presentations, and planning sessions that we provide and facilitate (our services). Delivery of these products and services is not what Quality Assurance is all about. They are a means to an end, and that end is not defined by the business paradigm.

The government paradigm fares worse for the Quality Assurance function. The control aspects of quality are precisely the line responsibilities that can prevent Quality Assurance from successfully taking the strategic focus needed to achieve its ends. Again, the desired ends remain undefined in favor of a definition of the means.

A nonprofit organization isn't described by the business or government models. "It's 'product' is neither a pair of shoes nor an effective regulation. Its product is a changed human being" (emphasis in original). Nonprofit organizations "need to learn how to use management lest they be overwhelmed by it." From this viewpoint, Quality Assurance is a nonprofit organization.

Managing The Nonprofit Organization attempts to fill a gap in management guidance available to organizations such as Quality Assurance. Drucker addresses the specific needs inherent in the managing of the nonprofit organization. What Quality Assurance groups haven't dealt with issues from "their mission, which distinguishes them so sharply from business and government; to what are 'results' in nonprofit work; to the strategies required to market their services and obtain the money they need to do their job; or to the challenge of introducing innovation and change in institutions that depend on volunteers and therefore cannot command?"

Without mentioning Quality Assurance once throughout the book, Drucker has laid out in simple language the problems facing our Quality Assurance profession. He quickly focuses on several of our paramount problems. On "the need to attract volunteers, to develop them, and to manage them for performance; on relationships with a diversity of constituencies; " as well as "the problem of individual burnout, which is so acute in nonprofits precisely because the individual commitment to them tends to be so intense."

Drucker has broken his book into five parts each dealing with a different perspective on managing the organization. Each part contains five chapters, the bulk of which contain interviews with many respected managers from nonprofit organizations around the United States - both large and small. The final chapter of each part is called "Summary: The Action Implications" and provides immediate action ideas for the reader to pursue.

In "The Mission Comes First" (Part One) Drucker defines the central role of the organization's mission. "Nonprofit institutions exist for the sake of their mission." Drucker would be unhappy with many of the Quality Assurance mission statements floating around the industry today. Many define QA's mission in terms of someone else's mission (e.g. ... to help IS meet the requirements and expectations of the customer!) "A mission statement has to be operational, otherwise it's just good intentions. A mission statement has to focus on what the institution really tries to do and then do it so that everybody in the organization can say, This is my contribution to that goal."

A mission statement like "Our Mission Is Quality" is worse because "nobody can tell you what action or behavior follows from" it. Drucker sees this as one of the most common mistakes: a "hero sandwich of good intentions." Quality Assurance professionals need to recognize that they can only accomplish a finite amount of work. To reflect that, QA's mission statement must be "simple and clear. As you add new tasks, you deemphasize and get rid of old ones."

Drucker sees the pruning of unproductive or valueless activities as a critical task for an organization's leadership. "Nonprofit organizations need the discipline of organized abandonment perhaps even more than a business does." Sometimes this requires making some very hard choices. We may have to sidetrack a quality program we consider top priority because it isn't really having the desired impact. It's tough to recognize this fact and back off.

Our constituencies must be ready for what we're offering. However, QA must also be willing to vary its work with different constituencies. If the mission is to produce a changed human being, then QA must accept that each individual or project team being serviced will have different levels of quality maturity. QA must look for incremental improvement of skills at every opportunity, even if others are left slightly behind because they express reservations or hostility. Frances Hesselbein was the National Executive Director of the Girl Scouts of the United States America and is now the president of the Peter F. Drucker Foundation for Nonprofit Management in New York. When interviewed by Drucker, she commented on the difficulty of moving programs forward with mixed levels of acceptance and resistance: "We began with those Councils ready and eager to move ahead. ... Those not on the sled could wait. We made it very clear that they had a choice. But we were firm in our determination to move ahead with those who were ready and enthusiastic."

Drucker prescribes three "musts" for a successful mission statement. First, concentrate on strengths and performance. "Do better what you already do well - if it's the right thing to do." Second, look outside of the organization for opportunities and needs. Quality Assurance should ask where it can "really make a difference, really set a new standard." Third, concentrate on what the organization really believes in. Drucker has "never seen anything done well unless people were committed."

In "From Mission To Performance" (Part Two) Drucker addresses the need to translate the organization's mission statement into a strategy for fulfilling that mission. "The nonprofit institution is not merely delivering a service. It wants the end user to be not a user but a doer. It uses a service to bring about change in a human being." That is the essence of running a Quality Assurance function within Information Systems. We must continually promote quality concepts until they become part of the culture. People will create quality systems, not because they've bought some product that QA offers, but because that's the way it's done in the organization as a whole. That's the new culture. That's what QA does. "It creates habits, vision, commitment, knowledge. It attempts to become part of the recipient rather than merely a supplier."

A key to a successful Quality Assurance strategy is to focus on the desires and needs of the customer. What does IS need from its QA group? We've got to avoid attempting to drive the market place with our preconceived ideas about how IS should be addressing quality. Drucker quotes Philip Kotler of the J. L. Kellog Graduate School of Management, as saying that "many organizations are very clear about the needs they would like to serve, but they often don't understand these needs from the perspective of their customers. They make assumptions based on their own interpretation of the needs out there." Quality Assurance professionals too easily fall into this trap of believing that they already know what the organization needs.

Another key part of an organization's strategy includes funding. To be effective, Quality Assurance must establish long-term commitments with management and avoid the annual budget battles that divert so much energy away from the mission. Drucker quotes Dudley Hafner, executive vice-president and CEO of the American Heart Association, as saying that "it's just much more efficient to organize with the notion that you are going to have a long-term relationship with your donors, that you're going to help them increase their support to the organization." In the business world the role of "donor" is played by management, while "gifts" materialize as budget. Hafner feels that "development means bringing the donors along, raising their sights in terms of how they can support you, giving them ownership in the outcome of your organization. That takes a long-term strategy rather than putting together an annual campaign to go out and collect money."

Drucker believes that "nonprofit strategy requires careful thought and planning." Early successes are important. We must concentrate initially on "somebody willing to work hard at making the new successful, and ... whose success then becomes a multiplier in the organization." Quality Assurance must also "organize itself to abandon what no longer works, what no longer contributes, what no longer serves."

In "Managing For Performance" (Part Three) Drucker addresses the issues surrounding the definition and measurement of success for the organization. "There is the temptation to say: We are serving a good cause." Everyone knows how important quality is! "To believe that whatever we do is a moral cause, and should be pursued whether there are results or not, is a perennial temptation."

Quality Assurance must be able to quantify its impact on the entire IS organization. "One starts with the mission, and that is exceedingly important. What do you want to be remembered for as an organization - but also as an individual?" We can measure the intended impact of our programs: defect rates, customer satisfaction, productivity, etc. We can also measure the critical success factors that we believe impact those measurements: number of reviews, walkthroughs, planning sessions, presentations, etc. As we show a correlation between these two types of measurements, we illustrate the value that QA adds to the organization. That correlation must tie back to the mission. "The moment we lose sight of the mission, we begin to stray, we waste resources. From the mission, one goes to very concrete goals."

"Good intentions, good policies, good decisions must turn into effective actions." Albert Shanker, president of the American Federation of Teachers AFL-CIO, is quoted by Drucker as saying that "those who are pursuing the long-term rather than the short-term objective find that the short-term objective falls into place."

On the surface Drucker's "People and Relationships" (Part Four) may appear least applicable to a discussion of Quality Assurance management. Nonprofit organizations usually rely almost exclusively on volunteers - people who aren't paid for contributing to the organization's mission yet often exhibit extreme levels of commitment. The employed permanent staff usually represents a skeleton organization that would accomplish almost nothing if the volunteers were to lose their commitment and leave. Wait a minute! Isn't that a good description of the human resource available to the QA function?

The volunteers for QA are the project team members who, through their own commitment and resolve, attempt to let quality in the door. "There is less and less difference between the work they do and that done by the paid workers - in many cases it is now identical." QA's volunteers participate in walkthroughs, reviews, and inspections; join standards and planning committees; attend presentations and classes; and write columns for the newsletter all the while continuing to do their "real" jobs. Quality Assurance could not function without this network of activists.

QA volunteers need to be managed as the critical human resource that they are. In an anecdote about the pastor of a large church, Drucker articulates four things we should be providing every volunteer: "(1) a mentor to guide him or her; (2) a teacher to develop skills; (3) a judge to evaluate progress; and finally, (4) an encourager to cheer them on." The QA staff member is in a position to offer these things. People want to build quality systems. They need the guidance and knowledge to be able to.

"For all this to come together, the mission has to be clear and simple. It has to be bigger than any one person's capacity. It has to lift up people's vision. It has to be something that makes each person feel that he or she can make a difference."

In "Developing Yourself" (Part Five) Drucker focuses attention on self-development. Every QA professional should be striving toward continuous self-improvement of skills and knowledge that can be applied to the job. "Workmanship counts, not just because it makes such a difference in the quality of the job done but because it makes such a difference in the person doing the job."

Roxanne Spitzer-Lehmann is corporate vice-president of St. Joseph Health System, a chain of nonprofit hospitals headquartered in Orange, California. She told Drucker: "I think the best self-development is developing others." This fits extremely well with Drucker's idea that the majority of the QA professional's role involves mentoring, teaching, judging, and encouraging.

If we believe in the mission of QA and its embedded concept of continuous improvement, we must never fail to apply the concepts to ourselves as individuals. "You can not allow the lack of resources, of money, of people, and of time (always the scarcest) to overwhelm you and become the excuse for shoddy work. Then you begin to blame the world - 'they' won't let me do a good job." We must take personal responsibility for improving ourselves, for increasing our capacity to contribute to QA's mission.

In Managing The Nonprofit Organization, Drucker offers insights and guidance for running an organization that relies heavily on the interest, commitment, and resources of others. Quality Assurance is such an organization. QA professionals and IS management should read it carefully and listen to its message.

Drucker challenges each of us to run our organizations differently in the future; to ask ourselves the tough questions. "What do I do to enable the organization to tackle new challenges, to seize new opportunities, to innovate? What do I do? Not what does the organization do? Take action responsibility. What are my own first priorities, and what are the organization's first priorities, what should they be? These are the action agenda. These are the things that must be done."