Connecting the Dots

budget common leadership issues cost cost of leadership effective leadership influence leadership leadership misconceptions leadership myths productivity profitability profitability killers return on investment stewardship Nov 24, 2023
common leadership issues

As we close every single lesson we share, whether it’s in-person or virtual that will end up on our digital platform, we challenge whoever we’re working with to identify one specific thing they can take action on immediately AND to detail the specific results they want to achieve in the process. In doing that, I nearly always take it a step further by setting an expectation for the participant to consider how their action step can increase productivity and profitability in their organization. I do that because that’s something I was held accountable to for years and it taught me just how critical productivity and profitability are even for folks in support roles like safety or human resources. All that said, I’ve seen that verbiage end up being something of a curveball for some folks so let’s make sure it translates to any role, even those in a nonprofit organization or for someone in the public sector…

Even after we’ve done the work to prevent anyone from falling prey to the leadership myths we looked at before and we’ve developed an understanding of how it really does impact EVERY organization, we still need to be able to connect the dots as to where or how it actually shows up. As I broke down each of the specific ways ineffective leadership and poor communication can kill profitability, I was very intentional about detailing specific costs incurred within each area. While nonprofits and many organizations operating in the public sector may not track (or even use the terms) productivity or profitability, they most certainly have responsibility for both - even if they’re calling them something else!

During a recent conversation that Cindy and I had with a friend who heads up a great local nonprofit organization, we worked to connect the dots by comparing the productivity that’s measured in basically any production environment I’ve ever been around to her team’s effectiveness in serving their clients. She had targets for the number of people each of her team members served each week or month and she had clear expectations for the quality of service each of those clients received. While they weren’t logging it on a throughput report like widgets coming off an assembly line, I made a case for how similar what they were doing really was to measuring productivity… Regardless of the specifics of the industry we’re working in, we’re all engaged in providing something to someone. When better leadership is in place, the number of people who are impacted will increase and the level of service they receive will too!

As we consider the idea of profitability, I’ll confess to being one of those greedy capitalists who believe more profit is better than less! With the exception of the federal government, I can’t point to many scenarios where an organization has benefited anyone long term without generating a profit - and I’m very willing to argue that the federal government isn’t doing much to benefit the people they’re servicing. (For clarification, the word servicing is used here in veterinary terms…) The disconnect though is in how that profitability is measured! Be it a nonprofit or a department anywhere in the public sector, there’s some kind of budget in place. Very few organizations have the opportunity to operate indefinitely with a limitless checkbook funded by other people’s money. To that end, even the feds run out of the money they’ve pillaged from us peasants - they just have the ability to print more…

Probably the best example of how profitability ties to nonprofit or public sector roles is what a lifelong friend shared for me to include as a testimonial for What’s Killing Your Profitability?:

Profitability is a rarely heard term in government service, but careful financial stewardship applies to the government just as much as business owners and shareholders. The citizens of this great nation provide their hard-earned tax dollars for the benefit of their communities, with the intention that government is managing those funds in the most cost-effective manner. “What’s Killing Your Profitability” provides critical lessons for government as well as industry! Government executives and agency heads must recognize that profitability killers have the same effect on taxpayer funds! Wes illustrates how poor leadership kills profitability which, in public service, means killing efficient government administration. From high turnover to disengaged employees to an unaccountable workforce, the lessons ring true in the halls of government. This is a must-read for every public servant!

And I can’t point to a single nonprofit that I’ve ever been involved with that this statement wouldn’t apply to! The question that most naturally follows any of this though is likely, “How does the style of leadership differ between not-for-profit and for-profit?” My short response is It Doesn’t! but we’ll work through that in more detail soon…