By studying industry leaders from other sectors, you may be able to immediately adapt their insights to address challenges that your nonprofit (or the nonprofit you are funding) is facing or will face in the future.
Amazon Founder and former CEO Jeff Bezos unknowingly gave your nonprofit (or the one you fund) a huge gift in their 2018 annual report.
In the report, Bezos clearly outlined the four steps to Amazon’s continuing success through predictable and consistent improvements and sustainable operational excellence. This was an insider’s look intended to give their investors greater confidence in Bezos and Amazon’s ability to deliver on their promises.
Why you should care?
Your funder is very similar to an Amazon investor. In short, funders will support (or continue to support) your nonprofit if they believe you can deliver on your promises. Like the Amazon investor, if a funder loses faith in your nonprofit’s ability to deliver, they will take their resources elsewhere.
You want your funders to love your nonprofit as much as Amazon’s investors (and customers) love them.
Amazon’s Four Steps to Operational Excellence
1. Excellence is teachable.
Bezos said, “People are pretty good at learning high standards simply through exposure. High standards are contagious.”
In order for your nonprofit to expose your staff and volunteers to excellence or high standards, you have to know what excellence or high standards look like, and best practices are a smart place to start.
Best practices are the professional procedures that are accepted or prescribed as being correct or most effective within a given industry or discipline.
2. Excellence is domain specific.
Bezos said, “I believe high standards are domain specific, and that you have to learn high standards separately in every arena of interest.”
Accepted best practices and proven industry standards in your nonprofit operations are domain specific and easily broken down into these six areas. They are:
- Program Management & Accountability
- Fundraising, Marketing & Communications
- Governance, Legal & Risk Management
- Finance & Accounting
- People and Organizational Development
- Business Systems, IT, & Facilities
3. Excellence must be recognizable.
Bezos said, “What do you need to achieve high standards in a particular domain area? First, you have to be able to recognize what good looks like in that domain.”
In each best practice area, there are individual best practice statements defining “what good looks like” in that domain. Of course, there are hundreds of possible best practice statements in each of the six domains and not all of these statements are created equal. In other words, some best practices should be weighted higher in importance.
In reality, by selecting the “right” best practices to concentrate on, many of the others take care of themselves. That is because some best practices only provide a remedy to a symptom without solving the underlying problem while others address the core issue.
4. Excellence must be clearly communicated.
Bezos said, “To achieve high standards yourself or as part of a team, you need to form and proactively communicate realistic beliefs about how hard something is going to be.”
Once you have identified the appropriate best practices, you will need to understand their importance, your current level of operational competence, the consequences of nonperformance, and what you need to do to improve.
Only then can you communicate what the standard is, how you will measure, what your expectations are, and what you intend to do about it.
Follow the Money
Nonprofits need more funding. Funders need more confidence. More confidence comes from demonstrated operational competence. Funders with more confidence give nonprofits more funding. Operational competence can be measured and improved.
Bezos said, “And finally, high standards are fun! Once you’ve tasted high standards, there’s no going back.”
How can your nonprofit (or the nonprofit you fund) be more like Amazon?