The largest intergenerational transfer of wealth in history is now underway. How, in that context, can philanthropists develop a framework to assess the impact of their nonprofit partners? And how can social sector leaders develop a set of tools to assess and increase the impact of their work? These are two of the many questions Bill Meehan and Kim Jonker explore in their book, Engine of Impact: Essentials of Strategic Leadership in the Nonprofit Sector. We caught up with them to learn more about equipping leaders for this new era of impact.
Ashoka: What’s that main goal that you set out to achieve with your book?
Kim Jonker: We wrote the book to help nonprofit leaders and social entrepreneurs to have more impact in the world. We sought to equip those leaders, as well as staff and board members, to increase the effectiveness of their organizations. Equally important, we wanted to help donors identify high-performing nonprofits and social entrepreneurs.
Ashoka: How did this project get started?
Jonker: For me, it goes back to 2005, when I first encountered a wonderful social entrepreneur named Roy Prosterman, founder of an organization now called Landesa. It’s a group that uses land reform in developing countries as a lever to lift people – over 400 million and counting – out of extreme poverty. I might have assumed that this extraordinary organization had a large budget and a massive paid staff. But it turns out that Landesa had been operating on a shoestring budget for many years. This spurred me to think: if dollars aren’t what drive impact, what does?
Bill Meehan: A few years later, Kim and began co-leading peer learning retreats for leaders of high-performing social sector organizations. We saw that across different geographies and focus areas, many of these leaders struggled with the same challenges and exhibited the same leadership strengths. We began to ask: What are the key factors that distinguish these leaders and their organizations, and how can other organizations learn from their example and experience?
Ashoka: How would you describe the most important contribution that you hope to make with your book?
Meehan: I’ve tracked this sector for a long time, in part through teaching students at Stanford Graduate School of Business for nearly two decades. What’s needed now is actually a renewed focus on the fundamentals of strategic leadership. Social innovation in its various forms has contributed a useful framework, to be sure, but we’re now seeing a lot of fads that come not from a place of deep wisdom and insight but from what I would call “excited innovation.” Some people get bored with discussing or thinking about fundamentals. That’s fine. But we are asking: “Why aren’t you doing them?”
Jonker: We also felt we could contribute a useful framework for what we call strategic leadership – a framework that incorporates those fundamentals. We drew on the metaphor of a high-performance engine, and we identified seven essential components that any organization must have in order to become an “engine of impact.” The first four components are a clear and focused mission, an effective strategy, rigorous impact evaluation, and an intangible component that we call “insight and courage.” The last three components provide “fuel” for that engine: organization and talent, funding, and board governance. These may seem pedestrian, but they are deeply neglected, which leads to misused resources in the social sector and missed opportunities for impact.
In the Stanford Survey on Leadership and Management in the Nonprofit Sector – a study that drew responses from more than 3,000 stakeholders – we found that about 80 percent of nonprofit organizations struggle with at least one of those seven essential components. How can an engine work when one part is defective? It destroys the performance of the entire effort.
Ashoka: It’s interesting that you call out courage. Can you tell us more about that?
Meehan: Kim and I come from McKinsey & Company and the world of analytics, but we recognize that analytics will take you only so far. Courage, to me, is about taking an unpopular insight and sticking to it. One of my formative experiences was meeting Ashoka’s founder, Bill Drayton, in 1974. When I asked him what he did, he said: “I’m a public sector entrepreneur.” His insight was that we should have entrepreneurs solving social problems, as well as business problems. That was and is a powerful insight. Courage means being prepared to do the good hard work of championing that kind of insight – and waiting 10 or 15 years or more while the world ignores you.
Qualities like insight and courage are evident not just in founders but also in executive leaders. Take Helen Keller International, of which Kathy Spahn is CEO. Kathy has taken a nonprofit founded 100 years ago and reshaped its strategy to address new challenges – for example, vitamin A deficiency which we know is both a leading cause of preventable childhood blindness and a major contributor to child mortality. That kind of pivot requires insight and courage, too. It requires a leader who can dedicate her life to building a vision and a movement. We want funders to be able to recognize and reward these qualities wherever they appear.
Ashoka: What tools or advice do you have for leaders who want to improve the performance of their organization?
Jonker: We have a very simple and instructive tool – the Engine of Impact Diagnostic – that’s free on our website. It’s a self-reported survey that takes 10 minutes to complete. It allows leaders to assess their organization along the seven dimensions of strategic leadership. That way, they can see if their engine is working and what may be needed to improve its performance. Then it plots where the organization fits on a matrix we’ve developed to help determine whether an organization is ready to scale. If you’re a leader or board member looking to optimize your organization’s impact, this tool can be helpful on your journey. It can be especially helpful to have different stakeholders of the same organization take the diagnostic to see where they agree or disagree about the nonprofit’s strengths and weaknesses.
With regard to advice, we encourage social sector leaders to think in terms of “earning the right” – the right to scale their organization, the right to stake a claim for funding. The sector is full of well-meaning people. It’s full of promising ideas. But only a select number of organizations have what it takes to turn good people and good ideas into a true engine of impact. The best leaders are constantly pushing to join that group.