Applying Guiding Principles for Success from
Best in Brand Businesses ©
By Steve McGraw
For-profit and non-profit businesses are equally affected by the same environmental factors that determine their success. There are guiding principles that when used as foundational elements of an enterprise will determine whether that business becomes best in brand - a genuine brand.
If an organization aspires to be best in brand and a success in every measure, then these three principles need to be put into practice as foundational pieces reflected in every part and action of the organization. Upon this foundation lays the opportunity for this organization to reach its potential to be the genuine brand in its category above all others in making a transformational difference in the lives of others.
Business theory giants like W. Edwards Deming, the father of quality improvement and total quality management demonstrated the power of focusing on quality and the result of unleashing the power of individual creativity towards excellence to advance a business to become best in brand. David Aker, the dean of Brand Strategy, has demonstrated how the personalized relationship between the brand and the customer/consumer will elevate a brand to the best in its class and command a position of privilege in the marketplace. Duane Knapp, brand expert and Fortune 500 advisor defines how to become a genuine brand. Being positioned as a genuine brand brings the privilege of premium pricing and other brands paying for the privilege to associate with that brand. For the non-profit, one example of the result of this position is to be sought after for cause related marketing by private sector brands.
The price of entry to compete as a best in brand or genuine brand is to begin with products or services that are needed and differentiated, to offer a very high level of quality in the product or service, to have consistent execution of the brand experience across all layers of the business at all of its points of contact, and all of which with exemplary customer service.
There are three guiding principles that determine the success of a brand evolving into a genuine brand. They are:
Ownership:
Successful businesses and especially genuine brands understand that ownership internally and externally are keys to their success and to their position as best in brand. Familiar examples are companies that internally offer stock options to its employees, profit sharing, bonuses tied to measurable outcomes and decision making; and externally stock holder/investor, product purchaser. Even the person who buys a pair of Nike shoes with the “swoosh” on them, feels like they own a little piece of Nike.
Best in brand businesses have learned that when people internal to the organization experience ownership and are stakeholders in the company, they are more committed, more dedicated to the success of the brand, and willing to put in the effort it takes for success. Much like the Deming model of quality improvement, a sense of ownership unleashes the motivation and creativity in everyone involved in the success of that organization.
Non-profit ownership gets confusing when viewed in the IRS definition that a non-profit is governed by a Board but held in trust for the greater public. There is no stock to own and typically, there is no profit sharing (since non-profits do not have “profit”). The Boards and staff of non-profits are not owners but stewards of the resources and funds in their trust.
Externally in non-profits, “owners” are typically represented by donors who by closest analogy are the external investors to the organization. Clients who receive services and products are consumer/owners on whose positive impact of those services and products will determine donor/investor involvement and support. Donor and client sense of ownership is a key factor in the non-profit organization’s success and ultimately becoming best in brand.
Internally, the only thing Boards, staff and volunteers own in a non-profit is decision making. Having a say in the decisions that chart the course for the future of the non-profit is what gives the sense of being a stakeholder/owner in the organization. Being a stakeholder motivates commitment and personal investment to ensure success.
Many successful national non-profit organizations understand this to mean that Board members and leaders at the local and national levels need to be empowered with decision making authority over their area of governance. They have learned that such a structure best attracts and retains the people and leaders from the community that are positioned to best help and advance that organization.
Successful business and community leaders are usually best positioned to help a non-profit access the resources necessary for its success. They have the personal means and/or the relationships with others (corporate/personal) with the means to provide the resources needed for a non-profit to be successful. Providing ownership through decision making/governing has been proven to be a best practice to motivate such leaders to be attracted to join such a non-profit, to be a stakeholder, and then to be motivated to ensure resources are successfully secured.
Advisory roles to such people typically do not provide the motivation necessary to deliver resources at a leadership level nor provides incentive for them to get involved in the first place. There are many non-profit organizations willing to offer decision making/governing involvement to their leader stakeholders. Leaders like to lead and they will join charities where they can lead. In the United States we live in an ownership society. The concept is in our daily lives, it is part of the fabric of our culture, values, and business practice. We understand ownership and are motivated by it.
Some of the most successful national non-profits are those who have leadership stakeholders empowered with governing decision making (governing Boards at national and at local levels) and as a result, they are invested and working hard to secure resources at the national and local levels, i.e. Boys and Girls Clubs of America. In such a structure the organization has two powerful jet engines driving the success of that organization; one at the national level and the other (many actually) at the local level. National organizations are best positioned when they have an organizational structure that fully employs both engines.
Creating and advancing a culture of maximizing relationships:
Cornerstone to a successful genuine brand is establishing a personalized relationship, an emotional relationship, between the brand and the customer where that brand is top of mind, emotionally valued and first choice in that category. Businesses with genuine brands have figured it out that this is achieved by creating and advancing a culture of maximizing relationships with their organization both internally and externally.
Nordstrom and Starbucks are great examples of this concept. Both companies are legendary in establishing a relationship with their customers at an emotional level that results in a very high level of customer loyalty and willingness to pay premium prices to experience their brands. Starbucks relationship with its employees/partners is described by their own employees as almost cult like. Starbucks employees love Starbucks. Starbucks calls their employees, partners. Partner motivation is very high, morale is high and Starbucks partners typically become long term employees. Starbucks knows that when their partners like a particular drink or product, sales of that product increases substantially. It is their store partners that create and advance positive relationships with their customers. Businesses like Starbucks and Nordstrom have figured it out that creating and advancing a culture of maximizing relationships internally and externally results in their brand becoming a best of brand, a genuine brand.
Non-profits relationships include its staff, volunteers, Board members, donors, clients, business partners, vendors, media, and the general public. As like in the Starbucks example, non-profits’ relationships internally (staff, Board and volunteers) materially affect their relationships externally (donors, clients, partners, public). Organizational structures and cultures that result in high internal turnover and lowered morale cannot avoid having a negative impact on its external relationships. For non-profits, maximizing relationships is essential to its ability to generate revenues and successfully provide services. Everything a non-profit does is about relationships. The quality of these relationships, (internally and externally), ultimately determine the success or failure of the organization.
The literature and practice in a donor centered approach to constituent relationships and fundraising is resulting in increased engagement and significant increases support at every level. Therefore, the organizational structure or business model of any business and especially a genuine brand must be one that creates and advances a culture of maximizing relationships.
Quality Assurance:
This is a standard practice in businesses focused on excellence, it is data driven and is well understood. Standards of excellence are benchmarked and applied to all levels of the business. Where practice does not meet standards then remediation is provided to elevate those practices to the standards of excellence. This may include changes in procedures, deployment of resources, training, or reconfiguring human resources.
This best practice is also found in non-profit organizations. The Boys and Girls Clubs of America, Big Brothers Big Sisters of America and many others practice quality assurance across their organizations.
Standards of excellence are established and benchmarked across all levels of the non-profit operation including delivery of service, finance, records management, risk management, human resources, fund development, marketing, and Board governance and development. Standards of excellence can be established for customer/client satisfaction by establishing specific service delivery goals and measuring them by surveys and focus groups on a regular basis.
Centralized staff with expertise in this function and peer evaluators go to each club, chapter or office and conduct the evaluation or consultation. A report is given to the local Board as well as at the national level. A work plan is developed and agreed on to improve deficient areas to standards. Training and support is given to facilitate skill development, improved practice and/or changes in human resource configurations.
The Board at the National level must also employ means to evaluate its national operation to established standards as well as a means to evaluate themselves objectively and with accountability. Accountability is in practice at every level of the organization.
Through this means the non-profit business is able to ensure consistency of best practice across the organization. Maintaining consistent best practice allows the organization to ensure quality service to its clients and with its partners as well as being well positioned to leverage fundraising and marketing in significant ways. The non-profit can approach other businesses with confidence in presenting their organization at a high level of quality performance and confidence across all of its operations. This practice of quality assurance structures the organization to be self correcting and to set itself up for success.
Summary:
In summary, there are three guiding principles that provide the foundational structure for a for-profit or non-profit business to be successful and are essential elements to become best in brand or a genuine brand. Ownership is shared and becomes a powerful motivational force. Maximizing relationships resulting in a positive and emotional connection to the brand is seen and experienced internally and externally at all levels and in all activities. The organization is committed to excellence and is self correcting with accountability at all levels. Each of these principles represents a powerful and proven component of a successfully run business or brand. Taken together they provide the foundation that drives the quality and nature of services and products, organizational structure, internal and external relationships, stakeholder commitment, and the success of the brand to rise above the mix and become a genuine brand, one that stands out as the benchmark for other brands. The one that everyone one else wants to be associated with.
Strategic planning for organizations need to be on a foundation of these three guiding principles. Reflecting these principles in governance and operations as we develop strategies, goals and tactics will utilize the best practice of some of the most successful for profit and non-profit brands in our nation. Upon this foundation lays the opportunity for your organization to reach its highest aspirations to be the best in brand in its category above all others in making a world of difference and transforming lives.
Steve McGraw is the principal of The Human Capital Group. He holds a Master’s degree in Psychology with an emphasis in organizational development. He has over twenty-five years of experience leading and managing in non-profits and over sixteen years at the Executive Director level. He received four years of individual mentoring from a national and published expert in Brand Strategy. www.linkedin.com/in/stevemcgraw/