Thursday, December 8, 2011

Expect Failure, Then Deal With It

Failure is a topic that a lot of business and nonprofit professionals are talking about today. Whether this trend is a result of new ideas or concepts on how organizations deal with failure or a reflection of the overall economic recession, there are a few key concepts that I have taken from my readings that I’d like to share here.

Failure is not Immoral

Dan Pallotta, one of my favorite thinkers in the nonprofit world, recently released an article on how risk should not be considered immoral in the nonprofit world. I’d like to take his thinking one step further and add that failure is also not immoral.

Pilot projects are one of my favorite ways to test new ideas on a small scale. At my current position, we started a pilot program for land banking with three different local partners and one national. We invested a small amount of seed money to buy properties and work through the logistics of foreclosure sales, local partner agreements and ground leases.

In the end, we were only able to buy one property during that 9 month pilot . We certainly didn’t see the financial returns we wanted from the pilot, but we were able to test the waters and identify many of the hurdles that we would experience in the future.

Was it immoral or wrong to invest my time, our companies time and our local partners’ time in this pilot that produced so little? My answer two years ago may have been different, but today we have been able to raise more than $6.2 million, create more than 350 affordable housing units, and have covered our operating costs as a result of that pilot program. I’d call that a big success in our corner of the world.

The example above might be more of a parable on taking risks and finding solutions to problems you encounter, but isn’t failure just another way to discover problems and find out which of your assumptions were wrong.  

As an administrator of federal funding in past jobs, I experienced the failure of my assumptions on almost a daily basis. From assuming that all nonprofits could produce annual financial statements, to application materials that didn’t include clear instructions that anyone could follow. Failure seemed like a daily tasks.

In order to over come this type of failure, there are a couple of beliefs I have developed over the years that I think have helped me endure.

First, learn everything that you can about the product, the market and the client that you can. Knowledge is power after all, and knowing everything you can before you launch that new program or product will be the most valuable work you do up front.

Second, assume that you don’t know everything about the product, the market or the client that you need to.  This might be more an attitude, but it helps me deal with the problems that inevitably pop-up, and has worked better for me than just standing my ground on the “facts” I believe I know.

The nonprofit world is rife with adversity. Our missions and work often focus on those with the lowest incomes, the least resources and the most insurmountable problems. So it can often feel wrong, even unethical to take risks or fail when so much is at stake. But failure, like beauty, is in the eye of the beholder.  When we fail, we must learn. Then apply what we’ve learned and move forward.

I believe one of our defining characteristics as humans is the urge to move forward. To challenge ourselves, to explore new ideas and improve our standard of living. Just think about where we’d be if our parents, ancestors and society had given up and stopped moving forward.


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