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7 Signs of a Healthy Organization

In our many years of working with non-profits, co-operatives, social enterprises, and other purpose-driven organizations we’ve learned that some organizations tend to be stronger than others. These organizations all have 7 traits in common and their programs, employees, clients, and bank accounts are healthier because of it.

In general, there are 7 elements that strong organizations share:

1. Cohesive Culture & Strong HR Practices

An organization’s culture is unique. It sets the tone for how employees interact and communicate with one another and influences employees’ understanding of what their supervisor expects of them. Culture impacts productivity, employee retention, branding, operations, professionalism and more.

An organization’s culture can change over time, depending on its leaders, employees and the environment of the sector at large. If an organization’s culture is problematic it will greatly impact staff, and external stakeholders as a result. Strong and ethical HR practices are critical.

When productivity is plummeting or bullying, favoritism, lack of accountability, or lack of trust is prevalent- change is needed. Leaders often hope these problems will go away with time, but addressing such issues in a timely manner is critical. It may be as simple as some hard conversations about the root of such issues, or a neutral, trusted third party who understands the sensitivity of culture shifts may be required.

Organizations need strong and ethical HR practices to help maintain a healthy, vibrant and cohesive culture and keep the organization and its employees running strong.

2. Healthy Finances & Diverse Funding Bases

Having seasoned financial professionals with the appropriate experience is fundamental for any organization. It’s important to ensure budgets are linked to strategic plans so that organizations allocate resources most effectively to support their mission. As well, having the right data available to inform strategic decisions means an organization can plan ahead.

The funding model for non-profits has changed dramatically in recent years and as a result many of the strongest organizations are those that have diversified their funding bases. An example is the trend towards non-profits starting social enterprises to help generate revenue while providing employment and skills-training opportunities for clients.

3. Looking for Friends in New Places (or Innovative Relationship Building)

Non-profit leaders are often experts in knowing and connecting with their clients, communities, stakeholders and allies. They engage in countless multi-sector networks as key players in policy development, funder and donor relations, advocacy and other important work.

Forward-thinking leaders look beyond the usual networks to find symbiotic relationships that turn heads while bringing in resources, raising profiles, and enhancing networks.

Some of the strongest leaders we’ve worked with are experts at looking for friends in new places and creating unusual partnerships where, for example, non-profits team up with private sector businesses to find particular resources such as food services, or vehicles from car dealerships. Another partnership could involve teaming up with post-secondary institutions to gain help from students who can provide fresh perspectives, innovative approaches and new talent.

4. Strong Information Technology Systems

Being up to speed on the latest and greatest IT is a challenge, but having basic systems that can improve efficiencies, data analysis, engagement and more can have a powerful impact.

Many non-profits are dealing with outdated servers, but have legal and security concerns about moving to the cloud. Employees working from home or on the road and accessing sensitive company information from personal devices adds more complexity to the IT question.

An organization doesn’t need to have internal IT expertise. It may be smoother and more financially viable to engage external help. Though it’s easy to get overwhelmed by the myriad of software and applications offered to organizations, a good tech consultant will assess IT needs and provide advice for strong, suitable systems without pushing for particular products.

Undervaluing IT is a mistake that causes employees to waste time trying to work with slow, inefficient systems and do work that a good IT system can do more quickly and efficiently.

5. Shared Vision Linked to Strategic Business & Operational Planning

Most non-profit organizations have strong visions, missions and values. The healthy organization will not underestimate the strategic and business planning and the operational goals required to realize their visions.

Building a strong strategic business plan is only the first step – linking that plan to operational plans that address each area of an organization is a vital secondary step.

Strong non-profits know the impact they seek to make on the world. They leverage that through strong business and operational plans, linked to their visions, to reach their potential. They can then take strategic and measured chances with innovative programs, services, investments and partnerships.

6. Strength in Leadership & Governance

A fundamental element of any organization is strong leadership at the organizational level and good governance at the board level. In addition to its fiduciary responsibility and the need to manage risk responsibly, a board’s key roles are to hire the right leader to steer the ship and to finalize a strategic plan to guide it.

An Executive Director or CEO has to manage the endeavors of the board, so cultural and experiential fit of the leader is crucial. Together, EDs and boards need to consider succession planning to ensure changes at the leadership level are smooth and beneficial to an organization. A note to boards- choose your leader wisely!

7. Purpose Beyond Identity

Most strong non-profits have purpose embedded in everything they do. These organizations never forget why they exist and position themselves strongly in their communities. Purpose creates identity and authenticity, but it must also ripple through policies and practices. It ripples through to external businesses, for example through procurement of office supplies, catering, or janitorial services as well as through strategic partnerships. Purpose is the essence of an organization and it is increasingly defining organizations both in the non-profit and private sectors.

Because they form the backbone of an organization, these 7 elements will impact almost every aspect of its work. That’s why the healthiest organizations are those that have these elements firmly in place. Organizations with challenges in these areas risk larger impacts the longer they ignore them. But when these challenges are smoothed out, they can do what they do best- serving their visions and missions.

How does your organization look? Need help in one of these areas? Call us! We’d be happy to chat.