Building an agile nonprofit

A few months ago, I officially gave up my role as CEO at Geonetric to focus 100% on my new gig, leading a non-profit called the New Bohemian Innovation Collaborative (NewBoCo). We accelerate world-changing ideas, from Iowa. Sometimes that’s accelerating startups. Sometimes it’s accelerating adult tech careers or kids’ learning.

In this new organization, I brought with me a love for agile thinking. I’ve been pretty deep in the agile world for about eight years, when we first adopted Scrum in our software team at Geonetric. There, we had gradually and aggressively expanded those principles into a brand new way of organizing the business. With the help of the thinkers at Agile for All, we went so far as to eliminate traditional management and hierarchy in 2013.

When we founded NewBoCo, I wanted to bring those same ideas to a nonprofit. But this time, I had some different advantages:

• I brought with me eight years of experience working with agile and all of the learning that came from it.
• We were starting from scratch — literally building a new organization from the ground up, so we could design it any way we wanted.
• I could hire people from the get-go with the expectation that this was an unusual place to work with a different kind of working style and culture.

While it’s still young — not even three years old — the experiment at NewBoCo has been working remarkably well. I thought it might be helpful to jot down some of the learning we’ve had so far, for the benefit of other leaders in the nonprofit world.

Adopting the core agile practices in a nonprofit

All work at NewBoCo is represented on one of these huge, rollable Scrum boards.

While it’s traditionally associated with software development, agile works well in any knowledge-work environment. This nonprofit certainly is, in short, converting brain power from our staff into the outcomes we want.

If you’ve worked in an agile workplace, you’ll recognize some of these things immediately upon walking in the door:

• There are huge rollable scrum boards everywhere, so the work of the organization is visible on these boards.
• There are retrospective sheets all over the walls; retros are held weekly with all staff in which we openly and candidly discuss what’s working well and what’s not.

Retrospective sheets capture team feedback on things to celebrate (blue) and things we’d like to work on (pink). Team-wide retros take place almost every week.

• The workplace itself is entirely open, in a collaborative format. The staff of fourteen all works together on the second floor. There are four conference rooms adjacent to us for private meetings or heads-down work.
• You’d likely see the team in a standup or retro or impromptu conversation about some topic. Frequent small meetings and conversations make long, boring meetings unnecessary.

I haven’t observed any difference in adopting core agile processes in the nonprofit world from the for-profit sector.

Running a nonprofit without traditional management

The agile experiment at Geonetric went much further than just those core practices, though. I wanted to try those more advanced ideas at NewBoCo as well.

At NewBoCo, there’s:

• no traditional hierarchy. While I play the role of Executive Director, there’s no delegation infrastructure or lieutenant-type roles. There are just teams of people working toward well-defined outcomes, and that’s more or less it. Author Steve Denning calls this an “adhocracy”.
• no recognizable performance evaluation process. Instead, we — gasp! — talk to each other and give feedback, in the moment, wherever possible.
• a spirit of collaboration. With the entire staff in our retrospectives each week, everyone gets a strong sense of what everyone else is doing and where the challenges are. This generates ideas and perspectives from all angles, all the time. It’s hugely valuable and something we rely on to get breakthrough thinking on a regular basis.

Those are also true at Geonetric. But at NewBoCo we’ve taken things a few steps further, trying some new things:

• salary data is transparent. Everyone’s salary and bonus info is visible, including mine. (We’ve developed a model for nonprofit compensation that, once it’s a little further tested, I’d love to write about.)
• all of the organization’s data is transparent to all of the staff. The same financial documents we provide to our Board of Directors are given to the entire staff. Even my narrative emails to the board once a month are cc:d to the entire staff. The staff has access to all of the organizational documents, except for a few personnel files and obvious things like bank account information. But otherwise, the entire staff sees and has access to everything.
• staff are able to attend board meetings. There’s nothing secret happening there, so staff can, if they want, attend and listen. Staff can read board meeting minutes and see all of the documents the board sees. (There are some aspects of board governance that require private conversations or documents, however.)

Purpose drives alignment and performance

This was my first time working in a nonprofit. At first, I thought leading one would be very different than the for-profit world, but it hasn’t turned out that way. In some ways, it’s easier in a nonprofit to work with a completely flat org chart.

For example, nonprofits are often driven by a relentless focus on a mission, a clearly defined higher purpose. In the for-profit world, it’s sometimes hard to make that connection. I love author Daniel Pink’s observation that motivation comes from Autonomy, Mastery and Purpose, and found the purpose aspect much easier to find — and use as a tool to align the team — in the non-profit world.

The ideas in Daniel Pink’s book “Drive” were key in designing these workplace concepts.

That alignment around a core purpose is critical to making a flat-hierarchy model work. When there was just a two of us on staff — as it was in 2014 — the hierarchy was irrelevant. But as we’ve grown the program’s size and the staff tremendously since then, the core purpose has made it fairly easy to keep the teams focused on delivering the outcomes we want. Everyone wants to know their work matters, and in the nonprofit world, that part is largely built into the organization’s DNA.

The results so far

In the past, I’ve wondered if I drank the agile Kool-Aid so much that I wasn’t being objective about it (I can admit I’m a zealot!). So, it’s important for me to step back and make sure we’re using agile as a means to an end: a better performing team leading to stronger outcomes for our community.

Looking at it objectively, I’d have to say it’s unequivocally working. I offer several pieces of evidence:

• A strong organizational culture: while this team of 14 is admittedly small, the team’s culture is very strong. It’s candid, open, flexible, and committed. All traits I’d expect to see on any high-performance team.
• A demonstrated ability to execute: this small team has gone from a handful of small programs in 2014 to a wide array of programs today: a code school for adults, a prototyping lab, extensive STEAM summer camps for kids, and much more.
• Rapid financial growth: Many nonprofits operate on a shoestring. We’ve been fortunate to rapidly build and grow this nonprofit to meet our community’s needs. In 2014, the organization ran on a budget of $250k; in 2016, it was just over $1 million, and in 2017 it’ll approach $3 million. I’m not sure that a traditional nonprofit structure would grow that quickly and adapt as quickly as this one has. At the very least, it’d be much more challenging to do without this agile framework in place.
• Strong financial performance: One measure we use to determine the organization’s long-term viability is a constant emphasis on operational revenue — as opposed to donated revenue. In 2014, more than 80% of the organization’s revenue was from donors. In 2016, it was about 50%, even having grown 4x in that time. For 2017, we expect donated revenue to be less than 33%, while almost tripling our budget.

While there are other factors at play in addition to agile, having built a company of my own before, and having been a part of growing many other companies, I look at the agile culture we’re building as a key strategic weapon for NewBoCo to continue to make a big impact.

What do you think? Is agile the right way to run a nonprofit organization? Reach out, I’d love to learn more.

-Eric

eric@newbo.co

Eric Engelmann founded Geonetric in 1999, and presently works as the Executive Director of NewBoCo in Cedar Rapids, Iowa. He’s a board member at Scrum Alliance, the Technology Association of Iowa, and GO Cedar Rapids.