The following is a interview of Denver Frederick, Host of the Business of Giving, conducted by Kyle Peterson, Executive Director of the Walton Family Foundation on AM 970 The Answer in NYC.
These organizations don’t go around as the “best.” They go around as “better than most.” They’re humble. They are not sticking out their chests. They do it in a more quiet way. The other thing is: they’re never happy with where they’re at. They would not want to be called “the best.” They are not satisfied with the status quo. And what makes them such wonderful cultures is that they understand this is work that’s never finished, and they need to get better every day because the culture never stays the same. It either goes forward or it goes backwards, and they’re committed to seeing that it goes forward…and that it gets better.
Kyle: I am thrilled to talk about the subject of culture and the tour that you’ve been on. You’ve been on a culture tour, Culture Tour 2018. You’ve talked to a hundred organizations. This is really important to me. It’s something that I have been curious about over the last 20 years. It’s something I’m working on now big time at the Walton Family Foundation. So, I’m curious to hear from you what you’re learning.
First question for you before we get to some of the really cool stuff. You’re titling your book that’s to come out, Better Than Most. Why not just The Best?
Denver: That’s a really good question. A couple of ways to answer that. Number one, I did it based on a Tiger Woods putt at Sawgrass in 2001. It’s one of the more famous calls by Gary Koch, and it was about a 60-foot putt, a triple breaker on the island green– the place where you’re on the green, and he just kept on saying, “better than most, better than most, and better than most.” Incredibly, Tiger sank the putt. That became the inspiration for the title.
But there are two other reasons, Kyle. Number one is that, there is a humility to each and every one of these organizations. These organizations don’t go around as “the best.” They go around as “better than most.” They’re humble. They are not sticking out their chests. They do it in a more quiet way. The other thing is, they’re never happy with where they’re at. They would not want to be called “the best.” They are not satisfied with the status quo. And what makes them such wonderful cultures is that they understand this is work that’s never finished, and they need to get better every day because the culture never stays the same. It either goes forward or it goes backwards, and they’re committed to seeing that it goes forward… and that it gets better.
Usually, if you wanted to do something wonderful to make the world a better place, you either would go to work for a nonprofit, or perhaps you would work in the government. But now, with purpose-driven businesses, social good businesses, you have some competition for the very best talent.
Kyle: For a guy who has never been interviewed, that’s a good answer.
There’s tons of books out there about culture. There’s a great one you and I were talking about. Dan Coyle’s book, The Culture Code. It seems like everybody is saying that culture is important.
Is there something about the nonprofit sector where you think culture is really important, like kind of a do-or-die thing? Is that what you’re discovering?
Denver: I think there are a couple of things along those lines. Number one, for most of the nonprofit sector, we don’t make a product. It’s completely made up of people. We’re not making widgets. We’re not making pens. What we do is we try to make change in the culture, which is made strictly by people. So, therefore, you could say that people… and people being empowered and energized… is even more important. But I think another thing is that the nonprofit philanthropic sector has lost its monopoly on good works. Usually, if you wanted to do something wonderful to make the world a better place, you either would go to work for a nonprofit, or perhaps you would work in the government. But now, with purpose-driven businesses, social good businesses, you have some competition for the very best talent.
My daughter is 28 years old, and she’ll tell me, “Dad, it really doesn’t make any difference whether it’s a nonprofit or if it’s a social good, I want to make an impact on the world, and the way an organization is organized is really between them and the IRS.” If you’re not creating an irresistible culture, you’re going to lose some of the very best people, and I have been told by people who have started these social businesses that they’re coming after the nonprofit sector. They recognize that there’s 3.9% unemployment. Good people are hard to find. The nonprofit sector is the third largest sector in the United States behind retail and manufacturing; 11.9 million people. They’re going to LinkedIn, and they’re going to try to poach the best ones. We have not paid enough attention to culture in the sector, and that was one of the inspirations for trying to shine a light on it.
I really relied probably more than anything else on word of mouth. I can’t tell you the number of organizations who’ve contacted me asking me to do this, and I have had to decline. I’ve said I’ve done too many of these things… or something like that… because I didn’t want weak cultures in there. I wanted “better than most.”
I’m trying to find ways that organizations, ideas that they’ve used, to effectuate those things. Because I’ve been told by so many people, “We don’t need a cultural revolution in our organization. Give me a couple of things that I can do that will make this a better place, and I can do them on Monday.” That’s pretty much what we’re trying to do.
Kyle: That’s so true. Tell us how you went about exploring this. You talked to a hundred organizations. How did you pick them? And what did you do once you were there?
Denver: I would have to say that, this is a little bit of better than most. I wouldn’t say that these are the hundred best organizations. I’ve probably spoken, Kyle, to maybe 200 CEOs about their corporate culture. And of those 200, 100 of them I went to visit. Really, as you’ve said, it’s been a tour of the United States. I’ve been obviously to New York. But I’ve been up to City Year and Year Up and Center of Effective Philanthropy and Bridgespan in Boston. I’ve been to so many organizations in Washington like the United Nations Foundation, the United Way, the Nature Conservancy, Global Giving. I’ve been out to Chicago to Easter Seals and the Alzheimer’s Association. I just came back from Philadelphia where I saw Springboard Collaborative and the Center for High Impact Philanthropy and the Academy of Natural Sciences.
I’ve been out to San Francisco. I just saw 15 organizations out there earlier this month. What I did is I did a pretty good cross-section of going to Idealist, going to Glassdoor, going to Charity Navigator. I spoke to tons of people, and I got myself to a point where I said, “This is one of the better nonprofit organizations that I’ve seen.” I really relied probably more than anything else on word of mouth. I can’t tell you the number of organizations who’ve contacted me asking me to do this, and I have had to decline. I’ve said I’ve done too many of these things… or something like that… because I didn’t want weak cultures in there. I wanted “better than most.”
I think the other thing that I’ve done is that I’m not really looking to highlight the organization as much as some people might think. I’m looking to highlight the ideas. I want to give people in the sector, ideas. And I think if there’s anything that’s distinctive about this effort is that it’s prescriptive and not descriptive. In other words, we’re not going to be talking about transparency or the importance of silos. I’m trying to find ways that organizations, ideas that they’ve used, to effectuate those things. Because I’ve been told by so many people, “We don’t need a cultural revolution in our organization. Give me a couple of things that I can do that will make this a better place, and I can do them on Monday.” That’s pretty much what we’re trying to do.
People have also enjoyed the voyeuristic nature of it because it takes them inside the organization, and they like to see what other organizations… sometimes are competing with them; sometimes they respect them. But they like to know what other people are doing. It’s a little bit of the Joneses there; you know what I mean, that people have really thoroughly enjoyed.
I did about 4 pages of prompts. I covered about 25 topics: from the hiring, the onboarding, the recognition, using technology, diversity and inclusion, teams, collaboration, innovation, failure. I allow people to speak about what they want. Usually, I get somewhere between 6 and 15 people at these focus-groups… a cross-section. CEOs have been involved in a lot of them, but it’s everybody from the newest hire to the 25-year employee, somebody in the mailroom, someone out front, someone who’s from the C-suite, and they all talk.
They’ve never had a conversation like this within their organization. I’ve had a lot of tears…
It’s really been a very uplifting experience for all the participants.
Kyle: You’re lifting up the hood.
Denver: Lifting up the hood a little bit, and I’ve tried to do that cross section. You asked how I went about it. I did about 4 pages of prompts. I covered about 25 topics: from the hiring, the onboarding, the recognition, using technology, diversity and inclusion, teams, collaboration, innovation, failure. I allow people to speak about what they want. Usually, I get somewhere between 6 and 15 people at these focus-groups… a cross-section. CEOs have been involved in a lot of them, but it’s everybody from the newest hire to the 25-year employee, somebody in the mailroom, someone out front, someone who’s from the C-suite, and they all talk.
The thing that probably surprised me as much as anything is how emotional people have become. They’ve never had a conversation like this within their organization. I’ve had a lot of tears, actually, in terms of people feeling; they didn’t know their colleagues felt that way. People have also said that they had thought a lot of these thoughts, but they have never articulated them until they heard their co-worker. And you see these nods going on, yeah. I think they are also touched by how much the people they work with appreciate the organization as much as they do. It’s really been a very uplifting experience for all the participants.
Kyle: Wow, that’s really cool! One of the things that Dan Coyle talks about in his book, The Culture Code, he talks about safety, talks about vulnerability, and one of the highlights of really high-performing cultures is vulnerability, which you’re describing. People coming and talking and often showing them their true selves, it can get emotional. But people should feel that they can speak their minds. It sounds like that’s exactly what you got in your interviews.
Denver: That’s exactly right. As far as the vulnerability is concerned, it really does start at the top. In so many of these organizations that I’ve been to, the CEO has made a point of highlighting his or her mistakes. So, other people know what they did wrong. They’re not afraid to broadcast that. They want people to see that example, and they want to indicate what they’ve learned from it. Once they do that… this is also, by the way, been on a personal basis as well, things that have gone in their lives. It’s not just professional. They will actually talk about some of the things that they’ve been going through which allows then the entire rest of the organization to bring their full selves to work.
I think traditionally, in organizations or corporations, we have been instructed to take the rational part of our self and walk it into the office. But if there’s any spiritual or emotional piece of you, we like you to check that at the door. We don’t want that coming through. Part of the safety is in organizations where you can be your full self, people feel safe. They say, “I can be my weird self, but I know they’re all being their weird selves as well. People speak freely then, and you get an incredibly much better effort.
These people become your friends because you’re not trying…there can be an enormous amount of psychic energy when you’re trying to cover up who you really are. People don’t understand that. I think that at heart, we all feel like frauds, and we’re about to be discovered. But in places where you have this safety, where you have this authenticity… where you have feedback, people don’t have to play that game, and you have everybody in the organization actually knowing what it is and trying to support you in strengthening your strengths and bolstering your weaknesses.
Kyle: What’s cool there is that is you can move faster to getting the impact that everybody cares about. Some of these really tough problems that the nonprofits that you talked to are trying to solve.
Before we get to some of these topics that are the tools that might get you real progress on Monday, a question about the hundred organizations you talked to. Did you see any patterns, any trends amongst funders versus nonprofits, or those that are more internationally focused versus domestic? Or those in the Southeast versus those in the Northeast; anything that you see through the hundred that would be an interesting pattern to tell your guests about?
Denver: There are so many that it’s almost hard for me to pinpoint a couple. I would have to say having come back from the Bay area recently, it’s much more data-driven. They are younger organizations. I think in some ways, they are set up in a way that’s more responsive to the world in which we live. I’ve been impressed by some of the legacy organizations like Save the Children, being one. But I’ve got to tell you, some of these legacy organizations have a hard time because…you can ask their leaders, if they were to start their organizations all over again, would they organize it along these lines today, and invariably, the answer is going to be no. So, they don’t have quite that nimbleness.
So those organizations 20 years or less, I find to be a little bit more consistent. Also, they’re much more technology-driven, which allows them to attract better, young people. People don’t understand that. Millennials want to have their home experience and their work experience to be almost the same when it relates to technology. When you’re doing something at home, and you’re coming in to work and email’s about it, you essentially don’t want to be there much longer. You want the new tools. You want the cutting-edge stuff.
I’ve also been taken, I think, by all these organizations about transparency. One of the things that I didn’t fully appreciate about transparency is that transparency is just not within the organization. It also includes the donors. You take an organization like GiveDirectly, they are talking about the impact they’re having. Someone visiting their website will find that information out not only when the rest of the organization finds it out, but when the CEO finds it out. So, this transparency is really radical transparency. And that is something which I have found in a lot of organizations. Also part of that transparency—it’s funny, at GiveDirectly, the guy said: I had a hard time when I came here because I’m a PR guy,” and t said: “ I’ve always been looking to shape the story.” And they said, “No, no, no. No shaping of the story. We want to tell it like it is.” That does so much for the culture of an organization and the people who work there.
Kyle Peterson and Denver Frederick inside the AM970 studio
Kyle: Let’s dig into some on these cool approaches that you identified. Let’s start with hiring. What did you see in terms of the best organizations? … What are they doing differently in terms of hiring?
Denver: I think the interview process is really interesting. The interview process is as far removed from what I’m used to, Kyle, than what you see today, in these best organizations. Where I used to be, you would have a job opening. You dust off the job description. You post it online. HR would screen it. Manager would interview somebody. You find a person or two you like. Then you take them to your supervisor, and the person will be hired. This could not be farther than the truth.
This is much more like hiring somebody in the tech industry. It is an ordeal. It’s a three- or four-month process. It goes on and on and on. At New Story; you have to submit a video before you even get started. It’s a 10-step process. Multiple role plays, three or four visits to the office. You see a lot of things along those lines. Structured interviews are more important than they used to be because organizations are aware there’s implicit bias. So, they are really trying to get empirical information. They’re masking resumes to make sure that people don’t get prejudiced in any kind of way. So, structure is a big, big piece of it. But there’s also a lot of creativity within that structure.
One of my favorite questions was out at One Degree. They try to determine what a person’s passion is outside of work. The woman who was telling me this story was a dancer. She was then asked to describe her kind of flamenco dancing as a leading expert in the field, as herself, and as a five-year-old. She said, ”I’ve never gotten to twirl on a job interview before.” Structure does not mean it’s not creative. It’s very experiential.
Chuck Slaughter at Living Goods says, “Try before you buy.” Jim Siegal, who is CEO of KaBOOM says. “You really can’t tell that much when you’re sitting across the desk from somebody. We put our people out in the field, out at the playgrounds. We want to see how they’re going to interact, how comfortable they’re going to be, whether they’ve got the right stuff.” So, experiential has been a big piece of it.
Another thing is that there’s a lot of hiring by committee. Teach for America as an example: managers don’t get to hire anymore. That has been given to a committee– to do the hiring. At DoSomething.org, you have to interview with the entire organization. That’s the final step of the hiring process. At Child Trends, the woman says,”You’re not hired by a person; you’re hired by the entire organization.” They understand that there has to be this acceptance across the organization. They think, first of all, it’s a better way to sell themselves, but every organization almost– like Truth Initiative– will be sure that you’re at least interviewed by every person of a department that you’re going to interact with. Hiring as this committee includes the CEO.
Make-A-Wish America is not that small an organization. Dave Williams interviews every single person that they’re going to bring on board. That has been one thing that’s really been changed I would have to say in terms of the kind of people they’re looking for – number one, they want people who want fulfillment and not credit. That to me crystallized it as much as anything… Humility, people who can collaborate; Turning to the Truth Initiative again, they’re trying to stop tobacco use in this country, particularly among young people. They do a lot of science. If you haven’t co-authored a paper, they’re going to dig deep to find out why you haven’t co-authored a paper. Are you not that willing to share your research? So, they really dig into that.
I would have to say also, positivity. I never really thought about that. The head of Fountain House, which deals with mental illness, he says, “That’s one thing you can’t teach. We want positive people. You can teach them everything else, but you can’t teach them to be that way.” The kind of person… I guess if there was one thing that came up more than any other will be the word “ nice.” Kathy Calvin, who heads up the UN Foundation, says, “We want competent people, but we want nice people. Nobody wants to have to work with jerks.” You see a lot of what the hiring process is like in these organizations, and they’re incredibly consistent along those lines.
I guess the biggest thing though is that it’s forward-looking. It’s not backward-looking. It’s not about a person’s performance. It’s about a person’s potential. Once you get away from a report card, and you start putting personal goals into this, it really changes things dramatically.
You know how it is in most organizations. Everything’s cool, everything’s fine, everything is great. And then one day, the anvil of a resignation letter drops on the desk without a word being said before that.
Kyle: I think that is definitely a trend, as you said. It’s not as if you’re investing in expensive machinery when you’re a nonprofit….a new factory. It’s people. So, take the time to pick out the best people.
Let’s go to performance management. A lot of stuff has been written about this. You can pick up a magazine almost every day and find an article. But not necessarily about what’s going on with nonprofits. Tell us a little bit about the annual reviews that are happening at nonprofits and the ones that are doing this in the most interesting way.
Denver: Let me just start, if I may, by saying that not enough nonprofits in this country are doing it as seriously as they should. According to the Concorde Group, 61% of CEOs are never reviewed by their board, and 42% of nonprofit organizations have no formal procedure for management. That’s a serious problem right then and there. I know a lot of these are probably going to be smaller organizations. But again, looking at this as a sector in totality, that’s something which really needs to be done.
Then a tremendous pendulum away from annual performance reviews towards continuous feedback. But I have to say at the end of the day, people find the annual performance review still has an awful lot of value. Now, you can’t do it just once a year. You have to have quarterly reviews along the way. Everybody knows if you do an annual review, it’s really going to be the last quarterly review because of recency bias; all you’re going to do is remember what the guy or gal did in the last two months. But they really do feel that it makes a big difference, particularly when you have that feedback that comes on a regular basis and when you have that quarterly check-in.
Much self-assessment; Save the Children would be a poster child for that. You really do a very careful self-assessment. I went to a lot of places, Kyle, where people were taken by the thoroughness of the review. It meant an awful lot. Bridgespan, that was the case. Year Up was the case. These are 12 pages, 13 pages. They’re the people above you, below you, to the side of you. They’re looking at you, and people were so taken by the effort and the thought that went into that; that really meant an awful lot. People were also impressed by the customization of these reviews. At IDEO.org, they have something called Journeys, and everybody has a customized, year-and-a-half or two-year plan with promotions and milestones and things along the way that really meant an awful lot to them.
I guess the biggest thing though is that it’s forward-looking. It’s not backward-looking. It’s not about a person’s performance. It’s about a person’s potential. Once you get away from a report card, and you start putting personal goals into this, it really changes things dramatically. At Share Our Strength, what I thought they did interesting down there, Kyle, was that they remove all compensation from the annual performance review. They do it at a separate time because they recognize that all the wonderful things that we just said there kind of get paled when somebody says 3% or 5% or 6%.
They want to be able to focus on the issues of the person, help the person get better. I guess the last thing I would say is that they are forward-looking to the point that they deal with the individual beyond their tenure at the organization. They’re not afraid to have those conversations. They recognize that this is the world in which we live, and if you begin to talk about what that person wants to do three, five, ten years down the road and how they can be a springboard–the organization– it actually is one of the best ways to keep those people because people also understand: You care about me; you don’t care about me as a cog in the organization.
This is the last thing I will say on this point which I thought is interesting. They recognize that a person peaks at their job at around three years, and they will intervene. They will be proactive to find out if there’s something else that person wants to do around there because they recognize, particularly among young people, that they’re trying to get a stack of skills and different skills. They don’t wait. You know how it is in most organizations. Everything’s cool, everything’s fine, everything is great. And then one day, the anvil of a resignation letter drops on the desk without a word being said before that. So, they’ll say: “ What else would you like to do?”
The Nature Conservancy would be an example: they’ll let you create your own job. If you have proven your competence, and you see something that should be done, they, along with a lot of other organizations, say: “Create your own job that doesn’t exist.” They have told me this has done so much for the organization because again, those people know what the organization needs often, rather than the people sitting at the C-suite.
Kyle: Mark Tercek, who is the CEO of the Nature Conservancy, is a very smart guy. It’s interesting about this subject, about performance management and feedback, there’s this illusion I think that the private sector has primacy over the nonprofit sector. You have to get all these great ideas from the private sector and bring them over to the nonprofit sector. But hearing those ideas, I should be taking notes. I think it almost is the other way around. I think a lot of the times, I’m seeing, I hear from private sector companies having picked up an idea from the Nature Conservancy, for example.
Denver: I think that like everything else, when you don’t have the compensation of the private sector, you often are more creative, and you do things that you otherwise might not do. The corporate sector can get a little lazy by saying, “Give them a 10% or 15% bump.” The nonprofit sector, not as a whole, but certainly in these “ better than most” organization, are really leading the way, and I would agree with your point, not just for the nonprofit sector, but also I think in many cases for the corporate sector as well.
Kyle: Last issue I want to take on is around rituals. Every organization has these kind of cultural artifacts that make it special to work, whatever it is, at Share Our Strength, the Nature Conservancy. What are these artifacts or rituals that you’ve seen that really have power to drive performance in an organization?
Denver: Rituals are the foundation of corporate culture, and to the point where you talk about belonging… sort of like in a treehouse club. Rituals are the thing that are unique and distinctive, and they create that connection between all the people who are involved in the organization. They are really so important….that sense of belonging. Because if you don’t have a sense of belonging, you get disengaged very quickly. This is what keeps them engaged. There are just a lot of wonderful, wonderful rituals. Too many to mention, but I’ll cite two organizations, if I can, because I thought they were fun. I thought, as far as recognition is concerned, KaBOOM, the playground people, did a couple of interesting things. They are childlike in their culture because they do playgrounds.
I digress for a moment. It’s amazing how many organizations’ cultures reflect what their work does. Generation Citizen which is trying to encourage active civics in high school. They’re trying to re-imagine what Civics is like in a very active way. When I asked them what their culture is like, they’ll say, “Everybody here has a voice.” I can go on with one organization after another. At KaBOOM, it’s a playful culture. Everybody in that organization has a sand pail on their desk. One of the things that they do is, you write something called sands— which are appreciation notes to your colleagues who’ve done something special for you, gone over and beyond the call of duty to help you. You stick it in their sand pail which is called sands, and they start all their meetings by reading sands that have been sent to other people. Very sweet idea, and very consistent with who their culture is.
Another thing they do down there is, once you’ve worked there for three years, they bring in a graphic artist who works with you, Kyle, and does a caricature of you on the wall that will go into perpetuity. In your case, it could be all the things you’re doing with the Walton Foundation; it could be Arkansas, and it could be you juggling on your bike, and that will go on the wall. And people go back to that wall, and it’s every single person who’s ever touched that organization. It’s just a really, really nice idea.
At DoSomething.org which is an organization that deals with tweens doing social good. They’ve got about five and a half million members, but it’s in that 12-, 13-, 14-year-old area. They have what they call a Fail Fest, and they celebrate failure. People will get nominated by their manager to do a Fail Fest. They have to do it with a pink boa. They have to talk about three learnings that they’ve had and three learnings for the organization. It has to have a modern-day corollary along with those three things to make it light and fun, and it’s a way of making failure acceptable. And as Aria Finger says, “It’s a great way for us to spot talent.”
One of my favorite things they do over there… everybody wants work-life balance. The way they enforce work-life balance, they have something called Toto Tuesday. On Tuesday afternoon, at 5:30 on the dot, they will blast on over the Sonos speakers Toto’s Africa. Everybody will get up and sing, and if you ever dare want to stay at work past 5:30, they will play it on repeat, over and over again, louder and louder, until you’ve gone home to your family or gone to the gym. That’s the way they get work-life balance.
Those ideas, and I think as I was saying at the very top– those practical tips; somebody can come up with their own song within their organization to do something that’s light and fun. We can overwork ourselves in the nonprofit sector, and probably Tuesdays or Wednesdays are the two perfect days to do it. So, that’s what they do over there. You have lots and lots of those types of rituals which I think are very practical and make a big difference.
Kyle: Denver, this has been amazing. Thank you for sharing your ideas, what you’ve picked up, and your Better Than Most book that’s coming out. Culture, feels like to me, is something that’s so obvious, it’s around us. It’s also so elusive. Trying to trap it, what it means, and what are the good spots. Thank you for sharing those good spots with us today.
Denver: Thank you for doing this. It’s really been a pleasure as well. Thank you so much, Kyle.
Kyle: Thank you.
Kyle Peterson and Denver Frederick
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at www.facebook.com/businessofgiving.