Forward Guidance for Nonprofits: Where is it Taking You?

THE TERM 'FORWARD GUIDANCE' IS USED BY central banks to influence market expectations about the future levels of interest rates. Banks do this by forecasting where markets will go and communicating their forecasts to businesses, governments, and the public. I can see I've really grabbed your attention now. But wait -- I'm going somewhere with this concept that has related, but not necessarily financial, applicability to the nonprofit sector.

I'm intrigued by the phrase, which I admit I hadn't heard until recently. I'm also intrigued with the idea of 'forward guidance' -- of articulating how something will turn out or could turn out based upon agreed-upon indicators, is (or should be) one critical component of planning for a sector as much as for individual organizational planning.

As the chart above from the banking industry illustrates, forward guidance is a combination of calendar-based indicators and trends and outcome-based indicators and trends. Look where you get the greatest impact -- it's on the outcome-based side the of spectrum, which combines explicit evidence from past performance with forward looking information.

Forward guidance requires organizational leaders to look for and interpret trends and scan the landscape for potential opportunities and pitfalls in order to plot future directions. It requires leaders to have their antennae up beyond the institution's walls, homing in on information and ideas that could be of practical use in thinking about the future.

Forward guidance is about influence and impact. As with the banks and interest rates, it's about shaping public perception and opinion that supports the need for the nonprofits in our lives. It encourages people to get involved and to open their hearts and wallets.

Here's the snag: I think many nonprofit leaders are still more comfortable looking solely at past performance as the predictor of the future (the left side of the chart). It's safe and, well, predictable. We know the cast of variables and the vocabulary. Our ability to forecast solely based on past performance has blindsided more than one nonprofit organization -- cultural organizations come immediately to mind, but I also wonder if education is stuck in this traditional approach despite all the talk about STEM, Common Core, and the electronic classroom.

We nonprofit leaders are woefully unskilled at forecasting using different vocabulary or trickier metrics that focus on consumer/community needs and wants. We rarely receive that sort of training in a classroom; it's rarely demanded of us on the job. Many of us haven't a clue about what to do with future trend information from across our own sectors or from other sectors, especially how to intelligently apply/adapt it in a timely, proactive way.

We may read an article, listen to a TED talk, or attend a session at a professional conference that sheds some light on where our sector is/may be going, yet are many of us taking those perspectives and fashioning them into predictive tools for our boards and staffs to forecast the future? Are many of us assembling forward guidance with the help of our nonprofit colleagues in our own communities or regions?

So, let's think about how we can move from the "least impact" side to the "greatest impact" side of the forward guidance spectrum.

Let me know how you're doing it. I guarantee there are dozens of people anxious to learn from you.

Quick Update: Just read this Nonprofit Quarterly article about 10 trends and 10 predictions for 2014 --- a little forward guidance grist for the mill, perhaps?

Three Most Important Nonprofit Executive Director Soft Skills

If you were asked to narrow down the list of executive director qualifications to the three most important, which ones would you identify? Would the list consist of soft skills, hard skills, or some combination? Would your list be based on the great ED you are or one you've worked for, or would it be your wish list for the ED you haven't been fortunate yet to work for? This was an assignment in my recent online class in leadership and administration for the American Association for State and Local History . I asked the class to review three-five advertisements for museum directors and analyze what these listings intimated about the organization’s past experience, current focus and goals, and future aspirations. Then, I asked the class to identify what they consider to be the three most important qualifications they would look for in a director. (Okay, so there's more than three if you dissect my three big groups.) Soft skills outnumbered hard skills, although

Back in the Saddle

MY LAST POST WAS NOVEMBER 2012, A LIGHT YEAR AWAY it seems, that marked the beginning of a long push toward completing a manuscript on history museum leadership with my co-author, Joan Baldwin. We finally submitted 350+ pages to our editor at Rowman & Littlefield this week. If all goes well, we expect the book to be available in early 2014. It's taken us two years to get to this point, so six more months or so of revision and production don't seem too long to wait until we can hold the final product in our hands (and you can, too!). The project put a lot of things on hold, including this blog. I'm glad to be back writing about intentional leadership -- leading by design -- for nonprofit boards and staffs. Certainly, my thoughts are now informed by the forthcoming book, in which Joan and I posit that nonprofits need to focus resources on leadership, not just management. Most cultural nonprofits are at a crossroad, as is the sector in general, where nothing is qu

What Would Make You Turn Down an Invitation to Join a Board?

THERE'S SO MUCH WRITTEN ABOUT RECRUITING BOARD TALENT, I thought I'd spend a little time thinking about it from the prospect's point of view. Clearly, there are boards where the line is long to get on them. But what would make you turn down an invitation? Here's a short list to get the conversation started: 1. You've had no prior exposure to the organization. Your immediate reaction is "did you pull my name out of a hat?" (Is that lady in the picture the head of the Nominating Committee?) Seems as though there must be a hidden agenda at work (like you're rich and once you become a board member you'll pour all your resources into the organization) or the organization is simply looking for any warm body to fill a seat. 2. The organization doesn't have a good reputation. There's something to be said for street cred. An organization that's floundering may be strengthened by your participation or you may find yourself sucked into

Donald L. Guerra said…

Education open ways to brilliant and amazing career openings. It assists us to achieve better chances of career development and advancement since great education is a qualification criteria for work in any segment of any industry.visit the site

June 3, 2017 at 11:36 AM

Unknown said…

There is AN array of definitions gift within the net for the phrase 'Online Virtual Assistant'. however the foremost common understanding concerning this can be that it offers on-line body support through the employment of pc and therefore the net. more

August 18, 2017 at 1:17 AM

online sentence rephraser said…

Banks and financial institutes forecast is very accurate i think. So before investing your money it is better always to research and look on the stock exchange market. Its fluctuation as well.

October 30, 2017 at 11:34 AM

October 30, 2017 at 11:35 AM

Thomas Venney said…

Research paper-the keyword If you are a pupil, Research newspapers are possible of life the other you are going to be writing until Your wedding day. There are some things you can do, and also tips to follow along Which create writing a research paper bit less debilitating. domestic violence paper outline is the best one option to proofreading your writing.

October 30, 2017 at 11:39 PM

Anonymous said…

Well this article that I've been waited for so long. I need this article to complete my assignment in the college, and it has same topic with your article. personal statement for masters in business administration can help you. Thanks, great share

November 12, 2017 at 4:09 PM

Leading by Design

Search This Blog