081 – Entrepreneurial Mindset in Non-Profits with Alex Charfen

Episode Transcription

David Pisarek: Tune in as we join forces with Alex Charfen. We’re unveiling Must-Know strategies for non-profits, blending business savvy with mission-driven success. This episode is a non-profit game-changer that you cannot afford to miss. Welcome to the Non-profit Digital Success podcast. I’m your host, David, and today we have a remarkable, amazing, I’m super excited that he’s here with us, Alex Charfen.

Alex is an influential entrepreneur and an author recognized for his expertise in entrepreneurial personality type EPT. Starting his business journey at a young age, he made significant strides in real estate, particularly during the 2008 economic downturn. His innovative CDPE process was crucial in hastening the recovery from the US foreclosure crisis.

Alex is known for his book, The Entrepreneurial Personality Type, as well. He is a respected voice in the entrepreneurial community, sharing his insights on various global platforms. I’ve been following Alex for a few years. He’s super insightful. I want to have him come on to this show today because you’ve probably heard me say this a few times: you need to run your non-profit like you are a business.

Somebody, at some point, the founder of your non-profit (maybe it’s you if you’re listening), you started this journey out of place of somewhere really good that you wanted to create a positive impact on the world in one way or another. The entrepreneurial spirit is right there. Alex, thank you so much for joining the show today.

Alex Charfen: David, thanks for such an awesome introduction. I appreciate you having me, man.

David Pisarek: No problem at all. When we think about non-profit leadership, how can understanding the entrepreneurial personality type enhance our approach to team building, maybe organizational development?

Alex Charfen: I think when you look at the world of non-profits, David, if we’re looking at larger bureaucratic non-profits, this doesn’t necessarily apply. But if we’re looking at upstart or innovative or entrepreneurial non-profits, I think one of the most important things for us to remember is that what we’re really looking to do with this organization is create momentum.

I think what happens so often with non-profits, or at least my observation with non-profits, is that there’s such a focus on the vision and the effect and the future, and there’s tons of discussion around it and tons of excitement around it. But where the rubber meets the road, there’s no clear planning of clear outcomes, clear measurement, and then accountability for each person involved.

I think what happens with a lot of non-profits that I’ve observed is that there’s a lot of energy in the ideation process. There’s not a lot of energy in the actual implementation and execution processes.

I think when I look at a lot of non-profits, they end up getting stuck in that planning ideation place, and unfortunately, even though they have the best of intentions, there’s not a lot that’s accomplished, and things tend to take a really long time.

David Pisarek: How many people have been stuck in the meeting-to-death cycle? “All right, we’re going to meet today. All right, here’s a plan of action. Next week we’re going to meet again. Awesome. What did we do? Well, not much because we were busy with the work that we were doing.” We need somebody to take charge, to be the leader, to really drive forward whatever that thing is that you want to do actually instead of just sitting and talking about it.

Alex Charfen: One of the frameworks we share with small businesses, and it’s absolutely 100% applicable to charities, really to any organization, to any team, to any group, to any group of people who are trying to accomplish something. There are three things present when we’re in a state of momentum.

Before I go into the three things, let’s just talk about what it looks like to be in a state of momentum. Just so you know, that’s my favourite word in the world. I don’t just hear that word. I feel it. It’s who I am. It’s a part of my DNA. I love to be in momentum. I love to be making things happen. I love to be changing the world, affecting people, making an impact, making a huge income. Those things are really important to me.

When we’re in momentum as human beings, this magical thing happens.

When I say human beings, I want to make it clear that I work with entrepreneurs and entrepreneurial personality types. That’s where most of my perspective comes from. So this might not apply to everybody in the world, but it applies to most of the people that are going to get involved in small businesses or small charities, the people who want to make an impact.

We live to be in momentum. David, I’ll ask you, you’re an entrepreneur. What does it feel like for you when you’re in momentum?

David Pisarek: I wake up just ooosing excitement. I’ve got this idea. I’m very much an A-type. I’m very much like the go-getter. I think you need to be in that zone as an entrepreneur, somebody that’s running the ship, CEO, CVO, whatever your title is, driving that forward, whatever your position is. I, at an early age, found that I had friends, but I was very much driven by what I wanted, not trying to please really other people. It’s that, I guess, self-motivation that really propelled it.

Alex Charfen: That motivation (that really, for people like us) when you look at the entrepreneurial personality type, psychology tells us that we need extrinsic or intrinsic motivation, something that’s external from us or internal from us. It’s motivating us. I think our personality type just has innate motivation. We literally can’t turn it off. And when we’re in momentum, this magical thing happens.

Like you said, you wake up ooosing, wanting to get things done. What I look at is there’s really three places that there’s this massive change for us when we’re in momentum. The first place is physiological. We actually have more stamina. We can do more, we can go more, we have more energy, we can get more done. It’s not like we’re talking ourselves into it. It’s there when we’re in that place of momentum.

Like you said, right when you wake up, you’re activated and you’re ready to go.

The second thing that happens when we’re in momentum is chemically, we feel the chemical change of momentum in it. It makes us feel like we’re doing what we need to do. In fact, when I speak in large groups of people, I often ask, “What does it feel like to be in momentum?”

People give answers like yours, but eventually, somebody says it feels like we’re alive. I think it’s that simple for people like us being in momentum feels like we’re alive. It’s not just physiologically and chemically, it’s cognitively. We actually make better decisions. We see things more clearly. We see the future brighter.

When we’re in momentum, we are boosted as human beings.

Now, the entrepreneurial personality type is interesting because the second state of momentum is when we’re facing resistance. It’s this time in our lives where we see an outcome clearly. We can see the light at the end of the tunnel. But the world around us is saying, “Hey, you don’t have what it takes. You don’t have enough money.” or “You don’t have enough experience. You’re too old, you’re too young, you’re not the right person to do this.” But we stay focused on that light at the end of the tunnel, and we compel it towards us. We compel ourselves towards it.

And even though the people around us are saying, “Hey, that light’s a train. Get out of the tunnel.” We trust ourselves, and we move towards that light. We finally breach through it, and that’s where we become who we are today.

So, as entrepreneurial personality types, when we’re facing resistance, we turn it into momentum. David, have you been through that process?

David Pisarek: Oh, absolutely. The world was built on people who are entrepreneurial to make things happen.

Alex Charfen: 100%. You look at everything we’re using around us; it was created by entrepreneurs. We are imbued by God or a higher power, or whatever you call it.

With the power of creation. We literally build the world around us.

Everything that you and I are using today, the shirts we’re wearing, the microphone I’m talking into, the screen I’m looking at, was first a vision in the mind of someone just like us. We literally create the world.

Now, the third state of momentum, and this is where people like us need to be careful. It doesn’t mean it matter if you’re a business or you’re following a workout program or you’re growing a charity whatever you’re trying to accomplish in the world.

When we get into a place where we feel full constraint, it’s not facing resistance. This is the place where we feel stuck, like we’re held in place. We don’t understand our next steps. We don’t know what we should be doing, and we feel like We are held in place. David, have you ever felt like that?

David Pisarek: A little bit. Every several months, there’s uncertainty, there’s… Cloudy.

Alex Charfen: Yeah, it’s so good that you said that. It feels funny when you said “a little bit.” Every few months, because every one of us as entrepreneurs, when we’re confronted with this, we’re like, “I feel that. I’ve felt that. I know exactly what he’s talking about.” But it’s almost like we’re afraid to talk about it because we might catch it. That feeling of full constraint is so challenging.

When I ask people what it feels like to be in constraint, they say things like it’s exhausting, it’s frustrating, causes anxiety, depression, frustration, all kinds of stuff. Then somebody says, “It feels like I’m dying.” I think it’s really that simple. When we as entrepreneurial personality types, as evolutionary hunters, as people who get up every day wanting to chase something, wanting to make something happen, wanting to change the world around us, when we’re in full constraint, it literally feels like we’re dying.

Here’s what happens. That same set of conditions that is present when we’re in momentum reverses when we’re in constraint. Physiologically, we are exhausted. We have feelings of being tired and worn out and we’re overwhelmed, and we have symptoms of things that they now call things like Hashimoto’s and Lyme disease and chronic fatigue and adrenal fatigue, which are real symptoms.

They come from us not being able to move forward, not being in momentum. The second thing that happens is, chemically, we feel the depression, we feel the frustration, we feel the anxiety of being in constraint. The third thing that happens is cognitive (we actually feel brain fog.) We have a hard time making decisions. Our vision narrows. We go into a fight or flight pattern, fight, flight, fawn or freeze, and we’re in that parasympathetic nervous response where we really don’t make the best decisions.

And so for people like us, protecting our momentum is crucial. Protecting our state of mind is crucial.

When it comes to momentum and working with organizations, there’s three things that you need at the organizational level, at the department level, at the project level, and at the individual person level in order to be in momentum. So when we look at a company, we want to apply this to the company, departments, projects, and people. And those three things are simple.

In order to be in momentum in your life, and I’m going to give you a test so that you can actually self-discover that this is true, but in order to be in momentum in your life, you need three things.

One is clear outcomes where there’s a finish line and a destination. Something that we can actually tangibly see that we’re we’re aiming at and we’re going to cross through. The second thing we need is clear scoreboards. We call it transparency. You need to understand with perspective whether you’re moving forward or not.

So often, as entrepreneurial personality types, we head to this place where we’re actually creating progress, but we don’t feel like we are. And until we have measurement, we verify that we are, and then we know we’re in momentum.

The third thing, and this is important, is we need to have clear accountability. What are we doing and what are the people around us doing? And so when I take that framework and I share it with you, outcomes, transparency in the form of measurement, and accountability knowing what we’re doing, the people around us are doing.

Here’s how you can test this. Think back to any period of momentum in your life. David, can you remember a significant period of momentum in your life?

David Pisarek: Absolutely. What was it? Last year, we signed on as our biggest client ever at our agency.

Alex Charfen: Congratulations, man. That’s awesome. When you signed on with that biggest client, what was the outcome that you were chasing that put you into this period of momentum?

David Pisarek: The outcome that we were chasing was “How do we level up? How do we get to that next stage in the business? How How do we grow? How do we scale?” But not just scale in terms of more money coming in, but the team and the processes and the organization and the product management of the work that we are doing.

Alex Charfen: For you, you had this algorithm client come in and the outcome becomes we need to put new processes, structure, routine in place so that we really can serve these clients at a high level. What was the score you were using during that period of time?

David Pisarek: What we were using… We were taking a look at the number of meetings that we’re having. Did we go up or down on them, the frequency of them the length of them, that type of thing. We were taking a look at agendas, these very tangible, very specific things that we can alter, we can adjust those levers and go, “Okay, we need more of this or less of this to deliver, to satisfy the client, and to be able to complete the project and move forward with them.”

Alex Charfen: Okay, so your measurement was a set of milestones that you were looking at and saying, “Let’s examine these milestones, see the ones that we’re checking off. It gives us clear evidence that we’re moving forward, and now we are delivering at the level that we want to deliver.” Then when we look at the last condition that was necessary, David, what were you responsible for and who was helping you?

David Pisarek: I was responsible for, essentially, oversight on the project as a whole in my agency, and strategy with that.

Alex Charfen: And then the people around you?

David Pisarek: I was at the 10,000-foot level. They were at the 5,000-foot level. Immediately below me, dealing with project management, account management, internal communications, client communications, and that piece.

Alex Charfen: Okay. What I’m hearing is you had this very clear outcome with this new client. You had clear measurements in the form of milestones. You understood your responsibilities and the people around you understood their responsibilities, even the level where those responsibilities strike.

Here’s what’s interesting, David. I’ve taken thousands of entrepreneurs through what we call the momentum equation exercise, and we ask them simple questions. What’s a period of momentum in your life? And I’ll share one of these – not related to business. When I was 13 years old, I got into high school. I got into a speech class by accident. I thought I was taking one elective. It was a different one.

At that time, I was not the most outgoing person. I was the shy kid. I had a hard time with being in front of rooms and stuff, but I got into a speech class, and my goal getting in was like, “I’m going to survive this class.” And the scoreboard in the class was an actual scoreboard in the class that showed how you were doing and was hung on the wall. And the accountability was I was learning speech from the instructor, Rick Lara, who’s still a good friend of mine.

We’ve known each other now for 37 years, 38 years this year. And then the other students in the class and the feedback that we were getting, the support that I was giving them. I got into this trying to survive a speech class. And what happened over the four years that I was in high school, I was in this period of massive momentum because I started speaking, I started winning,

I started going to tournaments, started winning tournaments, I started breaking all kinds of records. And so for me, this very humble beginning of, “holy crap, I need to survive,” turned into my understanding that I could speak in front of people, that I could command a room, that I could lead a team. I actually became the team captain for the speech team, that I could go out and compete.

And so when we look at periods of momentum in our lives, outcome momentum, measurement, and accountability is always there.

If you’re in an organization now, whether it’s a charity, a business, a team, or a family, where you don’t feel momentum, one of those three things or more is missing.

You probably have nebulous unclear outcomes. The measurement isn’t something that people are actually looking at and paying attention to.

And oftentimes, people don’t understand their roles and responsibilities. So when you put that into a company, everything changes.

David Pisarek: I really love that, and I wish that more organizations would take that approach to the work they’re doing. Unfortunately, in the non-profit world, they’re underfunded, they’re understaffed. There’s a lot of reactive instead of proactive attention to things that do come up.

But it’s important on a quarterly basis to do some strategic planning to go, “Okay, this coming quarter, Q1, Q2”, whatever it is, “We want to achieve X. What are the five major things, three major things?”, whatever it happens to be, break it down into manageable tasks, assign that to somebody or your team to be accountable. Maybe it’s you. And then every week, look at this thing.

Put it up on a piece of paper on the bottom of your monitor, a post-it note on the side of your monitor, whatever. Put a calendar event on repeat every day where you’ve got some focused time to think about that or to take some action or to work on whatever that thing is that you want to accomplish for the end of the quarter. You’re going to see that just setting these small little goals is going to actually get you there.

Alex Charfen: You know what you said is really important, David. The vast majority of organizations do not do strategic planning at all. I know that sounds unrealistic, but we interview and talk to hundreds of companies every quarter, and the percentage of them that come in with a strategic planning process is less than 1%. Anyone out there is thinking, “Oh, they’re dealing with tiny little companies.” For our organization, most of the companies we talk to are around a million or multiple million, and they still don’t have a strategic planning process.

What we coach and train is that in any organization, we need to have a clear understanding of what’s going on for every person in the company. When you look at it…I’ll use a sports analogy, David, but I want to be really candid that I do not follow sports. If you ever ask me, did I see the game last night? The answer is I didn’t know there was a game last night. But there’s this analogy that just works really well for this thought process.

Any team’s locker room on the first day of the season and you walk up to a rookie on any given sports team and you say, “What are your goals?”

 They’re going to give you an answer in a heartbeat. They’ll say, “Someday I want to get to the Hall of Fame. I want to win the Championship. I want to beat who we’re up against this. Here’s who we’re lined up against this month. This is what I have to do this week as far as drills and practice and everything else. Here’s what I need to do today so that I have a chance at getting to the Hall of Fame.”

When you look at most organizations, whether they be a business or a charity, and you ask someone, What are the goals around here? They don’t have that framework. They’ll say things like, Get a lot done, help people make an impact. They might share some part of a big vision, like impact a million people or impact a billion people.

Sorry, I just was chuckling to myself because I’ve been a coach and consultant for 30 I remember way back when people used to say, “What’s your goal?” And they would say, “I want to impact 100,000 people.” I’m like, “Oh, okay, well, we’ve got zero right now. How are we going to get there?” Then it changed to, “I want to impact a million people.”

And that was probably 15, 20 years ago. Then at some point it became, “I want to impact a billion people.” Then recently, I was in an event where somebody was asking – Sorry to laugh. I mean, it feels like I’m making fun of this person. I’m not trying to, but they said, “What’s your goal?” She said, “I want to impact 10 billion people.” I’m like, “Crap. Somebody needs to tell her that there’s not 10 billion people to impact.” I guess I could have looked at it differently and said, “Oh, she wants to impact everybody on the planet right now and the 3 billion that come in the future.” But that’s what most of the time somebody will share in the question, “What are the goals around here?”

When we can duplicate that framework by having a long-term client-centric mission and annual outcomes and quarterly goals and monthly objectives that we’re going to achieve, and then weekly commitments, what are the things that we’re actually doing, and daily productivity, each person in an organization knows if I do what I need to do today, we might get to that long term Hall of Fame goal.

Creating that structure in an organization is crucially important, and most organizations don’t have it.

David Pisarek: There are lots of different frameworks out there for accomplishing this. It’s the EOS framework, where you’ve got like, rocks, and then you break those down into the pebbles and all that type of thing.

Whatever the framework is, as long as you are putting in place a goal that is going to help you get closer to accomplishing your mission. You share that with the people, the team, the folks that are around you. You share that with your community, with your constituents, the people that are in your programs, are using your services, are on social following you, whatever it happens to be. You are going to achieve it. You are going to have support. You are going to have help.

But start small, like trying to hit everybody on the planet, that is super, super ambitious. We want to make our goals SMART, right? Specific, measurable, attainable, realistic and timely. Don’t bite off more than you can choose.

Start small, work forward. The next goal. Make that one maybe a little bit bigger.

You need to follow your path, your vision. It’s great to be inspired by other organizations that are out there. There’s lots of people doing really amazing things in this world, but what you want to do is what you want to do.

Maybe your goal is to help 30 people in your community this year. Go for it. Do it the best freaking way that you can.

Alex Charfen: I agree. While there are a lot of frameworks out there, I think our company, Simple Operations, has the most effective and best one.

You mentioned EOS, which is a good alternative. It’s an interesting framework, but as you said, you really get it down to where you do 90-day targets, and then you execute through a weekly meeting. And what we’ve observed in that framework is that what happens is the visionary, the manager, the leader, and the person who’s running the organization end up way too involved.

David, I think one of the things that if you’re a visionary, whether you’re running a charity, a business, or anything else, one of the things you should endeavour to do as quickly as possible is get yourself out of the day-to-day. Being in the day-to-day of a business, being involved in the tactics, being involved in the details, creates so many symptoms for us as visionaries.

Here’s what I mean by symptoms. When we’re too overwhelmed in the day-to-day, it can make us anxious, it can make us feel frustrated, it can make us feel resentful of our team because we’re way too involved. When we have too much coming at us on a day-to-day basis, when we’re getting interruptions and questions and death of a thousand paper cuts and we’re involved in the tactics, it can actually reduce our capacity to be a visionary.

It puts us in a parasympathetic nervous system response. It dysregulates our central nervous system because we have highly sensitive, highly adaptable nervous systems, but we also have to protect them from too much in the day-to-day, too many tactics, too many details.

One of the symptoms that happens when we’re stuck in the day-to-day is that (and if you’re a visionary who runs a business or an organization of any kind, you’ll probably relate to this) is you wake up in the morning, you find a mistake, and it completely destroys your entire day because you’re the one who found the mistake. You feel like you’re the only one who finds mistakes.

Mistakes must be being made everywhere. And so I often have people on teams tell me, “Well, you know, John, our visionary, is really frustrated because he found a mistake yesterday. So he’s been investigating everything for the last 24 hours and finding all kinds of issues.”

The reality is, as visionaries, we are not meant to be in a day-to-day tactical position.

We are that small percentage of the population that gets up every morning, travels into the future, creates a new reality, then comes back to the present and demands it becomes real.

And the best way for us to do that is to make that reality so clear that our team actually understands it and that we’ve fully communicated where we’re going. And then we build a realistic step-by-step plan to get there.

And when I say realistic, what often happens in the mind of entrepreneurs or in the mind of type A personalities is they hear the word realistic, and they’re like, “Oh, realistic. Realistic is what would have happened anyway. I want to chase this big, hairy, audacious goal. I have this massive vision. I want to change the world.” Well, here’s the issue. So many of us are teaching our team to chase a dream and to lose gracefully. And let me tell you what I mean by that.

If we don’t have the next interim step for our team to pursue, which is realistic and clear, and there’s a clear path to get there, what often happens is we share these big, massive goals, and then we fall short. And so we’re telling our team they need to chase a dream. And then when we fall short, we teach them how to lose gracefully over and over and over again.

And what happens is if you’re always aiming at something that’s huge and falling short, you create a culture in your company that goals really mean anything around here. And what we aim at is just something we think about or came up with, and falling short is okay.

And when we change that paradigm and we create realistic outcomes that have a clear path to get there and our team can execute and succeed, we have a team that starts to learn how to win. We have a team that starts to expect to win. We have a team that actually becomes more engaged and gets more done.

If you’re teaching your team how to lose gracefully, the people who really care about what you’re doing, the true believers, which, by the way, if you’re running a charity, most of the people attracted to helping you are true believers. They believe in your cause. They believe in the mission. They believe in what the charity is going to do.

If you’re teaching them to lose gracefully, oftentimes, the most valuable people, the A players, the one that can help you the most, are going to bail out because they don’t want to be in a situation where they’re losing.

And it’s so crazy, David, because all the time we work with organizations that have had these huge pie-in-the-sky goals, and we still think you should have big dream goals. Those are your client-centric mission. Those are the future. But the one year, the quarterly, the monthly, those should be clear, and those should have a path to get there.

And when we change this paradigm, we often take a company that’s been stuck or plateaued or standing in place or frustrated, a lot of issues on the team. We make a simple change. We take those pie-in-the-sky goals and bring them back down to something realistic, and all of a sudden, the company starts growing. I just want to make the point that realistic does not mean slow.

We’ve worked with organizations, tons of organizations that have gone from the low seven figures to the multiple eight figures by creating realistic, achievable, clear path outcomes in their companies. Because when a team understands how to get there, they’re going to execute like crazy and get you there. If you’re telling an entire organization of people, “Here’s this dream I have. Let’s go achieve it.” It’s going to be really hard for you, the company, or any individual member of the team to feel like they’re winning.

David Pisarek: We’ve probably all heard the saying, “Reach for the stars and land on the moon.”

Alex Charfen: I think the saying something like, “Shoot for the moon, and if you miss, you’ll land on the stars,” or some dumb crap like that.

Let’s be very realistic about that. If you shoot for the moon and you miss, you’re going to die. Your life support systems are not going to only last. You’re going to go into some massive orbit around the Earth, or even worse, go into deep space, and you’re going to die. You’re going to become a popsicle. You’re going to be a frozen person. It’s not going to ever have any achievement in your life. And so I hate that phrase because of what it does.

By the way, I know I just got a little emotional. Let me calm down. I get emotional about this because so many entrepreneurs have these patterns in their mind, like I need a big, hairy, audacious goal. I’m going to shoot for the stars, put the biggest number I’ve ever had, and write it down, cross it out, and double it.

The way we set goals and the way we try to achieve them is fundamentally broken. And what happens is you go to an event or you go to a conference or you go to something where you’re watching a goal achievement expert, and it’s somebody who bounces around on stage and motivates everybody.

It makes a lot of noise and tells you things like, Write the biggest number down, cross it out and double it. Do it again. That’s your goal. And what happens is that process might have worked for one or two people out of 100 or 200 or 300. And that’s the person who gives the testimonial.

And so everybody’s like, “Well, I guess this is how it works.” Nothing could be further from the truth. We can have huge dreams in the future. But when we create clear process, structure, and routine to achieve what we want to achieve in the short term, that’s how we get our life into momentum. That’s how we make real, lasting, permanent change. And that’s how we grow the organization that we care about.

David Pisarek: 100%. What I would like everybody to do is think about whatever level in your organization that you’re in, whether you’re the graphic designer or you’re a director, manager, VP, CEO, CVO, whatever. Think about what you want to achieve in a five-year span. This should be personal as well. “Oh, I want to take a three-week vacation traveling the world” or whatever, or three months, whatever. But the business goals, what is it that you want to achieve?

Then we’ll look at a one-year goal. What is it that you can achieve? One year that will get you one step closer to hitting that five-year goal. Then go, “Okay, right now, this quarter or this coming quarter, what am I going to do to get a quarter of the way to that one-year goal?” And be very specific around those. Make sure that you share those.

So if you’ve got team with you, have your whole team do this. It needs to come also from the top of the organization down. You need somebody steering the ship that’s going to say, “Look, this is the vision for the organization. How can we, together, collect and make this happen?”

Every department, every person is going to have a different take on it, and that’s okay. But you can collaboratively come together to get to where you want to be.

Alex Charfen: Yeah, no question. I think the key here is creating consensus and alignment. I think the biggest issue in most organizations is that there is top-down motivation of what’s going to happen, and there’s not enough time spent on consensus and alignment. Consensus is making sure everybody agrees and understands, and alignment is everybody’s going in the same direction for the same reason.

What often happens in organizations that don’t have a clear strategic plan, don’t have a planning process, don’t have an execution system, is that consensus and alignment really doesn’t exist because there’s nothing to have consensus or alignment around other than day-to-day activities and feeling like you’re buried in your job. One of the frameworks we teach, and we can share this,

David, if you go to predictablebusinesssystems.com, we teach a framework called the Five Core Functions. And it’s a quarterly analysis tool where you can analyze your business and see exactly what it needs. Now, there’s a lot of analysis tools out there. This is the only one that we’ve seen, and I’ve been doing this a long time. It’s the only one that I’ve seen, where you analyze what does the business actually need to deliver to your constituency, your customers, your members in a better way.

The five core functions of business are simple. There’s lead generation, everything you do to create a lead. There’s lead nurture, everything you do to nurture that lead. There’s conversion, everything you do to take that person from a lead to an actually involved person who’s either purchased or donated or whatever that is. Then there’s delivery, and then there’s retention, reselling, upsell, and those are the five areas. When you look at a business, it’s pretty easy to see that.

When you look at a charity, it’s exactly the same. In charities, you’re generating leads of people who might donate. You’re nurturing those leads so that they will donate. You’re converting them to an actual donor, and then you’re delivering two things in a charity. The actual outcome of the charity, like what it is we’re doing to do our charitable work in the world.

Then I would also recommend you have a delivery of information back to all the donors, showing them the change that they’ve made in the world. A charity that my wife and I were involved in, Charity:Water, which was run by Scott Harrison, they did really incredible at this. They delivered the change, which was building wells around the world and places where they didn’t have clean water.

But then they also delivered updates to us. At one point, I think they sent us a GPS tracking beacon, so we could see the well that was being built. And they sent us pictures and they sent us information. And so as donors, we knew that the delivery happened and they were confirming it with us.

And then retention, reselling, upsell in a business. Retention, we want to make sure people stay with us. Resell is people buy from us again. Upsell is that people buy something larger from us.

Same thing applies in a charity. Retention is we keep that person as a donor. Resell is they donate again, or maybe they get on a donation monthly program or they have something that’s automatically going to you. And then upsell is, can we get them donate at a higher level for an opportunity for them or an opportunity for the organization?

I think one of the reasons so many organizations stall out is they don’t have a consistent tool to analyze what the organization needs. And if you break things down in those five categories and you look at where are we weakest, that’s where you put your energy.

And then that quarter, the organization gets stronger. It’s able to achieve more. Can you do the same thing the next quarter? And so, again, you can go to predictablebusinesssystems.com. We have a short e-book on the five core functions that also shows you a matrix you can use for scoring that applies both to businesses and to charities.

David Pisarek: I love that. I think it’s absolutely spot on. And there’s different levels. Alex, you and I were chatting right before we hit record here. Look, we know that there’s a know, like and trust factor. It takes seven to eight interactions with somebody, whether it’s email or social or phone call or see a kiosk in a mall where somebody is ringing a bell looking for… Whatever it happens to be. It takes a number of interactions before they know about you. They like you and they trust you.

And there’s different levels of the donor life cycle. So you have the casual, which is, “Yeah, I’ll follow you on social. I’ll leave a comment or I’ll share or I’ll like something,” like the couch surfer type model. And you can take them through those five steps as well from lead gen, nurture, sales conversion.

How do you drive people through that if they’re just, I don’t know, socially connecting with you versus actually giving you time? You can go through those five steps with volunteers, and then you can go through those steps with actual people that are giving you money. You can go through those steps with corporate sponsors who are giving you maybe goods or services in return for X, Y, Z.

You can go through that with your board of directors. You can go through that with your staff in your organization as well. It really does play across the whole spectrum. Even though we’re talking about business, this absolutely 100% applies to you as a non-profit.

Alex Charfen: Yeah, there’s no question. I think that the biggest challenge… I just want to be careful with how I say this because I don’t want to offend anybody working in a non-profit. But I think that the biggest challenge with the majority of non-profits that I’ve been involved with is that they’re not run like a business. There’s not enough accountability around outcomes. There’s not enough accountability around measurement, and there’s not enough accountability as to who’s responsible for what.

As a result, a lot of the charities that I’ve observed from the outside, some of the ones that I’ve been involved in the inside, there’s a lot of discussion, a lot of ideation, a lot of getting excited, but very little execution. When you go through those five core functions, here’s what happens. You get very clear on what the organization needs.

You start executing those things and you see a difference in the organization. You see movement, you see growth, you see more donors, you see more activity. Then that pattern of, “Hey, if we do this intentionally, we get results,” makes it so that everybody involved wants to do it intentionally again and get more results.

I think, like I said, I won’t offend anybody running the charity. This is not a universal statement, but the majority of charities that I’ve been involved in, ironically, have been run by entrepreneurs, but they run their business like a business, and their charity does not run like a business. I don’t know what to compare it to.

David Pisarek: I think it goes back to what you started off with, which is the word momentum. If you are creating goals and you have a strategy in place that allows you to achieve it, you can check that off.

Be like, “I made this thing happen. We were able to raise $3,000, $10,000, $5 million, whatever. We were able to help feed starving children, 3,000 of them in this city. We were able to build wells in these countries.” Whatever it happens to be, they’re like, “Okay, you get that hit, you get that dopamine, you get that little social media ding that everybody’s talking about is really bad for us,” right? You get that positive feedback from chemical reaction in your body that you actually achieved something. “Let’s do it again.”

Alex Charfen: Yeah.

David Pisarek: Let’s raise that bar just 5%, 10%. Let’s push for that.

Alex Charfen: No question. I think it’s interesting that you brought up the chemical reaction. When we create a realistic outcome, we do the work to get there, and we cross a finish line, there’s actually a chemical experience that we have that makes us want to do it again. As entrepreneurial personality types, there’s this weird condition that if we set up clear finish lines, as we cross them, they lose importance to us because we need to go back on the hunt. We need to go figure out what we’re going to do next.

And so what happens in too many organizations is that the finish line is not really a finish line. It’s this roving thing that keeps moving away. It’s like, “Oh, Here’s what we’re going to do. But then we’re going to add some stuff to it, and then we’re going to do some other things, and then we’re going to move.” And so there’s really no, “Hey, we’ve done this, we can celebrate it, and now we can plan what we’re going to do next.” So it’s really important in your organization that when it comes to clear outcomes, measurement and accountability, that the outcomes are actual finish-line outcomes.

David Pisarek: Here’s the question for you. What advice would you have for non-profit or charity in adapting traditional business strategies, like what we’ve been talking about, so that they can align their team with their mission and their leaves?

Alex Charfen: I think start thinking about the charity as a business. I know that makes people feel uncomfortable because the outcome of a business is profit and the outcome of a charity is some type of assistance or change or transformation of a cause.

The problem I see is that the difference between how a business is run and a charity is run is why the charity has so many challenges and struggles and frustrations.

What I mean by that is what we talked about earlier. Have clear outcomes for the charity, have clear measurements for the charity, and then have clear accountability.

I think one of the things that happens in too many charities is that the person running the charity feels like everybody is giving to the cause and giving to the charity. So as a result, they don’t hold people accountable or they don’t create accountability. If somebody is showing up to help a charity, they actually want accountability.

Same thing in business. A lot of times people tell me, “Oh, I want my team to have freedom and autonomy.” Well, freedom and autonomy is totally different from lack of direction and lack of understanding. Lack of direction and lack of understanding, whether it’s in a charity or a business, makes it so people are deleveraged.

It makes it so they hold back. They don’t take initiative. They don’t step up. These are the complaints we hear from visionaries all the time. It’s like, “My team’s not performing. They’re not stepping up. They’re not doing what I want them to. They’re not taking action.” Well, oftentimes it’s because they don’t have the clarity to do those things.

So even in a charity organization, giving each person who’s involved, each volunteer, each person, even if you have people who are on salary or staff or in the office, having a ton of clarity around exactly what they’re accountable for so that they can succeed.

That confusion with a lot of leaders of, “I want people to have independence and autonomy.” And what they really give people is a lack of clarity and no direction. And people do not succeed where they have a lack of clarity and no understanding of direction. When they understand where they’re going, they understand the direction, that’s when people can get into momentum and change things.

David Pisarek: Two things I want to add to that. Yesterday, I saw a quick little video about Simon Sinek, and he was saying, “What is CEO? We should abolish that. It should be CVO, a Chief Visionary Officer.” You’re going on a road trip. How do you know where you’re going to go? “Well, you’ve got a GPS. You’ve got a clear defined direction. You know you need to go this way. All right, there’s a road closure. There’s some construction. All right, we’re going to pivot. We’re going to go over here and go around.”

You need somebody that can really drive the organization forward in that way. I think that that’s really the smartest way to move through the life cycle of a non-profit, staying true to your goal, your mission, why you started as an organization to begin with, because that’s what’s going to help drive you forward.

Alex Charfen: Yeah, for sure.

David Pisarek: Awesome. Alex, these have been some really fantastic insights on running your business or non-profit. For anybody who’s listening, do you have any wishes, desires, or actions that you want them to take in the next, I don’t know, a couple of days after listening to this?

Alex Charfen: Yeah, I think you should go download the five core functions and understand the framework. Whether you work in an organization you’re running an organization or you’re a manager. It’s one of those frameworks that apply to any organization to help you understand what you should do next. It also is a really great way to analyze the organization so that you’re clear on what it needs.

David, in our experience, what we see as the biggest challenge in business, and remember, we don’t work with a lot of charities, but what we see as the biggest challenge in organizations is that there is inconsistent planning of what should be done. There’s inconsistent analysis and prioritization of what it can be done. And so if you consistently analyze and prioritize and then execute, that analysis, prioritization, and execution is what really changes companies and what changes any organization.

David Pisarek: Absolutely. So we will have a show notes page. Thanks again for joining in, Alex. It’s been great having you on the Non-Profit Digital Success podcast.

To everybody listening, if you want any of the links, resources, the transcript of what we were talking about, just head over to our podcast page at nonprofitdigitalsuccess.com. Click on this episode for all the details. And until next time, keep being successful.