Free Micro-eMBA Module #8: Managing Your Organization’s Finances

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting,
LLC. Adapted from the Field Guide to Leadership and Supervision in Business
and Field Guide to Leadership and Supervision for Nonprofit Staff.

This module is in the organization development program. However,
this module can also be used by anyone as a self-study exercise
to learn more about managing finances.

Sections of This Module Include the Following

Introduction
Outcomes
Materials for Review
Suggested Topics for Reflection and Discussion
Activities to Build Systems and Practices
Assessments
Tracking Open Action Items

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INTRODUCTION

New business leaders and managers have to develop at least
basic skills in financial management. Expecting others in the
organization to manage finances is clearly asking for trouble.
Basic skills in financial management start in the critical areas
of cash management and bookkeeping, which should be done according
to certain financial controls to ensure integrity in the bookkeeping
process. New leaders and managers should soon go on to learn how
to generate financial statements (from bookkeeping journals) and
analyze those statements to really understand the financial condition
of the business. Financial analysis shows the “reality”
of the situation of a business — seen as such, financial management
is one of the most important practices in management. This module
will help you understand basic practices in financial management,
and build the basic systems and practices needed in a healthy
business.

In the case of a corporation, the board has final responsibility
for the overall financial health of the organization. Therefore,
it’s critical that new corporations quickly build up the roles
of the board treasurer and board finance committee. The treasurer
and finance committee can be wonderful assets to the chief executive
when managing the finances of the organization — however, the
chief executive should never completely ignore the finances by
leaving them for the treasurer and other board members to manage.
The board’s role in ongoing governance of finances can include
ongoing review of financial reports during board meetings, approving
yearly budgets and financial statements, approving a set of fiscal
policies (guidelines for managing finances), reviewing results
of a yearly audit conducted by an outside auditor, co-signing
checks that are over certain limits and approving contracts, and
ensuring the organization conforms to relevant rules and regulations.

NOTE ABOUT LEARNING FINANCIAL MANAGEMENT: At first, when learning
financial management, many people might react that the learning
experience seems mostly like filling one’s head with strange concepts
and processes. Typically, the learning process starts with this
experience — it probably isn’t until the learner actually enters
an accounting transaction and analyzes a financial statement that
learning about financial management seems more “real”.
But the learning process almost always starts by reviewing concepts
and processes. Financial management almost always tells the truth
about the situation of a business — so the learning process is
well worth the effort.

NOTE ABOUT BOARD COMMITTEES: Consider establishing a Board
Finance Committee to review and
help guide implementation the information in this learning module.
Major activities and goals from this learning module could be
incorporated in that Committee’s Committee Work Plan.

Also consider
Related Library Topics

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OUTCOMES

Learners who complete this module will achieve the following
outcomes:

1. Learn Basics of Bookkeeping and Finances
2. Understand Budgeting and Deviation Analysis
3. Understand Basic Cash Management Practices
4. Recognize Major Financial Statements
5. Know Basics of Financial Analysis
6. Evaluate Your Financial Management Practices

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MATERIALS FOR REVIEW

• The following materials will help you address each of
  the topics and learning activities in this module.
• Note that additional materials for review are associated
  next to certain topics and activities listed in this module.

Background Reading

Quickly get a “big picture” view of the aspects of
financial management by scanning the types of topics and their
order at
All
About Financial Management in For-Profits

Basics and Getting Started

Basics
of Financial Management
– – – Role
of Treasurer (read link “Role of Treasurer”)
– – – Charter
and Work Plan for Board Finance Committee
– – – Getting
an Accountant or Bookkeeper if Needed (read “Getting and
Using Accounting Services”)
– – – Buy
Accounting Software to Help You? (scan each of the articles at
the links)
– – – Getting
a Bank and Banker (read “Getting and Using a Banker”)
– – – Basic
Overview of For-Profit Financial Management
– – – – – – Basics
of Financial Management in U.S. Small For-Profit Businesses
– – – – – – Free
Introductory Accounting & Bookkeeping Tutorial
(scan the topics in the tutorial)

Activities in the Yearly Accounting Cycle

Bookkeeping Basics:

Bookkeeping
Basics, including:
– – – Beginners’ Guide to Financial Statements
– – – Bookkeeping and Accounting Tutorial
(more detailed tutorial … be patient)
Financial
Controls
– – – Internal
Controls for a Small Business (scan the controls to get a sense
for them)
– – – Sample
Financial Procedures Manual

Critical Operating Activities in Financial Management:

Managing
a Budget (read all)
– – – The Right Way to Prepare a Budget?
– – – Small
Business Budget Example
Credit
and Collections (read at least 3 articles)
– – – Collection Letter Secrets to Getting Paid
Budget
Deviation Analysis (read all)

Financial Statements and Analysis:

Financial
Statements (read 2 of the articles)
– – – Profit
and Loss (Income) Statement (read all)
– – – Balance
Sheets (read all)
Financial
Analysis
– – – Profit
Analysis (read 2 of the articles)
– – – Break-Even
Analysis (read 2 of the articles)
– – – Ratios
(read 2 of the articles)

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SUGGESTED TOPICS FOR REFLECTION
AND DISCUSSION

• Learners are strongly encouraged to discuss the following
  questions with peers, board members, management and staff, as
  appropriate.

Preparation for Financial Management

1. What is the role of the board treasurer? See Role of Treasurer.

2. What are at least 3 goals of a Board Finance Committee?
See Charter and Work Plan for Board Finance Committee.

3. What needs to be considered when selecting an accountant?
See Getting an Accountant or Bookkeeper if Needed.

4. What needs to be considered when buying accounting software?
See Buy Accounting Software to Help You?

5. What needs to be considered when selecting a banker? What
services might a business need from a bank? See Getting a Bank and Banker.

6. What is the board’s role in financial management? See Basics of Financial Management in U.S. Small
For-Profit Businesses.

Basics of Accounting

1. What is the accounting cycle? See Basics of Financial Management in U.S. Small
For-Profit Businesses.

2. What are the elements of an accounting system? See Basics of Financial Management in U.S. Small
For-Profit Businesses.

3. What is a fiscal policies and procedures manual? See Basics of Financial Management in U.S. Small
For-Profit Businesses.

Bookkeeping and Financial Controls

1. What general activities are included in bookkeeping? See
Basics of Financial Management in U.S. Small
For-Profit Businesses.

2. What types of information are in a financial fiscal policies
and procedures manual? See Sample Financial Procedures Manual.

3. What is cash-basis vs. accrual-basis accounting? See Basics of Financial Management in U.S. Small
For-Profit Businesses.

4. What bookkeeping journals might you start out with? See
Basics of Financial Management in U.S. Small
For-Profit Businesses.

5. What is a Chart of Accounts? See Basics of Financial Management in U.S. Small
For-Profit Businesses.

6. What is the purpose of financial internal controls? What
are some practices in internal controls (HINT: think about signing
checks, opening mail, how to verify that account totals are accurate,
etc.)? NOTE: The concepts in financial controls are essentially
the same between a for-profit and nonprofit organization. See
Internal Controls for a Small Business — scan
the controls to get a sense for them.

Budget, Cash Management, Credit and Collections, and Budget
Deviation Analysis

1. What is a yearly (or operating or annual) budget? How is
a yearly budget prepared? See Basics of Financial Management in U.S. Small
For-Profit Businesses,
The Right Way to Prepare a BudgetHow Do We Prepare a Budget?

2. What are fixed expenses and variable expenses? See The Right Way to Prepare a Budget and
Fixed and Variable Expenses?

3. What is petty cash? How should it be handled? (The concept
is essentially the same in nonprofits and for-profits.) See Internal Controls for Petty Cash and Receipts.

4. What is a cash flow and how should cash be managed? See
Managing Cash Flow.

5. What is a cash flow statement? What is a cash flow projection?
See Managing Cash Flow.

6. What is a budget deviation analysis? What information is
considered during this analysis? See Budget Deviation Analysis.

Financial Statements and Analysis

1. What are two major forms of financial statements used by
for-profit organizations? See Financial Statements.

2. What general information is included a Profit and Loss Statement?
Balance Sheet? See Financial Statements.

3. What can be detected from a profit and loss statement? See
Profit and Loss Statement.

4. What can be detected from a balance sheet? See Balance Sheet.

5. What is the purpose of profit analysis? Break-even analysis?
Ratio analysis? See Profit Analysis, Break-Even Analysis and Ratio Analysis.

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ACTIVITIES TO BUILD SYSTEMS AND
PRACTICES

• Learners are strongly encouraged to complete the following
  activities, and share and discuss results with peers, board members,
  management and employees, as appropriate.
• As you proceed through the following activities, be sure
  to note any incomplete actions in the Action Item Planning List.

Building Role of Treasurer and Board Finance Committee

1. In the case of corporations, one of the greatest assets
to a chief executive can be the board treasurer and finance committee.
Do you have a board treasurer and a finance committee? If not,
make it a high priority to recruit a treasurer and organize a
board finance committee. See Charter and Work Plan for Board Finance Committee.

Designing Operating (or Annual or Yearly) Budget

1. Your operating budget depicts the revenue the organization
expects to earn. It also depicts how that revenue will be spent.
Budget development starts from strategic planning. If you completed
Module 6: Developing Your Strategic Plan.
then you already have designed a basic yearly operating budget.
If you completed Module 7: Marketing Your Products, then you’ve
updated your operating budget to include revenue and costs of
your products and services. If you have not completed these two
modules, you should review information and materials in those
modules to draft and update a basic operating budget.

2. Obtain authorization of the operating budget by the board
(in the case of corporations). Board members should receive copies
of the operating budget for their review and authorization in
a board meeting. The minutes of the board meeting should reflect
member’s approval of the budget. Approval indicates that the board
expects the organization to operate over the coming year according
to the expected expenses and revenues depicted in the approved
operating budget. Note that if board members have been involved
in previous strategic and product/program planning, then their
approval of the budgets should be very straightforward at this
point.

Building Basics of Bookkeeping and Financial Controls

1. For your business, do you use a cash-basis vs. accrual-basis
accounting system? How do you know? What system should you be
using? What about for generating financial reports? See Basics of Financial Management in U.S. Small
For-Profit Businesses.

2. Will you be using a software tool to do your bookkeeping
and accounting? See Buy Accounting Software to Help You?

3. What bookkeeping journals do you use for your business?
If you do not have journals, then start with a simple cash journal.
See Basics of Financial Management in U.S. Small
For-Profit Businesses.

4. Do you have a Chart of Accounts for your business? If you do not have one,
then consider an example provided in the following links. If you have selected
a software tool to help you manage your finances, then that tool might already
have a Chart of Accounts in it. See Chart of Accounts.

5. What financial controls do you have in place? If you have
not yet done so, draft a set of financial controls for your organization.
Think about controls to guide signing checks, handling petty cash,
opening mail, how to verify that account totals are accurate,
etc.) (The concepts in financial controls are essentially the
same between a for-profit and nonprofit organization.) See Sample Financial Procedures Manual.

Credit and Collections

1. Imagine that you did not get paid by a client or customer.
What would you do? Write down your answer and consider it to be
a basic draft of a financial procedure to handle collections.
See Credit and Collections and
Collection Letter Secrets to
Getting Paid.

Budget Deviation Analysis

1. A few months after implementing your operating budget (that
includes expected expenses and revenues), modify the budget report
to include the column headings listed in your reading in the section
Budget Deviation Analysis. Analyze how closely
actual expenses and revenues are matching planned expenses and
revenues. What is the percentage difference for each item or account
or line item in the report? Is that percentage difference a problem?
What caused the difference? What are you going to do about the
differences in the future? Conduct a budget deviation analysis
each month in your business.

Financial Statements — Profit and Loss (Income Statement)

1. Generate an Income Statement for your business. Generating
an income statement requires that you have been entering business
financial transactions either by hand in a journal(s) or in an
accounting software package. Ideally, you have an accounting software
package that will produce a statement for you merely by entering
a command or clicking on the button on your computer screen. If
you generate a statement by hand, see examples in Profit and Loss (Income) Statements to provide
direction. Do you have an operating profit or loss?

Financial Statements — Balance Sheet

1. Generate a balance sheet for your business. Similar to an
income statement, generating a balance sheet requires that you
have been entering business financial transactions either by hand
in a journal(s) or in an accounting software package. Ideally,
you have an accounting software package that will produce a sheet
for you merely by entering a command or clicking on the button
on your computer screen. If you generate a sheet by hand, see
examples in Balance Sheets to provide direction. Do you
have a positive or negative net worth? Calculate your current
ratio. See Ratios. What does your current ratio indicate
about your organization? Calculate your quick ratio. See Ratios. What does your quick ratio tell
your about your organization?

Financial Statements — Cash Flow

1. Generate a cash flow statement for your business. A cash
flow statement can be one of the most important statements for
a new business because it can depict whether you can pay your
near-term bills or not. Generating a balance sheet requires that
you have been entering business financial transactions either
by hand in a journal(s) or in an accounting software package.
Ideally, you have an accounting software package that will produce
a sheet for you merely by entering a command or clicking on the
button on your computer screen. See Managing Cash Flow.

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ASSESSMENTS

1. Evaluation
of Financial Practices in Businesses

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REMINDERS FOR THOSE IN THE ON-LINE DEVELOPMENT PROGRAM

Reminders About You

1. Are you using your skills learned in previous modules? For
example, as you using methodical approaches to problem solving
and decision making? Are you using strong practices of meeting
management? Are you communicating key information to others throughout
your organization?

2. Are you discussing topics and materials with peers, board
members and others, as appropriate? Discussion and ongoing feedback
are some of the best methods to really learn new information and
materials.

3. Are you helping others to hold you accountable to your times
that you committed to reading and study in this program?

4. Are you reflecting on learnings from past modules and how they build on the learning
in this module? For example, are you seeing your organization from a systems view,
as explained in the module “Starting and Understanding Your Organization?”

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TRACKING OPEN ACTION ITEMS

1. One of the first indicators that an organization or a person
is struggling is that open action items are not tracked and reviewed.
(Open action items are required actions that have not yet been
completed.) Instead, people only see and react to the latest “fires”
in their workplaces or their lives. Whether open action items
are critical to address now or not, they should not entirely be
forgotten. Therefore, update and regularly review a list of open
action items (identified while proceeding through this program)
that includes listing each open action item, who is responsible
to complete it, when it should be completed and any associated
comments. When updating the list, consider action items as identified
during discussions, learning activities and assessments in this
module. Share and regularly review this action item list with
the appropriate peers, board, management and employees in your
organization. You can use the following Action Item Planning List. (At that Web address,
a box might open, asking you which software application to open
the document.)

2. If you have questions, consider posing them in the national,
free, online discussion group hr.com, which is attended
by many human resource and organization development experts.

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(Learners in the organization development program can return
to the home page of the organization development program.)

---

For the Category of Financial Management (For-Profit):

To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

Free Micro-eMBA Module #11 (Optional Module): Conducting Complete Fitness Test of Your Business

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

This module is in the organization development program. However, this module can also be used by anyone as a self-study exercise to assess the health of major aspects of a business.

Sections of This Module Include the Following

• Introduction
• Outcomes
• Materials for Review
• Suggested Topics for Reflection and Discussion
• Activities to Build Systems and Practices
• Assessments
• Tracking Open Action Items

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INTRODUCTION

This module provides a set of extensive checklists that can be used to assess the health of a business’s practices in the areas of legal, governance (Board), human resource management and supervision, market research, advertising, public relations, customer service and sales, and financial management.

If you have completed the various learning modules in the organization development program, then the various checklists in this module will likely indicate that the practices in your business are very healthy.

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OUTCOMES

Evaluate Quality of:

1. Compliance to Laws and Regulations
2. Board Operations
3. Strategic Planning
4. Supervisory and Human Resource Management Practices
5. Market Research
6. Advertising
7. Public Relations
8. Customer Service and Sales
9. Financial Management

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MATERIALS FOR REVIEW

• The following materials will help you address each of the topics and learning activities in this module.

For-Profit Organizational Assessment

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SUGGESTED TOPICS FOR REFLECTION AND DISCUSSION

• Learners are strongly encouraged to discuss the following questions with peers, board members, management and staff, as appropriate.

1. After doing the above assessment, identify the 2 or 3 functions (Boards, human resources, planning, etc.) that had the most checkmarks in the “Needs Work” columns.

2. Which of those 2 or 3 functions needs attention before the others? If the Board and/or Strategic Planning got the most checkmarks, then be sure those functions get prompt attention because, without attending to them, it’s not likely that improvements in other functions will last very long. Those two functions are what tend to ensure the long-term health of all other functions.

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ACTIVITIES TO BUILD SYSTEMS AND PRACTICES

• Learners are strongly encouraged to complete the following activities, and share and discuss results with peers, board members, management and staff, as appropriate.
• As you proceed through the following activities, be sure to note any incomplete actions in the Action Item Planning List.

1. After identifying which of the 2 or 3 functions need the most attention (see #1 above) for now, list the activities that were marked as “Needs Work” in each of those functions, eg., list the activities that “Needs Work” in Boards.

2. For each of those lists, refer to that list as a “Work Plan” and assign that Plan to a Board Committee to oversee that the list is addressed, eg, assign the list of “Needs Work” in the Board function to a Board Development Committee or assign the list of “Needs Work” in the finances function to a Finance Committee to ensure the list is addressed.

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ASSESSMENTS

There are no assessments in this section of the module, as there are in the other modules in the program, because this module is all about assessments, as provided above.

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TRACKING OPEN ACTION ITEMS

1. One of the first indicators that an organization is struggling is that open action items are not tracked and reviewed. (Open action items are required actions that have not yet been completed.) Instead, organization members only see and react to the latest “fires in the workplace”. Whether open action items are critical to address now or not, they should not entirely be forgotten. Therefore, update and regularly review a list of open action items that includes listing each open action item, who is responsible to complete it, when it should be completed and any associated comments. When updating the list, consider action items as identified during discussions, learning activities and assessments in this module. Share and regularly review this action item list with the appropriate board, management and staff members in your organization. You can use the following Action Item Planning List.

2. If you have questions, consider posing them in the national, free, online discussion group hr.com, which is attended by many human resource and organization development experts.

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REMINDERS FOR THOSE IN THE ON-LINE DEVELOPMENT PROGRAM

1. Are you exchanging feedback with others about what you’re learning in this program?

2. Are you sticking to your study schedule for this program?

3. Are you practicing your basic skills in management and leadership, including in problem solving and decision making, planning and meeting management?

4. Are you communicating throughout your organization by using your skills in internal communications?

5. Are you managing yourself? How many hours a week are you working? Are you noticing any signs of stress? If so, what are you doing about it?

6. One of the ways you might be able to tell if you’re stressed out and/or losing perspective might be whether you’re tracking details or not. Are you using the action item list referenced above?

7. Are you reflecting on learnings from past modules and how they build on the learning in this module? For example, are you seeing your organization from a systems view, as explained in the module “Starting and Understanding Your Organization”?

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TRACKING OPEN ACTION ITEMS

1. One of the first indicators that an organization or a person is struggling is that open action items are not tracked and reviewed. (Open action items are required actions that have not yet been completed.) Instead, people only see and react to the latest “fires” in their workplaces or their lives. Whether open action items are critical to address now or not, they should not entirely be forgotten. Therefore, update and regularly review a list of open action items (identified while proceeding through this program) that includes listing each open action item, who is responsible to complete it, when it should be completed and any associated comments. When updating the list, consider action items as identified during discussions, learning activities and assessments in this module. Share and regularly review this action item list with the appropriate peers, board, management and employees in your organization. You can use the following Action Item Planning List. (At that Web address, a box might open, asking you which software application to open the document.)

2. If you have questions, consider posing them in the national, free, online discussion group hr.com, which is attended by many human resource and organization development experts.

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(Learners in the organization development program can return to the organization development program.)

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For the Category of Evaluations (Many Kinds):

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

• Related Library Topics
• Recommended Books

Free Micro-eMBA Module #10

Managing Ethics in the Workplace

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

This module is in the organization development program. However, this module can also be used by anyone as a self-study exercise to learn practical approaches to managing ethics in the workplace.

Sections of This Module Include the Following

• Introduction
• Outcomes
• Materials for Review
• Suggested Topics for Reflection and Discussion
• Activities to Build Systems and Practices
• Assessments
• Tracking Open Action Items

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INTRODUCTION

The management of ethics in the workplace holds tremendous benefits for everyone, benefits both moral — and even practical. This is particularly true today when it is critical to understand and manage highly diverse values in the workplace, and at a time when too many people still feel that business ethics is a topic for philosophy or is about shaming and blaming people. This module aims to make the topic of business ethics very understandable and accessible.

The field of business ethics has traditionally been the domain of philosophers, academics and social critics. Consequently, much of today’s literature about business ethics is not geared toward the practical needs of leaders and managers — the people primarily responsible for managing ethics in the workplace.

The most frequent forms of business ethics literature today typically include:

• a) philosophical, which requires extensive orientation and analysis; ‘
• b) anthologies, which require much time, review and integration;
• c) case studies, which require numerous cases, and much time and analyses to synthesize; and
• d) extended stories about businesses “gone bad”.

This lack of practical information is not the fault of philosophers, academics or social critics. The problem is the outcome of insufficient involvement of leaders and managers in discussions and literature about business ethics. More leaders and managers must become more involved. This module aims to help address this issue.

Also consider
Related Library Topics

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OUTCOMES

Learners who complete this module will achieve the following outcomes:

Set Up Systems to Manage Ethics, Including:

1. What is Business Ethics?
2. Myths About Business Ethics
3. 10 Benefits of Managing Ethics
4. Ethics Management System
5. 8 Guidelines for Managing Ethics
6. 6 Key Roles and Responsibilities
7. Codes of Ethics
8. Codes of Conduct
9. Ethics Policies and Procedures
10. Resolving Ethical Dilemmas
11. Conduct Ethics Training

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MATERIALS FOR REVIEW

The following materials will help you address each of the topics and learning activities in this module.

• Business Ethics and Social Responsibility — particularly the sections:
  •  What is Business Ethics?
  • 10 Myths About Business Ethics
  • 10 Benefits of Managing Ethics in the Workplace
  • One Description of a Highly Ethical Organization
  • Ethics Management Programs: An Overview
  • 8 Guidelines for Managing Ethics in the Workplace
  • 6 Key Roles and Responsibilities in Ethics Management
  • Ethics Tools: Codes of Ethics
  • Ethics Tools: Codes of Conduct
  • Ethics Tools: Policies and Procedures
  • Ethics Tools: Resolving Ethical Dilemmas (with Real-to-Life Examples)
  • Ethics Tools: Training

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SUGGESTED TOPICS FOR REFLECTION
AND DISCUSSION

• Learners are strongly encouraged to discuss the following questions with peers, board members, management and employees, as appropriate.

1. What are “ethics” and “business ethics”? See What is Business Ethics?

2. What are at least 3 of the myths about business ethics? See 10 Myths About Business Ethics.

3. What are at least 4 of the benefits of managing ethics in the workplace? See 10 Benefits of Managing Ethics in the Workplace.

4. What does a highly ethical organization look like? See One Description of a Highly Ethical Organization.

5. What is an ethics management program? What does it do and how does it do it? Do all organizations have an ethics management program? See Ethics Management Programs: An Overview.

6. What are at 4 of the benefits of managing ethics as a program? See Ethics Management Programs: An Overview.

7. What are at least 4 of the guidelines for managing ethics in the workplace? See 8 Guidelines for Managing Ethics in the Workplace.

8. What are at least 4 of the roles and responsibilities to manage ethics as a program in the workplace? See 6 Key Roles and Responsibilities in Ethics Management.

9. What is a code of ethics? See Ethics Tools: Codes of Ethics.

10. What is a code of conduct? See Ethics Tools: Codes of Conduct.

11. What are at least 5 of the types of policies and procedures that could be used to guide behavior toward those suggested in a code of ethics or conduct? See Ethics Tools: Policies and Procedures.

12. What is an ethical dilemma? Does it usually involve a clear right and wrong? See Ethics Tools: Resolving Ethical Dilemmas.

13. What are at least 3 examples of real-life ethical dilemmas? See Ethics Tools: Resolving Ethical Dilemmas.

14. Describe at least 1 of the 3 examples provided for resolving, or addressing, an ethical dilemma. See Ethics Tools: Resolving Ethical Dilemmas.

15. If you have an ethics policy that asserts certain desired behaviors in the workplace, but you actually tolerate those behaviors, what will the legal system usually decide are your actual policies? See Ethics Tools: Training.

16. What training might you conduct to sensitive organization members to the ethical aspects of their day-to-day activities and decisions? See Ethics Tools: Training.

17. What are at least 5 ways to train people about an ethics program and ethics in the workplace? See Ethics Tools: Training.

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ACTIVITIES TO BUILD SYSTEMS AND
PRACTICES

• Learners are strongly encouraged to complete the following activities, and share and discuss results with peers, board members, management and employees, as appropriate.

1. Draft a code of ethics for your organization. Remember to include examples of preferred behaviors with each of the values in your code of ethics. Present the code to your board, explain its purpose and how you’d like to use it, e.g., to discuss it with staff members, post it throughout your organization and renew it annually. See Ethics Tools: Codes of Ethics and Ethics Tools: Codes of Conduct.

2. Pose an ethical dilemma (from the reviewed materials) to the staff and walk them through application of one of the three methods to resolve ethical dilemmas (these methods are included in the materials, as well). See Ethics Tools: Resolving Ethical Dilemmas.

3. Refer to your mental list of the mostly likely ethical dilemmas to occur in your organization. Would these potential dilemmas be addressed by current policies and procedures? Note what policies and procedures need to be added (included yearly review of your code of ethics) and propose them to a local personnel expert. Update your policies handbook and explain the additions to all organization members. See Ethics Tools: Policies and Procedures.

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ASSESSMENTS

Culture is comprised of the values, norms, folkways and behaviors of an organization. Ethics is about moral values, or values regarding right and wrong. Therefore, cultural assessments can be extremely valuable when assessing the moral values in an organization.

• Assessing and Cultivating Ethical Culture

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TRACKING OPEN ACTION ITEMS

1. One of the first indicators that an organization or a person is struggling is that open action items are not tracked and reviewed. (Open action items are required actions that have not yet been completed.) Instead, people only see and react to the latest “fires” in their workplaces or their lives. Whether open action items are critical to address now or not, they should not entirely be forgotten. Therefore, update and regularly review a list of open action items (identified while proceeding through this program) that includes listing each open action item, who is responsible to complete it, when it should be completed and any associated comments. When updating the list, consider action items as identified during discussions, learning activities and assessments in this module. Share and regularly review this action item list with the appropriate peers, board, management and employees in your organization. You can use the following Action Item Planning List. (At that Web address, a box might open, asking you which software application to open the document.)

2. If you have questions, consider posing them in the national, free, online discussion group hr.com, which is attended by many human resource and organization development experts.

---

(Learners in the organization development program can return to the home page of the organization development program.

---

For the Category of Ethics:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

• Related Library Topics
• Recommended Books

Diagramming the Basic Framework of Your Business Organization

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting,
LLC.
AField Guide to Nonprofit Program Design, Marketing
and Evaluation.

Also consider
Related Library Topics

Description

The following framework can be filled in by readers to design
a logic model (or diagram) for their organization and for each
of its programs or products. Guidelines and examples are provided
to help the reader.

Purpose of a Logic Model

A logic model is a top-level depiction the flow of materials
and processes to produce the results desired by the organization.
The model can be very useful to organize planning and analysis
when designing the organization and its products/programs or when
designing evaluations of products/programs. It can also be useful
for describing the organization.

What to Include and What Not to Include

Logic models can be in regard to whatever application in which
the designer chooses to use them. However, when using logic models
to analyze or describe organizations or departments, it’s often
best to use logic models to depict major, recurring items in the
organization or departments — rather than one-time items. For
example, you might not choose to do a logic model for the one-time,
initial activities to build an organization (constructing the
building, registering with state and federal authorities, etc.).
However, you might benefit more from using logic models to analyze
and describe the major, recurring activities that occur in the
organization or department (once they’re built) to continue to
produce the results desired for customers.

Size and Level of Detail

The logic model should be of a size that readers can easily
study the model without extensive reference and cross-comparisons
between pages. Ideally, the logic model is one or at most two
pages long. The level of detail should be sufficient for the reader
to grasp the major items that go into an organization, what occurs
to those inputs, the various outputs that results and the overall
benefits/impacts (or outcomes) that occur and to which groups
of people.

Note the content of program logic models is often more specific
than models for organizations. This level of specificity is often
quite useful for planners.

Definitions of Basic Terms

Logic models typically depict the inputs, processes, outputs
and outcomes associated with an organization and its processes
or products. Don’t be concerned about your grasping the “correct”
definition of each of the following terms. It’s more important
to have some sense of what they mean — and even more important
to be consistent in your use of the terms.

Inputs

These are materials that the organization or department takes
in and then processes to produce the results desired by the organization.
Types of inputs are people, money, equipment, facilities, supplies,
people’s ideas, people’s time, etc. Inputs can also be major forces
that influence the organization or products. For example, the
inputs to a product that is bought by trainer to teach learners,
for example, training materials, teachers, classrooms, funding,
paper and pencils, etc. Various laws and regulations effect how
the product may be applied, for example, safety regulations, Equal
Opportunity Employment guidelines, etc. Inputs are often associated
with a cost to obtain and use the item — budgets are listings
of inputs and the costs to obtain and/or use them.

Processes (or Activities or Strategies or Methods)

Processes are used by the organization or program to manipulate
and arrange items to produce the results desired by the organization.
Processes can range from putting a piece of paper on a desk to
manufacturing a space shuttle. However, logic models are usually
only concerned with the major recurring processes associated with
producing the results desired by the organization. For example,
the major processes used by an organization to produce a product
for trainers might include recruitment of learners, pretesting
of learners, training, post-testing and certification.

Outputs

Outputs are usually the tangible results of the major processes
in the organization. They are usually accounted for by their number,
for example, the number of products made by the organization.
Outputs are frequently misunderstood to indicate success of an
organization or product. However, if the outputs aren’t directly
associated with achieving the benefits desired for customers,
then the outputs are poor indicators of the success of the organization
and its products.

Outcomes

Some organizations may choose to analyze their organizationals
results in terms of outcomes, which are (hopefully positive) impacts
on customers whom the organization wanted to benefit with its
products. Outcomes are usually specified in terms of:
a) learning, including enhancements to knowledge, understanding/perceptions/attitudes,
and behaviors
b) skills (behaviors to accomplish results, or capabilities)
c) conditions (increased profits for customers, etc.)

It’s often to specify outcomes in terms of short-term, intermediate
and long-term.

---

Basic Example of a Logic Model

The following example is intended to further portray the nature
of inputs, processes, outputs and outcomes.

The logic model is for an organization called the Self-Directed
Learning Center (SDLC).

Logic models for programs are often more detailed.

---

Logic Model for

Organization (Name)
Or Product (Name)

---

For the Category of Business Development

To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

Free Micro-eMBA Module #5: Building and Maintaining an Effective Board of Directors

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting,
LLC.

This module is in the organization development program. However,
this module can also be used by anyone as a self-study exercise
to learn more about building and maintaining a board of directors.

Sections of This Module Include the Following

Introduction
Outcomes
Materials for Review
Suggested Topics for Reflection and Discussion
Activities to Build Systems and Practices
Assessments
Tracking Open Action Items

---

INTRODUCTION

If you are an incorporated business, it’s very likely that
you have already at least the beginnings of a board of directors.
Theory and law dictate that the board of directors is responsible
to govern your organization. Typically, new boards of directors
in a new organization work hands-on, almost as partners — or
as a “working board” — with the chief executive. A
wise CEO will see Board members almost as strategic partners,
rather than as a necessary evil that corporations must have.

It’s not uncommon, especially for new organizations, to act
as if they are lucky even to have anyone on their board. Wrong!
You deserve — and should always expect — to have a very participative
board that, no matter how hands-on they are at first, also attend
to major decisions about the organization.

For the organization to grow and remain healthy, board members
must grow in their roles to become more of a “governing board”.
Completion of this module will ensure that your board has the
necessary components, policies and practices in place from which
to develop a healthy governing board.

Note that you, as a learner in this program, can greatly enhance
the development of your board by continuing to involve board members
in discussions about topics and questions posed by this program.

NOTE ABOUT THE ORDER OF MODULES (AND SOME DUPLICATION WITH
PREVIOUS MODULE ON ROLE OF CHIEF EXECUTIVE OFFICER): : The modules
about starting an organization and about the role of chief executives
briefly mention certain activities in regard to building a preliminary
board of directors — there is a little bit of necessary duplication
between these two modules. This module helps the learner to round
out the board of directors and ensure they are fully functioning
for the organization.

NOTE ABOUT BOARD COMMITTEES: Consider establishing a Board
Development Committee (in the case of corporations) to review
and help guide implementation the information in this learning
module. Major activities and goals from this learning module could
be incorporated in that Committee’s Work Plan.

Also consider
Related Library Topics

---

OUTCOMES

Learners who complete this module will achieve the following
outcomes:

1. Understand Roles and Responsibilities of a Board
2. Adopt Board Policies
3. Build Board Committees
4. Recruit New Board Members
5. Ensure Strong Participation of Board Members
6. Prepare for Board and CEO Evaluations
7. Build Board Calendar to Schedule All Operations
8. Organize a Board Manual
9. Train Board Members
10. Assess the Health of Your Board Practices

---

MATERIALS FOR REVIEW

• The following materials will help you address each of
  the topics and learning activities in this module.
• NOTE: There are many materials included for review in
  this section. However, you do NOT need to review all of them
  in detail.
  a) You do not need to follow links out of the following documents
  b) You do not need to follow links in “Also see” sections
  c) You do not need to review any materials marked as “nonprofit”

Board Roles and Responsibilities

Overview
of Board Roles and Responsibilities (read all “for-profit”
and quickly scan some job descriptions)
– – – Overview
of Roles and Responsibilities of Corporate Board of Directors
(read all)
– – – Board
and Staff Responsibilities (read all)
Some
Legal Considerations for Board Members
Sarbanes
Oxley Act
Insurance
Against Liability

Board Operations

Board
Operations and Systems (read introductory paragraph)
– – – Depiction
of “System” of For-Profit Board
– – – Sample
Board Operations Calendar (read all)

Documents — Charter/Constitution/Articles, Operating Rules,
Policies, etc.

Articles
of Incorporation (scan one in the “for-profit” section)
Corporate Bylaws
(scan this one to get a sense for what’s in a bylaws)
Corporate
Resolutions (is a single act of approval to approve, eg,– scan
one)
Board
Policies (scan the names of some of the policies)

Staffing the Board

Staffing
the Board
– – – Joining
a Board (read a few articles)
– – – Sample
Board of Directors Recruitment Grid
– – – Guidelines
for Recruiting New Board Members (read all)
– – – Sample
Contents of Board Member’s Manual (read all)
– – – Orienting
New Members to Boards of Directors (read all)
– – – Basic
Guidelines and Sample Agenda for Board Training Session (read
all)
– – – Compensating
Board Members
– – – Removing
Members (read several)

Ensuring Successful Committees

Forming Board Committees
– – – Typical
Types of Board Committees (read all)
– – – Sample
of a Board of Directors Committee Work Plan
– – – Ideas
to Generate Participation in Committees (read all)
– – – Guidelines
to Form an Advisory Group (read all)

Ensuring Successful Meetings

Board
Meetings General Guidelines
– – – Sample
Board of Directors Meeting Agenda (read all)
– – – Basic
Sample of Board of Directors Meeting Minutes (read all)
– – – Board
Attendance Policy (Sample) (read all)
– – – Board
Retreats (read all articles)
– – – Annual
General Meeting

Evaluating the Board

Evaluating
the Board and Members (read introductory paragraphs)
– – – Evaluating
the Board of Directors (read all)
– – – Self Evaluation (read all)

Board and Staff Relations

Board
and Staff Relations (read all)
– – – Board
and Staff Responsibilities
– – – Suggestions
to Enhance Working Relationship Between Board Chair and Chief
Executive
– – – How
Much Should Your Board Be Involved in Management?

Evaluating CEOs

Evaluating
the CEO
– – – Guidelines
for Evaluating the Chief Executive (read all)
– – – Sample
Form to Use During Evaluation of Chief Executive (read all)
– – – Sample
of a Board’s Supervisory Skills Development Plan for CEO

---

SUGGESTED TOPICS FOR REFLECTION
AND DISCUSSION

• Learners are strongly encouraged to discuss the following
  questions with peers, board members, management and employees,
  as appropriate.

Board Roles and Responsibilities

1. Name the five duties and ten responsibilities of boards
(as listed on the materials included in your materials for review)?
(Note that various experts might offer a different mix of duties
and responsibilities. The important point here is to get a basic
sense of the overall responsibilities of a board.) See Overview of Roles and Responsibilities of Corporate
Board of Directors.

2. To whom is a board of directors responsible, that is, to
whom do they “report”? See Overview of Roles and Responsibilities of Corporate
Board of Directors.

3. What is the board chair responsible for? vice chair? secretary?
treasurer? See Sample Job Descriptions for Members of Boards
of Directors.

4. Test your knowledge of the roles of board and staff by completing
the table at Board and Staff Responsibilities — Test Your
Knowledge. Be sure to compare your answers to the table at
Board
and Staff Responsibilities.

Board Operations

1. What are the recurring major activities of a board of directors?
See Sample Board Operations Calendar.

2. What are some of the recurring yearly activities that a
Board should do? See Sample Board Operations Calendar.

3. What are at least five ideas to generate and sustain strong
participation of board members? See Ideas to Generate Participation in Committees.

Board Policies

1. What is the purpose of board policies? See Board Policies.

2. What is the purpose of board bylaws? See Corporate Bylaws.

3. What is a board manual? Name as many board manual contents
as you can. See Sample Contents of Board Member’s Manual.

4. What is a board resolution? See Board Resolutions.

Board Staffing (Recruiting, Orienting, Training, Informing)

1. What is the most important consideration when you set out
to recruit new members to your board? See Guidelines for Recruiting New Board Members.

2. How many guidelines can you name for orienting employees?
See Orienting New Members to Boards of Directors.
Informing them on a regular basis? See How Do We Keep Board Members
Informed?

3. How should you train your Board members? See Basic Guidelines and Sample Agenda for Board
Training Session.

4. What should you consider when deciding the compensation
to your Board members? See Compensating Board Members.

5. What’s involved in removing board members? See Removing Members.

Board Committees

1. What is the purpose of a board committee? See Typical Types of Board Committees.

2. What is a standing committee? Ad hoc committee? When should
each type be used? See Typical Types of Board Committees.

3. How many committees can you name and what is the purpose
of each? See Typical Types of Board Committees.

4. What is an advisory group (or committee or board)? See Guidelines
to Form and Advisory Group.

5. What is a work plan for a committee? See Sample of a Board of Directors Committee Work
Plan.

6. Can you name at least 4 of the ideas to generate participation
in committees? See Ideas to Generate Participation in Committees.

Board Meetings

1. What is a board meeting agenda? How are they developed?
See Sample Board of Directors Meeting Agenda.

2. What is the purpose of board meeting minutes? What should
be included in the minutes? See Basic Sample of Board of Directors Meeting Minutes.

Board Evaluations

1. How does the board evaluate itself? What is considered during
the evaluation? How often should the board evaluate itself? See
Board
of Directors Self-Evaluation and Evaluating the Board of Directors.

2. How does the board evaluate the chief executive officer?
See Guidelines for Board of Directors Evaluation
of Chief Executive and Sample
Form for Board’s Evaluation of the Chief Executive.

Special Topic — Board Liabilities

1. Is your board aware of any potential liabilities? Should
your board members consider getting any certain forms of insurance?
See Some Legal Considerations for Board Members
and Insurance Against Liability.

2. What are the ramifications of the Sarbanes Oxley Act for
your company? See Sarbanes Oxley Act.

---

ACTIVITIES TO BUILD SYSTEMS AND
PRACTICES

• Learners are strongly encouraged to complete the following
  activities, and share and discuss results with peers, board members,
  management and employees, as appropriate.
• Note that the roles of your board and employees will become
  more clear as you complete strategic planning and product planning
  later on in this program.
• As you proceed through the following activities, be sure
  to note any incomplete actions in the Action Item Planning List.

Specify Your Board’s Roles and Responsibilities

1. Clarify what your board will be doing and your staff will
be doing. Complete the Board and Staff Responsibilities — Test Your
Knowledge according to the wishes of your board. You can compare
your preferences to those suggested in the table at Board and Staff Responsibilities.

Authorize Up-to-Date Board Policies

1. Adopt an up-to-date and acceptable set of bylaws. Before
the next meeting, the board chair and CEO should write a memo
that highlights important points from the current bylaws. Or,
they might make marks in the margin of the current bylaws as means
to highlight important points. Include these highlights in the
board packet of information that gets sent to each board member
before the next meeting. Set aside 20 minutes in an upcoming board
meeting to collect feedback about the current bylaws. Consider
board resolutions to make any changes to the bylaws. Once changes
have been made, consider a resolution to formally adopt the bylaws.
See Corporate
Bylaws.

2. What board policies will you need? Draft — and carefully
enforce — a policy for board attendance. See Board Attendance Policy (Sample).

3. What other policies are required by Sarbanes Oxley? Role
of Audit Committee? Whistleblower? Document Retention/Destruction?
See Sarbanes Oxley Act.

Organizing Your Board Committees (Includes Recommendations)

1. What board committees should you have? You should have at
least an executive committee that can meet between board meetings,
if necessary. This committee could be comprised of chairs of other
committees and/or officers of the board. To identify other needed
committees, carefully consider the types of major issues that
your organization faces and any strategic goals to be accomplished
over the next year. What is the nature of these goals and issues,
for example, audit, compensation, financial, board development
and personnel? If possible, establish committees for each of the
major types of issues and goals faced by our organization. See
Typical
Types of Board Committees.

Recommendation: Establish the Following Initial Board Committees

2. Strongly consider establishing at least the following board
committees. Each of the following committees can help you accomplish
major sections of this Online For-Profit Organization development
program. Each of the following committees should have its own
work plan. The work plan should include goals to accomplish the
major activities specified in the associated sections of this
online program.

Strongly Suggested Standing Committees to Have:
a) Executive Committee — This committee can be comprised of chairs
from other committees and/or officers of the board. See Executive Committees — To Be or Not To Be.
b) Board Governance Committee — This could be done by the executive
committee for now. This committee also could include nominating,
orienting and training new board members. See Board Governance Committee.
c) Audit Committee — See Setting Up an Audit Committee.
d) Marketing Committee
e) Finance Committee

Other Standing Committees to Consider:
f) Personnel Committee
g) Product Evaluation Committee

Committees to Consider Organizing as Needed:
h) Planning Committee (this can be comprised of the chairs of
other committees)

Note that you will probably have much clearer idea about what
committees to have when you get done with your strategic planning
in an upcoming module. See Description of Typical Committees.

3. Quickly establish work plans for your committees. As soon
as your board has approved the new organization of committees,
be sure that each committee sets about to develop its own work
plan. Using a work plan is one of the best ways for committees
to stay effective and engaged. See Sample of a Board of Directors Committee Work
Plan.

Staff Your Board With Needed Skills

1. Identify what skills are now needed by your board. Again,
consider the nature of major issues and goals currently faced
by your organization. Also reference the Sample Board of Directors Recruitment Grid.
Write down what skills are needed.

2. Develop procedures for recruiting and orienting board members.
Include steps to recruit members, orient members, get completed
applications from board candidates and elect new members. Consider
information in Guidelines for Recruiting New Board Members,
Orienting
New Members to Boards of Directors and Sample Board Application Form. Have the entire
board review the procedures for acceptance and authorization.

3. Use your new procedures to begin recruiting new board members.
(The size of the board is usually specified in the bylaws. You
can recruit enough members to reach this size. If the size needs
to be changed, consider a resolution to modify the bylaws.)

Ensure Strong Participation of Board Members (Board Meetings)

1. Get board packets out to members at least a week before
each meeting. One of the clearest indicators to board members
that the organization is not taking them seriously is if they
don’t get materials in time for adequate review before board meetings.Write
a procedure for your staff to always send out a packet of meeting-preparation
information to board members at least one week before the next
board meeting. In the packet, include at least the following:

a) agenda for the upcoming meeting
b) report from the chief executive about major accomplishments
and current issues and plans over the next two months
c) financial reports, including at least a budget report and cash
flow statement
d) materials that can help board members act on any major decisions
expected from them in the next meeting

2. Expect nothing less than full (or excused) absence from
meetings. What kind of attendance are you getting to current board
meetings? Are you regularly getting at least a quorum of members?
(The quorum is the minimum number of members that must be present
in a meeting for that meeting and its processes to be considered
official. The quorum is usually specified in the bylaws). If you
are not getting strong attendance, then be sure to enforce a Board
Attendance Policy (Sample). If you don’t enforce this policy,
then you have a major problem — the problem is that you
aren’t taking it seriously to expect and pursue a strong board
of directors.

3. The board’s worst enemy — the “numb out” factor.
One of the first signs that a board is in trouble is when members
have opinions that they don’t express during meetings. If you
find yourself sitting in a board meeting and realize you have
“numbed out”, then you’re not doing your duty as a board
member. Do you need to follow any of the guidelines in Ideas to Generate Participation in Committees?

Ensure Your Board and Chief Executive are Really(!) Effective

1. Establish a procedure for regular board self-evaluations.
Don’t just “go through the motions” and not evaluate
whether the board is really effective or not. How does your board
evaluate itself now? Do you have a procedure that has been accepted
and authorized by board members? Is your board evaluating itself
on a regular basis? The board should conduct evaluations on a
yearly basis, or at least every two years. If the board isn’t
evaluating itself on a regular basis, then make this point to
discuss in an upcoming meeting. Consider information in Board of Directors Self-Evaluation and Evaluating the Board of Directors.

2. Establish a procedure for to evaluate the chief executive
on a regular basis — preferably once a year. Don’t just “go
through the motions” and not evaluate whether the chief executive
officer is really effective or not. Does your board evaluate your
chief executive officer? How often? How are the results used?
If you are not evaluating the chief executive on a regular basis,
then why not? Make this a point to discuss in an upcoming meeting.
Consider information in Guidelines for Board of Directors Evaluation
of Chief Executive and Sample
Form for Board’s Evaluation of the Chief Executive.

Clearly Communicate What Your Board Does (Board Operations)

1. Establish a calendar of the recurring major activities to
be conducted by your board each year. The calendar should be accepted
and authorized by the board. Consider information in the Sample Board Operations Calendar.

Ensure Adequate Protection from Liabilities

1. Conclude what insurance you do and don’t need for board
members. Is your board aware of any potential liabilities? Should
your board members consider getting any certain forms of insurance?
Consider information in the
Legal and
Insurance Considerations for Board Members and
Overview of Liability Insurance (including Directors’
and Officers’ Insurance).

Build a Board Manual for Each Board Member

1. Ensure that each board member has a policies manual that
contains at least the following policies and materials. See Sample
Contents of Board Member’s Manual.

a) Description of roles and responsibilities of your board
– see Overview of Roles and Responsibilities of Corporate
Board of Directors

b) Job descriptions for each board member and officer position
– see Sample Job Descriptions for Members of Boards
of Directors

c) Descriptions of your board committees, their overall responsibilities
and work plans – see Typical Types of Board Committees

d) Policies for recruiting new members, orienting them, informing
them and removing them – see Joining, Recruiting, Orienting, Informing, Removing
Board Members

e) Your board meeting attendance policy – see Board Attendance Policy (Sample)

f) Procedure for evaluating your board of directors – see Board
of Directors Self-Evaluation

g) Procedure for evaluating your chief executive officer –
see Guidelines for Evaluating the Chief Executive

h) Sample meeting agendas and board meeting minutes – see Sample
Board of Directors Meeting Agenda and Basic Sample of Board of Directors Meeting Minutes

i) Copies of your articles of incorporation (if applicable)
and bylaws

j) Copy of your strategic plan (if applicable)

k) Board operations calendar

Train Board Members to Be Highly Effective (Board Training
Session)

1. Conduct a board training session to ensure each board member
fully understands their role and has the necessary resources to
carry out their role. Review information in the document Basic Guidelines and Sample Agenda for Board
Training Session. Now draft a training session agenda that
specifies the topics that will be covered in the session, who
will address each topic and how. Schedule and carry out the training
session.

---

ASSESSMENTS

Consider any or all of the following assessments as means to
evaluate the health of your board of directors.

1. Board of Directors Self-Evaluation

---

REMINDERS FOR THOSE IN THE ON-LINE DEVELOPMENT PROGRAM

1. Are you exchanging feedback with others about what you’re
learning in this program?

2. Are you sticking to your study schedule for this program?

3. Are you practicing your basic skills in management and leadership,
including in problem solving and decision making, planning and
meeting management?

4. Are you communicating throughout your organization by using
your skills in internal communications?

5. Are you managing yourself? How many hours a week are you
working? Are you noticing any signs of stress? If so, what are
you doing about it?

6. Are you reflecting on learnings from past modules and how
they build on the learning in this module? For example, are you
seeing your organization from a systems view, as explained in
the module “Starting and Understanding Your Organization?”

---

TRACKING OPEN ACTION ITEMS

1. One of the first indicators that an organization or a person
is struggling is that open action items are not tracked and reviewed.
(Open action items are required actions that have not yet been
completed.) Instead, people only see and react to the latest “fires”
in their workplaces or their lives. Whether open action items
are critical to address now or not, they should not entirely be
forgotten. Therefore, update and regularly review a list of open
action items (identified while proceeding through this program)
that includes listing each open action item, who is responsible
to complete it, when it should be completed and any associated
comments. When updating the list, consider action items as identified
during discussions, learning activities and assessments in this
module. Share and regularly review this action item list with
the appropriate peers, board, management and employees in your
organization. You can use the following Action Item Planning List. (At that Web address,
a box might open, asking you which software application to open
the document.)

2. If you have questions, consider posing them in national,
free, online discussion groups hr.com, which are attended
by many human resource and organization development experts.

---

(Learners in the organization development program can return
to the home page of the organization development program.)

---

For the Category of Boards of Directors:

To round out your knowledge of this Library topic, you may
want to review some related topics, available from the link below.
Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been
selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

Board and Staff Responsibilities —
Test Your Knowledge

Applies to for-profits unless otherwise noted.

Use the following table to test your
knowledge of the differences between the roles of the board and
staff of an organization. Under the column titled “Responsibility”,
note if the activity is:
Board
Staff
Joint

Then compare your answers to the table
at Board and Staff Responsibilities.

Activity

Respon- sibility

PLANNING:

Director the process of planning	|
Provide input to long range goals	|
Approve long range goals	|
Formulate annual objectives	|
Approve annual objectives	|
Prepare performance reports on achievement of goals and objectives	|
Monitor achievement of goals and objectives	|

PROGRAMMING:

Assess stakeholder (customers, community) needs	|
Oversee evaluation of products, services and programs	|
Maintain program records; prepare program reports	|
Prepare preliminary budget	|
Finalize and approve budget	|
See that expenditures are within budget during the year	|
Approve expenditures outside authorized budget	|
Insure annual audit of organization accounts	|

PERSONNEL:

Employ Chief Executive	|
Direct work of the staff	|
Hire and discharge staff member	|
Decision to add staff	|
Settle discord among staff	|

COMMUNITY RELATIONS:

Interpret organization to community	|
Write news stories	|
Provide organization linkage with other organizations	|

BOARD COMMITTEES:

Appoint committee members	|
Call Committee Chair to urge him/her into action	|
Promote attendance at Board/Committee meetings	|
Recruit new Board members	|
Plan agenda for Board meetings	|
Take minutes at Board meetings	|
Plan and propose committee organization	|
Prepare exhibits, material and proposals for Board and Committees	|
Sign legal documents	|
Follow-up to insure implementation of Board and Committee decisions	|
Settle clash between Committees	|

---

For the Category of Boards of Directors:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

Facilities Management

Sections of This Topic Include

Plan Your Facilities
Select the Best Location
Specific Facilities (signage, computers, etc.)
Setting Up an Office
Telecommuting (working from home)
Inventory
Management (this section is in “Operations Management)
Logistics
and Transportation Management (this section is in “Operations Management”)

Also consider
Related Library Topics

---

Plan Your Facilities

Small-business planning often overlooks the critical importance of clarifying
what facilities are needed to support the development and provision of a product
or service, and then to plan how to get those facilities. That is true especially
if you are providing a product rather than a service because a product often
requires space to store the necessary materials and supplies to produce the
product, as well as to develop it.

Important decisions about facilities include, for example: How much space do
I need for storage? Production? Personnel? How should the facility represent
my brand, my colors and tone? What about parking? What about expected future
growth? Should I rent or buy?

After answering the above questions and considering the guidelines in the following
articles, write down your requirements for facilities. You, or any others who
are helping you, can continually reference your requirements to ensure that
your facilities meet your requirements.
Strategic
Facility Planning — Now More Important Than Ever
What
to Consider When Making Business Facility Decisions
Implementing
Facilities Management Successfully in 7 Steps
Facility
Planning: Steps, Process, Objectives, Importance
50
Expert Facilities Management Tips and Best Practices

Useful Resources in Facilities Planning Include
Planning
| Project
Planning | Technical
Writing

Select the Best Location

Having having thought about your needs and preferences for facilities, you
are ready to think about where to locate your business. Decisions include, for
example: Do I want proximity to my customers? Proximity to my suppliers? Distance
from my competitors? What municipalities might grant you some tax breaks if
you locate near them? What about parking?

Before you select a location, your answers to these questions should be written
in a specification that you can reference when searching for a location or that
you can bring to a real-estate agent. That way, you will be making the best
choice based on your actual needs, rather than on your personal preferences.
How to Find the Best Location
A
Step-by-Step Guide to Finding the Right Location for Your Business
Choosing
the Right Location for Your New Business
How
to Choose the Best Location for Your Small Business
How
to Choose a Business Location

Useful Resources in Selecting a Location Include
Planning
| Technical
Specifications | Contracting

Specific Facilities

Building

Strategic Facility Planning:
A White Paper

HVAC Systems

HVAC (Definition)
Types
of HVAC Systems

Offices

See Setting Up an Office below.

Computers

Computer and Network Security
The Use of Computers in Facilities/Installations Planning
Computer Aided Facilities
Management

Setting Up An Office

Designing
An Effective Home Office
Designing
Your Home Office
Introduction
to Property Management

(This section is about setting up office facilities. Information about organizing
yourself, your files, paperwork, etc., is included in the topic Organizing
Yourself.)
Office
Design, Leasing and Organizing
Organizing
Yourself (organizing your office and activities, once the office is set up)
Time
Management

Telecommuting (virtual workplace)

Basics

Basics of Telecommuting for Companies
The Rise of the Truly Virtual Workplace
Why and how to transition to a virtual workplace

General Resources About Telecommuting

Telecommuting Defined
26 Great Telecommuting Resources
Telecommuting Resource Center
List of sites
and articles about telecommuting

General Resources
About Facilities Management

USArchitecture.com a by the State Directory of Architecture, Engineering and Construction
International Facilities Management Association
Facilities Management News

---

For the Category of Facilities Management:

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

Theory of Change – Understanding How Any System Works

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

Much of the content of this topic came from this book:

Sections of This Topic Include

Basic Overview of Theory of Change
How to Develop a Theory of Change
Example of a Theory of Change (for Community Collaboration)
Examples of Theory of Change
Special Topics About Theory of Change
Trainings and Resources About Theory of Change

Also consider
Guidelines
and Framework for Developing Logic Models
Related Library Topics

---

Basic Overview of Theory of Change

A system, such as a program, product or program has a recurring set of activities,
including:

1. Inputs to the system, such as curriculum materials, funding and expertise
2. Processes that occur to the inputs, such as trainings, facilitations and
   coaching
3. Outputs from the processes, such as the number of students trained
4. Changes in external resources, such as new knowledge, skills and abilities
   among the students

Logic models are often used to depict this flow of activities. However, what
is missing from the logic models are depiction and explanation of how those
activities affect — or are supposed to affect — each other. The theory of
change is extremely useful in that regard.

A logic model can clearly depict the order of the phases in a systematic program,
such as the training program above. However, it does not explain how those phases
are closely integrated to produce the desired outcomes from the program. For
example, the logic model does not explain the assumptions that program designers
make when they conclude that certain processes will produce certain outputs
and outcomes.

The theory of change of the program explains those assumptions. It explains
the assumed causes and effects that program designers can study in order to
understand why a program works or does not work. The theory of change can also
explain what others must do to duplicate or improve similar programs.

Theory of change applies to almost any kind of designed system, including products,
services and programs. Thus, the concept can be extremely useful to any kind
of organization or internal unit in the organization.

Theory
of Change vs Logical Framework – what’s the difference?
Differences
Between the Theory of Change and the Logic Model

How to Develop a Theory of Change

Theory
of Change – When to Use
Theory
of Change (a how-to)
Theory
of Change (another how-to)
How
to Build a Theory of Change

Example of a Theory of Change (for a Community
Collaboration)

The following example is based on this logic model for a community collaboration of several nonprofit organizations working together to accomplish a common overall change in the community. The reader
is encouraged to print out that one-page model as he or she reads the following
theory of change. During the example collaboration, the lead organization supports
the organizational development of each partnering organization with assessments,
trainings, coaching and peer learning.

Information in a theory of change is sometimes described in a reverse order
of the parts of the logic model because the primary focus is on – and
starts with – the expected outcomes.

7. Community-level, long-term outcomes:

• certain social issues will be resolved for a certain group of clients in
  certain geographic area(s)

Program Activities:

These desired outcomes are to reduce the occurrence of gang activity, youth
violence, and child abuse and neglect among 12-21 year-olds in a certain area
by the end of the 3-year Program. The amount of change and the indicators to
those amounts for each social service might not yet be determined. Hopefully
the suggested degree of alignment between the participating organization’s
program outcomes can come from the result of the upcoming community assessment
and asset mapping. The occurrence and quality of these outcomes will be evaluated
at the end of the Program.

Assumption:

• The outcomes (impacts on clients) of the programs of each of the participating
  organizations in the Program are aligned with contributing to the desired
  community-level, long-term outcomes.

6. Long-term outcomes in each of the participating organizations: organizational
effectiveness and positive impacts in the community

Program Activities:

Each organization will undergo capacity-building activities to implement the best
practices in each of the major functions, for example, Boards, strategic planning,
programs, marketing, staffing, finances and fundraising.

Assumption:

The Program’s capacity-building activities will result in each organization’s
successful implementation of best practices that, in turn, will achieve effectively
organizational and program effectiveness for each organization and, in turn,
will result in positive impacts in the community.

5. Intermediate outcomes in each organization: new skills and abilities for
the personnel in the organizations

Program Activities:

Each organization’s personnel will learn about the best practices needed
in each common function in an organization in order to achieve a highly effective
organization and that personnel will apply those new skills to develop those
new abilities.

Assumption:

The Program’s methods and short-term outcomes will produce sufficient
skills for those personnel to implement best practices and capacity building.

4. Short-term outcomes in each organization: new knowledge for personnel in
the organizations

Description:

Personnel in each organization will gain new knowledge about the necessary
best practices in the most important functions in nonprofits in order to develop
high-performing nonprofits.

Assumption:

The Program’s methods will produce sufficient knowledge about best practices
and capacity building, along with indicators toward that knowledge.

3. Tangible outputs for each organization

Program Activities:

Tangible results will include, for example, valuation plans, assessments and
reports, action plans, strategic plans, training sessions, coaching sessions,
peer learning sessions, coaches’ notes, facilitators’ notes and
status reports.

Assumptions:

1. The Program actually uses the desired methods according to the eight principles
   for successful capacity building, as suggested in the Human Interaction Research
   study (listed below in the “Program methods …” section).
2. The Program methods actually produce these recurring outputs.
3. Establishment of best practices, and subsequent organizational and program
   effectiveness, will proceed through short-term outcomes (knowledge about capacity
   building), intermediate outcomes (skills to use capacity building to implement
   best practices) and long-term outcomes (having implemented the best practices).
4. These recurring outputs will contain sufficient information about the status
   of implementation of the best practices such that various levels of outcomes
   can be ascertained.

2. Program methods / interventions (capacity building activities)

Program Activities (capacity building activities):

The Program’s methods/interventions are designed according to the eight
principles for capacity building effectiveness, which are:

1. Comprehensive (comprehensive assessments are done and a variety of capacity
   building activities are used, including assessments, awards, training, coaching,
   peer learning, etc.).
2. Customized (according to the life cycle and culture of the organization
   via assessment and interviews).
3. Competence-based (capacity building plans are customized to the organization’s
   resource level).
4. Timely (capacity building plans are scheduled according to the organization’s
   resource level).
5. Peer-connected (a time-tested, peer coaching model is used).
6. Assessment-based (each organization is assessed via a variety of methods,
   including two different organizational assessment tools and interviews).
7. Readiness-based (each organization’s readiness is assessed via a readiness
   checklist and interviews).
8. Contextualized (capacity building continually accommodates/adjusts for other
   current activities within and around the organization).

Assumptions:

1. Each of the organizations will participate as expected in the Program.
2. Program personnel will be trained and effective in delivering Program services.
3. The Program’s capacity building methods ultimately will guide participants
   to implement and operate the best practices.

1. Inputs to the Program

Description:

Among the inputs are nonprofit organizational performance “best practices”
as defined by the United Way Management Indicators Checklist, which is a comprehensive
organizational assessment tool designed by 20 nonprofit organizational development
consultants. The best practices are itemized as approximately 170 specific behaviors
within a nonprofit organization. The best practices will be embellished with
best practices for sustaining a successful collaboration among the participating
organizations.

Other inputs are Program funding, eight participating organizations, consultants,
trainers, coaches, capacity building “best practices” and facilities.

Assumptions:

1. The Program’s selected “best practices” are those that
   together, when implemented, will achieve organizational and program effectiveness
   for each organization. The definition of “organizational effectiveness”
   has long been under scrutiny. Thus, this Program adopts these operating definitions.
   An “effective” program achieves desired outcomes among its targeted
   group of clients and in the timeframe desired. Also, an “effective”
   organization has ongoing high-quality operations that support ongoing effective
   programs.
2. The selected organizations each have programs that, together, achieve the
   desired community-level outcomes.
3. These best practices can be organized into the funder’s mandated four
   areas of outcomes for each participating organization, including development
   of leadership (Board and staff), organizational systems, program operations
   and community engagement/awareness.

Articles About Basics of Theory of Change

What is
Theory of Change?
What
is this thing called ‘Theory of Change’?
Theory of Change
Theory
of change basics: A primer on theory of change
Theory of change
How
Does Theory of Change Work?

Examples of Theory of Change

Theory of Change
– Examples
Use
of Theory of Change in Health Interventions
How
can a Theory of Change framework be applied to short-term international volunteering?
Theory
of Change for Strategic Planning
Use
of Theory of Change in Project Evaluations
Constructing
Theories of Change for Information Society Impact Research

Special Topics About Theory of Change

Evaluating a Theory of
Change Framework
Six
Theory of Change Pitfalls to Avoid
How to and how not to develop
a theory of change to evaluate a complex intervention

Trainings and Resources About Theory
of Change

Center for Theory of Change
Theory
of Change Training Curriculum
Theory
of Change for Development
Theory
of change (numerous articles)

---

---

For the Category of Evaluations (Many Kinds):

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

Related Library Topics

Recommended Books

Checklist for Program Evaluation Planning

© Copyright Carter McNamara, MBA, PhD

The following checklist might prove useful when planning evaluations for programs. The reader would benefit from first reading Basic Guide to Program Evaluation.

Name of Organization

Name of Program

Purpose of Evaluation?
What do you want to be able to decide as a result of the evaluation? For example:
__ Understand, verify or increase impact of products or services on customers/clients (eg, outcomes evaluation)
__ Improve delivery mechanisms to be more efficient and less costly (eg, process evaluation)
__ Verify that we’re doing what we think we’re doing (eg, process evaluation)
__ Clarify program goals, processes and outcomes for management planning
__ Public relations
__ Program comparisons, eg., to decide which should be retained
__ Fully examine and describe effective programs for duplication elsewhere
__ Other reason(s)

Audience(s) for the Evaluation?
Who are the audiences for the information from the evaluation, for example:
__ Clients/customers
__ Funders/Investors
__ Board members
__ Management
__ Staff/employees
__ Other(s)

What Kinds of Information Are Needed?
What kinds of information are needed to make the decision you need to make and/or enlighten your intended audiences, for example, information to understand:
__ The process of the product or service delivery (its inputs, activities and outputs)
__ The customers/clients who experience the product or service
__ Strengths and weaknesses of the product or service
__ Benefits to customers/clients (outcomes)
__ How the product or service failed and why, etc.
__ Other type(s) of information?

Type of Evaluation?
Based on the purpose of the evaluation and the kinds of information needed, what types of evaluation is being planned?
__ Goal-based?
__ Process-based?
__ Outcomes-based?
__ Other(s)?

Where Should Information Be Collected From?
__ Staff/employees
__ Clients/customers
__ Program documentation
__ Funders/Investors
__ Other(s)

How Can Information Be Collected in Reasonable and Realistic Fashion?
__ questionnaires
__ interviews
__ documentation
__ observing clients/customers
__ observing staff/employees
__ conducting focus groups among
__ other(s)

When is the Information Needed?

What Resources Are Available to Collect the Information?

---

For the Category of Evaluations (Many Kinds):

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

• Related Library Topics
• Recommended Books

Basic Guide to Program Evaluation (Including Outcomes Evaluation)

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

Much of the content of this topic came from this book:

This document provides guidance toward planning and implementing an evaluation process for for-profit or nonprofit programs — there are many kinds of evaluations that can be applied to programs, for example, goals-based, process-based and outcomes-based. Nonprofit organizations are increasingly interested in outcomes-based evaluation. If you are interested in learning more about outcomes-based evaluation, then see the sections Outcomes-Evaluation and Outcomes-Based Evaluations in Nonprofit Organizations.

Sections of This Topic Include

• Program Evaluation: carefully getting information to make decisions about programs
• Where Program Evaluation is Helpful
• Basic Ingredients (you need an organization and program(s))
• Planning Program Evaluation (what do you want to learn about, what info is needed)
• Major Types of Program Evaluation (evaluating program processes, goals, outcomes, etc.)
• Overview of Methods to Collect Information (questionnaires, interviews, focus groups, etc.)
• Selecting Which Methods to Use (which methods work best to get needed info from audiences)
• Analyzing and Interpreting Information
• Reporting Evaluation Results
• Who Should Carry Out the Evaluation?
• Contents of an Evaluation Plan
• Pitfalls to Avoid
• Online Guides, etc.
• Outcomes-Evaluation
• General Resources

Also consider

• Evaluations (many kinds)
• Related Library Topics

Learn More in the Library’s Blogs Related to Program Evaluations

In addition to the articles on this current page, see the following blogs which have posts related to Program Evaluations. Scan down the blog’s page to see various posts. Also see the section “Recent Blog Posts” in the sidebar of the blog or click on “next” near the bottom of a post in the blog.

• Library’s Business Planning Blog
• Library’s Building a Business Blog
• Library’s Strategic Planning Blog

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A Brief Introduction …

Note that the concept of program evaluation can include a wide variety of methods to evaluate many aspects of programs in nonprofit or for-profit organizations. There are numerous books and other materials that provide in-depth analysis of evaluations, their designs, methods, combination of methods and techniques of analysis.

However, personnel do not have to be experts in these topics to carry out a useful program evaluation. The “20-80” rule applies here, that 20% of effort generates 80% of the needed results. It’s better to do what might turn out to be an average effort at evaluation than to do no evaluation at all. (Besides, if you
resort to bringing in an evaluation consultant, you should be a smart consumer.

Far too many program evaluations generate information that is either impractical or irrelevant — if the information is understood at all.) This document orients personnel to the nature of program evaluation and how it can be carried out in a realistic and practical fashion.

Note that much of the information in this section was gleaned from various works of Michael Quinn Patton.

---

Program Evaluation

Some Myths About Program Evaluation

1. Many people believe evaluation is a useless activity that generates lots of boring data with useless conclusions. This was a problem with evaluations in the past when program evaluation methods were chosen largely on the basis of achieving complete scientific accuracy, reliability and validity.

This approach often generated extensive data from which very carefully chosen conclusions were drawn. Generalizations and recommendations were avoided. As a result, evaluation reports tended to reiterate the obvious and left program administrators disappointed and skeptical about the value of evaluation in general. More recently (especially as a result of Michael Patton’s development of utilization-focused evaluation), evaluation has focused on utility, relevance and practicality at least as much as scientific validity.

2. Many people believe that evaluation is about proving the success or failure of a program. This myth assumes that success is implementing the perfect program and never having to hear from employees, customers or clients again — the program will now run itself perfectly. This doesn’t happen in real life. Success is remaining open to continuing feedback and adjusting the program accordingly. Evaluation gives you this continuing feedback.

3. Many believe that evaluation is a highly unique and complex process that occurs at a certain time in a certain way, and almost always includes the use of outside experts. Many people believe they must completely understand terms such as validity and reliability. They don’t have to. They do have to consider what information they need in order to make current decisions about program issues or needs. And they have to be willing to commit to understanding what is really going on.

Note that many people regularly undertake some nature of program evaluation — they just don’t do it in
a formal fashion so they don’t get the most out of their efforts or they make conclusions that are inaccurate (some evaluators would disagree that this is program evaluation if not done methodically).
Consequently, they miss precious opportunities to make more of difference for their customer and clients, or to get a bigger bang for their buck.

So What is Program Evaluation?

First, we’ll consider “what is a program?” Typically, organizations work from their mission to identify several overall goals which must be reached to accomplish their mission. In nonprofits, each of these goals often becomes a program. Nonprofit programs are organized methods to provide certain related services to constituents, e.g., clients, customers, patients, etc. Programs must be evaluated to decide if the programs are indeed useful to constituents. In a for-profit, a program is often a one-time effort to produce a new product or line of products.

So, still, what is program evaluation? Program evaluation is carefully collecting information about a program or some aspect of a program in order to make necessary decisions about the program. Program
evaluation can include any or a variety of at least 35 different types of evaluation, such as for needs assessments, accreditation, cost/benefit analysis, effectiveness, efficiency, formative, summative, goal-based, process, outcomes, etc.

The type of evaluation you undertake to improve your programs depends on what you want to learn about the program. Don’t worry about what type of evaluation you need or are doing — worry about what you need to know to make the program decisions you need to make, and worry about how you can accurately collect and understand that information.

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Where Program Evaluation is Helpful

Frequent Reasons:

Program evaluation can:
1. Understand, verify or increase the impact of products or services on customers or clients – These “outcomes” evaluations are increasingly required by nonprofit funders as verification that the nonprofits are indeed helping their constituents. Too often, service providers (for-profit or nonprofit) rely on their
own instincts and passions to conclude what their customers or clients really need and whether the products or services are providing what is needed.

Over time, these organizations find themselves in a lot of guessing about what would be a good product or service, and trial and error about how new products or services could be delivered.

2. Improve delivery mechanisms to be more efficient and less costly – Over time, product or service delivery ends up to be an inefficient collection of activities that are less efficient and more costly than need be. Evaluations can identify program strengths and weaknesses to improve the program.

3. Verify that you’re doing what you think you’re doing – Typically, plans about how to deliver services, end up changing substantially as those plans are put into place. Evaluations can verify if the program is really running as originally planned.

Other Reasons:

Program evaluation can:
4. Facilitate management’s really thinking about what their program is all about, including its goals, how it meets it goals and how it will know if it has met its goals or not.
5. Produce data or verify results that can be used for public relations and promoting services in the community.
6. Produce valid comparisons between programs to decide which should be retained, e.g., in the face of pending budget cuts.
7. Fully examine and describe effective programs for duplication elsewhere.

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Basic Ingredients: Organization and Program(s)

You Need An Organization:

This may seem too obvious to discuss, but before an organization embarks on evaluating a program, it should have well established means to conduct itself as an organization, e.g., (in the case of a nonprofit) the board should be in good working order, the organization should be staffed and organized to conduct activities to work toward the mission of the organization, and there should be no current crisis that is clearly more important to address than evaluating programs.

You Need Program(s):

To effectively conduct program evaluation, you should first have programs. That is, you need a strong impression of what your customers or clients actually need. (You may have used a needs assessment to determine these needs — itself a form of evaluation, but usually the first step in a good marketing plan). Next, you need some effective methods to meet each of those goals. These methods are usually in the form of programs.

It often helps to think of your programs in terms of inputs, process, outputs and outcomes. Inputs are the various resources needed to run the program, e.g., money, facilities, customers, clients, program staff, etc. The process is how the program is carried out, e.g., customers are served, clients are counseled, children are cared for, art is created, association members are supported, etc.

The outputs are the units of service, e.g., number of customers serviced, number of clients counseled, children cared for, artistic pieces produced, or members in the association. Outcomes are the impacts on the customers or on clients receiving services, e.g., increased mental health, safe and secure development, richer artistic appreciation and perspectives in life, increased effectiveness among members, etc.

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Planning Your Program Evaluation

Depends on What Information You Need to Make Your Decisions and On Your Resources.

Often, management wants to know everything about their products, services or programs. However, limited resources usually force managers to prioritize what they need to know to make current decisions.

Your program evaluation plans depend on what information you need to collect in order to make major decisions. Usually, management is faced with having to make major decisions due to decreased funding, ongoing complaints, unmet needs among customers and clients, the need to polish service delivery, etc. For example, do you want to know more about what is actually going on in your programs, whether your programs are meeting their goals, the impact of your programs on customers, etc? You may want other information or a combination of these. Ultimately, it’s up to you.

But the more focused you are about what you want to examine by the evaluation, the more efficient you can be in your evaluation, the shorter the time it will take you and ultimately the less it will cost you (whether in your own time, the time of your employees and/or the time of a consultant).

There are trade offs, too, in the breadth and depth of information you get. The more breadth you want, usually the less depth you get (unless you have a great deal of resources to carry out the evaluation). On the other hand, if you want to examine a certain aspect of a program in great detail, you will likely not get as much information about other aspects of the program.

For those starting out in program evaluation or who have very limited resources, they can use various methods to get a good mix of breadth and depth of information. They can both understand more about certain areas of their programs and not go bankrupt doing so.

Key Considerations:

Consider the following key questions when designing a program evaluation.

1. For what purposes is the evaluation being done, i.e., what do you want to be able to decide as a result of the evaluation?

2. Who are the audiences for the information from the evaluation, e.g., customers, bankers, funders, board, management, staff, customers, clients, etc.

3. What kinds of information are needed to make the decision you need to make and/or enlighten your intended audiences, e.g., information to really understand the process of the product or program (its inputs, activities and outputs), the customers or clients who experience the product or program, strengths and weaknesses of the product or program, benefits to customers or clients (outcomes), how the product or program failed and why, etc.

4. From what sources should the information be collected, e.g., employees, customers, clients, groups of customers or clients and employees together, program documentation, etc.
5. How can that information be collected in a reasonable fashion, e.g., questionnaires, interviews, examining documentation, observing customers or employees, conducting focus groups among customers or employees, etc.

6. When is the information needed (so, by when must it be collected)?

7. What resources are available to collect the information?

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Some Major Types of Program Evaluation

When designing your evaluation approach, it may be helpful to review the following three types of evaluations, which are rather common in organizations. Note that you should not design your evaluation approach simply by choosing which of the following three types you will use — you should design your evaluation approach by carefully addressing the above key considerations.

Goals-Based Evaluation

Often programs are established to meet one or more specific goals. These goals are often described in the original program plans.

Goal-based evaluations are evaluating the extent to which programs are meeting predetermined goals or objectives. Questions to ask yourself when designing an evaluation to see if you reached your goals, are:

1. How were the program goals (and objectives, is applicable) established? Was the process effective?
2. What is the status of the program’s progress toward achieving the goals?
3. Will the goals be achieved according to the timelines specified in the program implementation or operations plan? If not, then why?
4. Do personnel have adequate resources (money, equipment, facilities, training, etc.) to achieve the goals?
5. How should priorities be changed to put more focus on achieving the goals? (Depending on the context, this question might be viewed as a program management decision, more than an evaluation question.)
6. How should timelines be changed (be careful about making these changes – know why efforts are behind schedule before timelines are changed)?
7. How should goals be changed (be careful about making these changes – know why efforts are not achieving the goals before changing the goals)? Should any goals be added or removed? Why?
8. How should goals be established in the future?

Process-Based Evaluations

Process-based evaluations are geared to fully understanding how a program works — how does it produce that results that it does. These evaluations are useful if programs are long-standing and have changed over the years, employees or customers report a large number of complaints about the program, there appear to be large inefficiencies in delivering program services and they are also useful for accurately portraying to outside parties how a program truly operates (e.g., for replication elsewhere).

There are numerous questions that might be addressed in a process evaluation. These questions can be selected by carefully considering what is important to know about the program. Examples of questions to ask yourself when designing an evaluation to understand and/or closely examine the processes in your programs, are:

1. On what basis do employees and/or the customers decide that products or services are needed?
2. What is required of employees in order to deliver the product or services?
3. How are employees trained about how to deliver the product or services?
4. How do customers or clients come into the program?
5. What is required of customers or client?
6. How do employees select which products or services will be provided to the customer or client?
7. What is the general process that customers or clients go through with the product or program?
8. What do customers or clients consider to be strengths of the program?
9. What do staff consider to be strengths of the product or program?
10. What typical complaints are heard from employees and/or customers?
11. What do employees and/or customers recommend to improve the product or program?
12. On what basis do employees and/or the customer decide that the product or services are no longer needed?

Outcomes-Based Evaluation

Program evaluation with an outcomes focus is increasingly important for nonprofits and asked for by funders. An outcomes-based evaluation facilitates your asking if your organization is really doing the
right program activities to bring about the outcomes you believe (or better yet, you’ve verified) to be needed by your clients (rather than just engaging in busy activities which seem reasonable to do at the time).

Outcomes are benefits to clients from participation in the program. Outcomes are usually in terms of enhanced learning (knowledge, perceptions/attitudes or skills) or conditions, e.g., increased literacy, self-reliance, etc. Outcomes are often confused with program outputs or units of services, e.g., the number of clients who went through a program.

The United Way of America (http://www.unitedway.org/outcomes/) provides an excellent overview of outcomes-based evaluation, including introduction to outcomes measurement, a program outcome model, why to measure outcomes, use of program outcome findings by agencies, eight steps to success for measuring outcomes, examples of outcomes and outcome indicators for various programs and the resources needed for measuring outcomes. The following information is a top-level summary of information from this site.

To accomplish an outcomes-based evaluation, you should first pilot, or test, this evaluation approach on one or two programs at most (before doing all programs).

The general steps to accomplish an outcomes-based evaluation include to:

1. Identify the major outcomes that you want to examine or verify for the program under evaluation. You might reflect on your mission (the overall purpose of your organization) and ask yourself what impacts you will have on your clients as you work towards your mission.

For example, if your overall mission is to provide shelter and resources to abused women, then ask yourself what benefits this will have on those women if you effectively provide them shelter and other services or resources. As a last resort, you might ask yourself, “What major activities are we doing now?” and then for each activity, ask “Why are we doing that?” The answer to this “Why?” question is usually an outcome.

This “last resort” approach, though, may just end up justifying ineffective activities you are doing now, rather than examining what you should be doing in the first place.

2. Choose the outcomes that you want to examine, prioritize the outcomes and, if your time and resources are limited, pick the top two to four most important outcomes to examine for now.

3. For each outcome, specify what observable measures, or indicators, will suggest that you’re achieving that key outcome with your clients. This is often the most important and enlightening step in outcomes-based evaluation.

However, it is often the most challenging and even confusing step, too, because you’re suddenly going from a rather intangible concept, e.g., increased self-reliance, to specific activities, e.g., supporting clients to get themselves to and from work, staying off drugs and alcohol, etc. It helps to have a “devil’s advocate” during this phase of identifying indicators, i.e., someone who can question why you can assume that an outcome was reached because certain associated indicators were present.

4. Specify a “target” goal of clients, i.e., what number or percent of clients you commit to achieving specific outcomes with, e.g., “increased self-reliance (an outcome) for 70% of adult, African American women living in the inner city of Minneapolis as evidenced by the following measures (indicators) …”

5. Identify what information is needed to show these indicators, e.g., you’ll need to know how many clients in the target group went through the program, how many of them reliably undertook their own transportation to work and stayed off drugs, etc. If your program is new, you may need to evaluate the process in the program to verify that the program is indeed carried out according to your original plans.

(Michael Patton, prominent researcher, writer and consultant in evaluation, suggests that the most important type of evaluation to carry out may be this implementation evaluation to verify that your program ended up to be implemented as you originally planned.)

6. Decide how can that information be efficiently and realistically gathered (see Selecting Which Methods to Use below). Consider program documentation, observation of program personnel and clients in the program, questionnaires and interviews about clients perceived benefits from the program, case studies of program failures and successes, etc. You may not need all of the above. (see Overview of Methods to Collect Information below).

7. Analyze and report the findings (see Analyzing and Interpreting Information below).

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Overview of Methods to Collect Information

The following table provides an overview of the major methods used for collecting data during evaluations.

Method	Overall Purpose	Advantages	Challenges
questionnaires, surveys, checklists	when need to quickly and/or easily get lots of information from people in a non threatening way	-can complete anonymously -inexpensive to administer -easy to compare and analyze -administer to many people -can get lots of data -many sample questionnaires already exist	-might not get careful feedback -wording can bias client’s responses -are impersonal -in surveys, may need sampling expert – doesn’t get full story
interviews	when want to fully understand someone’s impressions or experiences, or learn more about their answers to questionnaires	-get full range and depth of information -develops relationship with client -can be flexible with client	-can take much time -can be hard to analyze and compare -can be costly -interviewer can bias client’s responses
documentation review	when want impression of how program operates without interrupting the program; is from review of applications, finances, memos, minutes, etc.	-get comprehensive and historical information -doesn’t interrupt program or client’s routine in program -information already exists -few biases about information	-often takes much time -info may be incomplete -need to be quite clear about what looking for -not flexible means to get data; data restricted to what already exists
observation	to gather accurate information about how a program actually operates, particularly about processes	-view operations of a program as they are actually occurring -can adapt to events as they occur	-can be difficult to interpret seen behaviors -can be complex to categorize observations -can influence behaviors of program participants -can be expensive
focus groups	explore a topic in depth through group discussion, e.g., about reactions to an experience or suggestion, understanding common complaints, etc.; useful in evaluation and marketing	-quickly and reliably get common impressions -can be efficient way to get much range and depth of information in short time – can convey key information about programs	-can be hard to analyze responses -need good facilitator for safety and closure -difficult to schedule 6-8 people together
case studies	to fully understand or depict client’s experiences in a program, and conduct comprehensive examination through cross comparison of cases	-fully depicts client’s experience in program input, process and results -powerful means to portray program to outsiders	-usually quite time consuming to collect, organize and describe -represents depth of information, rather than breadth

Also consider

• Appreciative Inquiry
• Survey Design

Ethics: Informed Consent from Program Participants

Note that if you plan to include in your evaluation, the focus and reporting on personal information about customers or clients participating in the evaluation, then you should first gain their consent to do so. They should understand what you’re doing with them in the evaluation and how any information associated with them will be reported.

You should clearly convey terms of confidentiality regarding access to evaluation results. They should have the right to participate or not. Have participants review and sign an informed consent form. See the sample informed-consent form.

How to Apply Certain Methods

• Purposes and Formats of Questions
• Developing Questionnaires
• Conducting Interviews
• Conducting Focus Groups
• Developing Case Studies

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Selecting Which Methods to Use

Overall Goal in Selecting Methods:

The overall goal in selecting evaluation method(s) is to get the most useful information to key decision makers in the most cost-effective and realistic fashion. Consider the following questions:

1. What information is needed to make current decisions about a product or program?
2. Of this information, how much can be collected and analyzed in a low-cost and practical manner, e.g., using questionnaires, surveys and checklists?
3. How accurate will the information be (reference the above table for disadvantages of methods)?
4. Will the methods get all of the needed information?
5. What additional methods should and could be used if additional information is needed?
6. Will the information appear as credible to decision makers, e.g., to funders or top management?
7. Will the nature of the audience conform to the methods, e.g., will they fill out questionnaires carefully, engage in interviews or focus groups, let you examine their documentations, etc.?
8. Who can administer the methods now or is training required?
9. How can the information be analyzed?

Note that, ideally, the evaluator uses a combination of methods, for example, a questionnaire to quickly collect a great deal of information from a lot of people, and then interviews to get more in-depth information from certain respondents to the questionnaires.

Perhaps case studies could then be used for more in-depth analysis of unique and notable cases, e.g., those who benefited or not from the program, those who quit the program, etc.

Four Levels of Evaluation:

There are four levels of evaluation information that can be gathered from clients, including getting their:

1. reactions and feelings (feelings are often poor indicators that your service made lasting impact)
2. learning (enhanced attitudes, perceptions or knowledge)
3. changes in skills (applied the learning to enhance behaviors)
4. effectiveness (improved performance because of enhanced behaviors)

Usually, the farther your evaluation information gets down the list, the more useful is your evaluation. Unfortunately, it is quite difficult to reliably get information about effectiveness. Still, information about learning and skills is quite useful.

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Analyzing and Interpreting Information

Analyzing quantitative and qualitative data is often the topic of advanced research and evaluation methods. There are certain basics which can help to make sense of reams of data.

Always start with your evaluation goals:
When analyzing data (whether from questionnaires, interviews, focus groups, or whatever), always start from review of your evaluation goals, i.e., the reason you undertook the evaluation in the first place. This will help you organize your data and focus your analysis.

For example, if you wanted to improve your program by identifying its strengths and weaknesses, you can organize data into program strengths, weaknesses and suggestions to improve the program. If you wanted to fully understand how your program works, you could organize data in the chronological order in which clients go through your program.

If you are conducting an outcomes-based evaluation, you can categorize data according to the indicators
for each outcome.

Basic analysis of “quantitative” information
(for information other than commentary, e.g., ratings, rankings, yes’s, no’s, etc.):

1. Make copies of your data and store the master copy away. Use the copy for making edits, cutting and pasting, etc.
2. Tabulate the information, i.e., add up the number of ratings, rankings, yes’s, no’s for each question.
3. For ratings and rankings, consider computing a mean, or average, for each question. For example, “For question #1, the average ranking was 2.4”. This is more meaningful than indicating, e.g., how many respondents ranked 1, 2, or 3.
4. Consider conveying the range of answers, e.g., 20 people ranked “1”, 30 ranked “2”, and 20 people ranked “3”.

Basic analysis of “qualitative” information
(respondents’ verbal answers in interviews, focus groups, or written commentary on questionnaires):

1. Read through all the data.
2. Organize comments into similar categories, e.g., concerns, suggestions, strengths, weaknesses, similar experiences, program inputs, recommendations, outputs, outcome indicators, etc.
3. Label the categories or themes, e.g., concerns, suggestions, etc.
4. Attempt to identify patterns, or associations and causal relationships in the themes, e.g., all people who attended programs in the evening had similar concerns, most people came from the same geographic area, most people were in the same salary range, what processes or events respondents experience during the program, etc.
4. Keep all commentary for several years after completion in case needed for future reference.

Interpreting Information:

1. Attempt to put the information in perspective, e.g., compare results to what you expected, promised results; management or program staff; any common standards for your services; original program goals (especially if you’re conducting a program evaluation); indications of accomplishing outcomes (especially if you’re conducting an outcomes evaluation); description of the program’s experiences, strengths, weaknesses, etc. (especially if you’re conducting a process evaluation).

2. Consider recommendations to help program staff improve the program, conclusions about program operations or meeting goals, etc.

3. Record conclusions and recommendations in a report document, and associate interpretations to justify your conclusions or recommendations.

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Reporting Evaluation Results

1.The level and scope of content depends on to whom the report is intended, e.g., to bankers, funders, employees, customers, clients, the public, etc.

2. Be sure employees have a chance to carefully review and discuss the report. Translate recommendations to action plans, including who is going to do what about the program and by when.

3. Bankers or funders will likely require a report that includes an executive summary (this is a summary of conclusions and recommendations, not a listing of what sections of information are in the report — that’s a table of contents); description of the organization and the program under evaluation; explanation of the evaluation goals, methods, and analysis procedures; listing of conclusions and recommendations; and any relevant attachments, e.g., inclusion of evaluation questionnaires, interview guides, etc. The banker or funder may want the report to be delivered as a presentation, accompanied by an overview of the report. Or, the banker or funder may want to review the report alone.

4. Be sure to record the evaluation plans and activities in an evaluation plan which can be referenced when a similar program evaluation is needed in the future.

Contents of an Evaluation Report — Example

An example of evaluation report contents is included later on below in this document. Click Contents of an Evaluation Plan but, don’t forget to look at the next section “Who Should Carry Out the Evaluation”.

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Who Should Carry Out the Evaluation?

Ideally, management decides what the evaluation goals should be. Then an evaluation expert helps the organization to determine what the evaluation methods should be, and how the resulting data will be analyzed and reported back to the organization. Most organizations do not have the resources to carry out the ideal evaluation.

Still, they can do the 20% of effort needed to generate 80% of what they need to know to make a decision about a program. If they can afford any outside help at all, it should be for identifying the appropriate evaluation methods and how the data can be collected. The organization might find a less expensive resource to apply the methods, e.g., conduct interviews, send out and analyze results of questionnaires, etc.

If no outside help can be obtained, the organization can still learn a great deal by applying the methods and analyzing results themselves. However, there is a strong chance that data about the strengths and weaknesses of a program will not be interpreted fairly if the data are analyzed by the people responsible for ensuring the program is a good one.

Program managers will be “policing” themselves. This caution is not to fault program managers, but to recognize the strong biases inherent in trying to objectively look at and publicly (at least within the organization) report about their programs. Therefore, if at all possible, have someone other than the program managers look at and determine evaluation results.

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Contents of an Evaluation Plan

Develop an evaluation plan to ensure your program evaluations are carried out efficiently in the future. Note that bankers or funders may want or benefit from a copy of this plan.

Ensure your evaluation plan is documented so you can regularly and efficiently carry out your evaluation activities. Record enough information in the plan so that someone outside of the organization can understand what you’re evaluating and how. Consider the following format for your report:

1. Title Page (name of the organization that is being, or has a product/service/program that is being, evaluated; date)
2. Table of Contents
3. Executive Summary (one-page, concise overview of findings and recommendations)
4. Purpose of the Report (what type of evaluation(s) was conducted, what decisions are being aided by the findings of the evaluation, who is making the decision, etc.)
5. Background About Organization and Product/Service/Program that is being evaluated
a) Organization Description/History
b) Product/Service/Program Description (that is being evaluated)
i) Problem Statement (in the case of nonprofits, description of the community need that is being met by the product/service/program)
ii) Overall Goal(s) of Product/Service/Program
iii) Outcomes (or client/customer impacts) and Performance Measures (that can be measured as indicators toward the outcomes)
iv) Activities/Technologies of the Product/Service/Program (general description of how the product/service/program is developed and delivered)
v) Staffing (description of the number of personnel and roles in the organization that are relevant to developing and delivering the product/service/program)
6) Overall Evaluation Goals (eg, what questions are being answered by the evaluation)
7) Methodology
a) Types of data/information that were collected
b) How data/information were collected (what instruments were used, etc.)
c) How data/information were analyzed
d) Limitations of the evaluation (eg, cautions about findings/conclusions and how to use the findings/conclusions, etc.)
8) Interpretations and Conclusions (from analysis of the data/information)
9) Recommendations (regarding the decisions that must be made about the product/service/program)
Appendices: content of the appendices depends on the goals of the evaluation report, eg.:
a) Instruments used to collect data/information
b) Data, eg, in tabular format, etc.
c) Testimonials, comments made by users of the product/service/program
d) Case studies of users of the product/service/program
e) Any related literature

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Pitfalls to Avoid

1. Don’t balk at evaluation because it seems far too “scientific.” It’s not. Usually the first 20% of effort will generate the first 80% of the plan, and this is far better than nothing.
2. There is no “perfect” evaluation design. Don’t worry about the plan being perfect. It’s far more important to do something, than to wait until every last detail has been tested.
3. Work hard to include some interviews in your evaluation methods. Questionnaires don’t capture “the story,” and the story is usually the most powerful depiction of the benefits of your services.
4. Don’t interview just the successes. You’ll learn a great deal about the program by understanding its failures, dropouts, etc.
5. Don’t throw away evaluation results once a report has been generated. Results don’t take up much room, and they can provide precious information later when trying to understand changes in the program.

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Online Guides

• Basic Guide to Program Evaluation
• What is a Program Logic Model? (logic model captures inputs, activities, outputs, outcomes)
• Outcome Measurement: Showing Results (wonderful overview of outcomes, myths, etc.)
• W.K. Kellogg Foundation Evaluation Handbook

Outcomes-Evaluation

• Basic Guide to Outcomes-Based Evaluation for Nonprofit Organizations with Very Limited Resources
• What is a Program Logic Model? (logic model captures inputs, activities, outputs, outcomes)
• Basic Guide to Outcomes-Based Evaluation
• Paul Duignan on DoView and Visually Representing Outcomes

General Resources

(Thanks to Gene Shackman for suggesting many of the following resources.)

• American Evaluation Association
• Online library of resources for evaluation of mental health programs
• Free Resources for Program Evaluation and Social Research Methods
• Evaluation portal and links collection
• Guides for many types of evaluation
• Susan Kistler on Online Journals for Evaluators
• What is program evaluation: A set of beginners guides
• Hiring and Working With an Evaluator
• Our Ineffectiveness at Measuring Effectiveness
• Outcome Indicators Project
• Sudharshan Seshadri on Resources for Program Evaluation
• The Critical Need for Program Accountability & Evaluation
• How to Address Fears about Program Evaluation
• How to Maximize Funding by Tapping into Hidden Potential: Program Evaluation
• How Traditional Planning and Evaluation Interact
• Four Differences between Research and Program Evaluation
• Which Is More Important—the Means or the Ends? Process, Impact and Outcome Evaluations
• A Guide to Navigating the Evaluation Maze: “A Framework for Evaluation” from the CDC, Part 1
• A Guide to Navigating the Evaluation Maze: “A Framework for Evaluation” from the CDC, Part 2
• Tips on How to Conduct Interviews for Program Evaluation (part 1)
• Tips on How to Conduct Interviews for Program Evaluation (Part 2)
• Measuring and/or Estimating Social Value Creation: Insights Into Eight Integrated Cost Approaches
• How to Evaluate on a Budget: DIY or Outsource?

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For the Category of Evaluations (Many Kinds):

To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.

Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

• Related Library Topics
• Recommended Books