#104 Mar/Apr 1999

The 8 Habits of Highly Effective CDCs

1 CDC leaders must be aware of their own limitations and recognize they’re responsible for developing staff and building institutions. Any entrepreneurial venture – not just a CDC – can […]

1 CDC leaders must be aware of their own limitations and recognize they’re responsible for developing staff and building institutions. Any entrepreneurial venture – not just a CDC – can become a prisoner of its own vision. To make sure the vision doesn’t outrun a CDC’s capacity, the CDC’s top staff, board, and funders need to be realistic about the organization’s limitations and build an infrastructure that can support the full range of CDC activities.

2 CDCs should have a succession strategy not only for the departure of their president, but also for key senior staff. As a CDC becomes more comprehensive in its programs, it needs a talented and deep senior staff that operates as a team. That way, if key staffers leave, the CDC’s operations aren’t jeopardized, as was the case with ECI.

3 CDCs need to adjust their capacity to accommodate their vision on a regular basis. Every so often, CDCs need a time out. Key staff members need to ask, “Do we have the people we need to operationalize what’s on our plate today, plus our upcoming programs?” And don’t forget non-project work. Many CDCs neglect to count staff time needed to nurture partnerships, market and publicize the organization, and network with other groups.

4 CDCs need to put in place solid organizational systems before undertaking a comprehensive range of activities. ECI invested $1.5 million in Shelter Systems before the CDC even took a breath. Almost $200,000 couldn’t be accounted for. Accurate and timely financial data is a major issue for CDCs everywhere. In today’s computer environment, there’s really no excuse for not having operational systems that are commensurate with the complexity of a CDC’s activities. The technology isn’t particularly expensive anymore, and there’s plenty of expertise out there to help. A strong management information system is especially important. How else, for example, will you track what happens to the people you are helping to leave welfare or get jobs?

5 CDCs need to manage risk and have the necessary partners and resources to tackle risky projects. Risk isn’t bad – all successful ventures confront it. But as ECI illustrates, too high of a tolerance for risk can sink an organization. As CDCs become more complex, risk increases geometrically. A risky project with multiple interventions requires that the CDC and its board understand the level of risk and how to spread some of it to other partners.

6 CDCs need to put in place structures and strategies that encourage greater participation. Even though nearly all CDCs say they have a grassroots board, over time most CDCs tend to become more professionalized and less connected to the community. Most groups need to initiate a concerted effort to have the board actively represent the CDC within the community – and make sure there’s two-way outreach. CDCs are hierarchical. Community support dissipates without formal and informal mechanisms to promote community involvement.

7 CDCs have become adept at forming vertical relationships with funders and project partners – but they need to work harder to develop horizontal relationships with community organizations and institutions. To survive, most CDCs quickly learn how to form relationships with city officials, bankers, foundation funders, and corporate leaders. But the real strength of a CDC lies in the quality of its horizontal relationships – with block clubs, neighborhood churches, small businesses, civic clubs, and other like-minded community organizations and individuals. Without a wide range of these relationships, a CDC will lose influence in its neighborhood.

8 CDCs need to invest in building the capacity of their staffs through a formal human resource strategy. Large corporations invest in their people in a strategic way to develop their skills – and improve the company’s bottom line. CDCs have become more focused in recent years on classic personnel issues – benefits and salaries, for example. But this isn’t the same as initiating a formal program for developing people’s performance, skills, growth, and leadership capabilities.



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