May 01, 2016

Applying Successful Nonprofit Management Principles in the Courts

By Vice Chief Judge Samuel A. Thumma and Meredith Marshburn

Every organization uses management principles perceived to be effective that typically have a similar goal: to motivate individuals in furthering the purpose of the organization. The management principles used differ widely based on an almost infinite number of context-dependent variables. Is the organization large or small? Does it have one location or many? Does it provide a product, a service, or a combination of both? How are employees compensated? What are the culture and “feel” of the organization from the perspective of management, customers, and employees?

The effectiveness of the management principles used differs widely based on these same variables. For example, management principles that work well in an edgy, high-end restaurant, where wait staff are driven by the possibility of large tips from wealthy customers, may not work at all at a neighborhood diner where long-time employees are committed to serving comfort food at a fair price to regulars they’ve known for years.

Accounting for these variables in identifying and implementing successful management principles also is resource-dependent. The resources available to manage the wants and needs of a Fortune 500 company’s employees are very different from those available to the local nonprofit’s volunteers. And the resources available for the nonprofit’s volunteers, in turn, differ from those available to a state court system’s employees.

Clearly, identifying management principles is not a “one size fits all” concept. Given these differences, there is a great deal to be said for attempting to adapt to court systems management principles identified as “best practices” in for-profit organizations. But can courts learn from management principles identified as “best practices” in nonprofit organizations?

This article begins with a brief overview of some differences and similarities in for-profit organizations, nonprofit organizations, and government (more specifically, the courts). The article identifies how the courts have, in some significant respects, more similarities with nonprofit organizations than they do with for-profits. The article then discusses seven selected nonprofit management principles identified by the late management expert Peter F. Drucker in Managing the Nonprofit Organization (2006 paperback), and how these principles might apply to the courts. The article concludes that using nonprofit management principles in the courts merits serious consideration.

For-Profit, Nonprofit, and Court Organizations

This article divides the world of organizations into three categories: (1) for-profit, (2) nonprofit, and (3) the courts. Using these categories (which overlooks a great many details and draws bright lines where there are many shadows), significant similarities and differences exist when comparing for-profits, nonprofits, and the courts.1 As a proxy for a far larger number of factors, these similarities and differences are highlighted by focusing on ownership, funding sources, mission, the incentivizing of participants, and a determination of how success is defined.

For-profit organizations are owned by individuals or entities. Owners can be shareholders, limited partners, sole proprietors, or many other forms. Owners voluntarily fund the organization by purchasing its ownership interests. If owners become disillusioned with the organization, they can sell those interests. The organization generates income from the provision of goods or services through voluntary transactions with other individuals or organizations. The mission of a for-profit organization is to be the best provider of whatever it provides to make money for the owners. Participants in the organization are employees who are incentivized by compensation (typically money) in a variety of forms, ranging from hourly, to annually, to commission. A benchmark of success is whether the for-profit organization makes a profit (and, if so, how much) that can then be either distributed to the owners or reinvested.

By contrast, no individual or entity owns a nonprofit; the organization is a community asset, however that community is defined. Supporters voluntarily fund the organization by donations. If supporters become disillusioned with the organization, they can stop making donations. Along with donations, the nonprofit may generate revenue from the provision of goods or services through voluntary transactions with other individuals or organizations. The mission of a nonprofit is to create a community or public benefit and to secure enough funding to continue the work of the organization. Participants in the organization may be volunteers who are compensated by the reward of helping others. If the nonprofit has employees, their work typically is leveraged by a larger number of volunteers. The employees are compensated by a combination of monetary compensation and the reward of helping others. A definition of success is whether the nonprofit organization can sustain itself and continue to serve the community it serves.

The courts have some characteristics of for-profit organizations, some characteristics of nonprofits, and some that reflect the unique nature of the courts. The courts are not owned by any individual or entity; instead, they are a governmental entity that broadly serves the public. Unlike for-profit and nonprofit organizations, funding for the courts is not voluntary; it comes from taxpayers under the threat of penalties if taxes are not paid and fees, fines, and costs imposed on parties by the courts. The mission of the courts is public service through the administration of justice in a timely manner, treating all with fairness, respect, and dignity. Courts typically have employees who are compensated by wages or salary and, hopefully, the reward of helping the public. Courts also rely on volunteers, who are compensated by the reward of helping others. A definition of success for the courts is whether the public is served and justice is administered in a timely fashion.

Clearly, there are similarities and differences in these three organizational structures. As particularly applicable here, however, nonprofit organizations have a significant number of similarities with the courts. These similarities include public ownership, a public service mission, compensation that is received both monetarily and by the reward of helping the public or community, and a definition of success that is a focus on serving the public or community. Given these similarities, it is worth looking at “best practices” identified in nonprofit management to see if they might add value in managing courts.

Nonprofit Management “Best Practices” and Their Application in Managing Courts

Drucker’s Managing the Nonprofit Organization covers a lot of ground in identifying “best practices” for managing nonprofit organizations. It is a detailed, thoughtful book that merits careful study. What follows is a summary of seven “best practices” that Drucker identifies in the nonprofit world and a discussion of how each might apply in managing courts.

Identifying, Communicating, and Understanding the Mission2

Although discussed often in addressing mission statements, Drucker writes that a nonprofit organization must have a thoughtful, communicated operational mission, “otherwise it’s just good intentions.” The mission should focus on what the organization “really tries to do and then do it so that everybody in the organization can say, This is my contribution to the goal.” The mission “has to be clear and simple. . . . It has to be something that makes each person feel that he or she can make a difference. . . . In every move, in every decision, in every policy, the non-profit institution needs to start out by asking, Will this advance our capacity to carry out our mission?”

As applied to the courts, the basic mission is simple and direct: to serve the public and administer justice in a timely fashion. Court management should target this mission, or efforts will be muddled and confused. But what specific aspects of the mission are important? How about the fair, just, and timely resolution of disputes under the law? Enhancing confidence in the courts through accessibility, communication, and education? Administering justice with integrity, fairness, and equality? Resolving legal disputes in a prompt, timely, and fair manner while treating all involved with fairness, respect, and dignity? Each of these examples can be found in various court systems in the United States and each, hopefully, works well in that specific system.

A thoughtful mission that is expressly identified, communicated, understood, and used provides meaning and context to management decisions. Does a particular decision, project, or approach further the court’s mission? If not, why should it proceed? And a focus on mission allows employees to have a better sense of purpose. It can transform simple work perceived to be without meaning into a sense of how the work fits into the broader goals, resulting in a sense of “contribution to the goal.”

Embracing Change and Innovation

Drucker recommends embracing change and innovation when things are going well:

One strategy is practically infallible: Refocus and change the organization when you are successful. When everything is going beautifully. When everybody says, “Don’t rock the boat. If it ain’t broke, don’t fix it.” At that point, let’s hope, you have some character in the organization who is willing to be unpopular by saying “Let’s improve it.” If you don’t improve it, you go downhill pretty fast.3

At first blush, particularly as applied to the courts, this strategy seems counterintuitive. Many aspects of the courts have no substitutes. Although private mediation or arbitration may resolve civil and some family law disputes, that generally cannot be said for criminal and most juvenile matters. Moreover, most funding sources for the courts are not voluntary in the sense that contributions to nonprofits are voluntary. And some innovations fail because their costs lack corresponding benefits. So how could this “innovate when you are successful” concept apply to the courts?

In some respects, it may not. If an approach to a time-worn issue appears to be working just fine, it may be that no improvement is appropriate. But it also may be that looking to see how a well-functioning process can be improved is just what courts should be doing. Take, for example, times for case processing. Case processing can always be improved. Looking to improve times for case processing when things are working just fine is at the core of the court’s mission and allows a successful team to improve things in the cool of the day (and not in the heat of a crisis). Moreover, the fact that case processing is at the core of what the courts do and lacks any real substitute, by definition, provides a basis for looking to constantly improve. If a strategy is working, it suggests that the system and the people in charge of overseeing the system have been successful. And as a fail-safe, when a change is implemented when things are working well, if the new approach doesn’t work, there is always the option of returning to the “unimproved” approach that was working.

A focus on change and innovation also allows individuals to grow in ways that maintaining does not. Although many individuals will say, in the abstract, that they don’t like change, as applied, involving individuals in identifying, planning, and implementing changes can empower. As an example, consider how courts are using technology today compared to a decade ago. Or look at the proliferation of therapeutic courts that were virtually unheard of not so long ago. As Drucker writes for nonprofits, “[t]he first requirement for successful innovation is to look at a change as a potential opportunity instead of a threat.”4 And because it’s inevitable, isn’t it better to embrace change rather than dread it?

Adopting the Team Concept

Drucker champions the essential nature of the team concept:

The more successful an organization becomes, the more it needs to build teams. In fact, non-profit organizations most often fumble and lose their way despite great ability at the top and a dedicated staff because they fail to build teams.

The purpose of a team is to make the strengths of each person effective, and his or her weaknesses irrelevant. One manages individuals on a team. The focus is to look at the performance and the strengths of individuals combined in a joint effort.5

This focus on team in the nonprofit context translates extremely well to the courts. Even though the judicial officer presides over the courtroom, teamwork is essential in the courtroom. To best serve the public, a judicial officer hearing cases on the bench works with any number of individuals, including a bailiff, a clerk of court, a court reporter, and perhaps many others. Each team member has his or her strengths, and the focus of the team is to build on strengths in a way that makes weaknesses of team members irrelevant.

Outside of the courtroom, the team concept may be even more essential in the courts. Take, for example, building and implementing a computer system for use in case management. That system will be used by, and for the benefit of, a wide variety of individuals, including judges, court staff, litigants, attorneys, law enforcement officers, probation officers, and so forth. Failing to obtain input and feedback from all of these users will ensure failure, at least at some point, and be a missed opportunity. By contrast, although obtaining input from all does not guarantee success, it does allow for communication of needs, accountability, and course-correction and helps enhance the probability of success. Working in such a team environment also can facilitate interdependence, trust, productivity, and creativity and encourage collaboration and communication. Also, done correctly, the team concept recognizes and welcomes new team members (who, by definition, will bring new ideas from a different perspective), but also values long-term team members who have the institutional memory that can offer lessons learned from previous efforts. Using a team approach in court management furthers productivity and empowers groups to do the best work possible.

Being Accountable

An essential corollary to the team concept is accountability.

Everyone in the non-profit institution, whether chief executive or volunteer foot soldier, needs first to think through his or her own assignment. What should this institution hold me accountable for? The next responsibility is to make sure that the people with whom you work and on whom you depend understand what you intend to concentrate on, and what you should be held accountable for.6

As in nonprofits, accountability translates extremely well to court management. Two examples prove the point.

Let’s start with an example of when accountability is not present: an ongoing study committee that meets monthly with an agenda item that is consistently deferred, and the deferral continues until the item is removed because nothing is ever done. What has been accomplished? Quite literally, nothing. But more broadly, an issue that at some point was important slipped away with no consideration of the merits or how resolving the issue would improve the system. It may be that the decision to do nothing to resolve the issue is the correct one, but that’s only by chance as the merits of the issue were never considered in a meaningful way.

By contrast, let’s turn to an example when accountability is present: At a meeting of the same ongoing study committee, an item is raised, and three named individuals are designated to look into the issue. This subcommittee is asked to consider the issue and report back to the committee as a whole with written recommendations within 60 days. That empowers those three individuals, makes them accountable, and sets expectations for all involved about what the subcommittee will do, what it will provide, and when it will be provided. The subcommittee has a work plan, a goal, and a deadline. “By focusing on accountability, people take a bigger view of themselves. That’s not vanity, not pride, but it is self-respect and self-confidence. It’s something that, once gained, can’t be taken away from a person.”7

Welcoming Dissent but Targeting Consensus8

The team concept encourages different points of view. Although unanimity can lead to easy decision making, Drucker celebrates dissent. “If you can bring dissent and disagreement to a common understanding of what the discussion is all about, you create unity and commitment.”

You use dissent and disagreement to resolve conflict. If you ask for disagreement openly, it gives people the feeling that they have been heard. But you also know where the objectors are and what their objections are. And in many cases you can accommodate them, so that they can accept the decision gracefully. That also enables them very often to understand the arguments of the [other] side. . . . You do not prevent disagreement, but you do resolve conflict.

Applied to the courts, this concept of welcoming and encouraging dissent offers a real possibility of improving results. Take, for example, consideration of a differentiated case assignment system for civil cases, where the issue is whether to adopt a complex case system or a business court, or some similar concept. It may be that those considering such a change are not unanimous in the wisdom of adopting such an approach. When such a change is not universally embraced, encouraging respectful dissent in the decision-making process allows for individuals to raise differing perspectives before a decision is made. That discussion will either fortify a consensus, result in a change in plans before a change is implemented, or mean a change being considered is never implemented. That process, in turn, facilitates communication, an exchange of ideas, and an appreciation of competing views. As a result, the quality of decisions should be improved.

Although dissent should be welcomed, it cannot become paralyzing. Encouraging dissent implies that changes are made by consensus, but not unanimity. So although dissent is a wonderful way to test a proposed change, it should be used as a mechanism to build consensus, not empower one person to veto change.

Benefiting from Lessons Learned

Drucker encourages organizations to ask: “Is this the best application of our scarce resources? There is so much work to be done. Let’s put our resources where the results are. We cannot afford to be righteous and continue this project where we seem to be unable to achieve the results we’ve set for ourselves.”9

In the courts, there are numerous time-worn issues that continue to pop up and that are hard to fix. Attorney scheduling in high-volume courts is one example. Another example is the balance between having enough, but not too many, potential jurors summoned to account for jury trial needs. For a variety of reasons, courts do not have the luxury of expending time and money for numerous, repeated efforts to use the same strategy to fix or improve something. Because of this, having a long-term collective memory about what has been tried and failed (a.k.a. “lessons learned”) may be just as important as knowing what has succeeded. Also, knowing when to change course is essential, as is retaining knowledge of why attempted changes did not work. For a change to fail is understandable and will happen. Not learning from a failed change, however, is to fail twice: first by the failed change and second by failing to learn from the failed change. It is essential to benefit from lessons learned to avoid that second failure.

Celebrating Accomplishments and Contributions

Drucker is blunt in describing employee development:

• “Any organization develops people; it has no choice. It either helps them grow or it stunts them. It either forms them or it deforms them.”

• “[I]f you want people to perform in an organization, you have to use their strengths—not emphasize their weaknesses.”

• “Although successful business executives have learned that workers are not entirely motivated by paychecks or promotions—they need more—the need is even greater in non-profit institutions. Even paid staff in these organizations needs achievement, the satisfaction of service, or they become alienated and even hostile.”10

The courts, as with nonprofits, do not typically pay monetary bonuses for additional contributions, and in fact may be prohibited from doing so. Instead, paradoxically, individuals in the courts who are doing well typically are asked to do their regular job and also be involved in special projects without any change in pay. As a result, they are asked to do more work for the same monetary compensation.

Given this, it is important for courts to celebrate the contributions of individuals to the team and to the organization. This not only provides credit where credit is due, but it also allows individuals involved in the project to understand that their work is appreciated and important. Such efforts also recognize the team, encourage involvement in future efforts, and foster a positive work environment. The “cake and cookies” celebration after the completion of the project can have far more significance than simply providing people sweets. Thank you announcements and notes, certificates, and other nonmonetary recognition can be vitally important in the courts.

As with nonprofits, court employees who serve on productive teams and projects are rewarded by being asked to do so again in future endeavors without additional compensation. Celebration of achievement serves as a sort of psychic compensation, particularly where additional monetary compensation is not an option. Why would people work on difficult, time-consuming projects for no additional monetary compensation? Some don’t. But those who do often have been encouraged, have been instilled with the purpose of the organization, and feel a sense of ownership, satisfaction, and pride in the additional work.

Finally, people remember how they are treated, particularly when they begin a journey and when they end a journey. In the courts, recognizing the addition of an individual to a team is important. Even more important is to celebrate the contribution of an individual who is leaving the team. In this sense, successful courts (as with nonprofit organizations) understand that additional monetary compensation is not a necessary component of a productive organization. They wisely stress purpose, community-building, and employee satisfaction to constantly improve.

Conclusion

Effective court management comes in a variety of different forms, and there are certainly lessons to be learned from the for-profit sector. However, courts also can benefit from adapting “best practices” in nonprofit organizations. As in nonprofit management, court systems will benefit from focusing on (1) identifying, communicating, and understanding the mission; (2) embracing change and innovation; (3) adopting the team concept; (4) being accountable; (5) welcoming dissent but targeting consensus; (6) benefiting from lessons learned; and (7) celebrating accomplishments and contributions.

The views expressed are solely those of the authors and do not represent those of the Arizona Court of Appeals.

Endnotes

  1. Recognizing there are some extremely large nonprofit organizations and some extremely small for-profit organizations, this discussion uses more stereotypic examples where the for-profit organization is a large, publicly held corporation and the nonprofit is a local, largely volunteer, cause-based organization. The discussion adopts some concepts found in Authenticity Consulting, How Nonprofits Differ from For-Profits—and How They Are the Same, available at http://managementhelp.org/misc/Nonprofits-ForProfits.pdf (last visited May 21, 2016).
  2. Quotes from Peter F. Drucker, Managing the Nonprofit Organization 4, 114, 149 (2006).
  3. Id. at 66.
  4. Id. at 68.
  5. Id. at 152–53.
  6. Id. at 184.
  7. Id. at 193.
  8. Quotes from id. at 125, 126–27.
  9. Id. at 112.
  10. Id. at 147, 181.