[Management] Information Up-Flow, Part Of An Effective System

There is a subtle kind of experience that many executives in nonprofit or other types of organizations have gone through, often without a vocabulary to define it, and sometimes without even recognizing what happened. It almost always involves the CEO. The experience can often be so subtle that few of the participants recognize when they’re experiencing it.

This experience is called “up-flow.”

Up-flow is what happens when an executive, usually the CEO, sets up a situation in which positive information (and therefore power) flows subtly from those lower in the hierarchy up to and through the CEO. Almost always it features the many good things the institution has accomplished, such as “we ranked No. 1 in the region” or “we have the highest accreditation score of any similar organization in the state.”

As long as these assertions are true, the employees who helped gain the recognition feel justifiably proud. And if you were on the team you might recognize the feeling, if not the made-up term itself.

There can be a problem with such recognition. Up-flow is not cheerleading. In fact, it is nearly the opposite. Cheerleading is what a CEO or a senior manager does when they select one or more positive aspects of the entity to motivate an internal audience. In contrast, up-flow is ultimately a major shaping force behind the CEO’s outside perception.

What makes up-flow potentially corrosive is when the “buck” literally stops at the CEO, and non-executives most responsible for the good outcomes don’t get sufficient credit. This occurs when the CEO always makes the announcements, generically praises others who are responsible for the positive outcomes, yet rarely shares credit by citing any staff person by name.

To casual observers this might appear to be selflessness. The CEO takes advantage of normal human behavior by excluding any other name from the spotlight. When good news is touted without a name attached, human nature makes it unsatisf ying to attribute it to an amorphous organization. The typical impulse is to associate the sitting CEO with the good news.

This is largely a subconscious reaction, to be sure. Organizational cultures with strong up-flow consistently operate this way, which is what makes the practice so powerful. One of the primary audiences for a CEO engaging in up-flow is the board of directors. By appearing to deflect credit, even to other executives, the CEO can actually enhance the person’s position because it is difficult for the board members to associate positive developments with anyone else.

UP-FLOW FROM THE PAST

An organization’s past is fertile ground for up-flow. When a long-serving CEO publicly praises the organization’s founder (or any previous long-serving CEO) it will usually be a sincere statement of belief. But if the tribute only involves that individual, with no reference to the context within which they succeeded, it is once again understandable for others to link the current CEO with the honored one from the past. After all, most observers won’t see anything but a direct line of successful leaders in a well-run organization.

This is one reason why outsiders might develop a reverence for what seems to be an unerring leader. Often the CEO is rarely found outside the organization in any role not rooted in the organization. This might be a matter of preference and necessity, but it is also one of the better ways to project and protect the positive internal image the CEO has to constantly nurture.

Carrying out a modest up-flow campaign (planned or intuitive) in this environment makes it easier for observers to accept the public leadership profile.

UP-FLOW FROM THE MEDIA

The electronic media rarely create up-flow for an organization, but they often facilitate it. Feel-good stories can create substantial up-flow. Universities are also reliable sources of feel-good media stories in the spring when schools process a blizzard of applications. Borderline-qualified high school seniors score when admissions officers make a group exception are classic beneficiaries of up-flow for the entire school.

UP-FLOW FROM LOWER DECISION MAKERS

Universities also supply up-flow in other ways. Admissions officers trigger waves of up-flow with their positive decisions on applying students. Students can employ their own up-flow strategies to get accepted (in-person interviews are one example). Applicants for university undergraduate programs have a classic up-flow technique -multiple applications, especially in situations where the other competitive schools don’t.

Admission officers probably won’t admit this, but if prospective students apply to many comparable programs it can create a sense of urgency if the responses to acceptance offers fall short of the universities’ targets. This damages the positive up-flow.

HARNESSING UP-FLOW

Up-flow is a strong, overlooked dynamic. To make it work for you, start with the basics. Up-flow works only with positive material, which is why CEOs prefer it. In large organizations of any kind there is usually sufficient opportunity to gain from ordinary up-flow. Negative material has its own “rules” but it doesn’t lead to positive professional recognition.

Executives in small nonprofits typically can’t rely on organizational scale for up-flow to work. That doesn’t mean that up-flow fails in small organizations. In fact, CEOs of smaller organizations arguably can make it work very well. A key for small organization CEOs seeking to tap into up-flow is to find a way to magnify the normal results. Effective up-flow relies on proven pathways and internal connections.

What makes up-flow recognition difficult for anyone to capitalize on other than the CEO is when there is too much of a “crowd.” The majority of nonprofit organizations aren’t at risk for internal competition at the highest level because most nonprofits don’t have a large senior management team. This is why up-flow doesn’t usually work well for small organizations’ managers.

A look into the future suggests that up-flow will become more of a practiced art for medium to large nonprofits. This is because in social services, health care, and education -all major fields for nonprofits -there will be fewer, stronger service delivery systems. The hospital field already experienced such a transition when community hospitals either went out of business or folded into larger entities.

A new wave of nonprofit mergers is already underway in many parts of the country. It will be created by retiring Boomers. Eventually the trend will take on a more systems focus.

An example of such a shift will involve larger organizations with a retiring CEO and a smaller organization with a very qualified Gen X CEO who will become the new CEO. This will become a normal event in fields where name recognition and large service infrastructures are critical components of service delivery. Managing up-flow for these new entities will be crucial.

Up-flow is not about CEO pride. It’s about positioning the organization. Up-flow is a normal part of organizational structure, whether the funders are mixed and varied or governmental in nature. Outside partners and potential partners need to feel they are part of a well-run and effective system led by an effective CEO, and up-flow is a part of that.

Tom McLaughlin is the founder of the nonprofit-oriented consulting firm McLaughlin & Associates and the author of “Streetsmart Financial Basics for Nonprofit Managers,” 4th edition, published by Wiley. His email address is tamclaughlin@comcast.net