“No Margin, No Mission” – Sister Irene Kraus

Religious life seemed to be a foregone conclusion for Irene Kraus. 

Her father, a railroad executive with a penchant for practical jokes, would pray all the way to work. Irene said she prayed too when she rode with him, according to a New York Times article celebrating Kraus’ life.

Kraus graduated from the Daughters of Charity’s Elizabeth Seton High School in Baltimore in 1941. She joined the religious order immediately after graduation. She spent six years teaching elementary and high school students before her superiors decided she should switch to a medical career.

After getting her nursing degree, Kraus moved up the ladder quickly. 

Her first job was at a hospital in Binghamton, N.Y. She became the administrator of that hospital within a few years.

When the five separate hospitals of the Daughters of Charity decided to consolidate their hospital systems in 1986, Sister Irene was put in charge. The operation included 36 hospitals in 17 states with an annual budget of more than $3 billion.

Sister Irene later became the first woman to serve as chairman of the American Hospital Association. When the board considered changing her title to the more gender appropriate chairwoman or chairperson, Kraus refused, telling the board, “I didn’t work this hard to get here and have my title changed!”

Sister Irene cared about margins because she knew a profitable organization was the best way to continue the mission. Let’s look at three reasons margins matter more than ever to for-profit and nonprofit organizations.

Continuity: Cash is oxygen for any organization. Without it, the mission stops. There are no more tries at getting it right. That is why cash management must be the first task of any great leader. Cash is the “airbag” for your organization. If you have it, you can survive failures and market crashes, learn from them, and continue getting better at serving your customers.

Focus On Value: Having a margin mindset keeps leaders focused on providing the highest value to their customers. In a nonprofit setting, you have two sets of customers. Those who fund your mission and those who you provide services to. Maximizing value for both of those constituencies increases your chances of success and your impact.

Forces Creativity: One of Sister Irene’s core values for the organizations she led was to “Be Creative to Infinity.” Creativity is not needed when you have a bottomless budget to serve your constituents. Throwing money at a problem is always the easiest solution and it requires no imagination.

Without a margin mindset, we can all get a little fat and lazy. 

There is something about being between a rock and a hard place that brings out the best in all – as much as I hate it! When pressed, we will find ideas and energy that we did not know existed.

“Consider it a sheer gift, friends, when tests and challenges come at you from all sides. You know that under pressure, your faith-life is forced into the open and shows its true colors. So don’t try to get out of anything prematurely. Let it do its work so you become mature and well-developed, not deficient in any way.” – James 1:2-4, The Message Translation.

That is the power of a margin mindset. We all need it.

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Curt Fowler is president of Fowler & Company and director at Fowler, Holley, Rambo & Stalvey. He is dedicated to helping leaders build great organizations and better lives for themselves and the people they lead.

Curt is a syndicated business writer, keynote speaker and business advisor. He has an MBA in strategy and entrepreneurship from the Kellogg School, is a CPA, and a pretty good guy as defined by his wife and four children.