Nonprofit Boards Should Consider the Implications of Artificial Intelligence (AI)
BY: Eugene Fram Free Digital Image
AI is rapidly being implemented in many environments, some with aggressive intensity. Walmart, for example, will be replacing 7,000 jobs with artificial intelligence powered technology. Foxconn will be replacing 60,000 factory jobs with machines. * While this is a minuscule portion of Walmart’s total employment, it presents a new reality—machines create fascinating outputs that require less energy to produce and do so at lower costs. They are capable of making decisions, regardless of skill level. *
What Nonprofit Skill Levels Might be At Risk (more…)
Over several decades of contacts with nonprofit boards, I have yet to find one that has spent any time trying to define the organization’s culture that delivers service. Yet every organization has one. It defines what the organization has done well and what needs to be changed. It can grow over years haphazardly or change quickly when new board members are elected or when a new CEO is appointed. Those newly appointed, for better or worse, can change the organization’s mission as well as its culture. Nonprofit staffs that work a few levels below the board and CEO organizationally are especially sensitive to cultural movements emanating from above. They know that a change in culture can affect their work and livelihood.
The reason that nonprofit boards rarely try to define the cultures of their organizations is that it is an amorphous subject. Ask a group of directors to define the culture of their board or the organization and quite different answers will be given. Yet there are commonalities that arise that can form the culture—conservative vs. liberal policies; legacy vs. future focused programs; operations are clearly defined vs. CEO dominance assumes board powers in a de facto manner; etc. But cultures need to be defined: Uber failed in the process, while Microsoft has an ambition to transform Microsoft from “a know it all” to a “learn it all culture” *
I recently found a list of 12 attributes of a strong organizational culture. ** Following are six that I suggest that nonprofit boards should consider in assessing their needs of the organizations. My comments provide some practical ways that each can apply to nonprofit boards and organizations. (more…)
Once Again: How to Keep Nonprofit Board Members Informed.
By: Eugene Fram
With high performing nonprofit organizations, board members will rarely be invited by the CEO to participate in operational decisions. As a result, management will always have more information than board members. Yet the board still needs to know that is happening in operations to be able to perform their overview process.
The name of the game is for the CEO to communicate the important information and to keep directors informed of significant developments. Still, there’s no need to clutter regular board meetings by reporting endless details about operations. (more…)
Top Factors For Improving Nonprofit Board Members’ Board Experiences
By: Eugene Fram
Spencer Stuart, an international placement firm, asked 500 directors who serve on for-profit boards to name the top factors that would reasonably improve their board experience. Their answers also resonate in the nonprofit arena. (more…)
• In the planning effort, focus board personnel and financial resources only on those topics that are germane to the organization at a particular time. For example, financial planning, long-range planning or short-range planning. However the board needs to be open to generative planning if new opportunities present themselves or are developed via board leadership. (more…)
Dysfunction in the Nonprofit Sector—Reality or Myth?
By: Eugene Fram Free Digital Image
Judging from the vast literature on dysfunctional nonprofit boards and organizations (my own posts included!) one might conclude that the majority of nonprofits are struggling, incompetent and/or in crisis. I argue that this is not the case. Decades of experience lead me to believe that nonprofits have the same functional variables as profit making organizations—dysfunctional at times like Target or GM; efficient like Apple or Amazon. Everybody doesn’t get it right all the time.
Perceptions become reality to those who are quick to embrace popular labels such as the overused term, “dysfunctional.” Obviously, in the case of nonprofits, such perceptions are harmful. Once evaluated in this way the stigma persists and can seriously reduce the level of support that is so critical to the work of these organizations. (more…)
Clearly the purpose of a nonprofit board is to serve the constituency that establishes it—be it community, industry, governmental unit and the like. That said, the “how” to best deliver those services is often not so clear. An executive committee, for example, can overstep its authority by assuming powers beyond its scope of responsibility. I encountered this in one executive committee when the group developed a strategic plan in an interim period where there was no permanent ED. The board then refused to share it with the incoming executive. In another instance, an executive committee took it upon itself to appoint members of the audit committee—including outsiders who were unknown to the majority on the board.
The fuzziness of boundaries and lack of defined authority call for an active nonprofit system of checks and balances. For a variety of reasons this is difficult for nonprofits to achieve:
A typical nonprofit board member is often recruited from a pool of friends, relatives and colleagues, and will serve, on a median average, for four to six years. This makes it difficult to achieve rigorous debate at meetings (why risk conflicts with board colleagues?). Directors also are not as eager to thoughtfully plan for change beyond the limits of their terms. Besides discussing day-to-day issues, the board needs to make sure that immediate gains do not hamper long-term sustainability.
The culture of micromanagement is frequently a remnant from the early startup years when board members may have performed operational duties. In some boards it becomes embedded in the culture and continues to pervade the governmental environment, allowing the board and executive committee to involve themselves in areas that should be delegated to management
The executive team is a broad partnership of peers–board members, those appointed to the executive committee and the CEO. The executive committee is legally responsible to act for the board between meetings–the board must ratify its decisions. But unchecked, the executive committee can assume dictatorial powers whose conclusions must be rubber-stamped by the board.
Mitigating Oversight Barriers: There is often little individual board members can do to change the course when the DNA has become embedded in the organization. The tradition of micromanagement, for example, is hard to reverse, especially when the culture is continually supported by a succession of like-minded board chairs and CEOs. No single board member can move these barriers given the brevity of the board terms. But there are a few initiatives that three or four directors, working in tandem, can take to move the organization into a high-performance category.
Meetings: At the top of every meeting agenda there needs to be listed at least one policy or strategy related item. When the board discussion begins to wander, the chair should remind the group that they are encroaching on an area that is management’s responsibility. One board I observed wasted an hour’s time because the chair had failed to intercept the conversation in this manner. Another board agreed to change its timing of a major development event, then spent valuable meeting time suggesting formats for the new event—clearly a management responsibility to develop.
“New Age” Board Members: While millennial managers are causing consternation in some nonprofit and business organizations, certain changes in nonprofits are noteworthy. Those directors in the 40- and- under age bracket need some targeted nurturing. I encountered a new young person who energized the board with her eagerness to try innovative development approaches. She was subsequently appointed to the executive committee, deepening her view of the organization and priming her for senior leadership.Board members who understand the robust responsibilities of a 21st century board need to accept responsibilities for mentoring these new age board people, despite their addictions to their electronic devices.
Experienced Board Members: Directors that have served on other high-performance boards have the advantage of being familiar with modern governance processes and are comfortable in supporting change. They are needed to help boards, executive committees and CEOs to move beyond the comfortable bounds of the past. They will be difficult to recruit, but they are required ingredients for successful boards.