Author: eugenefram

Dr. Eugene Fram has over 25 years experience as a non-profit board member, consultant, and author. His model of nonprofit governance has been adopted by thousands of organizaations.

Stay on That Nonprofit Board!

By: Eugene Fram

Gene Takagi, noted San Francisco attorney, who specializes in nonprofit organizations published an article listing 12 reasons for resigning from a nonprofit board. It is worth reading.*

BUT

Nonprofit board members often become impatient with the slow pace of progress toward positive change. Here are some actions that may change the situation, improve service to clients and prepare the organization for any long-term mission disruptions.

• Talk With The CEO: He/s may feel the same frustrations and be delighted to find a board member who shares his goals. In fact, she/h may be thinking of leaving or be wedded to the current area only because of a family situation. As a result, your conversation may give a chief executive new hope and energy. On the other hand, if the CEO is too aligned with the past, it will be unlikely that the board will terminate the current CEO, unless there are some performance malfeasances involved. Then, estimate the CEO’s remaining tenure and use remaining time to find opportunities to make modest increments in change.

• Talk With Other Directors: Between board meetings, have informal coffee sessions with other directors to determine their views on the areas in which you feel change is necessary. Three or four board opinion leaders can garner positive movement, assuming there are no strong objections from the CEO.

• Outside Validation. If sufficient budget is available, ask the board to engage a consultant to examine the potentials for change. The rationale for the request might be: “We are doing well, let’s determine how we can better serve our clients.” If budget isn’t available or the CEO is against the expenditure, try to have the board arrange, for an outside speaker or two who might validate the need for change. This might be a person from the field or a local professor who has some insights aligned with change-focused board members .

• Seek Outside Financing: Personally seek sources for capacity grants that, if awarded, might be developed to further help clients. Ask the board to take leadership in applying for several of these grants. A single successful grant might be the linchpin to promote the type of change desired by the group having similar views.

• Chair The Nominations Committee: As chair, the director can be in a position to search for candidates who are forward looking. In addition, the committee, under the urging of the chair, can seek candidates who have served on other nonprofit boards and who have proven their meddle to bring about change.

Summary
For any single board member of a status quo nonprofit to lead a change on organizational culture will require tenacity, time and patience. The person will need to be extremely dedicated to the organization’s mission and want to improve the services to its clients. Very few board members have the grit to lead such a change. However, a small-motivated group can be an advanced guard to initiate some actions in the right direction. But the group will have to keep Peter Drucker’s insight in mind when the going gets tough, “Culture eats strategy change for breakfast.”

An unusual case of an ED accused of serious malfeasance, but the board refused to fire him. http://bit.ly/1om6XUw

*https://nonprofitquarterly.org/12-reasons-resign-nonprofit-board/

Does A New Nonprofit Board Member Really Understand Your Organization?  The New Board Member Nurturing Challenge!

 

Does A New Nonprofit Board Member Really Understand Your Organization?  The New Board Member Nurturing Challenge!

By: Eugene Fram       Free Digital Image

The careful nurturing of a new board member, whether for-profit or nonprofit, is critical. The pay-off of a robust orientation process is an informed and fully participating board director. The following are very similar occurrences in both for-profit and nonprofit boards:

The CEO of a transportation firm agrees to become a board director of a firm developing computer programs. He has risen through the transportation ranks with a financial background, but he knows little about the dynamics of the computer industry.

A finance professor is asked to serve on the board of a nonprofit school serving handicapped children. She has no children of her own and has never had any contact with handicapped children, social workers or teachers serving handicapped children.

In these similar cases, the new board member needs to become reasonably conversant with a new industry or a new human service field in order to be able to better apply policy development skills, strategic planning skills and to allow generative thinking.

On nonprofit boards, the problem is exacerbated when the new board member often is asked to immediately join a specific board committee without being able to understand the board perspectives and the organization’s mission vision and values. Following are ways in which the nonprofit board can resolve this problem:

  • Don’t appoint the new board member to committee until she/h has completed a board orientation program including a review of board procedures, attending several board meetings, has had visits with the staff, as they normally operate, and becomes alert to the major trends in the field. This ideally should take about six months assuming the board member is employed full-time elsewhere.
  • During this time, the chief executive and board president should be available to visit with the new board member as frequently as she/h wants in order to respond to questions.
  • Hopefully, the chief executive would informally meet the new board member (and each established director) quarterly to review current issues and opportunities. In addition to the information presented at the board meetings, this will provide a better perspective of the board’s mission, vision and values.
  • Ideally, the board volunteer should attend one staff meeting and one outside professional meeting to acquire a feeling for the topics reviewed at these gatherings and the field terminology.
  • During the first year, a senior board member needs be seated next to the new person at meetings to act  as a “host” for the new board member.

If most of these actions can be accomplished within a six-month period, major blind spots are removed, and the new board member can then join a standing board committee or an active task force. Now, reasonably understanding the organization and her/h own participation on the board, she/h has a background to make a substantial contribution for years to come.

Applying Fundamentals of a Nonprofit’s DNA To Enhance Planning

Applying Fundamentals of a Nonprofit’s DNA To Enhance Planning

By: Eugene Fram         Free Digital Image 

No two nonprofit organizations are identical. Each may reflect similar missions visions and values but—because of basic differences in their DNAs * —are clearly impacted by distinct characteristics that may have developed over a long time period.

Bob Harris, CAE, suggests a nonprofit’s DNA consists of five elements. * * Following are my thoughts on how they can be applied, if a nonprofit board wants to develop an understanding of the “real world” applications of the Harris DNA elements. This needs to take place prior to the planning efforts.

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Two Nonprofits Merge: Synergy or Collision Course?

 

Two Nonprofits Merge: Synergy of Collision Course?

By Eugene Fram              Free Digital Image

Having led a merger committee that resulted in a successful merger with another nonprofit, I thought my field observations might be of interest to others contemplating a merger. These comments center on a merger of two equal partners, which plan to form a new organization, not the acquisition of one nonprofit by another.

Assuming both organizations have merger committees that meet frequently, over an extended time period, the following initial issues need to be reviewed:

• Are the mission, vision and values of both organizations the same or sufficiently similar?

• Are there any financial issues that might cloud the negotiations?

• Do the two merger committees work well together and view each other positively as potential colleagues?

• Are both groups willing to invest the board time and financial resources to bring about a melding of the two groups?

• Are there any factions in either of the two organizations that might be emotionally opposed to the merger?

• What, at this early stage, might be some barriers (“deal breakers”) to the merger?

• What needs to be done to move the merger process forward and to develop an implementation plan, if both boards agree to the merger?

• How will the impact of the merger be determined and at what intervals will it be measured?

• In the event that either or both organizations are dissatisfied with the merger, what specific detail need to be specified in a “prenuptial” breakup agreement?

• How will the CEO of the merged organization be determined? This will have to be decided amicably

• How can morale of both organizations be maintained during merger discussions? What incentives need to be developed to maintain those who will certainly need a new job, e.g. CFO?

The Devil Is In The Details – Are These “Deal Breakers?”

• Consider various stakeholders who might be impacted by the merger. (These can include: community leaders, managers, staff, funders, vendors, media, etc.) How can consensus be achieved?

• Where will the new nonprofit be physically located? What are the real estates implications?

• The combination will probably require layoffs and new reporting arrangements. How will these be decided?

• How will the new board be constituted? Will a larger new board be necessary? If not, what is the plan for paring down the size of the new board.

• What legal counsel will be needed and at what costs? Will foundation support be needed to establish the merger?

• What systems or interpersonal relationships are necessary to avoid “surprises” before or after the merger?

Never Underestimate the Importance of Culture

The failure of the AOL-Time Warner merger has become an all time classic example of the failure of the two cultures to blend into a new culture. I have observed that blending two nonprofit organizations will certainly encounter cultural “bumps in the road,” starting about six months after the merger and can continue for several years. Although the mission, vision and values of both groups may be identical, culturally inspired blips can arise from differences in which previous boards operated, from expectations of the CEO, from staff differences, etc. However, they do take time, persistence and board leadership to resolve.

Any merger will have its own specific imprint. However, I hope that the guidelines cited above will be helpful in navigating the rough shoals that frequently appear after the honeymoon period.

 

Once Again!! Dysfunctional Levels in Nonprofit Boards & Organizations.

 

 

By: Eugene Fram.       Free Digital Image

Articles and studies from a Google search on “Dysfunctions in Nonprofit Boards & Organizations,” yields nearly two million items in less than a minute. These items show dysfunctions on charter school boards, church boards, healthcare boards, trade associations, human services boards etc.

Rick Moyers, a well-known nonprofit commentator and nonprofit researcher, concluded:

“A decade’s worth of research suggests that board performance is at best uneven and at worst highly dysfunctional. ….. The experiences of serving on a board — unless it is high functioning, superbly led, supported by a skilled staff and working in a true partnership with the executive – is quite the opposite of engaging.”

These data and comments can lead one to conclude that all nonprofit boards are dysfunctional. I suggest that nonprofit boards can generate a range of dysfunctional behavioral outcomes, but the staff can muddle through and continue to adequately serve clients.

Mildly Dysfunctional: Board meeting attendance can be a problem, left unattended by the board chair and CEO. Agendas are not completed within the meeting time frame. Strategic planning discussions takes place once a year with little reference to it between annual meeting retreats. Goals are established without measured outcomes, or more importantly–Impacts.
On the other hand, budgets and finances are reasonably well handled. Incremental growth each year is modest. Board recruitment takes place largely based on board contacts and friendships, with a few recommendations by the CEO. Most everyone on the board is mildly or fully dedicated to the organization’s mission.

Moderately Dysfunctional: Many of the above dysfunctions, plus one or more of the following ones:

• The board chair and/or the CEO receive heightened deference in board discussions.
• Important decisions are made without full participation by all board members. One of two directors set the tone for the discussions and the outcomes.
• Either the board chair or CEO has inadequate backgrounds to develop a robust board. Nearly all agenda topics center on operational issues.
• The board does not trust the CEO but is unwilling to take action to remove him or her.
• The mission is not clearly defined and “mission creep” can be a problem. In this instance, the staff can be productive, if some managers are able to isolate staff from the board dysfunctions.

Highly Dysfunctional: Many of the following board behaviors are exhibited:

• The board is divided into unyielding factions, a la the current US congress.
• Board discussions go beyond civil discourse into personal barbs, often disguised as humor.
• Board committees are not functioning properly. Important decisions are often delayed for a year or more.
• Rumors about the board conflicts are reaching funders, who are asking questions about the rumors.
• It is becoming difficult to recruit talented board members or professional personnel.
• The board chair and other board directors refuse to acknowledge the problems.

There is little that the staff can do in this situation, except to hope for a funding angel to cover the financial problems that will develop. However, I did observe one organization that recovered from such highly dysfunctional board behaviors and finally succeeded in recruiting more talented board members. It also adopted a new governance format. The change led to some board members to resign. (One was insisting that the board members should evaluate individual staff personnel!) However the mistrust between the board and staff, as a result of the dysfunctional board behaviors, continued for decades.

Associations, Board agendas, Board meetings, Board Recuitment, Building Trust, CEO Evaluations, Charity, Consistency, Crisis Management, Dysfunctional nonprofits, foundation boards, Good governance, Ineffective directors, Long-term Sustainability, Non-profit board of directors, Nonprofit board barriers, Nonprofit governance, Nonprofit impacts, Nonprofit mangement, Trustees, Trustees, 

 

     

     

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    What Role Should nonprofit Board Members Play in Overviewing Management /Staff Talent?

     

    What Role Should Nonprofit Board Members Play in Overviewing Management /Staff Talent?

    By: Eugene Fram    Free Digital Image

    Nonprofit boards rarely develop an in-depth strategy for assessing its organization’s human capital. Some will keep informal tabs on the CEO’s direct reports to prepare for the possibility of his/her sudden departure or is incapacitated. Others –smaller organizations with fewer than 20 employees—need only a basic plan for such an occurrence.

    Need for Strategy: In my view, maintaining a viable talent strategy to assess staff and management personnel is a board responsibility, albeit one that is often ignored. The latter stems from the constant turnover of nonprofit board members whose median term of service is 4-6 years—hardly a lifetime commitment. Like for-profit board members whose focus is on quarterly earning results, their nonprofit counterparts are likely more interested in resolving current problems than in building sufficient bench strength for the organization’s long-term sustainability.

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    Guidelines For Developing Authentic Nonprofit Board Leaders

    Guidelines For Developing Authentic Nonprofit Board Leaders

    By Eugene Fram               Free Digital Image

    The problems of Wells Fargo and Enron  have provided negative examples for future leaders, according to William George, Senior Fellow at the Harvard Business School. As an antidote to these and others serious problems that have plagued business and nonprofits in the last several decades, he cites the movement towards Authentic Leadership. He further lists six guidelines to identify behaviors in such leaders. Following are my views on how his guidelines can be useful to directors and managers in the nonprofit environment. (http://hbswk.hbs.edu/item/authentic-leadership-rediscovered)

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    Once Again: How to Keep Nonprofit Board Members Informed.

    Once Again: How to Keep Nonprofit Board Members Informed.

    By: Eugene Fram.            Free Digital Image

    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 board members informed of significant developments. Still, there’s no need to clutter regular board meetings by reporting endless details about operations.

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    Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: An Evergreen Board Problem?

    Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: An Evergreen Board Problem?

    By: Eugene Fram    Free Digital Image

    At coffee a friend serving on a nonprofit board reported plans to resign from the board shortly. His complaints centered on the board’s unwillingness to take critical actions necessary to help the organization grow.

    In specific, the board failed to take any action to remove a board member who wasn’t attending meetings, but he refused to resign. His three-year term had another 18 months to go, and the board had a bylaws obligation to summarily remove him from the board. However, a majority of directors decided such action would hurt the board member’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action.

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    Measuring Nonprofits’ Impacts: A Necessary Process for the 21st Century

     

    Measuring Nonprofits’ Impacts: A Necessary Process for the 21st Century

    By Eugene Fram      Free Digital Image

    Unfortunately, outcomes and impact are often unrelated, which is why a program that seems to produce better outcomes may create no impact at all. Worse, sometimes they point in opposite directions, as can happen when a program works with harder-to- service populations resulting in seemingly worse conditions, but (has) higher value-added impact. … Rigorous evaluations can measure impact (to a level of statistical accuracy), but they are usually costly (a non starter for many nonprofit), difficult and slow. * But how do the medium and small size nonprofits measure actual results in the outside world such as enhanced quality of life, elevated artistic sensitivity and community commitment?

    A Compromise Solution:

    To close the gap, funders and recipients would need to agree to apply imperfect metrics over time. These are metrics that can be anecdotal, subjective or interpretative. Also they may rely on small samples, uncontrolled situational factors, or they cannot be precisely replicated. ** This would require agreement and trust between funders and recipients as to what level of imprecision can be accepted and perhaps be improved, to assess impacts. It is an experimental approach

    How To Get to Impact Assessment:

    1. Agree on relevant impacts: Metrics should be used to reflect organizational related impacts, not activities or efforts. Impacts should focus on a desired change in the nonprofit’s universe, rather than a set of process activities.
    2. Agree on measurement approaches: These can range from personal interviews to comparisons of local results with national data.
    3. Agree on specific indicators: Outside of available data, such as financial results, and membership numbers, nonprofits should designate behavioral impacts for clients should achieve. Do not add other indicators because they are easily developed or “would be interesting to examine.” Keep the focus on the agreed-upon behavioral outcomes.
    4. Agree on judgment rules: Board and management need to agree at the outset upon the metric numbers for each specific indicator that contributes to the desired strategic objective. The rules can also specify values that are “too high” as well as “too low.”
    5. Compare measurement outcomes with judgment rules to determine organizational impact: Determine how may specific program objectives have reached impact levels to assess whether or not the organization’s strategic impacts have been achieved.

    Lean Experimentation

    The five-point process described above closely follows the philosophy of lean experimentation, ** now suggested for profit making and nonprofit organizations.

    Lean allows nonprofits to use imperfect metrics to obtain impact data from constituents/ stakeholders over time. Under a lean approach, as long as the organizations garners some positive insights after each iteration, it continues to improve the measurement venues and becomes more comfortable with the advantages and limitations of using these metrics.

    Organizationally the nonprofit can use this process to drive change over time by better understanding what is behind the imperfect metrics, especially when a small sample can yield substantial insights, and actually improve the use of the metrics.


    * https://nonprofitquarterly.org/2012/07/24/using-imperfect-metrics-well-tracking-progress-and-driving-change/
    ** http://ssir.org/articles/entry/the_promise_of_lean_experimentation