Identify Nonprofit Staff Groups To Help Drive Organizational Change.
By Eugene Fram Free Digital Image
Nonprofit executive directors Board Members tend to think of the staff professionals as individual contributors. These individuals are persons who mainly work on their own and but increasingly also have to contribute as team players – for instance, counselors, health care professionals, curators and university faculty. However, many executive directors fail to recognize that these individual contributors can be grouped according to identifiable types, with differing work-value outlooks. Each group needs to be motivated differently to drive change in today’s fast moving social, political and technological environments. Nonprofit board members can use these groupings in their responsibilities for overseeing promotable staff members.
Unwritten Protocols for Directors Can Boost Nonprofits’ Effectiveness
By: Eugene Fram Free Digital Photo
Nonprofit boards are governed by a series of obligations —some are clearly defined as legal responsibilities such as financial actions. Others, however, are less clearly defined and relate to people who are, in some way, associated with the organization. Guidelines to these diverse interactions are not typically archived in policies but are important to the overall professionalism of the board. They include consideration of its: board structure, internal operations, recruitment methods and leadership style.
In the best of all nonprofit worlds, every board member is an independent agent whose ability to make critical decisions on behalf of the organization is regularly uncompromised by outside pressures. This, unfortunately, is not always the case. Based on field observation I have concluded that questionable practices can plague nonprofit boards when social or political pressures are brought to bear on a board member. In governance terms nonprofit decision-makers should be “outside directors,” not overtly or covertly susceptible to management or board colleague personal pressures.
Discerning recruitment committees can screen candidates to be certain they are not subject to influences that might impair their judgment as board members. Lack of independence could easily divide and perhaps polarize the board as has happened in our country’s Congress. A candidate who is “sponsored” by a major donor and maintains personal ties with the donor can create a “hornet’s nest” for the recruitment group. There are no easy solutions to these problems.
Some typical examples of the apparent loss of independence:
• The legacy challenge. A board member is appointed to the board largely because his family has served on the board for generations, not because of his talent and/or commitment to the mission. If there are too many “legacies” on board, the optimal range of perspectives is narrowed resulting in inadequate discussion of potential actions. • The chief executive does not keep a professional social distance from the board chair and/or other board members. For example, their families are frequently engaged socially. • In “prestige boards,” a business or professional person persuades the board to accept a candidate who is business associate because he/she is a “good person” who needs board experience for networking purposes. • A candidate for a directorship has significantly caused problems on another nonprofit board, but a current active board member, a friend of the candidate, wants him to be elected so that he/she can be given a second chance.
What Can Be Done? Sometimes Nothing: But:
• Clearly acknowledge the challenges where they exist and then seek new candidates without such encumbering ties. • If possible, try to confront the situation directly, if it does not cause a schism within your board. Develop a policy, not a rule, which allows someone to open discussion if one of these issues arises. • Make independence one of the characteristics desired for board candidates and clearly acknowledge what is meant by the term. • A nonprofit board member can serve only one master—the organization’s mission. On the other hand, no nonprofit board that I have encountered is totally independent. As long as a board has enough members who are not beholden to other interests there should be no impairment in achieving the organization’s goals.
This type of subtle influence is rarely discussed, and to my knowledge, has never been researched. But, if left unattended by nonprofit recruitment committees, it can lead to political board schisms that seriously impact the organization.
A Nonprofit Paradox: Weak Leadership Pool, Positive Organizational Outcomes?
By: Eugene Fram Free Digital Image
It happens: one or both of the two nonprofit engines—governance and/or management — sputters out, yet the organization continues to meet its goals and deliver adequate service to its constituents. Some examples: a child placement agency manages to maintain the quality of its oversight while struggling to deal with an admittedly inept board and CEO. Another example: An ineffective volunteer board at a youth center, meeting quarterly for a couple of hours, allows the CEO to really manage the board and to motivate the staff. The CEO realized she and the agency were in dangerous positions without an innovative board providing standard oversight, although client services were positive. (more…)
Once Again! The Possibility Of Fraud – A Nonprofit Board Alert
By: Eugene Fram Free Digital Image
“According to a Washington Post analysis of the filings from 2008-2012 … of more than 1,000 nonprofit organizations, … there was a ‘significant diversion’ of nonprofit assets, disclosing losses attributed to theft, investment frauds, embezzlement and other unauthorized uses of funds.” The top 20 organizations in the Post’s analysis had a combined potential total loss of more than a half-billion dollars. *
One estimate, by Harvard University’s Houser Center for Nonprofit Organizations, suggests that fraud losses among U.S. nonprofits are approximately $40 billion a year. **
Vigilant nonprofit boards might prevent many of these losses. Here’s how:
How Does Cultural Intelligence (CQ)* Impact A Nonprofit Board?
By: Eugene Fram Free Digital Photo
There are many ways to assess the balance of capabilities on a nonprofit board. EDs and board chairs are generally familiar with the implications of terms like IQ (cognitive ability) and EQ (emotional intelligence). New research has added a third characteristic— cultural intelligence or CQ. Obviously, CQ comes into focus when boards are dealing with global or international issues. But its usefulness is still germane to community-based and/or domestically focused professional/trade associations. Making a change in board strategy is at best a challenging process. But when that plan collides with cultural differences, board culture will trump change. To paraphrase Peter Drucker’s pronouncement—“Culture Eats Strategy for Lunch.” Following are a few of the many types of nonprofit CQ divisions that I have observed:
Baby Boomers vs. Millennials: Up to this point in their history, NFP boards have tended to be organizationally conservative, but this may be changing rapidly. One of the most prominent developments is the influence of the millennials, those born rough between 1980 and the turn of the new century. The new cohorts tend to have cultural values that are quite different from those of their parent or grandparents.Millennial work patterns, for example, are more informal, often spanning long hours and ignoring 9 to 5 routines. All of this can create a cultural gap between themselves and their boomer board colleagues and between baby boom management and millennial staffs. As they move into senior management positions,will they collide with those who have adhered to traditional conservative nonprofit cultures? Currently their social values align with those of many human service nonprofits. But in the future, will cultural values they encounter frustrate them to the point of turning their energies toward other career opportunities? One current report concludes, “Despite what you may have heard, millennials aren’t lazy. In fact they’re downright work-obsessed–and it’s making life worse for everybody.”
Entrepreneurs vs. Public Service Backgrounds: Persons with public service backgrounds tend to move slowly in bringing about change. For example, the challenge of developing consensus among city council members can be daunting. In contrast, an entrepreneur must be able to pivot his/h organization quickly from plan A to plan B. Consequently, “processing” takes precedence over “pivoting” when an NFP organizational change is proposed. These two board types brings different tempos to board discussions. If the gap is left unresolved, the entrepreneur may leave and a valuable voice is lost. Unfortunately, in my experience, I have met too many entrepreneurs who simply refuse to accept nonprofit board positions because of this discrepancy.
Management Backgrounds vs. Independent Contributors: Persons with management background are directors who have had leadership responsibilities with small or large groups of subordinates. Independent contributors are those who basically work alone or may only have responsibilities for just a few subordinates—e.g., attorneys, professors, planners or physicians. Board members in the latter group can assume they have management knowledge superior to the executive director’s or other senior personnel. Often their insights are outside a manager’s experience “space.” This creates a cultural gap that can be harmful to nonprofit’s operations. Example: A medical association board refused to set performance standards. for its executive director and staff. One staff member commented, “Board members don’t want to build trust and establish mutually accepted goals, these guys just want to give orders.” The cultural gap was substantial because management and staff did not know the standards and behaviors by which they will be judged annually. Another staff colleague angrily commented, “I’m not going to allow a twenty-something medical intern order me what to do!”
How to bridge the gap
Board chairs and EDs should develop a realistic inventory of the types of CQs on their board to be certain that one style is does not dominate.
With the continual turnover of board membership and with annually changing board chairs, the ED needs to assume long-term responsibility for the inventory.
It probably is not possible to develop a perfect balance of cultural norms. As a result, the chair and ED must make sure that those who have “minority CQs,” such as the entrepreneur described above, feel that their participation is meaningful and appreciated.
Never underestimate the impact of culture and its various CQ components. The dominant legacy, especially with successful nonprofits, must be widely accepted. But it also should be reviewed occasionally to make certain that the board is not simply accepting it at face value. The Impacts must be robust performance for all clients, along with innovative and operational effectiveness. Assessing board member’s CQ categories can be a challenge for many chairs and EDs. These categories often do not fit into discrete groupings like age and educational levels. But practice with them over time should be helpful. They allow chairs and EDs to better retain those productive outliers whose CQs may not fit the traditional legacy culture.
Guidelines For Developing Authentic Nonprofit Board Leaders
By Eugene Fram Free Digital Image
As an antidote to the leadership succession problems that have plagued business and nonprofits in the last several decades, the Authentic Leadership model proposed by William George, Harvard professor, may be of interest. 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)
Authentic leadership is built on your character, not your style: According to George, these leaders must have flexible styles to be able to fill different role at different times—coach, mentor and inspiring others who must work with a minimum of management guidance. Example: He/s has to “stay on message” in any discussions of mission, vision and values. This is especially important when the economic environment is turbulent.
Because nonprofit boards must draw their candidates from a broad base of backgrounds, any board, in my opinion, can only hope to have three or four board members who can be authentic leaders and eventually fill the board chair position. Often professionals, such as physicians, professors and lawyers, as independent contributors, can lack leadership and strategic insights. Consequently, the CEO must contribute these insights when such a knowledge gap exists on the board in relation to strategy. Several nonprofit boards I have recently encountered, mainly composed of mid-level managers and independent professionals have lacked a single board member with any strategic background. Results: The strategic plan consisted of a broad-brush “strengths, weaknesses, opportunities and threats” (SWOT) analysis. Hardly a valuable planning document for the 21st century.
In terms of management selection, boards need to seek those who can make the hard decisions such as CEO termination and/or having to implement a board decision that is vigorously opposed by a small minority. But the leader must still remain an authentic person, even under these difficult circumstances. Example: One CEO I encountered had the amazing ability of being able to fire a subordinate but still maintain good interpersonal relations with the person—an amazing interpersonal managerial talent, indicating an authentic leader.
Authentic leaders are real and genuine. A nonprofit board member can be a distant personality to the management and staff. Only a crisis may determine the level of authenticity of his or her leadership style. But board members in working with management and staff on projects and in social contacts need to show that they are flexible and fair persons in their decision processes. Nonprofits are somewhat different from for-profits because the staff can be only two organizational levels below the board. Consequently staff members monitor board changes closely because they know a new strong personality can impact their futures and working conditions. Example: Two professors persuaded their board colleagues to adopt an overly detailed Management by Objectives program. It stressed the staff to spend a huge amount of time reviewing and assessing objectives, instead of client center work.
One way to view these characteristics is in the evaluation process of the CEO and organization. The process must be unscrupulously rigorous but fair to all concerned. (Example: see http://bit.ly/OvF4ri) Otherwise the management and staff will view the board as a distant body, only dedicated to financial results. Organizational morale will be impacted.
Authentic leaders are constantly growing. In terms of their board membership, they are seeking to learning about the organization’s environment, concerns and opportunities. They are curious people always seeking insights into the personal, professional, cultural and civic worlds in which they live. Harvard’s George defines their behaviors in this way, “ They do not have a rigid view of themselves and their leadership. Becoming authentic is a developmental state that enables leaders to progress through multiple roles, as they learn and grow from their experiences.”
Authentic leaders match their behavior to their context. Often they may have modest Intelligence Levels (IQ) levels but they have very high Emotional Intelligence (EQ), providing them with outstanding people skills. They can quickly recognize interpersonal challenges around them, and they provide moderating solutions. Many are described as not being quick to anger. Most importantly in the nonprofit board situation, they can empathize with board, management and staff problems, even though their full-time occupations are outside the organization’s mission arena.
Authentic leaders are not perfect, nor do they try to be. Nobody does his/h job perfectly, and authentic nonprofit board leaders are quick to accept this reality for themselves and others around them, for example the CEO. They know from experience that leaders can learn from their mistakes and become better leaders.
Summary Authentic leaders are frequently chosen today for the key roles in business and nonprofits, according to William George. In an era when nonprofits are being challenged by budget cuts and a surplus of unfulfilled client needs, it behooves board nominations and CEO search committees to review the above list of behaviors. Those who are fortunate to engage these leaders, in turn, should improve board and staff performance –“A” players hire “A” players.
How Prepared Are Board Members for the Challenges of the Nonprofit Culture?
By: Eugene Fram Free Digital Image
Given that the typical tenure of a new board member is six years. In addition, a new board member’s intention may be to make his/her unique contribution to the organization’s progress before he/s rotates off the board and is supplanted by another “new” director. With these factors in mind, I estimate that many volunteers enter the boardroom with little understanding of nonprofit culture. Even those who have served previously on business boards may initially spend valuable time in accommodating to the nuances of nonprofit practices and priorities before being poised to make contributions to the “greater good” that nonprofits create. Following are some areas that are endemic to nonprofits:
• Mission is Impact: Whereas the central mission of corporate boards is to make money for shareholders, nonprofit organizations, with their multitude of diverse missions, are commonly invested in impact. Most nonprofit directors, managers and staff are committed to helping the nonprofit organization fulfill its unique mission. I have seen staff and managers, often with highly marketable skills, remain with nonprofits despite financial pressure to move on. Dedication to the organization’s raison d’etre is a strong motivator that keeps good people working towards its accomplishment. Both types of organizations can report financial results quarterly, but nonprofits struggle to measure such long-term mission outcomes as ” … enhanced quality of life, elevated artistic sensitivity, community commitment and successful advocacy… .” The elusive nonprofit challenge becomes how to measure impact in order to assess mission fulfillment. (http://bit.ly/OvF4ri)
• A Slower Pace: The pace of the decision process is decidedly slower in nonprofits than in the corporate board. This can occur for a number of possible reasons. It could be that the NFP’s charter may purposely set up requirements that preclude hasty and possibly unwise decisions—by mandating a period of deliberation before an action is formally voted upon. It may possibly be that the organization recognizes that it has insufficient staff for fast implementation. And there have been a number of cases when a nonprofit board has had to defer action because a succession of meetings has not produced a voting quorum!
• Get or Give Obligations: Nonprofit board members are said to stand “10 feet tall” in response to their commitment and service to the organization. The value of their time, energy and expertise is immeasurable. Another important aspect of good board management is ensuring the availability of adequate funds. To this end, many nonprofits ask board members to help generate and/or make annual donations themselves within the parameters of their resources. Commonly, directors are urged to make a “stretch” gift– and there are times when they are even requested to make their largest donation to that organization or seek donations or services from others. Some directors resist this type of pressure. But even with a development staff taking proactive development responsibility, it is still the board’s responsibility to pursue funds by every appropriate means.
• Board Chair, CEO and Staff Relationships: This triumvirate of positions makes up the lifeline of any nonprofit organization. Both Board Chair and CEO have their own designated spheres of influence that sometimes succumb to a board culture that is resistant to change. The staff has its own set of issues related to the nonprofit’s “flat” structure. Here are some cultural breakdowns in internal relationships that can be disruptive to the organization.
The NFP Board Chair is probably more important than in an FP organization. The rank and file board members often defer to the current chair on proposed actions– generally to avoid conflict, which might impact donations or hobble potential networking efforts. This hesitancy to challenge the leadership cannot only impede progress but is apt to give the board a “rubber stamp” image..
The CEO will be the keystone to implementing a high-performance culture in a nonprofit organization. Boards are frequently resistant to consider replacing a CEO as long as he/s is producing at a “C” or “B” level. “If it’s not broken, why fix it?” is the view, albeit a short-term response. Understandably, the frequently shifting body of board members finds that maintaining the status quo is less disruptive. It is not, however, always in the best interest of the organization and its potential to grow and serve clients.
The Staff, unlike in the FP hierarchy, is structurally often only one or two levels below the board, thus well attuned to the frequent rotations of board personnel. A continual shifting body of directors makes staff members vulnerable to changing priorities, which can significantly impact their work. Nonprofits should offer many opportunities for staff and board to communicate appropriately—to interact in informal settings and on board-staff committees. But creeping board micromanagement needs to be avoided as a danger for nonprofits.
Summary: Once acclimated to the unique challenges of the nonprofit culture, serving on the board can provide an exceptionally rewarding experience. Board members will have a chance to work with others who are dedicated to the work of serving people with significant personal needs, improving the positive contributions of professional and trade associations and bringing value and enrichment to their communities.
Lifestyle & Behavioral Information – Some New Ways To Seek High Performance Nonprofit Board Members?
By: Eugene Fram Free Digital Image
Over several years, I have conducted nonprofit board recruitment projects. Two boards with which I worked had rather similar challenges. • They had concerns recruiting sufficient numbers of board members to fill their needs. • Current board members, largely composed of younger people, in the 30-40-age range, had significant problems balancing work and family obligations and attending board and committee meetings. • Attendance was sporadic. Although the boards were small, board members really did not know each other, and, in another situation, a board member sent a work subordinate to attend board meetings. A well-regarded board member never attended meetings and only occasionally met with the ED to offer advice. In both instances EDs and board chairs had significant power. One of the EDs complained she was doing the work of operating the organization and operating the board, and this may lead to too much potential personal liability. • Although these organizations, with budgets in the $8-$10 million range were operating successfully, the EDs involved realized that they were in line for long-term problems if board recruiting didn’t change.
What to Do • Consider establishing two boards, a board for governance and a consulting board. For the governance board, make certain the typical directors in the 30-40 year age range have a good understanding of their work-family obligation to be able to devote time for the organization. • For the consulting board, ask volunteers to work on projects that have a defined time limit. They will not be asked to be involved in more than one or two projects per year, an ideal inducement for millennials who are used to short bursts of activities. It may be necessary to recruit several persons with the same skills to provide coverage for several projects. • Keep communications flowing to the consulting board like one would to the governing board. Have social and educational events that allow the groups to meet informally. If the organization has a volunteer manage the consulting board, this person should be charged to keep the communications flowing. Members of the consulting board will only have occasional contact with the organization. • Overlay the traditional nonprofit skills grid with several time dimensions to recruit: 1. Recently retired people, both those traditionally retired and those who retried early, who may have time to be candidates for both the governing and consulting boards. 2. Seek individual contributors who may have more control of their time, such as medical doctors, lawyers, professors and small business owners. 3. Seek successful entrepreneurs who can schedule their own time, can resonate with the organization’s mission, vision and values and who want to give back to the community. • Beyond the time requirement, seek persons with experience on for-profit or nonprofit boards so they can share their board knowledge and become models for those having their first board experience. Their questions and behaviors can teach as much or more than formal seminars.
Summary The traditional nonprofit board skills grid can still be helpful in the 21st century. However it needs to incorporated lifestyle and behavioral information for each board candidate. These are important candidate attributes that must be thoroughly vetted.
It’s no secret that some board members cruise through their term of board service with minimal involvement. McKinsey Company, a well-known consulting firm, has suggested five steps that can be used to counteract this passivity in for-profit boards. * With a few tweaks, McKinsey suggestions (in bold) are relevant to the nonprofit board environment where director engagement is often a challenge.
Engaging between meetings: Nonprofit boards traditionally meet monthly, bimonthly or quarterly. Unless the board is a national one, these meetings range from one to three hours, with the three hours being typical of quarterly meetings. The meeting agendas are usually packed, and they leave little time for individual directors to enhance discussions. ** In addition, a sense of anonymity develops among board members who do not know each other personally, a significant barrier to team building. I have encountered nonprofit boards where disconnect between board colleagues is simply a nod—or less– when passing each other.
Board cohesion based on interpersonal relationships has an important impact on the quality of board discussions. It allows a board member to more fully understand the perspectives and goals of his/her fellow board members or “where they’re coming from.” With this information at hand on both sides of a discussion, it increases the possibility of creating “win-win” impacts for the nonprofit.
Responsibility for promoting between-meeting engagements needs to rest with the board chair. As a staring point, the chair can sponsor a few informal Jefferson dinners. The topic should be a cause which can excite the invitees. It needs to be, a challenge to the directors. ***
Engage with strategy as it’s forming—do not just review & approve it: Traditionally most of what becomes an organization’s strategy will emanate from the management and staff. But the board must proactively help to form strategy or step in to fill gaps when the management refuses to do it.
In forming strategy the board has an obligation to make certain all viewpoints are heard. Staffs as well as management ideas need to be considered. In addition, the board may need to take direct actions when the organization fails to fulfill a mission obligation. Example. A counseling agency only offered services during normal business hours–9 am to 5pm, five days a week. Its board required management to offer services, 24/7 with an emergency line when the office was not open. The management, a creative group, found a way to do it, without increasing costs.
Cultivate talent: The nonprofit board has several responsibilities in regard to talent. First, it must engage and then evaluate the CEO. This is a complex duty because the vast majority of the board members are not full-time employees and many have only tangential attachments to the organization’s mission field. Second, the board must overview the quality of the staff talent so that it is in line with budget constraints. Third, it must be aware of those within the staff who may be promotable to management. Finally it must be alert to succession opportunities internally and externally in the event the CEO were to leave abruptly. Succession planning for the CEO must also include considerations about the talents that will be needed beyond the current one.
Engage the field: Since nonprofit board members have full-time occupations outside the mission field, it’s important that they receive a flow of information about leading edge changes taking place outside the organization. However, CEOs sometime can operate a “mind the store” nonprofit, by looking at past successes without a visionary component. To help avoid this occurrence, specific directors might be assigned to become more deeply familiar with key projects in order to assess their progress.
Engaging on tough questions: A difficult task on a nonprofit board where politeness is an overriding value. Peers are friends and business associations and generally there are few potential penalties for “going along to get along.” In all my decades as a nonprofit board member, I have yet to see one board member ask that his/h dissenting vote be recorded in the minutes. A necessary action when he/she feels that the vote being passed by the majority may lead to harming the organization.
** In California, the Brown Act might prohibit such meetings. The Brown Act covered concerns over informal, undisclosed meetings held by local elected officials. City councils, county boards, and other local government bodies that were avoiding public scrutiny by holding secret “workshops and study” sessions.
Nonprofit Management 