Non-profit board of directors

How The Nonprofit CEO Can Exit Gracefully

How The Nonprofit CEO Can Exit Gracefully

By: Eugene Fram   Free Digital Photo by Membio

Like many nonprofit CEOs, Tom Smith has held the position for 10 or more years. As he reported, and I agreed with his assessment, the association he heads was doing well. The membership has increased substantially, revenues exceed expenses each year, and through a series of development events, the reserve account now exceeds $2million. But Tom was not satisfied. He said the job has become “boring.” In his words, it’s like turning on automatic at the beginning of each year—adjusting to a new board chair, developing a budget and being alert for “Black Swan” events that nobody can anticipate.   He quietly said to himself at the beginning of each year, “I wonder what the big problem is going to be this year?”

Preplanning  

Tom had a preplan: Several years ago, he had purchased an avocado farm in California, and had a partner-manager operating it successfully. He and his wife planned to move there, once he decided it was time to leave his CEO position.

Other potential preplanning actions he might have taken:

  • Buy a second home in a more temperate climate, as retirement dwelling.
  • Quietly investigate the potential to join a nonprofit consulting firm.
  • Assess whether or not he can be successful as a solo consultant.
  • Quietly interact with contacts in nearby education institutions to determine how his experiences and educational credentials might qualify him for teaching or administrative positions.
  • Review grant proposal requests from foundations and governments to assess how his expertise might match those of people needed to manage the grants.   (Be certain none of this type of activity creates a conflict of interest with his current CEO position.)
  • Register with search firm to test his “marketability’ for a more interesting CEO position. (Beware of any firm that requires a fee from you.)

Be Proactive

Once preplanning is complete, discuss it carefully with your family, financial advisors and possibly with an attorney if a major relocation is going to be involved. Be sure that they view the change as you do. Make certain they don’t see a missed opportunity within the current position. Also be certain that the time frame is reasonable for the CEO and the organization. It would be a mistake for the CEO to leave when the CFO is planning to retire. Traditionally, a one to three year period is needed from first discussion to the time the CEO departs.

Inform the Board

This should be accomplished in several steps. First quietly inform the board chair. Then at intervals alert other members of the board, the management team and staff.   The CEO has been around for a long time and has an obligation to prepare the organization for a major change. I recently watched a nonprofit executive group “tread water,” for 18 months from the rumors of the CEO’s departure through the selection of the new CEO and his arrival at the office.   To develop a graceful exit, the incumbent needs to be aware of the situation and help provide s smooth transition.

Leaving With Dignity 

Leave as scheduled. Any delay will extend the uncertainty that surrounds the transition.   As noted above, nonprofit organizations have their own ways of remaining static during these transition periods.   Your CEO nonprofit successor deserves better strong support.

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Developing Meaningful Relationships Within Nonprofit Boards

Developing Meaningful Relationships Within Nonprofit Boards

By: Eugene Fram

For several decades, I have suggested that nonprofit Board Chairs and CEOs have a responsibility to be sure that each board member perceives his/h continuing relationship as being meaningful. Following are some organizational guidelines that can assist Board Chairs and CEOs in this effort.*

  1. Developing or hiring strong executive leadership: Obviously when hiring externally it is necessary to engage a person with a managerial background. But many nonprofit CEOs can be appointed after years of being an individual contributor or leading a small department. These experiences condition them to do too much themselves, rather than to assume a strong management posture. This involves focusing more on strategy, on talent development, interacting more with the board/community and creating a long-term vision.

(more…)

The Search For a New Nonprofit CEO Needs To Be Realistic

 

The Search For a New Nonprofit CEO Needs To Be Realistic

By Eugene Fram  Free Digital Image

Boardmember.com in its October 11, 2012 issue carries an op-ed item by Nathan Bennett and Stephen Miles titled, “Is your Board About to Pick the Wrong CEO.” Although targeted to for-profit boards, all of the five items listed can be applied to nonprofit boards. Following are my applications to nonprofit boards. (more…)

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

Nonprofit boards and CEOs in the United States are being overwhelmed with requests from foundations and governmental agencies to move from providing outcome data to providing impact data. One nonprofit with which I am well acquainted has been required to reform its IT program to meet the requirements of a local governmental IT program, so that impacts can be assessed. It will be interesting to see how this scenario plays out.

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 nonstarter 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.

* http://ssir.org/articles/entry/the_promise_and_peril_of_an_outcomes_mindset
** 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

How Can A Chief Operating Officer (COO) Advance Your Nonprofit Organization?

How Can A Chief Operating Officer (COO) Advance Your Nonprofit Organization?

By: Eugene Fram

In my decades of involvement with nonprofit boards, I have encountered several instances in which the CEO has failed to engage the services of a COO– when this addition to the staff was clearly needed. In each case and for whatever reasons, this reluctance to act left the nonprofit organizationally starved.

This means that the CEO continues to handle responsibilities that should have been delegated, some of which a predecessor may had assumed during the start-up stage. I once observed a nonprofit CEO with an annual $30 million budget personally organize and implement the annual board retreat, including physically rearranging tables/materials and cleaning the room after the retreat! When top leadership is deflected in situations as this, client services and the general health of the organization is likely being negatively impacted. (more…)

Can Nonprofit Boards Afford To Underinvest In Management Leadership Development?

Can Nonprofit Boards Afford To Underinvest In Management Leadership Development?

By: Eugene Fram:

McKinsey & Company has published a substantial nonprofit study: To better understand the state of (nonprofit) leadership in the US social sector… The findings suggest that chronic under-investment in (management) leadership development for 337,000 small or midsize nonprofits,..(may risk) the sector’s capabilities to fulfill emerging missions effectively and to adapt to fast-changing demands.
(http://www.mckinsey.com/insights/social_sector/what_social_sector_leaders_need_to_succeed) (more…)

Falling in Love With the Mission & Other Sage Advice for a First Time Nonprofit Director

Falling in Love With the Mission & Other Sage Advice for a First Time Nonprofit Director

By: Eugene Fram          Free Digital Image

Sam Smith recently entered early retirement and wants to become a director on the board of a nonprofit organization. His motive is to give back to the community where he has prospered. As a first time board member, he can look to some advice from pros in the area, from a recently published article by Stanford’s Center Social Innovation (CSI).
http://stanford.io/1qefmx1

Following are my reactions to some of the article’s suggestions, hopefully adding important field information. My comments are based on having served on 12 nonprofit boards over several decades and my experiences as a consultant to at least a dozen additional nonprofit boards. (more…)