SuccessionPlanning

Different Strokes For Nonprofit Board Folks

Different Strokes For Nonprofit Board Folks

By: Eugene Fram     Free Digital Photo

Over decades of service on nonprofit boards, I have interfaced with board colleagues who possess a variety of performance styles and behaviors. Certain of these types seem to be common to all boards. My comments below are based on adaptations of a board member classification system suggested by David Frankel, Partner of Founder Collection. *

The Eager Beaver  

This board member (usually 30s to early 40s) has probably been successful as an entrepreneur or is, perhaps, rapidly rising through middle management in a larger organization. He/she wants to “get things done”. His/her impatience with the typically slow nonprofit rate of progress can be channeled and directed by the CEO or Board Chair. Discouraged by lack of action, this director may quietly exit the board on the pretext that work pressures have increase. On the other hand, if properly nurtured, board members in this category can offer substantial leadership contributions.  

The Checked-Out Check Writer 

Serving on a nonprofit board has likely become a family or company tradition for some board members. (Some local nonprofits are now about 100 years old or older.) Regardless of the person’s dedication to the mission, nonprofit board service becomes part of this board member’s DNA. Often they develop into respected leaders and can be conduits to modest or substantial donations. In addition, they have access to interpersonal networks that are useful in recruiting other able board members. This board cohort should be valued and its contributions, acknowledged.

The Vanilla Director 

This is a board member who attends meetings regularly, occasionally makes an interesting comment. He/she is dedicated to the mission of the organization and can make substantial financial or other contributions. One such director I observed, volunteered to assist the staff with a difficult field problem.  According to Frankel, these board members are “less critical and offer encouragement…. ” However, like many other nonprofit board members, across behavioral types, avoid rigorous discussions at board meetings. If substantial conflict appears between factions of the board on a major issue, they may resign instead of taking an unpopular stand.

The Nonprofit Entrepreneur

This is a director who has a substantial understanding of the nonprofit sector. He/s has served on other nonprofit boards and is dedicated to the nonprofit’s mission. He/s has a desire to help move the nonprofit to its next level of service to clients. He/s often brings bold or different perspectives to the board and management. She/h knows that to achieve growth and improve client services, it is necessary to “sell” ideas to other board members, as well as the CEO. It’s important that the nonprofit entrepreneur and CEO are on the same page in terms of the organization’s future and potential to serve clients. If not, the CEO, unfortunately, may view the entrepreneur with his/h “fast track” style as a disrupter.

An overview of nonprofit boards tends to focus on the unique set of skills and work experience they bring to the table (physicians, professors, accountants, full-time retirees etc.) A closer look at the board suggests another layer of classification i.e. individual styles, motivation and behaviors. Herein is challenge and opportunity to develop meaningful board experiences for each individual who has said “yes” to the call to service.*

* https://hackernoon.com/eight-people-youll-meet-on-your-board-of-directors-8963863d4a03  

Enlarging the Nonprofit Recruitment Matrix: The art of selecting new board member

Enlarging the Nonprofit Recruitment Matrix: The art of selecting new board member

By: Eugene Fram        Free Digital Image

There’s never enough to say about the selection of nonprofit board members. Following my last post on board behaviors and cultures I ran across a guide fo desirable skills/abilities for “for-profit” directors. From this list, I suggest the following additions to the recruitment matrices of 21st century nonprofit board candidates to improve board productivity. * Those included will have:

• Executive and Non-Executive Experiences: These include planners with broad perspectives needed to have visionary outlooks, a well as persons with unusually strong dedication to the organization’s mission. It may include a senior executive from a business organization and a person who has had extensive client level experience. Examples for an association for the blind could be the human resources VP for a Fortune 500 corporation and/or a visually impaired professor at a local university.

• Industry Experience or Knowledge: An active or retired executive who has or is working in the same or allied field. However, those who can be competitive with the nonprofit for fund development could then present a significant conflict of interest.

• Leadership: Several directors should be selected on the bases of their leadership skills/abilities in business or other nonprofit organizations. Having too many with these qualifications may lead to internal board conflict, especially if they have strong personalities.

• Governance: Every board member should have a detailed understanding of the role of governance, their overview, financial/due diligence responsibilities and the potential personal liabilities if they fail to exercise due care. In practice, nonprofits draw from such a wide range of board backgrounds, one can only expect about one-quarter of most boards to have the requisite knowledge. But there are many nonprofit boards that I have encountered that even lack one person with the optimal board/management governance knowledge. Some become so involved with mission activities that they do what the leadership tells them when governance issues are raised. Example: One nonprofit the author encountered, with responsibilities for millions of dollars of assets, operated for 17 years without D&O insurance coverage because the board leadership considered it too costly.

• Strategic Thinking & Other Desirable Behavioral Competencies: Not every board member can be capable of or interested in strategic thinking. Their job experiences and educations require them to excel in operations, not envisioning the future. Consequently, every board needs several persons who have visionary experiences and high Emotional Quotients (EQs.) Those with high EQs can be good team players because they are able to empathize with the emotion of others in the group. Finding board candidates with these abilities takes detailed interpersonal vetting because they do not appear on a resume.

• Subject Matter Expertise: Nonprofit Boards have had decades of experience in selecting board candidates by professional affiliations like businessperson, marketing expert, accountant, etc.

• Other Factors Relevant to the Particular Nonprofit: Examples: A nonprofit dedicated to improve the lives of children needs to seek a child psychology candidate. One focusing on seniors should seek a geriatric specialist.

* http://eganassociates.com.au/disclosing-the-board-skills-matrix/

How Does Cultural Intelligence (CQ) Impact A Nonprofit Board?

 

 

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.

* https://www.indeed.com/career-advice/career-development/cultural-intelligence#:~:text=Cultural%2

 

 

Guidelines For Developing Authentic Nonprofit Board Leaders

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.

Are Your Nonprofit’s CEO Succession Plans COVID Updated?

 

Are Your Nonprofit’s CEO Succession Plans COVID Updated?

By:Eugene Fram          Free Digital Image

“CEO succession planning is one of the most important responsibilities of a (nonprofit) board…”  * Yet others and I find it to be a neglected responsibly.  In the for-profit arena, a mistake in choosing the wrong CEO can “lead to a loss of $1.7 billion in shareholder value in addition to a loss of organizational confidence and momentum.“ *

Choosing the wrong nonprofit CEO in a situation when I was a board member set in motion a year of staff turmoil, lost growth potentials, decline in the nonprofits reputation and an uncalculated financial loss.  After a post-turmoil CEO took the helm, the agency prospered for more than twenty-five years.

Based on a national study of for-profit boards, following are some COVID-19 CEO succession questions that nonprofit board members should consider now. *

Is our emergency successor still right for this environment?  Is the internal successor capable of managing under turmoil conditions?  If not, a new external person needs to be contacted.  Often this turns out to be a consultant in the mission field.  It’s important to reevaluate all external options now for the CEO’s ability to manage under unprecedented conditions.

Is our CEO role specification still right?  Over several decades, I have encountered a number of what I would call, “mind-the-store” CEOs.  These persons have: nice personalities, keep expenses within budgeted incomes, but are not proactive in seeking innovation and change.  Unfortunately, these types of CEOs can satisfy their boards for decades under what might have been considered normal circumstances. Because CEOs have a better grasp of current mission-related trends, boards and CEOs should strategically positioned  for the Post-COVID 19 period, even while addressing unusual operational challenges.

Do we have the right people in our near-term succession pipeline– are they prepared?  The selection of the CEO is the only employment decision that nonprofit boards make.  But they are also required to overview the near-term staff succession pipeline for those with very special talents.  For many nonprofit boards, this involves an uncomfortable discussion of who might be in line to succeed the CEO or other senior managers should any become temporarily incapacitated.

Is your board ready and able to have these discussions?  Under current tenure requirements, the average tenure for nonprofit board members centers around six years—two six-year terms or three two-year terms. As a result of this brief tenure, many board members may feel that simply raising the question of CEO succession suggests a lack of the CEO’s abilities to manage.  It also may cause board conflict, if suggested.  However, it is simply the members’ due diligence responsibility and, if ignored, can cause strategic problems for the organization.

First Steps: *  Review your leadership/experiential criteria.  The abilities a nonprofit CEO may need may change substantially.  Working with the CEO, nonprofit boards need to take the lead in surfacing these criteria, for example, better understanding of IT requirements.·     

Ensure that your emergency (succession) plan is more than just a single name on an envelope. It’s a good idea to have a process ready for an unplanned exit by the CEO.   CEO experience criteria should be reviewed in depth every two years to be current.·     

Do now what you normally would put off for later.  Start listing the criteria that a CEO will need to operate successfully, emerging from the shock of the pandemic .  It will enable the board to consider the changes taking place. Also the CEO can have some guideposts on how his/h abilities need to be enhanced.

* https://corpgov.law.harvard.edu/2020/07/26/ceo-succession-plans-in-a-crisis-era/ 

Is Your Nonprofit Recruiting & Retaining by Using a Mission-Driven Approach?
Is Your Nonprofit Recruiting & Retaining by Using a Mission-Driven Approach?

By: Eugene Fram        Free Digital Image

Recruiting and retaining able people for nonprofit careers has always been a challenge.  Salary levels have not been comparable to business organizations and some government posts. Many small and medium sized nonprofits have frontline personnel organizationally located only two levels below the Board of Directors.  Consequently, career paths can appear stymied.

The employment situation has changed for two population cohorts.  They are: some millennials (born between 1981 and 1996) and those in the Generation Z cohort (born between 1997 and 2012).

(more…)

For-Profit Boards Versus Nonprofit Boards: Similar Challenges?

   

By: Eugene Fram                                  Free Digital Image

The wise person learns from his/h own experiences. The wiser person learns from the experiences of others. Chinese Proverb

The CEO Forum published an article covering the governance views of five business board members, known for their wisdom and vision.   Following are some of topics in the article that relate to nonprofit boards. *

Good governance is dependent upon well-curated boards. This means that nonprofit boards must look beyond the functional competencies (e.g. accounting, marketing, law, etc.) for candidates. Within these groupings, they need to seek candidates who have strategic outlooks, are comfortable with critical thinking and have documented leadership skills.   This requires recruiting and vetting efforts that go well beyond the friends, neighbors and colleagues who traditionally have been the sources for board positions. Also related is the issue of board succession, since that many will leave the board after a four to six year period. The current board(s) has an obligation to make rigorous recruiting and vetting become part of the nonprofit’s culture.

Assessing long-term sustainability. In the past, nonprofits have projected longevity because there will always be a need for the services or products they provide. This is no longer an assured proposition. Nonprofit day care centers now must compete with those that are for-profit. Improvements in medication have decreased the need for individual counseling and many new technologies can quickly solve problems that are embedded in the nonprofit’s mission.

Review governance best practices carefully! Know who is suggesting them and make certain they are appropriate for a specific organization. For example, some experts suggest that executive committees should be eliminated. However an executive committee that is responsible for a slim board committee structure can be effective in driving change and promoting better communications throughout the organization. **

Changing public accounting firms. Nonprofit accounting practice suggests changing public accounting firms about every five years. However one expert suggests, “It is important to ensure that judgment areas such as nonGAAP disclosures are well-defined, supporting calculations are well-documented and that the definitions and calculations are consistent across reporting periods.” At times of accounting firm change, nonprofit board members need to be able to add these issues to their question that they pose to management.

Ethics & Compliance. Like business organizations, nonprofits are subject to significant lapses in ethics and compliance. One study of  nonprofit fraud found that it 46% involved multiple perpetrators.  ***  As shown in the recent Wells Fargo debacle, establishing the tone for rigorous applications of a standard needs to start with the board and flow through all management levels. In the current environment, audit committees have to be especially alert and take immediate actions when red flags arise in either the ethics and/or compliance areas.   In my opinion, a nonprofit audit committee that meets only once or twice a year is not doing the necessary job.

Strategy. The nonprofit board has an obligation to help management see “around the next corner.” This involves board members assessing coming trends and sparking civil and meaningful board and committee discussions.

Board member comfort zones. Like their business counterparts, few nonprofit board members are “comfortable testing how to rock the norms.” It is easier to acculturate new directors to the current norms, a process that is inward bound and self-defeating. But a start can be initiated with questions such as, “If we were to start a new nonprofit across the street, what would it look like and who of the present board and a staff members would we ask to join us?

*https://www.forbes.com/sites/robertreiss/2017/05/22/americas-five-governance-experts-share-perspective-on-boards/#2a2ee326659a   

**For documentation see: https://goo.gl/QEL8x3

***https://nonprofitquarterly.org/nonprofit-fraud-its-a-people-problem-so-combat-it-with-governance/

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex Problem?

Nonprofit Boardroom Elephants and the ‘Nice Guy’ Syndrome: A Complex 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 board members decided such action would hurt the board member’s feelings. They were unwittingly accepting the “nice-guy” approach in place of taking professional action. (more…)

Is Your Nonprofit Forward-Focused or a Prisoner of the Past?

By: Eugene Fram            Free Digital Image

Governance arguably suffers most … when boards spend too much time looking in the rear view mirror and not enough scanning the road ahead. *

It has been my experience that nonprofits rarely address the possibilities and perils of “…the road ahead.” An endless stream of current and pressing issues can cause both Board and CEO to take a myopic view of their nonprofit responsibilities — either totally ignoring strategic issues or procrastinating a discussion of the subject. The results can be damaging to the organization. Here are some “prompts” that might guide nonprofit board members and CEOs as they attempt to provide leadership in this important but neglected area:

Balanced Agendas — Include and highlight strategic issues on every board meeting agenda (not just when a committee report is presented) until they are resolved with action plans, policy development or thoroughly discussed and removed. This constant emphasis on planning can go a long way towards achieving concrete actions on topics of future concern. A discussion of immediate issues juxtaposed with ongoing strategic concerns will provide a balanced meeting format that may possibly discourage board member’s attempts to micromanage, a very common tendency in nonprofit boards!

Short Term Focus — In a BoardSource report,  “…only 33 percent of nonprofits report that their board members are actively involved in advocating for their missions, and many organizations aren’t advocating at all.”** To inspire and challenge board leaders to actively serve as ambassadors.  The explanation for weak performance in this area is often attributed to the fact that the directors’ terms of service on the board are usually three to six years during which time people’s interest in the long-term future of the organization may be compromised. Some boards may be disproportionately represented by “millennials” whose participation comes with heavy time constraints. Problems of this type can be mitigated by seeking board members who are partially or fully retired. They are likely to be better equipped to focus on the important governance functions and the fundamentals in which the nonprofit operates. Boards need to look to look further out than anyone else in the organization… There are times when CEOs (those operationally concerned with strategy) are the last ones to see (environmental) changes coming.

Board Recruiting — Nonprofit recruiting can be a hit-or-miss process, often producing candidates who are readily available and familiar to the current board. Rarely will the committee seek out people who have strong track records as strategists and/or competent visionaries. This is a real challenge, but a forward focused board should make every effort to identify potential directors who have these types of experience and skills. The topic of recruitment is a challenging one and the process should have continual annual evaluation.

Can Nonprofit Boards Work Smarter Not Harder?
As noted earlier, nonprofit board people are often limited in the amount of time they can devote to board participation. Given these constraints, the board chair and CEO can choose from a range of options that will help orient directors to better understand the external landscape in which the organization operates. These initiatives can include visits to comparable facilities, opportunities to attend field related conferences or inviting experts in the same or similar organizations to interact with board members. The purpose is to infuse each member of the board with an informed view of the organization’s long-term future and prepare them to take the appropriate action. The CEO and board chair must address this question with a viable plan: What actually helps… (to develop) a board environment that encourages participation and allows board members to derive meaning, inspiration and satisfaction from their (board) work?

Talent: The Key to Nonprofit Success — A nonprofit board has one hiring decision to make: the engagement of the CEO. But it also has a significant responsibility to overview long-term talent development in the staff and management. The board of a family service agency needs to assure that its counselors are up to date on current modalities of counseling. A recreational organization must be operating in the context of accepted fitness practices. Annual talent reviews need to be scheduled with CEOs and the appropriate staff. In addition, individual board members, with the concurrence of the CEO, may want to have occasional professional contact with key people below the senior management.

Make strategy part of the board’s DNA — (Many nonprofit) … CEOs present their strategic vision once a year, the directors discuss and tweak it at a single board meeting (or a short retreat), and the plan is then adopted. The board’s input is minimal and there’s not enough in-depth information to underpin proper consideration of the alternatives.

An educated nonprofit board will have the depth of understanding to be alert to the future needs and problems of its organization. Typically there is usually an unanticipated “fork” in the road ahead. Status quo, “minding the store,” participation by rote are all too easy mindsets that will only hobble the progress of an organization. Board chairs and CEOs are key actors in turning an existing board environment into one that is focused on moving forward.

*Christian Casa and Christian Caspar (2014) “Building a forward-looking board,” McKinsey Quarterly, February. Note: Quotations from this article are presented in italics.

**https://boardsource.org/research-critical-issues/

 

Using A Nonprofit’s DNA In Planning?

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.

Board Structure: Nonprofit boards must effectively operate with a series of board committees. The number of committees varies widely. I have observed some with as few as three committees and others with as many as 15 committees. The latter group rationalizes the number by suggesting board member involvement leads to better understandings of missions, vision, and values. More desirable board candidates live time-compressed work and lifestyles and can’t become involved with committees that meet without defined charters or try to micromanage management decisions.

Three to about six committees seems to be optimal for a mature board in the 21st century. A startup board will require more committees to allow board members to assume operational roles. One warning! If this large committee DNA format is allowed to carry over into maturity, it can lead to a dominating board that will be difficult to change.

Strategy: “A Board must act strategically—not tactically” ** In terms of its DNA, strategy must be the “lifeblood” that helps relate all major decisions to the nonprofit’s mission.

Start-up nonprofits often focus on tactical discussions at Board meetings. Founders and board members must address tactical issues because board members have two responsibilities. They must govern and act as part or full-time staff.  But as the organization matures it becomes essential to fashion all agendas on policy/strategy issues. The responsibility for action resides with the Board Chair and CEO. The Board Chair, however, has a special obligation to proactively discourage lengthy discussions of tactical issues, frequently characterized as “weed discussions.” It should be emphasized that these are operational and management responsibilities, not Board agenda items. 

Sustainability: This factor involves several critical keystones. First is the sustainability of income sources. If, for example, the nonprofit is heavily dependent on governmental funding, to what extent is the nonprofit able to secure private and foundation sources should governmental support abruptly decline? Managers and audit committee members need to be continually alert to seeking new funding sources.

A second keystone involves succession planning. The Board has direct responsibility for CEO succession and must overview staff succession. The latter involves knowing who among staff personnel are promotable, or, with training, be able to fill managerial positions. In my opinion, most nonprofits boards don’t provide significant overview attention to staff promotions.

Relatively short board terms or tenures for most board members (4-6 years) allow the board to introduce new thinking. However, they may not motivate board members to come to grips with issues related to long-term sustainability. Board members are traditionally active for one planning cycle, assuming strategic planning takes place every three to five years. From a sustainability perceptive, this restricts discussions of DNA changes that may impact stakeholders in the seven to ten-year time frames.

Relevance: Two keystones are also important here. First clients and funders must be able to perceive that the nonprofit is fulfilling its mission with integrity and a focus on stakeholder satisfaction.

The second involves maintaining a strongly committed board. To achieve this goal, the Board Chair and CEO must take actions to make certain that each board member perceives that her/h contributions are meaningful.   These perceptions can only be determined from candid conversations with each board member. It’s the responsibility of both the Board Chair and CEO to annually assess that each board member is involved with meaningful activities.

Unlike humans, the DNA of nonprofit organizations can change with careful interpersonal adjustments. For example, assumed it is desirable to have emergency client services available 24/7 instead of the normal 40-hour working week. Then management and staff should work together to modify the DNA (fair scheduling hours, etc.,) to accommodate the change.

Performance: The approaches to assessing the value of nonprofits have recently changed. Focus has changed from assessing program outcomes to assessing program impacts. ***

Program objectives can be achieved, but they can have little impact on clients lives. For example, marriage counseling can be helpful in eliminating symptoms of problems to meet client satisfaction, but the results may lack impact because they don’t address the problems’ root causes. Data analysts are being employed by some nonprofits to model impact information that is being requested by foundations and donors. The task, however, can take a long time to implement.

Suggestion: Most well-run nonprofits review their missions, visions, and values every three to five years. A review of their DNA factors, prior to the planning cycle can enhance the process.