nonprofit boards. nonprofit directors. nonprofit director term limits

A Nonprofit Paradox: Weak Leadership Pool, Positive Organization 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 he and the agency were in dangerous positions without an innovative board providing standard oversight, although client services were positive.

A staff, dedicated to its own professionalism, can on occasion compensate for a lackluster board and/or senior management team by continuing to provide reasonable value to the nonprofit’s clients. Another example involved the ED, simultaneously a deputy sheriff, and his law enforcement colleagues taking payments to refer wayward youths to ED’s shelter. However, the staff continued to provide valuable services. * In the end it’s about leadership and the ability to step up to the plate when dysfunction occurs. In the last case, the staff acted in a professional manner, although the management was entirely corrupt and the board evidently inept.

Klaus Schwab, founder of the World Economic Forum, has some innovative thoughts on that subject. He identifies four key characteristics he believes are critical to strong innovative organizational leaders. ** I have listed them below, and the ways I think his ideas can be applied to nonprofit governance.

 

1. Systems Thinkers (Brains): Deep knowledge in their area of work. Our current economy and future opportunities will continue to value knowledge, expertise and ideas.

Nonprofit CEOs need not only cutting edge knowledge of their field—they must have a firm grasp of what nonprofit governance implies, particularly the shared leadership style demanded by accrediting agencies. Many CEOs also need to acquire the skills involved to interact well with higher-level executives from business and governmental organizations, in order to partner with them or to take an active role in fundraising.

Nonprofit directors should have a “strategic bent’ to their decision-making and an understanding of the serious downside of micromanagement. Since most directors’ everyday professional lives center on commercial endeavors, or the professions, they must adjust their board mindsets to focus on mission not profit. This is especially pertinent when applied to assessing nonprofit qualitative outcomes, e.g., community impacts. Using imperfect metrics – that are anecdotal, subjective, interpretative — outcomes or impacts can be roughly assessed. Also imperfect metrics can rely on small samples, uncontrolled situational factors and cannot be precisely replicated. Over time they can be highly useful in tracking progress and driving change. (See:http://bit.ly/OvF4ri)

2. Deep Collaborations (Soul): Even when a leader has unwavering commitment to his or her personal values; he or she cannot operate as an island…. Trust among collaborators from a variety of perspectives forms the foundations for deep and ongoing collaboration, which is essential for leading (organizational) change.

Nonprofit directors are part-time volunteers with very little opportunity to have contact with the staff. This lack of interaction can encourage mistrust on both sides. Some informal board/staff social events or board/staff working task forces can go a long way towards promoting a spirit of cooperation.

Although there exists a vast literature on the necessity to build a trusting relationship between volunteer chair and CEO, there is only modest mention of the trust required between nonprofit boards and staff. Many nonprofits are “flat” organizations, meaning there may only be one or two management layers between staff and board. Consequently, this relationship needs to work reasonably well to have operational success; few CEOs or boards can survive a staff “revolt.” Nonprofit CEOs and boards walk a difficult trail in maintaining a deep and trusting collaboration.

3. Empathetic Innovators (Heart): Passion is a key innovator, but to create social (and organizational) change empathy must plan a central role. Innovation must be rooted in deep empathy – a real understanding and sensitivity to the experience of another person –to be most appropriate and effective.

Nominating committees are often seduced by a display of passion for the mission in a board recruit. Passionate directors are driven but not always responsive to other governance interests and perspectives. But candidates who have low or moderate interest can make some surprising contributions because they can take their governance responsibilities seriously or lead in other areas. True board innovation is based on empathy with fellow board members and management. It is also a collegial effort towards fulfilling the mission.

Nonprofit innovators may become frustrated when they want to improve the performance of an established organization and find some of the staff, especially those in management positions, are unable or unwilling to change. In some cases, the answer may be well-planned terminations, showing an appreciation for what the person has contributed or moving the person to an individual contributor position, allowing him or her to be measured for a fulfilling a familiar operating service.

4. World Visionaries (Nerve): Social (and organization) innovators …must be skilled at integrative thinking — the ability to hold two opposing ideas in their minds at once and then reach a synthesis that improves each one. They must…. be comfortable navigating ambiguity and seeing possibilities in the fragmented, complex nature of our social reality as they envision a better future.

The word “nerve” usually conjures up aggression, risk taking or chutzpah! Klaus Schwab brings to it a more nuanced interpretation. My nonprofit “take “on it is a director’s ability to think critically, to weigh the risk of a proposed action with the possible outcome in thoughtful consideration of what is in the best interest of the organization. It is a standard to which nonprofit organizations must aspire if they are to survive and meet the needs of their community and professional clients in the 21st century.

It’s time to banish the old paradox in which productive staffs can compensate for incompetent volunteer boards or managements. Klaus Schwab expands the criteria for leadership in governance. In doing so, he raises the bar for the entire organization.

*For an example see: Ann Eigeman (2013) “Targeted Editorial Stands Out for Separating a Nonprofit’s Poor Management From Its Value,” NPQ Newswire, November 4th.

**Klaus Schwab (2013) “4 Leadership Traits to Drive Social Innovation,” Stanford Business Center for Social Innovation, October 31st.

 

 

 

 

 

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Nonprofit Chief Executives Should Have Title: President/CEO, Updated and Expanded

Nonprofit Chief Executives Should Have Title: President/CEO, Updated and Expanded

By Eugene Fram

This post, over several years, has developed a record of continued viewing interest. Rarely a day passes with the post’s count isn’t one to five views. On a recent day  there were 18 views.  Since originally published in 2013 , this post has had a  total of  about 1400 views. The  year-to-date August 2017 total is 508  views and counting, predicting another record year   Perhaps the controversial nature of topic causes the longevity of interest?

When nonprofit organizations reach a budget level of over $1 million and have about 10 staff members it is time to offer the chief operating officer the title of PRESIDENT/CEO. In addition, the title of the senior board volunteer should become CHAIRPERSON OF THE BOARD, and the title of EXECUTIVE DIRECTOR needs to be eliminated. Experience has shown that with a reasonably talented PRESIDENT/CEO at the helm, he/she can provide the following benefits: (more…)

Business Board Experts Offer Nonprofit Board Gems!!

Business Board Experts Offer Nonprofit Board Gems!!

By: Eugene Fram                                  Free Digital Image

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

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. * (more…)

More Than Passion Needed in Prospective Nonprofit Directors

(Free Digital Image)

More Than Passion Needed in Prospective Nonprofit Directors

By: Eugene Fram

What nonprofit selection committee would reject a candidate who demonstrates passion for the organization’s mission?   I can attest to the fact that in many recruitment processes, an interviewee who shows strong empathy for the cause is a “shoe-in” for the director position regardless of any obvious weakness in other skill areas. By contrast, one who appears ambivalent about the organization’s mission can be overlooked or even eliminated from the list. (more…)

How Prepared Are Board Members for the Challenges of the Nonprofit Culture?

 

 

 

 

 

How Prepared Are Board Members for the Challenges of the Nonprofit Culture?

By: Eugene Fram        Free Digital Image

Viewer Favorite–Updated & Revised

Given that the typical tenure of a new board member is six years. And assuming that a new director’s intention is to make his/her unique contribution to the organization’s progress before he 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 nonprofit create.  Nonprofits have a way of acculturating new board members to current culture in steady of allowing the new board member to insert his/h culture into the flow of nonprofit’s stream of ideas.   For example, a financial executive familiar with financial strategy may be asked to assist the  CFO with accounting questions, instead of  being asked to develop a financial  strategy for the organization.  Following are some areas that are endemic to nonprofits: (more…)

Resolution for 2017—Focus on Long-Term Nonprofit Sustainability

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Resolution for 2017—Focus on Long-Term Nonprofit Sustainability

By: Eugene Fram                            Free Digital Photo

Nonprofit boards, like their business counter-parts, can become complacent and lose their vitality. This sets the stage for nonprofit disruptions by the social and technical environments that surround them.   Following are some crucial priority questions (listed in bold) that have been raised for business boards. * They easily can be modified to drive the thinking of nonprofit directors and help them keep nonprofits sustainable and productive. (more…)

Nonprofits in Limbo: Preparing for the Unexpected

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Nonprofits in Limbo: Preparing for the Unexpected

By: Eugene Fram

As the nation is reeling from the jolt of the 2016 election results, I happened to read a recent report from Deliotte Consulting suggesting ways that for-profit organizations can improve their performance in uncertain times. The report centers on key drivers of board effectiveness that, in my opinion, resonate with similar nonprofit situations. Most nonprofit boards typically live with uncertainty and are perennially “on the edge.” Here are some ideas from the Deloitte * report that, when adapted early, can bolster their operation in times of disruption.

  • Bold, decisive leadership: Nonprofit boards are responsible for donor and charitable types of revenues that place directors in a public trust position. In addition board members typically will only be active for a median tenure period of four to six years. As a result they often become overly conservative in their strategic views and may accept CEOs that “mind-the-store” with modest incremental growth annually.

To prevent the organizational boat from capsizing in the perpetual seas of uncertain times, the board needs rely on  the best forward looking information about strategy, culture, people and clients. All of this must be in solid  alignment with a substantial mission, or a modified one if the external environment requires it. This allows the  nonprofit to cut through the cultural barriers that impede strategy development. As Peter Drucker has noted, “Culture eats strategy for breakfast every morning.”

  • Opportunity mind-set: Even when the organization is prospering, the board has a responsibility to press for innovations and to support small-scale experiments as called for in a “Lean Management” structure. Within this structure, the staff can test the waters via experiments to move more boldly, as long as the experiments yield positive results. **
  • Stakeholders: Nonprofits have a multitude of stakeholders, complicated by the fact that often those who receive the service are not the ones who support or pay for it.   This requires management to balance the needs of the various groups and that can call for heart-breaking decisions. For example, should revenues be allocated to marketing or used for needed client programs? To solve the dilemmas Deliotte suggests, “Building valuable, open relationships across multiple stakeholder groups is key to building trust and organizational resilience”
  • Match fit: Boards have a responsibility to motivate the nonprofit to realistically evaluate the tensions between new models and existing ones. Two examples show contrasting results. Easter Seals boards perceived the market changes involved with polio vaccines and modified their missions.   Nonprofit counseling agencies failed to assess the positive impacts of new pharmaceuticals and the need for face-to face counseling declined. To develop a fit, Deliotte suggests, “the board and the organization need to be agile and open.”
  • Culture, culture, and culture: Nonprofit boards’ cultures play a key role in determining the level of risk the board is willing to take. With key drivers, nonprofit boards have to take reasonable risks to survive and even encourage management to take it. Small scale, yet bold, experimentations that are jointly reviewed by board and management provide a “Lean Management” approach that has been used by venture supported business firms.
  • Cracking the diversity Code: Instead of recruiting new board members and maximizing the best they have to offer, nonprofit boards try to orient new board members to the current culture. A new member with a financial planning background, for example, will be asked to work with the CFO on accounting related problems. Instead, he/s should be asked to develop a long term-term financial plan.   Board background (such as strategic planning abilities, critical thinking) diversity, as well as demographic (such as gender, ethnicity) ones, must be carefully crafted and utilized as well as demographics.
  • Curiosity is Key: Deliotte Consulting concludes, “Directors should get out of the ‘same old’ board room, and should even look across borders to learn from approaches in (different nonprofits) and companies… . Developing news skills and insights are essential for innovation and should be sought to create the questioning and challenging environment needed to imagine, inspire and deliver better outcomes (and impacts). Complacency (in uncertain times) can be a killer.”

*https://www.google.com/search?q=Sevn+ways+to+im%5Bprove+board+effectivness+in+uncertgain+times&ie=utf-8&oe=utf-8#q=Seven+ways+to+improve+board+effectiveness+in+uncertain+times

**https://www.snpo.org/publications/sendpdf.php?id=2014

 

 

 

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