BoardSource introduced a new blog, “Exceptional Boards,” on January 19, 2012, that picks up on the conversation that Linda Crompton began here and explores what it means to be a truly exceptional board in today’s rapidly changing environment.

Click here to visit “Exceptional Boards.” And don’t forget to bookmark its address and sign up for e-mail notification or the RSS Feed for updates, so you don’t miss a posting from Linda and our expanded circle of contributors.

Thank you,

BoardSource

Leadership Lessons

November 21, 2011

I attended the White House Forum on Nonprofit Leadership last week. It was gratifying to join 200 nonprofit leaders to discuss the challenges and opportunities of better preparing, training, and sustaining the next wave of nonprofit leaders.

After a welcome and framing remarks by Jonathan Greenblatt, director of the White House Office of Social Innovation and Civic Participation, and other dignitaries, we broke into working sessions to create actionable goals and strategies in these important areas: Advancing Diversity and Inclusion; Developing Cross-Sector Talent Pipelines; Equipping Leaders to Face Tough Challenges; Scaling Social Innovations; Catalyzing Public and Private Investments in Leadership.

The initial thoughts of the working sessions can be found here. As you can see, this is the start of a very important conversation, and the White House is asking for your ideas, too.  I invite you to weigh in on those initial thoughts, here.

While I applaud the White House for this initiative, and I am thrilled at the commitment to the sector that it represents, there was a bit of a disconnect — embodied by the proverbial elephant in the room (or donkey — it’s an equal opportunity disconnect). No one mentioned the fact that government funding for the sector is on the chopping block, as is the charitable donation deduction. Whether or not we develop better leaders will be somewhat irrelevant if thousands of hardworking nonprofits, already fighting for survival, are swept up in the crossfire of political infighting and tradeoffs. When will it end?

Great leadership is needed—all over.

Basking in the Afterglow

October 11, 2011

The Future is now History.

The 2011 BoardSource Leadership Forum, “Governing Toward the Future,” is now in the past. I, along with more than 600 of the most interesting and knowledgeable nonprofit leaders from across the country, enjoyed two full days of discussion, debate, deliberation, and decision. In groups ranging from two-person conversations to full-blown plenary keynotes, we conducted a wide-ranging yet intensive examination of the future of our sector and how it relates to the larger economy.

If you weren’t there, I have to tell you: the synergy was amazing. A number of themes emerged across the sessions as if all the speakers and participants had done one, gigantic planning conference call ahead of time. Here’s what everyone was talking about:

Now more than ever, nonprofit boards need to embrace collaboration as the way we advance our missions and maximize our impact. We heard the plea from several speakers such as leading economist Jeff Faux, who said, “Whatever you are doing, you cannot do it alone… We need to return to a sense of cooperation.”  We heard Professor Jane Wei-Skillern from the UC Berkeley explain how nonprofits can increase social impact by building strategic networks with like-minded groups.

Also reverberating throughout the conference was what I viewed as an unprecedented sense of urgency around the need for innovation in the sector. Several sessions called for new ways of thinking. Cheryl Dorsey, Executive Director of Echoing Green, explained how visionary social entrepreneurs, who “refuse to accept conventional conceptions of what’s possible,” inject energy and find new solutions to our social and economic problems.  Others discussed how nonprofits need to take calculated risks, create “positive tension,” and invite a more diverse group of stakeholders to the table. In the event’s opening video, Yvonne Bryant Johnson from the GA Center for Child Advocacy memorably said that she had “given up on being right” as a strategy for challenging the status quo and bringing new ideas to the table.

We also heard about innovative business models for nonprofits. David Greco from Nonprofit Finance Fund urged participants to “flexify” by increasing earned income and reducing our reliance on restricted grants. CEO Maya Enista Smith talked about how Mobilize.org has an exit strategy— the organization was created around specific goals and will disband once targets are reached. Heerad Sabeti, Co-Founder of the Fourth Sector Network, optimistically explained how hybrid organizational structures are leading us towards a “fundamental transformation of the social sector” that holds promise for addressing the greatest challenges in our 21st Century.

Other themes revolved around the use of technology in governance. In an interactive debate on future board practices, Governance Consultant Bob Schorr suggested that committee work would someday operate differently—not situated in time or place, but rather evolving through a digital cloud of shared information. Indeed, our own BoardSource Virtual Boardroom demonstration had many visitors looking to save time and increase communication via an online governance portal.

We’ve started a post-BLF web page with pictures, video, and some of the presenters’ materials, and we’ll keep adding to it as we receive more. I encourage you to visit the page often.

But you really should be there. Mark your calendar now for the 2012 BoardSource Leadership Forum in Chicago, September 14 and 15. Better yet, register for it now. I guarantee we’ll make history there, too.

Lessons from Mother Nature

August 31, 2011

As I write this, the East Coast is recovering from the effects of Hurricane Irene, a storm that didn’t quite live up to her advance billing, but that wreaked billions of dollars in damages and claimed at least 49 lives. The biggest earthquake in 50 years just shuddered through the region, causing damage to two of the most famous Washington fixtures: the Washington Monument and the National Cathedral.

Too depressing to look outside, I decide. I’ll just settle down and read the paper. But it provides cold comfort, especially for those of us who care about the nonprofit sector:

  • Extreme market volatility means major gift conversations are on hold due to uncertainty
  • The possibility of double dip recession means organizations that are on the edge might find themselves pushed over the brink
  • The Congressional Super Committee must make significant funding cuts—and we all know that our sector has a big, fat target on its back
  • The charitable deduction is once again on the chopping block, likely creating disincentives for individual donors to give. I guess we’ll have to look to the foundations…but see bullet point one.

Did I just hear locusts marching in the distance?

I hope not. But in case the locusts do come—metaphorically speaking— just as we wrote during the economic crisis of 2008-10, now is not a good time to panic. We’ve been here before, and we’ve learned some lessons.

Here’s one:  Now IS a good time to pull out your strategic plan, dust it off if necessary, and make sure the plan includes a detailed road map towards sustainability. Depending on your funding structure, your plan should either move you further down the road towards the independence that comes from an earned revenue model, or ensure that you have, and continue to seek, multiple funding sources.  Over-reliance on any one funder or revenue stream could leave you stranded if that source dries up.

While I will be the first to say that it’s a new world out there, full of new ideas, technologies, challenges and opportunities, and we can never go back to “normal” again, there are some things which absolutely never change, and this is one of them:  don’t put all your eggs in one basket.

Take a lesson from Mother Nature and think “biodiversity of revenue,” and you’ll be headed down that golden road towards sustainability.

A Win-Win for the Sector

August 2, 2011

Every year since 1998, The Nonprofit Times has put out a list of the “Power and Influence Top 50”—movers and shakers in the nonprofit world who are changing the way the world views our sector.

This year, two new faces appeared on the list:  John Griswold, executive director of Commonfund Institute, and Aaron Hurst, president and founder of the Taproot
Foundation, both members of BoardSource’s board. Here’s what the NP Times (August 1, 2011) had to say about them:

Griswold directs Commonfund’s educational, market research and professional development activities, which includes the Commonfund Forum, the most important financial conference in the sector – if you can get in. Only 550 people get to go; it’s invitation-only access to some of the world’s great financial minds and
powerbrokers.

[Hurst] wasn’t the first to come up with the idea of hooking up for-profits with nonprofit partners, but boy has he made it happen. Taproot has recruited more than 10,000 business professionals as pro bono consultants. And, they aren’t just any consultants, unless you think Yahoo! is just another search portal. It’s
capacity building at its finest.

While I didn’t need the NP Times to tell me these two gentlemen are committed, exciting game-changers, it’s nice to get the external validation. They both have taken their own organizations to new levels of success and influence by looking at sector needs in innovative ways, John by educating nonprofit board members on investment strategies and creating fantastic opportunities for networking; and Aaron by recognizing the untapped potential of pro bono service to the sector and filling that gap with thousands of professionals, who line up to volunteer.

And here’s the good news for BoardSource—and why I’m essentially tooting my own board’s horn today—Aaron and John bring the same commitment, energy, enthusiasm, and intellect to BoardSource’s board that they do to their own organizations. I feel incredibly lucky to have them—as well as 10 other amazing board members—as a collective beacon that helps me steer the organization. As you can imagine, candidates who accept an invitation to BoardSource’s board know they will be held as a standard for all nonprofit boards, and they accept that challenge. Last year, they even created their own board vision statement:  As the preeminent educational resource for nonprofit boards, BoardSource’s own board is a model of governance performance. As our organizational mission is to build exceptional boards, our own board is exceptional and inspires exceptional governance practices.

A pretty bold statement, but not out of reach for this exceptional group of individuals. Congratulations, John and Aaron, and thank you, Nonprofit Times, for recognizing their superb contribution to the sector.

Relationship Issues

July 20, 2011

 

I read an interesting article the other day on Bridgespan’s Web site. It was an interview about nonprofit board service with Phyllis Yale, a Harvard-trained consultant at Bain and Co., the “incubator” of Bridgespan. Phyllis serves on the board of Bridgespan Group, a national nonprofit, as well as Cribs to Crayons, a local, Boston charity. You can read the article here.

 

When asked how she decides whether or not to serve on a nonprofit board, Phyllis said her number one criterion was whether or not the board and chief executive had an excellent relationship. She said, “I would rather spend my time helping the organization and the CEO be successful, instead of dealing with unproductive dynamics.”

 

That got me to thinking. How much time do we spend in board meetings playing defense around the personalities and quirks of board members and chief executives? How productive is that? More important, whose responsibility is it to ensure that the dynamics are, indeed, productive?

 

On the boards I’ve served (and there have been a lot of them), it has nearly always been the board chair who is the key to productive meetings and successful board dynamics. The chair sets the tone for the meetings; acts as a conduit between the chief executive and the rest of the board and as a touchstone for the chief executive—a sounding board, a confidant, a cheerleader, and occasionally a helpful curmudgeon. No one on the board can contribute more to creating that “excellent relationship” than the chair.

 

In fact, the chair is such a critically important position that all of us should do much more to prepare board members for leadership.  Readers of this blog will recall my strong belief in chief executive succession planning, but shouldn’t boards be equally prepared for a change in the board chair position? What does your board do to prepare its next generation of leadership? Here’s an idea:  Having a chair-elect position allows another board member to observe and learn from the chair and be prepared to step up when the time comes. Encouraging members with leadership potential to chair board committees gives them another glimpse into what it means to lead the full board. A great chair will mentor future leaders, modeling how governance functions best when the chair works in strategic concert with the chief executive.

 

I guess you could say a good chair–chief executive relationship is like a good marriage:  two independent partners who choose to be interdependent for the sake of the relationship itself. Nurture that relationship, and watch the rest of the board follow, and watch board candidates like Phyllis Yale leap at the chance to serve on your functional, productive board.

 

Taking the Lead

June 29, 2011

 

Every five years the Meyer Foundation and CompassPoint sponsor a study of nonprofit executive leadership called “Daring to Lead.” Focused on job satisfaction, executive transitions, financial sustainability, and board relations, the 2011 results can be found here. As a nonprofit chief executive myself, I pored over the report with great eagerness. I’m human; I like to see how my personal experiences compare with those of my peers.

Sorry…I’m going to keep those observations to myself.

What I’d like to address today is how ubiquitous the board was throughout the report—how executives’ experiences, and their decisions whether to stay in their position or leave, often rose and fell with the relative efficacy of their board. I have written before in this space on the critical necessity of having a succession plan in place; sadly, the report tells us that only 17 percent of organizations have documented one. And only a third of the executives thought their boards would choose the right successor upon their departure. Boards must do a much better job in the succession arena: committing to making a plan, then determining the qualities they should seek to drive their organizations forward. As the report reminds us, transitions can be an opportunity.

The report teased out for board-executive relationships what most of us experience in our romantic lives – a honeymoon phase, wherein the first year was “very happy” for 52 percent of the executives, but that level had dropped to 37 percent in years one through three. Tracking an almost identical curve, 20 percent were “very satisfied” with the board in the first year, headed down to 13 percent in the next three years. After that time, both curves headed upward. The report surmises: “many boards see executive transition as ending with the hire, when in fact leaders—nearly all of whom are in the role for the first time—need intentional support and development as they build efficacy in the executive role.”

How many of us, as board members, have breathed a deep sigh of relief once we’ve signed the contract with our new CEO, believing our work is done for the moment? As one of those CEOs, I can say: it’s only the beginning. While CEOs need some time alone to figure things out, the steep learning curve they must climb in those early years will be greatly ameliorated by the systematic and empathic support of the board.

It’s no surprise that the financial crisis colored executives’ experiences throughout the report, finding that 65 percent suffer “recession anxiety.”  The CEOs of organizations that had more reserves, not surprisingly, fared better than those that did not. But overall, boards could do more to help—less than half participated in fundraising activities and almost half of boards have not achieved 100 percent giving. Similar to the finding on our BoardSource Nonprofit Governance Index 2010, where executives gave their boards a C + on their performance, only 20 percent of executives in this study were “very satisfied” with their boards.

“Daring to Lead 2011” finished with four overall Calls to Action: 1) Plan for successful transitions; 2) Advance understanding of nonprofit financial sustainability; 3) Expand and diversify the professional development options available to executive directors; and 4) Find new ways to improve the performance and enhance the composition of boards. While number 4 focuses exclusively on the board, the way I read it, all of them fall under the broad purview of the board’s responsibilities. 

Chief executive transitions are inevitable; some are sudden, some are planned. Some are unfortunate and some present enormous opportunities for organizational growth. How they are planned for and executed, and how the new chief executive is oriented, coached, and supported going forward, are all within the board’s portfolio. While “Daring to lead” referred to chief executives, it is boards of directors who must also dare to lead by going beyond hiring to helping those executives learn and grow, so that all—board and staff—are working together to further their shared goals.

You’ll be able to learn much more about this study at our BoardSource Leadership Forum in Atlanta on September 22-23, when Rick Moyers, one of the report’s authors, will present these and other important findings.

 

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