Thursday, January 26, 2012

Surrounding Yourself With Talent

What type of talent should The New Executive Director nurture in current staff?  What should they value in new employees? The answer is critical to differentiating between our current understanding of the ED’s role and The New Executive Director.  It will impact the Director’s career, the effectiveness of the organization and the people served by that organization. The qualities that an ED values most in their team sets a standard that affects everything from program development, fundraising, collaboration and the long-term success of nonprofit.
Walking into
uncertain times

Employer surveys over the past four decades document the growing emphasis upon those “soft” skills: communication, dependability, tenacity.  In fact, the transformation is now so complete that basic technical skills requirement no longer rank in the top five of what employers seek.  As one Director explains, “I can teach them what they need to do a good job, but they need those soft skills like persistence in order to do a great job and add real value to this organization.”

Now comes new data which suggests that leaders’ priorities in this area are changing in important ways.  Whether it is corporate or nonprofit, ‘creativity’ is identified as the emerging critical competency for the successful enterprise of the future.

That's creativity—not administrative skill, passion or even dedication. In the midst of an era of economic limits where we are entering an age of austerity, this indicates an intriguing shift in attitude.  As business models for nonprofits change, the threat to traditional nonprofit captains is titanic.  Retrenchment of government budgets, private household debt burdens, the expansion of venture philanthropy, an emerging legal framework for public benefit corporations all represent fundamental DNA challenges to traditional nonprofits.  Uncertainty is confronting today’s ED, many of  who now sense a large gap between the level of change coming at them and the ability of their staff to deal with it.

This is why The New Executive Director views creativity as the essential leadership asset that must permeate an enterprise.

Might As Well Break Your Business Model Before The World Does It For You
The Great Recession has shaken many of the assumptions held by those in charge. Since half of the EDs in America are 55 and older, this means the majority of our leaders cut their management teeth back in the 70s and early 80s, an age which valued basic administrative skill and virtually ignored creative leadership.  When you consider that 40% of human service nonprofits still conduct client intake via pen and paper, you get a sense that even before the recession we were a few decades behind the curve.

It’s not the technical hardware we’re talking about, but the interconnected mindeset.  Most nonprofits just use technology to digitize existing systems, sometimes described as ‘paving the cowpaths’. Today the world is massively interconnected—economically, socially, and politically—and operating as a system of systems. For too many Directors, the answer is that their stakeholders are plugged into their individual social networks, but not to the nonprofit. So what does this look like for The New Nonprofit?  

Against that backdrop of interconnection, interdependency, and complexity, an entrepreneurial generation of nonprofit leaders are emphasizing fresh thinking and continuous innovation at all levels of the organization. The New Executive Directors are seizing upon creativity as the necessary element for nonprofits get nimble, reinvent themselves and thus remain relevant players in the funding and service community.

So you’re looking for creative talent and innovative thinking.  What does this do for the nonprofit?

Question your status quo. Every organization has legacy programs that are sacred cows. Often the need to perpetuate the ‘success’ of these products inhibits creativity within the organization and thus leaving exciting new options open for other nonprofits to advance competing innovations.  The New Executive Director understands that new revenues will have to come from new sources, and thus be open to break with existing assumptions, methods, and even traditional services.

Rethink your business model. Directors who prioritize creativity as a need in their staff are more likely to pursue innovation by changing their business model. In an age of accelerating change, they surround themselves with talent that can think on their feet and not wait for direction from the laborious traditional strategy/planning sessions so beloved these past few decades.  Strategic Thinking matters more than Strategic Planning.  The New Executive Director builds staff capacity to favor continuous, rapid-fire shifts and adjustments to their business models.

Destroy your institutional lethargy. The New Executive Director will not await certainty…nor near certainty. Nor will they tolerate it in their staff.  Creative leaders will develop a team that fights the institutional urge to wait for completeness, clarity, and stability before making decisions.  This takes a combination of vision, strategic awareness and gut level confidence. Also required is strong analytical skills to sift through mountains of data and decide what is relevant. These talents drive decision making that is faster, more precise, and even more predictable.

Any questions?
The New Executive Director must create a culture which is far more transparent and entrepreneurial. The New Culture is infused with the belief that the changing economy is an opportunity, not a threat. The New Nonprofit understands that risk is to be managed, not avoided. The New Executive Director has the ability to build creative enterprises with fluid business models, not absolute ones.

Something significant is happening to the American economy and to the nonprofit sector. In response to powerful external pressures and the opportunities that accompany them, The New Executive Directors are redefining the job. They are showing the rest of us that a world of increasing complexity will give rise to a new generation of leaders that make creativity the path forward for successful enterprises.

Monday, January 23, 2012

How To Think About Recruting Board Members

High performing Board members just don’t happen.  Truly transformative leaders just don’t fall from the sky.  Great Board members are identified, recruited and oriented.  In this piece, let’s discuss a basic question, “Who are you choosing to put on your Board?”

Sadly, haphazard Board recruitment is the rule rather than the exception.  Selection is not totally random, but Boards tend not to think about who would be a good Director until an opening appears, with the result that slots are filled by the best candidate willing and available at that time.

Part of the failure to recruit solid members starts by failure to identify what type of person belongs on the Board.  Many Boards do have a recruitment matrix to think through what type of technical skills (accounting, law, facility, etc).  Much of this thinking is then mirrored in the basic job description.

However, we often fail to target soft skills.  While everyone brings different strengths to the table, Great Board Members have at least one, if not several, of the following qualities.  When thinking about building a Great Board, consider who you choose.

Choose Strategic Thinkers
Great Board members identify new opportunities or unsolved problems, and can ignite the discussion about these issues.  They understand What Matters, both externally and internally.  They bring clarity to complex issues by presenting the issue so other Board members can grasp the issue and contribute to the solution.  Strategic thinkers have a mental model that connects today’s action with tomorrows outcome, the organization’s role within it, and an understanding of the competencies it requires.

Equally critical is that Strategic Thinkers do not wait for permission raise such issues.  They take initiative to organize people and time to start the discussion and drive the agenda.

Early last decade a small nonprofit afterschool program in Pittsburgh positioned itself to secure numerous grants and contracts to provide tutoring services.  They got ahead of the curve because several Board members, well versed in education policy, understood the opportunities of the federal No Child Left Behind. Within three years, the organization had tripled in size.

Choose Ambassadors
Ambassadors aren’t born, they’re groomed.  It is not enough to recruit well connected people and hope they’ll carry the message to their Rotary Club, Business Association or even their golfing buddies.  Nonprofits must help their Board members articulate the mission, the issues and the trends that affect the work. Being a good ambassador externally reverberates internally.

Junior Achievement of Western PA provides Board members with monthly policy updates and talking points printed on business card formats.   This gives Board members simple things to share in their routine discussions during the month.

Networking Matters
Choose Networkers
We have left the age of the Knowledge Worker and entered the age of the Networker.  It is not enough for Board members to know a lot about their mission, outcomes or field. Great Board members know enough about their own organization and the external environment to recognize opportunities. They then open doors or make critical introductions. 

As Malcolm Gladwell noted in The Tipping Point, networkers are the go-to people, the must-haves at meetings. The effects are viral. The more they connect the nonprofit to the external environment, the greater money, time and talent will flow into the nonprofit.

Choose Coaches
Great Board members know that pursuing the mission means accepting responsibility for results at all levels.  This means helping the entire organization achieve results even when it is not a direct responsibility.  This may involve showing up at a special event that's not required, or pitching in with ideas and information on another committee’s project.   It also entails helping to build the skills of fellow Board members. This type of Board leadership is essential in a flat, decentralized organization.
Understanding the fiscal position of a nonprofit can be a challenge for Board members not in the financial industry.  Therefore,  the Board of one nonprofit food bank in Utah recruits fiscal talent not on professional knowledge alone, but also on the ability to teach financial literacy to lay members of the Board.

Choose Commitment
Commitment is about quality, not quantity. A passion for the mission is essential in order to be a Great Board member.  Passion translates into a singular focus Board members exhibit when doing each piece of work for the nonprofit.  The nonprofit becomes a major priority in their life, and it shows by the investment of time, energy, ideas.  You can’t fake commitment.   

Many Boards incorporate the strategy of engaging people first as volunteers in events or on adhoc committees.  If in time they display passion for the mission and  enthusiasm for the organization they then are added to the pool of potential new Board members.

Great Boards are crafted.  It takes effort and attention to detail.  Recruitment is an ongoing process as potential new leaders are identified, nurtured and oriented.  But the investment of time and energy is critical to building an effective and sustainable nonprofit.

The qualities outlined here serve as signs of whether a person can be entrusted with major decisions and will contribute to advancing the mission. They show that the leader will take care of others and the organization

Friday, January 20, 2012

PSU Trustees say no apologies nor significant changes

If the appearance of impropriety is often worse than the original actions, the Penn State's Board of Trustees looks worse and worse by the day.  A few observations about this article where select Trustees announced no apologies - no changes.

  • When the Trustees met, not all had read the Grand Jury presentment  "It depends on where we were on Saturday if we had access to the presentment,” Riley said.  That's funny, because I read the presentment on the Internet the day it came out...November 4th.  

  • The Trustees kept no minutes at the meeting where they fired Paterno.  You have a governance meeting where you take personnel actions in response to a legal crisis and you choose not to record the minutes.  That's going to open up a whole other can of legal worms.

  • Cynthia Baldwin is another interesting character...her role needs to be explored more.  She was a Trustee before resigning to take a position as PSU Counsel (a highly unethical move to begin with).  She acted as attorney to Shultz and Curley at their arraignment and has since resigned to spend more time with family.  Hmmmm....

  • They fired Paterno for failing to report yet according to Eckel;"In the end, though, the board did not dismiss Spanier for failing to keep them informed."  Wow...Spanier, Curley and Shultz were not terminated for failing to report, just Paterno.

What's clear is that the Trustees used the firing of Paterno as a way to deflect attention from the real questions: the failure of governance, the cozy business relationships with people like Baldwin, the instinctive covering for people like Spanier.  It appears the university has learned nothing and thus it keeps this story alive.

One suspects facts will continue to drip, drip, drip out and cause further pain to those who fervently believe in the "Penn State Way".  It's going to get worse....much, much worse

"Blah, blah, blah, blah"....the cost of fine print

Having spent time working for government, I watched first hand as technical, cumbersome and jargon laden language was used purposefully to hide information from the public and policy makers.  More than once I got my hand slapped for trying to rewrite papers for clarity.  Demoralizing to say the least.

So have you taken a look at your mobile phone contract lately? Or your cable agreement? Chances are, you’re paying more than you think.  We're just 2/3rds thru the month of January but alreay I've been on the phone three times with companies disputing additional charges:  rental car, health care and the evil empire of Comcast.

This month’s SmartMoney Magazine catalogs a horrifying array of contracts, product waivers and legal disclosures with language that has likely bamboozled each and every one of us at some point.

From 100+ page checking account contracts to unexpected fees in everything from airline tickets to gift cards, this lack of clarity is costing us, big time. Experts estimate that hidden disclosures cost each American household more than $2,000 a year.

Tuesday, January 17, 2012

Why people choose one Board over another

A short observation over on the Fast Company blogs About why people chose to serve on one board over another. Disregarding personal reasons (lack of time, conflict of interest) I've turned down 4 offers to join Boards over the years (and said yes to 9). Reasons for each offer I rejected can be found in the article.

Key paragraph: "Most board candidates consider the following to be deal-breakers: too big and stale of a board to allow new board members to truly engage, weak leadership at the CEO or board level, an obsolete board structure, weak board participation--in attendance and/or giving/fundraising, and revenue challenges that the leadership is unprepared to face.

Saturday, January 07, 2012

Self-dealing and nonprofit boards.....DON'T do it

Nonprofits are governed by the Non-Distribution Constraint .....meaning that board members cannot materially benefit from the operations of the organization. So do your conflict of interest policies explicitly state that Board Members cannot do business in any shape or form with the organization? Board Members can't be your landlord, they can't be your consultant they can't be your supplier.

I know some will say that there are legal exemptions....and there are. However, you're taking a gigantic risk. First, it's the appearance of impropriety , which is often worse than the act itself. Your reputation with the public matters. A small slip can cause lasting damage.

It's a GIANT Red Flag
Another reason is that it waves a red flag in the face of the IRS. With over 500 new agents involved in the nonprofit division they have a lot more resources to get into your business. Once you are on their radar you'll spend lots of time, energy and money dealing with them. Why give them a reason.
Finally, don't do it because it's just not right. Your Board members should be serving in order to help advance your mission. Business dealing change the nature of the relationship between the Board member and the organization. It also puts one on a slippery slope that can lead to more fraudulent activities.

Tuesday, January 03, 2012

Reduce the Signal-To-Noise Ratio for your Board

Signal-to-noise ratio is a measure used in science and engineering to quantify how much a signal has been corrupted by noise. You experience it when the level of static drowns out the music on you car radio.

This week I visited a friend for dinner at her house. Sitting on the table by the door was the monthly Board guess somewhere in the vicinity of 80 pages. She sighed, "Have to read that before tomorrow's meeting". Why do we inundate Boards with piles of information.. it's mental clutter that detracts from the critical issues they need to focus upon. It just creates too much noise for the signal to get through.

Here's an open ended invitation to send me your Board packet so we can discuss if you're providing more Noise than Signal.