Empower Leaders to Lead

As leaders, board members not only guide the organization but build its culture. They are responsible for developing the mission, exploring the need, and overseeing programs and services. Their duties also include identifying new board members and supervising the organization’s CEO. 

Therefore who is on the board is extremely important. Unfortunately, board leadership can be a chicken and egg phenomena- who is on the board determines who is interested in the organization and who is on the board in the future.

Boards can be strategic and change the momentum of the body but the transition can be tough and often it leads to loss of some members. Board member transition is beneficial because it encourages the organization to engage new leaders and increases the organization’s network. But transition does not mean the organization says goodbye to a donor and friend.   

Asking a board member to be responsible for new duties or step down is not easy. Begin by explaining why these new duties are important and how they will lead to stronger programs and additional opportunities for clients. Thank the board member for their service and identify outcomes they were partially responsible for. More importantly, ask them to take on new responsibilities that are connected to their passions and the organization’s new direction. For additional information on how to transition board members, see https://gaylenelsonesq.wordpress.com/2013/10/15/never-fire-a-board-member-again/

Once board members realize they need to build a new culture, the next step is to identify gaps in skills and knowledge. Building a new board culture is difficult for all organizations but it is more difficult for organizations with limitations on who can be on their board. Some organizations are tied to a neighborhood, community, or group of people. These type of organizations often require leaders be a part or member of the organization and are known as grassroots organization.

Grassroots organizations believe in empowerment since their members rise up to lead. Members are trained as leaders. Examples are unions and neighborhood groups.

Who can be a member of the organization or the board is often determined by the mission. Since members share common background, attributes, or characteristics, they typically are not as diverse as the organization needs. Sometimes they can look to staff to fill the voids. These organizations can also look to collaboration with other organizations to gain additional resources. Collaboration with others may lead to blending or expansion of the organization since there is no bright line between neighborhoods particularly when kids attend schools outside of the neighborhood.

 Strong organizations are using new tools to raise resources and engage new leaders. We will begin to explore these new tools in the next post.

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Creating Leaders Inspired by Mission

Board members are the organization’s biggest advocates. They are responsible for raising funds, governance, strategic planning, and financial oversight. To perform these responsibilities successfully, they need to understand, articulate, and be committed to the organization’s mission, the clients served, and the social change they are working towards.

Yet, many board members do not have a background in philanthropy and their daily work is far removed from the clients served. Clearly participating in board meetings is not enough. How does the agency build board members connected to the mission?

Creating opportunities for board members to see, hear, and connect to the mission is another reason why it is important to begin molding board members as volunteers.  The volunteer development plan should include diverse opportunities for emerging leaders to connect directly with clients. Once leaders become board members, the goal is to build on these connections.

This type of grounding can be brought to the board in what is often referred to as “mission moments.” During these conversations, clients are invited to board meetings to tell their story. But, asking clients to come to board meetings places an added burden on them. Additionally, it is not easy for clients to tell their stories to strangers. 

Since program staff are responsible for daily program management and working with clients directly, they could bring these stories to the board. Unfortunately, this once removed experience is rarely strong enough. To make it genuine, the board member needs to see it first hand and transform it into their story by integrating their own experience and using their own words.

A better option is to offer volunteer opportunities before board meetings and to assign responsibilities to board members. By asking board members to participate, they are more likely to arrive on time and take it seriously. Once they have completed their duties, build in a short time for them to digest the experience and ask questions. 

Another opportunity is to invite former clients to serve on the board. These board members know the challenges first hand and appreciate the hardships clients endure.  These leaders also understand the importance of the services provided and how they can transform lives. Their presence is a strong reminder of the importance of the organization. Fellow board members look to them for direction and insight. Additionally, board members are reminded that the clients served are people with dreams and shortcomings no different than their own.  

Board members are an essential part of a nonprofit’s capacity. Yet many missions and bylaws limit who can become a board member. We will explore the benefits and challenges of grassroots membership organizations in the next post. 

Agencies Market to Fulfill Need

Succession planning leads to organizational growth by creating space and inviting engagement of new leaders. In turn, new leaders strengthen the organization by connecting it, and the services it provides, to a bigger part of the community. New leaders also build more diverse revenue streams and enhance programs by introducing the organization to new donors and volunteers. These activities lead to stronger organizations serving more clients in need.

In this age of marketing, branding, and social media, nonprofit leaders sometimes see marketing as a dirty word. Nonprofits deliver services to eradicate need not market them. Indeed, many organizations claim they are the best kept secret. But, this is not a badge of honor, after all how can an organization eradicate need if no one knows about it or the need?

Most donors have many passions and support many organizations. They choose causes and organizations they want to be associated with. Donors can not build a relationship with an organization they don’t know about.

The Philanthropic community has learned many things from the corporate community from evaluation to efficiency. To succeed and grow, nonprofits need to get beyond being the “best kept secret.” What are the tools?

Today’s marketing experts have many tools at their disposal from print to social. Nonprofits can use these tools and stay true to their mission by introducing the cause and the organization to potential donors and leaders. Like the corporate world, nonprofits need new leaders to engage not just click a button. We will discuss how nonprofits build these relationships with new leaders and move the needle beyond the static “like” in future posts.

The First Staff Member

One of the first and most exciting organizational growth stages is adding the first staff member. Since it is a big jump forward, there are many challenges and opportunities. How can leadership successfully navigate these challenges and propel the organization forward?

Begin by developing a strategic plan. The plan will develop, prioritize, and communicate specific reasonable expectations to fellow board members and the new staff. Working together to develop this plan will encourage buy-in of all board members and a strong understanding of the opportunities and challenges that lie ahead. The plan should include a “SWOT” analysis identifying Strengths, Weaknesses, Opportunities and Threats. At this stage, it is easy to create a plan that is beyond the capacity of the organization. Although it is important to dream big, it is essential to build a plan that is achievable given current capacity. Focus on the low hanging fruit and who is responsible for harvesting it.

This is an opportunity to launch the new staff person as well as the organization. Develop a Program and Personnel committee with the main role of supervising staff. The time commitment of these leaders’ will grow as they regularly check in and provide guidance to the new staff member. Supervision by committee can be difficult and the strategic plan will help.

The Program and Personnel committee is the staff person’s connection to the board. Checking in is essential but it takes away momentum. The more latitude staff has the more that gets accomplished. Additionally, there will be times a leader will take on another’s roles, expect the fluidity and develop strong avenues of communication to facilitate cooperation and avoid duplication.

Since the script is fluid and supervision is through a board committee, the new staff person should not be someone new to the field. The title of this role is immaterial. Although they may be responsible for administrative functions, they will also have day-to-day responsibility of the organization. Further, the new staff person will need a strong understanding of the strategic plan and the ability to identify the opportunities as they present themselves.

The board may consider a fellow board member as a candidate.  In this case, both candidate and board should be aware of the special challenges related to the transition from board to staff. See:  https://gaylenelsonesq.wordpress.com/2013/12/04/one-of-the-toughest-transitions-board-to-staff.

If the new staff member is not coming from the board, explore opportunities for them to be mentored or receive guidance from a board member that is an expert in the field. Additionally, create strong partnerships and collaboration opportunities with other organizations and leaders to facilitate organizational and staff growth.

Connected to this stage are new expenses from unemployment insurance to technology. The strategic plan should identify the amount of revenue that will be needed as well as potential sources. Further, fundraising is most successful when everyone is involved.

Transition is possible when there are new leaders to step up and strengthen the organization. Finding new leaders is the responsibility of all current leaders. We will discuss how to identify new leaders in future posts.

Executive Structure After Transition

Organizations gain new connections and opportunities with each new leader. Creating space for new leaders does not mean current or former leaders disappear. Instead strong organizations develop opportunities for all to contribute. How does an organization respect and recognize their former leaders and develop new ones?

The challenges are even larger for founders. Founders have special roles and special opportunities. They identified the organization’s need and built it from the ground up. Being a new leader is exhausting, but the role of founder is demanding. There will never be another founder. Communities look to organizations to grow and develop to meet their needs. How do organizations maintain balance while inviting all to participate?

Building a structure that encourages the contribution of all leaders is challenging. Former leaders are used to guiding the organization and providing advice and guidance. However, offering advice does not mean the former leader remains in control or makes decisions. As leaders take on new roles, there will be new expectations and boundaries.

Successful leaders, both current and former, understand the limits and opportunities of their participation. The new leader makes the decision. They are building the organization now. They do not have credibility if the organization is not behind them.

Part of a leader’s legacy is how the organization continues to grow after the leader’s term. Current leaders learn from the past. As best as our records are we cannot capture everything. Former leaders have the knowledge and personal relationships to provide guidance. Their participation also increases credibility.

Boundaries are rarely black and white. Partners may not realize when they are striking to close to someone else’s role. Supporters are used to coming to leaders even after transition. It is the former leader’s role to remind someone who asks them to cross the line to respectfully decline.

It is the founder’s responsibility to direct board members and others to new leader. This is challenging for many founders. It was very hard to build the organization. Many see it as disrespectful, if the organization chooses a different path, a new vision.

Stepping back after transition is similar to a parent’s relationship with their young adult children. Parents know that if they push too hard, their adult children will walk away and not ask for additional guidance. Further, once that adult child makes a mistake, the parent responding with “I told you so” rarely creates additional avenues of communication.

In a small number of cases, founders and new leaders can successfully lead together. They believe in each other and respect one another’s skills. Even in these cases, there will be times when leaders disagree, building a plan to navigate these differences before they occur is essential.

Creating leadership structure is even more challenging for emerging organizations. We will explore this in the next post.

 

Leaders Reinvent

With the help of new leaders, organizations rise above the challenges. Engaging donors and transforming them into leaders; reaching out to the community to identify new leaders; cultivating thriving clients and asking them to mentor current clients. A healthy organization is always developing new leaders and growing.

Organizations depend on many leaders to transform. Indeed an organization’s strength is grounded in the partnership between board and staff leadership.  Being an executive director is demanding; being a new executive director exhausting. A dedicated board works with the executive director to raise resources and build the vision. In other words, a working board is the force behind a successful executive director.

As an organization matures, its capacity grows allowing it to reach the next development stage. Building the capacity to make that transformation is rarely a one person job. Often all leaders are needed to propel the organization forward. What are these specific stages and what are the challenges associated with each stage?

One of the first is an organization transitioning from all volunteer leadership to its first paid staff. The title of this first staff person is rarely significant. This first staff person signals an expanded intensity and capacity to raise resources and focus on the mission. Adding resources also signals new expenses from salary to administrative. Even if this person begins in a part time capacity, their work is rarely part time and creates the opportunity to boost the organization faster than the efforts of just an all volunteer board.

Similarly, an organization’s strength is boosted as it transforms from the founder to the next leader.  Organizations are naturally an extension of their leaders particularly in the initial stages. Expanding an organization’s leadership increases the number of leaders developing the organization building a distinct organization character.  Because nonprofits are owned by the community, leadership transition is a signal of strength and devotion to the people served.

As an organization grows, it faces additional challenges. Some are structural and require more resources to solve: larger budget deficits; implementing a new direction; redesigning a core program; loss of a main funder. The larger the decision, the more important it is for all leaders to be involved in creating and implementing the solution. If leadership ignores these challenges, they may become ingrained and more difficult to tackle. As these challenges loom, some leaders leave. Those that remain look to new leaders to develop solutions. How does leadership resist procrastination and propel the organization forward? We will explore these life cycles and questions in future posts.

Exploring CEO Salary

Focusing part of an organization’s energy on increasing capacity is always a smart move. In the face of transition, it is a necessity.

An essential part of building capacity is diversifying and expanding resources. Increasing revenue generation enhances the health of the organization making it more attractive to potential new leaders. Often there is an unexpected second step to attracting the best leader: exploring the CEO market compensation rate.

How can the CEO’s compensation rate vary significantly from market rate? After all most boards review their CEO annually and the organizations’ tax return (also referred to as the 990) state that the Board reviews the CEO’s salary annually.

There are many reasons CEO salary rates may vary from market rate. First, the market rate itself is not a set number but a range depending on a number of factors. The starting point is always the organization’s overall budget.  An organization with a ten million dollar budget will normally compensate their CEO more than an organization with a million dollar budget. Part of this is the capacity of the organization. Organizations with smaller budgets often have less left over after paying program and administrative costs.  Some would also argue that the higher salary is dictated by the organization’s increased complexity leading to the need for a more seasoned CEO.

Another factor to consider is the mix of revenue sources. Organizations that rely heavily on government funding may not have the flexibility of an organization depending on diverse resources. Many government grants do not cover all administrative costs associated with the program and reimburse organizations after expenses are incurred. Additionally in this age of high government deficits, many governments are paying invoices at a slower rate, forcing many organizations to open lines of credit. Private individual donations are often donated for general operations rather than for a specific program or expense. “Gen op” revenue provides flexibility and an increased capacity to afford a higher CEO salary.

Starting a new leader at market rate, does not guarantee their salary will continue at that rate. Many leaders prioritize other organization needs in front of their own. Often organizations forgo salary increases to launch new programs or bring on employees with essential new skills.  Additionally, because the salary market rate varies, many CEO’s don’t fully realize their own value until they transition.

If the CEO salary is below market rate, then the salaries of other leaders may be as well.  This may partially explain the constant turnaround in leadership staff. In these cases, the organization should develop a long term strategy to bring all salaries to market rate.

In upcoming posts, we will explore other issues board leaders should explore as they bring on a new leader.