Guarantee Leadership for the Future

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Opinion

June 26, 2011

Nonprofits Should Take Steps Now to Guarantee Leadership for the Future

By Tom Adams

During the worst economic times ever faced by the vast majority of nonprofits in the United States, we have witnessed remarkably effective management by the talented and dedicated men and women who serve as executives and board leaders.

Their commitment to survival and growth is one of the key points that comes across in “Daring to Lead,” the new report released by CompassPoint Nonprofit Services and the Meyer Foundation.

But the survey, based on data from 3,000 leaders, also exposes a challenge facing the nonprofit world: sustained neglect of the building blocks of high performance. We are failing to plan for leadership succession, to invest in executive performance management, to develop leaders, and to attend to the relationships between board and executives.

Attention to these deficits is critical—especially at this time. A big share of nonprofit leaders is reaching retirement age. And younger leaders aren’t getting the nurturing they need to gain all the necessary skills to take over.

Devoid of attention, this combination will rob the nonprofit world of decades of experience and wisdom and leave us unprepared for the future. Despite the continued economic slump, grant makers and nonprofit leaders alike must do all we can to deal with this problem.

Charities have countless ways to deal with these challenges, but first nonprofit leaders must ask themselves this: Is there a direct relationship between effective leadership and organizational impact?

Not everybody in the nonprofit world does.

Nonprofit leaders need to think really hard about whether they believe their effectiveness as leaders affects their organization’s results. Foundation executives need to ask two questions—not just about whether their effectiveness affects the foundation’s results but also about whether their grantees’ leadership affects the foundation’s results.

If you don’t buy the premise, talk with leaders of high-performing businesses, government agencies, or other nonprofits. I believe you’ll find the evidence is unequivocal, but you must decide for yourself.

If you do believe the answer is yes, then it’s time to talk about this issue in frank conversations with managers, staff members, and board members.

Everyone must be urged to think about their answers to the question: Does individual and collective effectiveness matter—and what actions and investment of time and money will increase our results?

 

For those who say they are ready to take the next steps, here are the best ways to focus energy and money, based on my work with hundreds of nonprofits across the country:

Invest in succession planning and leader transitions.

High-performing organizations plan for leadership transition and succession.

For example, William Ewing served as a larger-than-life executive of the Maryland Food Bank for three decades. His board prepared for his retirement. Through a careful transition-planning and capacity-building effort, the Maryland Food Bank continues to thrive and grow under its new executive, Deborah Flateman.

So plan ahead for transitions of the executive, board chair, and key managers and board members. These actions will help:

Thoughtful organizations see transition as an opportunity and begin planning for them two or more years before they occur.

The first stage of review should include a look at the organization’s business model, strategy, resources, leadership, and culture. The plan should express what to preserve and what to change during the transition. For example, Cabrillo Economic Development Corporation, in Ventura, Calif., began planning for its founder Rodney Fernandez’s retirement over five years ago and will complete the transition this year.

Focus on performance management and leader development.

If you don’t know where you are going, you most likely won’t get there.

Performance management is a process that focuses individual and organization efforts on shared goals and results.

High-performing organizations link their strategic plan and performance-management system to leader development aimed at the mission results they seek.

For example, the Charlotte-Mecklenburg Housing Partnership in North Carolina incorporates specific objectives from its strategic plan into each senior manager’s performance goals and job description. The result: Despite the housing downturn, the partnership is developing a 70-acre parcel into a mixed-income development.

Strive for diversity of leadership.

Community racial and ethnic diversity also influences the leader-development agenda.

The Denver Foundation, Third Sector New England, the Council of Michigan Foundations, and the Baltimore-Washington Racial Diversity Collaborative, among others, offer concrete ways to make attention to changing demographics and community cultures part of effective leader development.

The high-performing organization sustains success by developing a pool of diverse, creative leaders who are attentive to the shifting needs of their constituents.

Support new executives.

About two-thirds of executives are in their first nonprofit executive position. One-fourth of all nonprofit executives are forced out of their position.

New executives report the most trauma in their second and third years on the job. A major issue is their relationship with the board, and yet the amount of time executives invest in working with their board is declining.

Those facts further limit the potential impact of organizations and indeed the collective power of nonprofits.

Some national organizations and state and local management support organizations offer assistance to executives and boards in building an effective board-executive relationship. Some of these also support new executives.

However, we need to broaden this support. Our “sink-or-swim” approach to executive development is costly and disastrous.

The commitment and zeal exhibited by nonprofits is infectious and inspiring. This is our individual and collective nourishment and source of renewal.

You cannot read “Daring to Lead 2011” without seeing the results of the enthusiasm of nonprofit leaders, as well as the opportunity to double down on leader development and leader transitions and significantly increase our impact in the world.

It’s time for everyone to act on the direct relationship between effective leadership and mission results. The case is powerful, the potential is stunning, and the time is now.

Tom Adams is president of TransitionGuides, a Silver Spring, Md., organization that leads executive searches for nonprofits. He is also author of The Nonprofit Leadership Transition and Development Guide.