Is your organization well positioned for strategic planning?

October 10, 2013 erik Board governance, organizational development, Planning

readiness1 I believe there is a misconception out there about strategic planning because I keep running into executive directors who think just because the current plan is expiring that is must be time to begin work on a new strategic plan. I also oftentimes run into folks who believe it is a perfect time to start planning when their agency is experiencing instability, blurriness, and confusion. In my humble opinion, there is a time and place for strategic planning and embarking on this journey at the wrong time can be at best frustrating and at worst damaging.

Readiness questions

Just the other day, I was talking with a friend about this issue, and they asked the obvious question, “How do you know when the conditions are right?” I started off saying something stupid like: “You’ll know when the time is right.” I knew it was dumb advice as it was coming out of my mouth.

So, I went home and started digging through my library of planning materials. I came across an old strategic planning document from a previous employer who had partnered with BoardSource to create the manual. So, you know it is good stuff. 😉

readiness3 As I had hoped, I found a section titled “Key Questions to Assess Readiness and Capacity”. Here are those questions:

Do your regular board meetings (apart from retreats) include at least one strategic, or “Big Picture,” issue on the agenda?
Is your current strategic plan based on realistic and comprehensive assumptions about the agency and its external environment? What considerations are missing?
How might changing demographics and other economic, social, and political trends affect a constituent, client, or membership base that provides a primary revenue stream?
What goal should the agency strive to achieve for financial reserves (for example, at least one-half of the operating budget)? Are there some potential revenue streams to consider?
Are new priorities clear and the proposed means of paying for them realistic? Which programs should be self-supporting? Which might be operated at a loss in order to fulfill the agency’s mission?
What metrics do you use to monitor organizational effectiveness?
Have you considered all the options and chosen a planning method (aka planning model) that works best for the agency? Are you flexible enough to combine approaches if that suits our culture?
How do you include board members who are not on the planning committee as participants in the process?
What performance measures should be included in your strategic plan?
How do you keep our strategic plan active and visible within and outside the agency?
How often do you conduct strategic planning? Does that cycle make sense for the agency?
When you are ready to undertake a planning process, are you clear about why you are planning?
Are you clear about the roles of the board, executive director, and staff in strategic planning? Do you honor the distinctions?
Have you used consultants in the most effective ways possible? If you have never used a consultant, should you consider doing so?

I’m not thrilled with these questions because I think they blend together two different issues — capacity and readiness. So, if you’re just trying to decide whether or not your agency is ready to start down the strategic planning road, I suggest you and your board governance committee spend some time chewing on questions 7, 8, 11, 12, and 13.

The other questions are important, too. I just think the five question I just highlighted cut to the heart of the matter.

We’re not ready, but we still need a plan!

If your board governance committee determines that you’re not ready, but you see difficulty down the road and think you need a plan to guide your efforts, you may not be out-of-luck.

You should look into developing a short-term tactical plan focused on the next 12 months.

Perhaps, a business plan or a something addressing a specific agency function (e.g. resource development, program, facilities, etc) might be a better use of time for you and your volunteers.

Did you mention consequences?

Earlier in this post I said, “. . . there is a time and place for strategic planning and embarking on this journey at the wrong time can be at best frustrating and at worst damaging.”

I been down this path many times, and I encourage you to please learn from my mistakes.

If you start down a strategic planning road when you aren’t ready to do so, I’ve seen the following things happen:

It feels like you’re spinning your wheels, and you end up spending LOTS of time of stuff that you thought were obvious.
Volunteers get frustrated. They feel like they’re going nowhere fast. Some even express that it is a waste of their time.
I’ve seen board members resign in the middle of difficult strategic planning processes.
I’ve seen major disagreements result in boardroom rifts.
I’ve also seen executive directors get fired.

How has your agency determined readiness? Do you have other questions to add to the list? Please use the comment box below to share your thoughts and experiences. We can all learn from each other.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
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Non-profit governance: The work of the board, part 5

October 2, 2013 erik Board governance, Planning

Dani Robbins is the Founder & Principal Strategist at Non Profit Evolution located in Columbus, Ohio. I’ve invited my good friend and fellow non-profit consultant to the first Wednesday of each month about board development related topics. Dani also recently co-authored a book titled “Innovative Leadership Workbook for Nonprofit Executives” that you can find on Amazon.com.

Governance: The Work of the Board, part 5

Setting the Mission, Vision and Strategic Plan

By Dani Robbins

strategic planning Welcome to the final post in our five-part series on Governance. We have already discussed the Board’s role in Hiring, Supporting and Evaluating the Executive, Acting as the Fiduciary Responsible Agent, Setting Policy, and Raising Money. Today, let’s discuss the Board’s role in setting the mission, vision and strategic plan.

As previously mentioned, Boards are made up of appointed community leaders, who are collectively responsible for governing an organization. As outlined in my favorite Board book Governance as Leadership and summarized in The Role of the Board, the Fiduciary Mode is where governance begins for all boards and ends for too many. I encourage you to also explore the Strategic and Generative Modes of Governance, which will greatly improve your board’s engagement, and also their enjoyment.

At a minimum, governance includes:

Setting the Mission, Vision and Strategic Plan,
Hiring, Supporting and Evaluating the Executive Director,
Acting as the Fiduciary Responsible Agent,
Raising Money, and
Setting Policy.

One of my goals for this blog is to rectify the common practice in the field of people telling non-profit executives and boards how things should be done without any instruction as to what that actually means or how to accomplish it.

What “Board members being responsible for setting the mission, vision and strategic plan” means is:

The Board sets –meaning discusses and votes to adopt or revise — the mission statement, which answers why your organizations exist.

The Board also sets the vision of the organization. A vision statement is a description of what the organization will look like at a specified time, usually 3-5 years, in the future. There are two minds in the field as to if a vision statements should be a Utopian view such as “an end to hunger” or a more concrete view such as “to be the premier youth development organization.” I lean toward the latter; I find it challenging to set goals to get to Utopia.

The Board votes upon the strategic plan, after participating in a strategic planning process “in which the board, staff, and select constituents decide the future direction of an organization and allocate resources, including people, to ensure that target goals are reached. Having a board-approved, staff-involved strategic plan that includes effective measurements and the allocation of resources aligns the organization, provides direction to all levels of staff and board, and defines the path for the future of the organization. It also allows leadership, both board and staff, to reject divergent paths that will not lead to the organization’s intended destination.” (Innovative Leadership Workbook for Nonprofit Executives)

The process — and the document — can be very long or very short. In fact, I have a new theory that the longer strategic plan is, the less likely it is to be used. For my clients, I recommend a 4-5 meeting process: We start with setting or revising values, vision and mission and end with assignments, measurements and due dates.

Please do not accept a plan that does not include assignments, measurements and due dates. If you cannot answer the question “How will we know when we get there?” you will not get there. A plan without measurements, assignments and due dates is just a list of goals that are unlikely to be accomplished.

For information on what should be included in the process, please click here.

A strategic plan should be a living document that guides the organization and provides a point for ongoing programmatic and organizational evaluation. It should not sit on a shelf.

All organizations should have a strategic plan.

Strategic plans get everyone on same page as to where you are as an organization and where you are going. They allow the group to decide the goals moving forward; create measurements to determine if you met your goals and assign responsibility and due dates for specific goals.

Strategic planning is a process that results in not only a document but also a shared understanding among key stakeholders.

In the absence of that shared understanding and agreement, there are still moving parts, but they’re not aligned. The absence of a plan sets the stage for people to do what they feel is best, sometimes without enough information, which may or may not be right for the organization. It opens the door for one person’s vision to get implemented and others to feel unheard or unengaged. The absence of a plan allows for major decisions to be made on the fly and for potentially mission driven decisions to be compromised. As we all know, movement goes in other directions than forward.

What do you think? As always, I welcome your insight and experience.

Obamacare and your non-profit: Part Two

September 26, 2013 erik Uncategorized

On Monday of this week, I blogged about the Affordable Care Act (ACA) and what it might mean for non-profit organizations including those that have fewer than 50 employees and don’t think this legislation applies to them. At the end of my post, I asked a few questions as I always do. Within 24 hours, one person did weigh-in and others sent me direct emails. So, I decided to share that expert feedback with you today.

Feedback from a federally qualified healthcare center

The following is a comment from Rose Reinert who is a community outreach liaison from a healthcare non-profit in my hometown of Elgin, Illinois. I’m sharing it here because I know many of you don’t get an opportunity to loop back around to former posts to read the comments.

Great post Erik! As you know, I work as Community Outreach Liaison for an area Federally Qualified Health Center that meets the medical and dental needs of all, regardless of ability to pay, and I can say there are a lot of changes coming. It reminds me of when we used to play hide and seek and scream, “Ready or not! Here I come!” In this case, we have to make ourselves ready, and there are a lot resources to do so.

I have also found a lot of confusion surrounding the Affordable Care Act. Having said that, our organization, Greater Elgin Family Care Center has received federal and state funding for In Person Counselors who can assist in education and enrollment.

If anyone is in the Greater Elgin area and would like to learn more about the Affordable Care Act, please let me know. We can come to you to give talks to your staff, your clients, or any one who might want to learn more!

Rose Reinert, rreinert@gefcc.org

Feedback from an HR professional

The following is an email from a former volunteer and friend of mine who is a human resources professional. Her comments reference resources she recently blogged about. (I should note that she is one of my favorite HR bloggers and I subscribe to her site) If you want to check out her blog, click here to visit her site which is titled “Don’t bite the apple . . . Work is not a fairytale”.

Here is what she said in her email:

Erik,

Hi there, I hope all is well. Great Article on Obamacare. I didn’t want to post my blog to yours and some of my information doesn’t apply. I just wrote a post on the notices with a link to the DOL approved notices.

ALL businesses subject to FLSA (which is pretty much everyone) has to send notices to employees to tell them if they are or are not providing insurance by October 1st. It has to go to ALL employees f/t, p/t and even if not on insurance. It’s a great thing to post about and provide the links. The first page of the notices explain to the employees how to go out to exchanges and look at healthcare. It also notifies people that if they buy from there and the employer pays part of the premium they can lose their match.

Feel free to take anything you’d like out of the post and if you need anything else, I’d be happy to help. I have access to a lot of info through SHRM.

Have a great day,
Denise

Feedback from an insurance professional

Dan Walter is a board member for my local United Way and he is a partner and senior vice president for Lundstrom Insurance. After reading Monday’s blog post, he sent me a guest commentary he recently wrote for The Daily Herald newspaper.

Here is his article about the Affordable Care Act:

The Affordable Care Act (ACA) is about to enter its most far-reaching phase. In 2014, the ACA mandates that nearly all citizens purchase qualifying health insurance or pay a penalty. Guaranteed insurability will provide access to health insurance coverage regardless of health history. Health plans must accept pre-existing conditions that might have been denied or limited under the present rules.

The Health Insurance Marketplaces, also known as the public Exchanges, are scheduled to be operational on October 1^st, with coverage that can be effective as soon as January 1, 2014. Rather than create its own exchange, Illinois chose to partner with the exchange established by the federal government. Illinois consumers will have access to six carriers, far fewer than originally anticipated.

By October 1^st of this year, most employers are required to distribute a notice to every employee informing them about the Health Insurance Marketplace. The Marketplace/Exchange will provide access to private health insurance plans as well as certain government-based health plans like Medicare and Medicaid. Also, the public Marketplace/Exchange is the only place an individual can access premium and cost-sharing subsidies. Premium subsidies are available on a sliding scale up to 400% of the federal poverty level (FPL) and consider the entire household income for eligibility. Cost-sharing subsidies help offset high out of pocket costs for people with incomes up to 250% of the FPL.

Insurance will continue to be available through brokers and carriers without going through the Marketplace. Brokers will have access to many other plans and other carriers, as well as those on the Marketplace/Exchange. Some carriers like Blue Cross Blue Shield of Illinois have also created their own private health insurance exchanges which brokers can access on behalf of their clients.

New ACA Fees and taxes will also go into effect in January. Two of these new costs are the Health Insurer Fee and the Reinsurance Fee. Starting at $8 Billion in 2014, the Health Insurer Fee will apply to health insurers offering individual coverage and fully insured group plans. The tax is allocated among health insurers based on relative market share. By 2018 this tax will have grown to $14.3 Billion.

The Reinsurance Fee is scheduled to be in effect for a three year period, decreasing over that time from a starting point of $5.25 per person, per month and applies to individual coverage and fully insured group plans, as well as self funded plans.

Combined, these two fees will add an estimated 3-4% to the premium. The amount will vary based on the number of people covered and a formula applied to the carrier’s net premium for the prior year.

In July of this year it was announced that the penalties and reporting requirements of the so-called “Employer Mandate” would be delayed to 2015. This portion of the law affects businesses with 50 or more full time equivalent employees and obligates them to offer coverage that meets certain standards of coverage and premium affordability. Not doing so will risk fines ranging from $2,000 per full time employee, to $3,000 for each full time employee who obtains a subsidy on the government Marketplace/Exchange. Other requirements and timelines of the ACA remained intact.

This is only a brief summary of some key points of ACA. If this sounds confusing or complex, it reinforces why individuals and businesses should be very discerning about ACA related information. Be sure to identify whether the information you rely on applies to individuals, small or large employers, and even whether it applies to your state or not. Obtain good counsel and guidance to help you understand your choices as well as your compliance obligations and potential penalties.

The impact of ACA is far reaching. With appropriate guidance, you will navigate it just fine.

My final thoughts on this issue

If you think your non-profit won’t be impacted by ACA, you are most likely wrong. At a minimum, this legislation will get your employees talking about healthcare benefits in your workplace. It would be wise to read up on ACA, talk to your insurance people, and be prepared to talk intelligently with your employees about this issue if and when questions arise.

This blog thread appears to have resonated with DonorDreams readers. Do you have more questions or comments? If so, please use the comment box below to share your thoughts and experiences.

The truth about your agency’s budget versus its mission

September 25, 2013 erik Uncategorized

budget1 Full discloser . . . I went out for a few glasses of wine on Tuesday night with a non-profit friend and got back home a little late at night. So what? Who cares? Well, I need to be up and on the road at 5:00 am to visit an out-of-state client, which means I needed to write my Wednesday blog post on Tuesday night. Oooops! So, I’m heading to bed in the next few minutes and wringing my hands about not writing something in the morning. Luckily, my friend said something provocative over a glass of wine and that will the be center of today’s post.

I can see that you’re now curious. 😉

OK . . . so, you’ve probably figured out that we were more than one glass of wine into the evening when I had my epiphany . Regardless, I think his point is still provocative. He said . . .

“For non-profit organizations, it always comes down to the budget in the final analysis.”

I can already see that some of you are saying, “Duh! Really, Erik? How much wine did you drink last night?” However, I know many of you very well, and some of you are saying, “Ummmm, NO! The budget is important, but it always boils down to a question about mission and vision.“

When I first heard my friend’s point, I must admit that I was taken back to high school and American History class. I thought that the debate about budget vs. mission is analogous to the founding fathers putting a series of checks and balances in the United States Constitution.

How so?

Well, the executive director and staff are typically focused on issues of mission. They are always advocating for clients and programming that best meets the needs of the community. Whereas, the board of directors typically uses the power of the various policy documents (e.g. agency budget, strategic plan, etc) to place parameters on staff to ensure accountability and sustainability.

So, who is right?

At the risk of fueling your suspicion that I might have had one too many glasses of wine on Tuesday evening, I point you in the direction of the following classic 1970s television commercial featuring George Steinbrenner and Billy Martin to resolve this conflict:

[youtube=http://www.youtube.com/watch?v=z_zDcQV6_6k]

Which side of this classic debate do you come down on? In the final analysis, does your agency budget trump everything else or does your mission and vision define the budget? Please use the comment box below to share your thoughts and experiences.

Here’s to your health! And, ohhh yeah . . . cheers! 😉

Does your non-profit put its employees first?

September 20, 2013 erik organizational development

Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking at posts from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

In a post titled “People-Service-Profit,” John talks about the impact that Federal Express’ corporate philosophy of People-Service-Profit has on it employees . . . which in turn has an effect on customer service and loyalty . . . which ultimately is reflected on the bottom line in profit

When reading John’s blog post this week, I immediately had two thoughts, which I will address below in two different sections.

Non-profit culture

People who work for non-profit organizations are different. In my experience, they aren’t motivated by the same things as their for-profit counterparts. Here are just a few examples of what I’ve seen people on the frontline of the non-profit sector do:

They often agree to work for less money than they otherwise might earn working in the for-profit sector.
I’ve seen non-profit employees work longer hours than they’re asked (or authorized to do). I’ve even seen hourly employees fudge their timesheet in order to avoid overtime (e.g. they get in trouble for working unauthorized time . . . overtime isn’t part of most agency’s budgets).
I’ve seen program assistants purchasing supplies for their programs using their personal money because there isn’t enough agency funding to do so.

peoplefirst2 The point I’m trying to make is that most non-profit organizations have built a culture that revolves around THE CLIENT. This focal point is so intense that ideas threatening to shift that focus are often seen as heresy.

While many people see a client-focused philosophy as altruistic, there can be a cost to this kind of corporate philosophy.

Low employee morale
Burnout
Cynicism
Poor staff cohesion

Another significant negative effect of this philosophy is “The Nonprofit Starvation Cycle”. I talked about this phenomenon in a previous “DonorDreams: O.D. Fridays” post on July 26, 2013 titled “Is your non-profit only living for today? Then you need Picasso!”

In the Picasso post, I describe how senior leadership and board volunteers are blinded by the agency philosophy of CLIENT FIRST, which results in zero funding important organizational capacity building expenditures. The end result is a non-profit that has no capacity and starves itself out of business.

Heck, in yesterday’s post about budgeting, I confessed that when I was an executive director, my finance committee once convinced me to eliminate donor newsletters from the budget in order to balance it. Ugh . . . while this was done in the name of putting the CLIENT FIRST, the result was putting the donor second (which is the person who needs to see ROI on their investment if they are going to renew their support). How did THAT make any sense?

So, let’s jump back to John’s post about company philosophy and FedEx.

If you are an executive director or someone who supervises staff, you should click -through and read the 10 bullet points located in the middle of John’s post. After reading those FedEx examples of how managers should treat their employees, I encourage you to complete the exercise described in the paragraph after the list.

It likely will be an eye-opening experience for you.

The Loyalty Effect

I suspect many non-profit people who are reading today’s post are probably still not convinced that a CLIENT FIRST philosophy can be damaging.

More than a year ago, I wrote a week long blog series focused on “The Loyalty Effect: The Hidden Force Behind Growth, Profits, and Lasting Value,“ which is a book written by Frederich Reichheld. I mostly focused on translating some of his business themes into resource development messages.

However, one of Reichheld’s bigger points is how employee loyalty drives customer loyalty, which turns into profit on the bottom line.

If you are still one of those skeptics when it comes to this post, look at it from this perspective . . .

Many of your clients have “special relationships” with your staff. In fact, if you surveyed your clients, I suspect they would say they come to your agency primarily because of that relationship and secondarily because of your services. I know for a fact this was true for the kids using the programs at my former agency.

So, investing in your employees results in their retention and loyalty. This in turn keeps your customers coming back, which in turn drives impact and program results. When you communicate this impact (e.g. ROI) to donors, it improves your donor loyalty rates and you raise more money.

Please don’t misinterpret me here.

I am NOT suggesting you shouldn’t strive to make your clients happy and provide them with the best possible programming. However, I am saying the non-profit sector needs to take a page out of FedEx’s book and figure out how to invest in its people. It will make a huge difference in so many different ways!

Putting your employees first IS putting your customers first because your employees will put the customer first especially if your organizational values drive them to do so.

If you have some time this morning, I also encourage you to jump in the “way back machine” and check out that six part blog series about donor loyalty as it relates to some of Reichheld’s loyalty principles:

Want to change? Where to start?

If this post has you thinking about creating a different company culture, you may want to check out a post by Inc.com titled “How to Create a Company Philosophy“. It is definitely worth the click! 😉

Did you click-through and read John’s 10 bullet points? If so, how well did your agency do? What are you doing to invest in your employees? Is your organization avoiding the starvation cycle? If so, how are you making the case for investments in capacity building? Have you ever correlated your employee turnover to client turnover to donor turnover? If so, what have you found? Please scroll down and share your thought and experiences in the comment box below.

Here’s to your health!

You’ve got to stop emailing your non-profit board members all the time!

September 18, 2013 erik Board governance, organizational development, technology

duck1 You know what Douglas Adams says (according to Brainy Quote). . . “If it looks like a duck, and quacks like a duck, we have at least to consider the possibility that we have a small aquatic bird of the family anatidae on our hands.” This quotation kind of sums it all up when I hear non-profit staff complaining about how disengaged their board members are, while they are in the middle of sending out another long email to those same board volunteers.

Let me start by telling you that I am one of the biggest offenders of overusing email. Guilty as charged! I need to seek help, but they say the first step in getting better is admitting you have problem.

My good friend (and former supervisor) used to remind me constantly that he believed email should be used as an “information tool” rather than a “communication tool“.

I spent many years contemplating this advice.

In the final analysis, he was saying email should be compared to snail-mail and the United States Postal Service. Email is like a stamp that you’re putting on a letter. He would advocate using email to send a document, but don’t use it to engage someone in a conversation about something.

I can almost hear him saying: “If you need to engage someone in something, then pick-up the darn phone!”

Of course, I don’t see this issue as being quite so black and white. Email technology has made tasks like coordinating meetings and answering simple questions really easy. So, I guess I don’t completely agree that email is only good for sending out agendas, meeting notes, etc.

HOWEVER . . .

Many of us are overusing email and doing so in ways that result in disengagement. I understand this is a serious assertion, but stay with me on this one.

duck2 When I look at my email inbox, I do a lot of scanning. I first look at the names of people who sent me something. As I do this, I am deleting anything that vaguely looks like spam or advertising. I don’t even open it. After this first purge, I re-visit those who are left standing and start looking at subject lines. I’m essentially trying to prioritize what I should open first versus leave for later when I have more time. And when I say “leave for later,” it could be days or weeks later.

(Confession time: at the time of this post, I currently have 1,027 unopened emails . . . I am truly embarrassed.)

I suspect some of you do the same thing. (Of course, de-nial isn’t just a river in Egypt as the old expression goes)

I also suspect that many of you are sending emails of all sorts to your board members’ work email address.

Finally, I am willing to bet that many board volunteers prioritize their work emails ahead of anything they get pertaining to their volunteer commitments. It is just a guess, but I think I’m on solid ground.

So, what just happened? You were put on the back burner regardless of how important you think your email might be.

In today’s fast paced world, I believe the technology revolution has created a new set of assumptions around communications:

If something is very important, it warrants a face-to-face meeting.
If something is pressing or needs to be discussed, it gets done by phone.
If something isn’t time sensitive, it gets put in an email or a snail-mail envelope.

Am I over-simplifying? Maybe, but then again I don’t think I’m too far off.

If you’re still with me, then it is hard not to conclude that sending lots of emails to your board members is the equivalent of sending them lots of unimportant stuff.

Choosing how and what and when to communicate with your board volunteers is important.

If you want to be relegated to the back burner of a board member’s email inbox, then keep sending those emails.

Here’s a suggestion . . .

Look at your board roster and select the names of your three most influential board members.
Sort your email outbox by name/email address
Count how many emails you’ve sent to each of those board volunteers.
If you’re averaging more than one per week, then you may want to re-examine how you communicate with them.

You may want to do a quick inventory of what you’re emailing board members. Once you develop a list, set-up informal policies for yourself on what is acceptable to email, what should be a phone call, and what needs to be done in-person.

The following are a few suggestions that I have:

Distribution of agendas and meeting notes — email
Checking in to see if a board volunteer completed something — phone
Getting buy-in from board volunteers on something — meeting
Coordinating calendars for a meeting — email
Checking to see who is still coming to a meeting (e.g. quorum call) — phone
Circling around to a board volunteer who was expected to make a meeting but didn’t show and needs to be “in the loop“– phone (possibly even a meeting over a cup of coffee)

There are lots of times that we shouldn’t be using email, but unfortunately we do it because it is convenient. If you have a moment, I suggest you read a wikiHow article titled “How to Know when Not to Use Email“. It is definitely worth the click!

Do you overuse email? Are you seeking a support group like me? LOL What are you doing about it? Can you add to the list above regarding when it is OK to use email vs. phone vs. in-person meetings for various communications with board volunteers? Please scroll down and use the comment box to share. Your kindergarten teacher would be proud of you. 😉

Here’s to your health!

Non-profit boards need to stop crying about evaluating their CEO

September 13, 2013 erik Board governance, organizational development

In a post titled “There Is No Crying In Performance Reviews!,” John talks about how year-end evaluations are difficult exercises not only for the person being evaluated but also the person doing the evaluation. He goes on to talk about the reasons for the anxiety, shares a few difficult stories, and finishes with how he has made a few changes to make the process easier.

If you are responsible for evaluating employees, you should click-through and read this post.

However, when I read this post, my mind was in a very different place.

I had been working with a number of different non-profit boards and facilitating trainings on board roles and responsibilities. I usually administer a simple little pre-test a few days before conducting the training. Not only does it help me get a sense of the board’s collective mindset, but I share the aggregated results with the board prior to launching into the curriculum. I’ve found that doing so gets participants’ attention and creates a greater sense of focus.

CEO review1 One of the pre-test questions that tends to trip people up is whether or not the board has a responsibility to “oversee the CEO“. Believe it or not, it isn’t uncommon for one-quarter to one-third of board volunteers to say “NO“.

I always find it funny because the previous question on the pre-test asks if they are responsible for “hiring the CEO,” and almost everyone agrees that is a basic non-profit board responsibility.

So, where is the disconnect?

If you are responsible for hiring someone, then doesn’t it follow that in most situations you’re responsible for developing their annual performance plan AND evaluating their performance?

After re-reading John’s post this morning, I think the answer is simple.

The collective board and its individual members feel anxiety about evaluating its one and only employee. As John describes in this post, it is the same feelings that individual managers experience.

Understanding where that anxiety comes from is a step in the right direction of solving the problem. The following are just a few of the reasons cited by John:

not being organized;
not doing your homework;
not knowing the jobs being assessed, or how they’ve really done them; and
not having detailed examples to cite in defense of critical feedback.

If your non-profit organization is going to thrive, then you and your board need to GET OVER IT. As John points out in the title of his post, “There Is No Crying In Performance Reviews!”

CEO review2 So, maybe you don’t know where to start?

Well, I think some of the answers can be found the aforementioned bullet points (aka the causes of this avoidance behavior). Here are a few of my suggestions:

Make it a board policy that an annual performance plan, which is rooted in your strategic plan, is developed and issued to the executive director by the start of the year. Make sure this policy speaks clearly to the issue of who is responsible for making this happen and how they engage the board in the process.
Develop a 360-degree feedback process and get input from all of the executive director’s direct reports.
Make it a practice to ask the executive director to self-evaluate themselves as part of the process.

These are just a few suggestions. The following are even better resources that I found online:

First Nonprofit Foundation: “Evaluating the Executive Director: Your Role as a Board Member” by Vincent Hyman
Berkeley Development Services: “Evaluation of the Chief Executive: A Briefing for Non-Profit Boards of Directors“
blue avocado: “Executive Director Evaluation Survey Form“

Oh yeah! One more thing . . . once you start down this path, take great care not to fall into some common pitfalls. What would those pitfalls be? Well, the following are just a few according to a document I recently found in an old board governance manual:

Avoid falling prey to the “halo effect“. (aka the CEO can do no wrong mentality)
Keep personality out of the process . . . this is only about performance. (e.g. Just the faces, ma’am)
Being too lenient (e.g. the glass is half full)
Being too critical (e.g. the glass is half empty)
Being clouded by recent events (e.g. letting a crisis or recent victory override an entire year’s worth of performance)

In my experience, the vast number of non-profit boards don’t do a good job with managing and evaluating their executive director’s performance. This needs to stop because “that which gets measures . . . gets DONE“. In other words, if you want your agency to succeed, you need to stop crying and figure it out!

How does your agency evaluate its executive director? What have you done that takes some of the anxiety out of the process? How do you keep from falling into common pitfalls? Please use the comment box below to share your thoughts and experiences. We can all learn from each other.

Here’s to your health!

Is your non-profit organization dead or alive or BOTH?

September 6, 2013 erik organizational development

In a post titled “Alive AND Dead,” John shares a thought experiment that was devised by Austrian physicist Irwin Schrodinger. It was a mind bending story about a box, a cat, poison, food and a conclusion that proves that the cat is dead AND alive until someone opens the box to check the situation out.

Yes . . . my friend, John Greco, shared a story that was used to demonstrate the nature of quantum mechanics in a blog post about organizational development.

Yes . . . I am going to go down the same rabbit hole this morning and apply all of this to non-profit organizations by sharing two stories. One story is about an organization that was both alive AND dead. The other story is about an executive director who was also both alive AND dead.

I encourage you to click through and read John’s post. But, if you haven’t done so already, please keep in mind that the basic premise to all of this is best summed up in John’s own words:

“It seems our perception is reality only until we see reality. In this sense, during times of great change, we can be living and working in a world that no longer exists if we do not actually see the changes in the world we are actually living and working in …”

The agency is alive AND dead

alice2 If I’ve seen it once, I’ve seen it hundreds of times. And I bet you have, too. I will omit the names to protect the innocent.

Once upon a time . . . there was a non-profit organization that everyone in the community looked upon as being big, strong and invincible. Their staff was well regarded. They had very impressive volunteers who sat on their board. They are what I describe as a “blue chip agency“.

Ask anyone in the community and they would tell you that the organization was awesome. Ask any donor what they thought, and they’d swear the agency was a terrific investment. Ask any of the agency’s board members, and they’d tell you that they can do ANYTHING (and they actually believe it). Ask the staff and you’d hear the same thing.

As the story goes . . . one day someone gets the bright idea to run a capital campaign and double the size of their existing facility. Donors are engaged. Millions of dollars are raised. The facility is expanded.

Putting aside the question of “alive vs. dead” . . . let’s re-frame it a little differently. Did this agency have the “organizational capacity” that everyone thought they did?

As we learn from John’s blog post, the answer is both ‘YES’ and ‘NO’ until you open the box and take a good look.

In this story . . . everyone perceived that organizational capacity existed; funding was secured based on those perceptions and the building was expanded. Unfortunately, when you looked a little deeper this organization didn’t have the capacity to raise the necessary annual operating dollars to run a facility twice its original size.

For a period of time, this agency was both alive AND dead.

The CEO is alive AND dead

alice3 We’ve also all seen this situation.

Once upon a time . . . there was an executive director who was well thought of by their peers. They were doing what was necessary to keep the agency together and everything moving in the right direction. Donors love the executive director. The staff would take a bullet for their boss. The board of directors continued to say nice things on the year-end evaluation.

This person seemingly had lots of job security, but one day everyone in the community wakes up to the news that the board voted to fire the CEO.

(Spoiler alert . . . before you start asking ‘who’ is Erik talking about, let me confess that this example is an amalgamation of many different situations that I’ve seen over time.)

So, what happened to precipitate this reversal of good fortune for the executive director? Here are just a few real life explanations that I’ve seen turn things upside down very quickly:

A major grant or funding source is lost and great stress descends upon the agency.
One employee decides they should be the executive director and starts rocking the boat.
One board member has been unhappy for quite some time about (insert issue here) and decides to stop being quiet. They finally have the courage to stand up in the face of general contentment and makes it an issue, which gets traction quickly.

For a period of time, this executive director was both alive AND dead.

The moral to these stories?

head in sand A non-profit organization that doesn’t invest time and resources into evaluation and critique is akin to an ostrich sticking its head in the sand.

Does your agency . . .

Host a critique meeting after each of its special event fundraisers?
Formally evaluate its executive director at the end of every year?
Host a critique meeting after its annual campaign pledge drive?
Formally evaluate every board board volunteer at the end of every year?
Host an annual meeting for donors to learn more about your agency? And survey your donors to solicit feedback on how they think you’re doing and what you can do better?
Formally evaluate every employee at the end of the year?

If you answered ‘NO to any of these questions, there there is a possibility that your organization is both . . .

Dead AND Alive

As always, John sums it up better than I can, when he says:

“Help people look into the box. One key component of change management is communicating the need for change early and often. It is selling the problem. It is noting the forces and effects that require change. It is articulating the “burning platform.” It is projecting out in compelling fashion what the consequences are if we don’t begin transitioning.”

Is your organization dead? Is it alive? Is it BOTH? Using John’s words, what does your agency do to “help people look into the box“? By the way, I know someone who can help you look inside that box and provide an outsider’s perspective. 😉

Here’s to your health!

Non-profit board and staff go together like chocolate and peanut butter

September 5, 2013 erik Board development, Board governance, organizational development, volunteers

at each others throat Over the years, I’ve met non-profit board volunteers who didn’t see value or the need for staff. Likewise, I’ve met countless numbers of staff who complain about their board members. I’ve also met executive directors who deliberately do things to disengage their board volunteers (e.g. taking on fundraising responsibilities, reducing the number of board meetings, etc).

Why is it that these two very important stakeholder groups sometimes can’t get a long? I suspect the answer to this question is layered and complicated, but the following must be in the top three:

There is a blurry understanding of what each other’s roles are.
There is an unequal division of responsibilities.
No one is paying attention to what it takes to nurture a productive relationship.

Last week, I was on vacation in Michigan visiting friends. One of those visits was with someone who served on a local non-profit board. He served for more than a decade, and he was the board president for almost one-third of his tenure. When I asked him how things going, the news wasn’t good. He was burned out. His fellow board members were burned out. Things were falling apart. A merger with a neighboring agency was inevitable.

When I asked “What happened?” the answer was simply: “We don’t have any staff. It is an all-volunteer agency. It is us against the world.”

I think it is an indisputable fact that . . .

Board need staff AND staff need the board!

So, what can be done to turn this relationship FROM something that looks like the scene at the end of the movie “War of the Roses” TO something like this vintage 80’s television commercial:

[youtube=http://www.youtube.com/watch?v=DJLDF6qZUX0]

I’ve reached back into an old board development training manual and found the following characteristics of an effective board-staff partnership:

Common expectations
Cooperative planning
Open and honest communications
Respect
Mutual evaluation

If board and staff can accomplish these things, it will result in clarity around the following questions:

Where are we going?
Why?
How are we going to get there?
How will we know if we achieved what set out to do?

Have you ever worked for a non-profit agency where board and staff weren’t on the same page? How did it make you feel? What was the result? How does your current agency achieve some of the characteristics spelled out in the aforementioned bullet points? Please use the comment box below to share your thoughts and experiences.

Here’s to your health!

What is your non-profit predicament?

August 30, 2013 erik Uncategorized

In a post titled “My Predicament Is Not My Problem,” John makes a distinction between things that are “problems” and things that are “predicaments“. In short, he talks about how predicaments are a special kind of problem that require different leadership skill sets and approaches.

Here is how John sums it up:

“And, while predicaments are (of course) problems, they aren’t problems that can be solved in any ordinary problem solving way. And therein lies the problem. For when leaders treat predicaments like problems — analyzing the components, fast-acting on this part or slow-tweaking that part, they make their predicaments worse.”

predicament2 I find this distinction really fascinating, and I haven’t been able to stop thinking about it since I read this post. So, I’ve been focused on identifying some non-profit related “predicaments” and here is what I’ve come up with . . .

Over the last decade, donors’ needs have shifted. Investing in an organization’s mission isn’t enough anymore. They want to see results . . . outcomes . . . data. But wait! That stuff is boring and they want it all wrapped up in an engaging narrative that is spun by someone who is a good storyteller. Too much data or too much storytelling, and the whole experiment in philanthropy seems to fall short.
The Great Recession started in 2007 with a stock market crash occurring in 2008. Before the crash, many non-profit agencies’ fundraising plans appeared to work well enough to get them what they needed to function. After the crash — what some people are calling ‘The New Normal’ — those same fundraising plans for some agencies don’t seem to work as well, but abandoning the plan and starting from scratch doesn’t appear practical or reasonable.
In the middle part of the 20th Century, non-profit boards were composed of local business leaders who were CEOs and owners of local businesses. Fast forward to the end of the 20th Century and the early 2000’s, and big box stores have replaced locally owned businesses. CEOs and business owners are located in major cities and in some cases halfway around the world. Many non-profit boards are full of middle managers, and many people are left asking “Who will be the next generation of big time local philanthropists?“

In John’s post, he talks about needing a special kind of skill set to solve “predicaments“. Specifically, he points to interpretative thinking skills, patience, and sustained attentiveness.

Heading into this Labor Day weekend, I’m asking you to scroll down to the comment box below and consider doing two things:

Share your opinion on whether or not the three things I’ve identified above are “problems” or “predicaments” or neither. You are also welcome to talk about other “predicaments” you see in the non-profit sector or at home in your agency.
Do you or others in your agency possess the special skill sets that are identified as being necessary to handle “predicaments“? Are there other skills you think are necessary? If you, your employees and your board don’t possess these skills, how are you planning to acquire them?

Enjoy the long weekend and please take a moment to contemplate and respond to these questions. We can all learn from each other.

Here’s to your health!