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Why is Governance Partnership Important to Nonprofit Organizations?

June 12, 2010 in Governance, Leadership, Mission with 2 Comments

Why is Governance Partnership important to nonprofit organizations? Why is Governance Partnership important to Boards of Directors, Board Chairs, and Chief Executives?

Here is my answer to these questions.

It  is important because nonprofit organizations and its leaders are concerned about making sure that the mission will make a difference in the community. It  is important because nonprofit organizations and its leaders are concerned with improving organizational performance.

Much of the guidance offered to nonprofit leaders today comes from books, conferences and consultants. Books focus on the importance of leadership and management and its role in improving and revitalizing organizations. Conferences offer name brand speakers who offer hope and inspiration to nonprofit leaders in search for new methods and solutions to attain organizational excellence.  Consultants focus on individual and organizational improvement strategies.

Much of this guidance is based on the following leadership premises:

  • Organizations will be successful with the right leadership.
  • If  you can recruit, hire and/or equip the Chief Executive or Executive Director with the right vision, skills, abilities, and charisma, the nonprofit organization will not only be successful, it will thrive.
  • Effective leadership leads to mission success and positive organizational performance.

These premises,  according to the theory of governance partnership,  are only partially true. They are only partially true because of its singular focus on the organizational leader. This focused approach excludes the board of directors.  By excluding governance,  the potential benefit and impact of the board of directors and what it has to offer is diminished. The current heroic model of leadership marginalizes the board of directors.

The theory of governance partnership is based on an alternative premise:

  • Every nonprofit organization has two key leaders.
  • The board chair is the leader of the board of directors.
  • The chief executive is the leader of the organization.
  • The board chair and the chief executive must work in partnership to lead the entire organization.

The theory of governance partnership offers a new leadership model for nonprofit organizations.

At the very core of  governance partnership is the possibility of a dynamic relationship between the Board Chair and the Chief Executive. If the board chair and the chief executive are committed to constructing an effective and dynamic governance partnership, they will be creating the cultural context for the board of directors and the organization to be aligned around a shared mission and common commitment to organizational performance. The quality and strength of the partnership, according to the theory of governance partnership, makes impact the overall success of the nonprofit organization.

That is why Governance Partnership is important to nonprofit organizations.

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The Governance Intersection in Nonprofit Organizations

May 22, 2010 in Governance, Leadership, Organization with 0 Comments

Think of the many highway intersections you have encountered. Some are simple and unmarked , others have four way stop signs or stop and go lights. Some intersections are more complex having five or more roads coming to a central point controlled by a traffic circle. The most complex intersections are those that involve multiple Interstates coming together in an interchange of concrete ribbons intersecting each other like a pretzel.

The relationship between the board chair and the chief executive has been described by Sandy Boyd from the Iowa Nonprofit Resource Center as being at the intersection of governance and the organization. This governance intersection has been described by Maureen Robinson in her book Nonprofit Boards that Work as “…one of the most complex and perplexing relationships in the nonprofit sector”.

Similar to the variances in road and highway intersections, governance intersections vary by organization as well. In many small start-up nonprofit organizations, the intersection between the board of directors and the chief executive is quite simple, much like an unmarked road intersection in a rural area. Negotiating this intersection is simple and clear, and if there is no traffic present, you might not even need to stop. In larger and more mature organizations, the intersection might be more complex and confusing, much like the Interstate interchanges  in large urban centers like Chicago, Dallas/Fort Worth or Seattle.  Traveling through these intersections successfully involves following signs, making no sudden turns, and having faith and confidence that you will get through the intersection safely.

The ability of the Board Chair and the Chief Executive to build a governance partnership early on in their tenure together will increase the chances that they will successfully navigate the governance intersection. In doing so, they will be able to successfully lead and guide the organization as it implements the mission and works for positive organizational performance.

The essence of the governance partnership is based on the intersectional paradox of governance and organization.

Role of the Chief Executive and Faithful Presence

May 9, 2010 in Governance, Leadership, Mission with 0 Comments

One the most important roles of the Board of Directors is the selection of a Chief Executive, according to BoardSource. It is the Chief Executive that acts in the intersection between governance and the organization.

The Chief Executive acts on behalf of the board to ensure that the organization is effectively engaged in making the mission come alive within the parameters established by the board. The chief executive leads the day-to-day process of creating a mission-directed culture that engages staff, volunteers, supporters, and the community. The Chief Executive leads the day-to-day process of promoting a performance-based culture that builds organizational health and sustainability.

The Chief Executive acts on behalf of the organization to ensure that the board of directors is engaged in effectively governing the organization.  The board looks to the Chief Executive to demonstrate day-to-day compliance with the shared  mission and organizational expectations.

This governance intersection can be a very difficult and complex place.  It is this place from which the Chief Executive must constantly  focus on building the governance partnership.  If this relationship is based on a shared mission,  if there is a common commitment to mutuality and the building of trust, and if there is an effective pattern of communication, the governance partnership will grow! If, on the other hand,  this relationship is characterized by mission drift or confusion, lack of trust and transparency, and a poor pattern of communication, the governance partnership will fall apart and the organization will drift into mediocrity or irrelevance. Worse case scenarios include organizational crises that may involve the dismissal of the Chief Executive. There are numerous examples described in the media where this has happened.

In a book entitled To Change the World, James Hunter describes a way of looking at cultural engagement that might help Chief Executives as they negotiate this difficult governance intersection while  nurturing the governance partnership. Instead of trying to change or fix  governance and/or the organization during times of difficulty, Chief Executives might  practice what Hunter calls  Faithful Presence. Faithful presence is not about change.  Instead, it emphasizes cooperation between individuals and institutions to serve the common good. It is this cooperation that is central to the idea of governance partnership.

Perhaps the best the Chief Executive can do in the governance intersection is practice Faithful Presence.

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Good Strategy requires Good Intelligence

April 26, 2010 in Leadership, Strategy with 0 Comments

The first phase in the development of any strategic plan is all about the gathering information and good intelligence. There are two key things that you need to think about as you design this first phase:

1. Who do you want to talk to and where are you going to get good intelligence?

2. How are you going to gather that intelligence?

The answer to the Who question is really about the nature of your nonprofit organization. Are you a brand new organization? Or are you a legacy organization that has been around for a long time? This is a key question because helps you think about the organizational stakeholders.

Every organization has stakeholders…the board and the staff, volunteers and donors, consumers and customers that benefit from the organization, community members and  business, public agencies and other nonprofit organizations . As a young organization, this collective group is likely to be very small and homogeneous. As an older organization, this group could be very large and diverse. All of these individuals and groups have a stake in your organization and likely have  opinions about what the mission and vision. They are likely to express their voice about the nature of the organization’s values and what areas of focus should be considered strategically as the organization moves forward.

The strategic plan development design should address The Who — Who do we talk to as part of the information and intelligence gathering process.

The second question focuses on The How.  The How question is a methodological question. What methods are we going to use to collect the intelligence and how will these methods ensure that the information collected is good intelligence.

Let me offer several methods for your consideration:

  1. Individual and group interviews
  2. Focus groups
  3. Future search conferences
  4. Open space conversations
  5. Individual Questionnaires — mailed or emailed
  6. Telephone surveys
  7. Retreats
  8. SWOT analysis
  9. Town hall meetings

While list of methods can be quite long, your strategic plan development design should address how you want to collect information and how you can use that process to engage your stakeholders as you are gathering that information.

Remember….good strategy requires good intelligence. If you choose effective methods, you can engage your stakeholders. This engagement process not only helps you gather good intelligence, it also is the first step in eventual implementation of your new strategic plan.

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How much time should the Chief Executive spend on Governance?

April 19, 2010 in Governance, Leadership with 1 Comment

When we talk about improving governance, a key question that keeps on surfacing is:  How much time should the chief executive spend on governance?

When I asked governance experts this question, without hesitation they say 25%! After that first response, the often pause and then add this statement, They should spend more than 25%, but that might be unrealistic. This is the response from experts at three national conferences I attended for board members and chief executives in health care, colleges and universities, and nonprofit organizations.

When I asked a similar question to Chief Executives, How much time do you spend on governance? their response was only 5% to 10%. They justified this time allocation to the reality of their jobs and the amount of time it takes to run an organization.

Clearly there is a lack of alignment between the current reality of chief executives and the expectations of governance experts.

Peter Drucker, in his 1990 article entitled Lessons for Successful Governance, answers the question with a question and then provides his view.

Who should be responsible for an effective board, for the relationship between board and executive officer, and for the structure of governance in the nonprofit institution? The standard answer is, the board’s chairperson. There is only one thing wrong with this; it does not work. What works is to assign responsibility for the effective governance of the organization to the (chief) executive officer and to make it one of his or her key duties.

Peter Drucker avoids the time question. He creates clarity by re-framing the question about how time the chief executive should spend on governance by stating that the chief executive is responsible for effective governance. To be clear, Peter Drucker also stated in this article that the chief executive must work with the volunteer board chair to ensure effective governance.

Blue Avocado, a  popular nonprofit blog, asks a similar question, Who is responsible for the board doing a good job? They look to Peter Drucker for advice as well.  We agree with Peter Drucker: The responsibility for the board’s effective work — both governance and support — is ultimately the responsibility of the executive director.

The chief executive and the board chair must forge the governance partnership. That not only takes time…more than 25%…it takes commitment! The chief executive must do what it takes to ensure that the governance is effective!

Strategy as Permission

March 18, 2010 in Leadership, Strategy with 1 Comment

Strategy as permission. That phrase may sound kind of strange. However in my experience as a Chief Executive for the past 18 years at ChildServe, the strategic plan has given me  permission to pursue the expansion of the mission. Approved strategy is permission-giving.

Of course, strategy and the strategic plan can only be permission-giving if the organizational stakeholders have participated in the development process and the governing authority has given approval.  Once approved, the  Strategic Plan functions as a strategic road map for the organization.  It is the Chief Executive’s  responsibility to ensure that the Strategic Plan does not just sit on a shelf gathering dust. Instead, the Strategic Plan should be a dynamic document that clarifies what the  priorities will be for the next three years. No longer does the Chief Executive have to guess what the Board is thinking, wonder if a particular strategy is supported, or if an initiative is important. Those discussions and decisions have already happened.  It is the  role of the Chief Executive to lead the organization and engage the Board of Directors to make sure those things happen.

I can look forward to the future of ChildServe. I have permission to do what what we collectively agree needs to be done to advance the mission.  The  partnership with the Board affirms a  mutual purpose and commitment as the Strategic Plan is unfolding.

Strategy as permission….what a great reason to pursue effective strategic planning!

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Four Key Strategic Questions

March 3, 2010 in Governance, Leadership, Organization, Strategy with 0 Comments

There are four key questions that must be addressed as a nonprofit organization begins the strategic planning process.

  1. The Vision question — What are we going to look like in 3 to 5 years?
  2. The Mission question — Why do we exist today?
  3. The Values question — What defines and drives our culture?
  4. The Focus question — What should we be focusing at to get to our future?

The Vision question is all about defining the future of the organization. The role of leadership — governance in partnership with organizational leadership — is to define the future. Without this picture, the strategic plan will not have a point of arrival.

The Mission question focuses on the role and purpose of the organization today. Mission statements should be compelling. Mission statements should be describe the scope of the organization. Mission statements should be short enough so that all stakeholders can say it in one single breath.

The Values question is about the cultural fabric of the nonprofit organization. Every organization has a culture that is shaped by the staff, volunteers and governance. What values describe that culture? Do those values also drive the culture? If the culture needs to change, what values need to be adopted to drive and lead that change?

The Focus question gets to the heart of strategic planning. In order to get from hear to your preferred future as described in the Vision statement, what do you need to do? Since most nonprofit organizations do not have the resources to do everything, Governance and organization leaders will need to  identify the three to five critical areas that need strategic focus for the length of the strategic plan. When those areas are identified, strategic goals and initiatives can be developed to provide the guidance on how to operationalize the Strategic Plan.

All great strategic plans begin with these four questions. In answering these four questions you are developing a framework for your strategic plan. Once this framework is developed, the next step in the strategic plan design process is the plan content. That next step will be the subject of another governance partnership post.

If you begin your strategic planning development process with these 4 questions, you are ensuring that your strategic plan will be relevant to your organization. Your new strategic plan will serve as a strategic road map for governance and organizational leaders.

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Nonprofit Organization Starvation

February 21, 2010 in Governance, Leadership, Mission, Uncategorized with 1 Comment

Organizations need to be fed to be healthy and sustainable. If organizations are not fed, they will starve.  Authors Ann Gregory and Don Howard,  in their article The Nonprofit Starvation Cycle, state that organizations must have proper care and feeding if they are to be successful in making their mission come alive in the community.

While Gregory and Howard point out that funding restrictions and/or reductions can lead to organizational starvation, they rightfully point out that there is a shared responsibility that goes beyond funders. Organizational leaders often do not make the appropriate investments in infrastructure. Governance leaders often unaware of these lack of investments. They focus instead on the bottom-line.  Funders often times are not aware of the organizational challenges until the organization performance begins to diminish. A lack of transparency and accurate reporting leads to the downward spiral called the Nonprofit Starvation Cycle.

The authors suggest that one of the most important solutions avoiding or getting out of this  downward spiral begins with the question: What does this organization really need to succeed?

When governance and organizational leaders as well as funders begin to answer that question with a shared voice they will breath new life into the organization. The organization will avoid its public  obituary.

The governance partnership model offers two fundamental suggestions to those leaders that are seeking an answer to that important question:

1. Develop a shared commitment about mission. Define that shared commitment in the form of mission outcomes.

2. Develop a shared commitment about organizational performance. Define what organizational success means in the form of organizational results.

Organizations with good leadership need not starve to death.

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