Making things work: Key players produce success for nonprofits

By Wickham Skinner | Mar 28, 2011

In spite of noble purposes, capable, dedicated employees, unselfish volunteers and, generally, a rich body of professional knowledge, many nonprofits fall far short of their promise to contribute to society. My experience is that a substantial number are poorly managed, and most just muddle along as well as they can, struggling to survive but failing to achieve their potential.

This column focuses on why it is that relatively few nonprofits are excellently managed and what changes in management practices would produce consistently better results. We conclude that the practices and relationships of board chairmen and executive directors are vital keys to success.

First off, it is clear that managing in the nonprofit sector is difficult, and often more so than in for-profits. Money is nearly always scarce; funds must be constantly raised; salaries paid to managers and staff are generally low; there are tradeoffs abounding between economic, social, human impacts; public commentators and boards of directors who, as volunteers, are not subject to orders and frequently criticize; competition is usually at hand; services needed keep changing; and with multiple and off-setting criteria, judging performance is precarious.

Academics and consultants have tried to help practitioners wrestling with these troublesome facts by providing a body of generally acknowledged “best practices of non-profit management."

“The book” usually lays out clearly defined steps fundamental to good nonprofit management:

1) define the mission and objectives;

2) examine the organization’s strengths, weaknesses, opportunities, and threat;

3) identify the key problems being faced or to be faced; i.e. dilemmas to be solved;

4) define/describe key tasks to which top priority must be given;

5) craft out a strategy as to how the key tasks can be carried out in the face of the dilemmas identified (No. 3 above);

6) design a structure of people, skills, policies and organization that can best carry out the strategy; and

7) regularly measure the unit’s performance and revise actions and policies accordingly.

 

While these orderly steps provide a straightforward and sensible model of management theory for nonprofits, they clearly fail to insure success. To understand what’s wrong we need to go back to basics, analyze real cases, and see what they tell us.

As I review success stories from my personal experience I see one clear pattern in success:

The seven step “book” looks good on paper but carrying it out requires certain practices of managers and volunteers which violate the orthodox management mantra of always keeping lines of responsibility separate and clear. The behavior of two particular managers is critical.

The success of the enterprise is largely dependent on the executive director (ED) and the chairman of the board of directors (CH), both individually and how they work together. Their knowledge, skills, energies, and relationship are keys to the performance of non-profits. Neither one of them, no matter how able or energetic each may be, can do it alone.

In theory these two individuals perform quite different functions. The ED is the professional, trained and capable to run the operation with efficiency and dependable, high quality performance. The CH is a volunteer, expected to provide top-level leadership and oversight of the overall performance of the ED and the organization. The CH is tasked to lead the board in forming and carrying out long range strategies while supplying the ED with financial resources essential to the tasks to be performed.

But in practice it’s not so simple.

1) the ED usually is expected to raise financial resources through the staff “development” officer;

2) the CH is often diverted by other interests and responsibilities;

3) the CH assumes the "strategic plan” is a good one and that the ED is a professional and knows what they are expected to be doing to carry it out;

4) the board members lack professional expertise and, avoiding micro-managing, rely completely on the CH to be told what they should be doing, and expect the ED to be capable of managing the operation.

So while the “book” spells out what needs to be done it does not deal with the real life difficulties in making it happen. Cases abound with serious results: the nonprofit’s strategy is left unchallenged, the nonprofit just drifts along, sub-par performance is largely accepted, finances are a continuing hard-scrabble struggle for the ED, the ED is swamped with the pressures of daily operations and forced into a day-to-day, month-to-month focus while being steadily overworked, the CH feels powerless or complacent about the need for change including the quality of the board, and the board is uninvolved, often bored and unchallenged except for periodic, scheduled meetings which usually focus on past results.

 

In contrast, cases of successful nonprofits demonstrate four vital lessons:

1) An energetic, involved, challenging CH is vital. Not much happens beyond on-going ground level operations without such an individual. No one should accept a CH position without being prepared to make such an ongoing investment.

2) The ED must insist that the CH and the board do their jobs of continually updating the mission, objectives and strategies of the organization, and insuring that financial resources needed are obtained.

3) The ED has a responsibility and the professional knowledge to take a leading role in working with the CH to examine, challenge, and revise the mission and strategies. There is no valid excuse for simply leaving that work to the CH, especially if it is not being done as it should.

4) Board members, too, cannot be excused for complacency just because they are not summoned into action by a diverted CH. As a group they have the ultimate responsibility. As individuals their persistent good questions to the CH can activate the whole enterprise.

Working “by the book” suggests nice, neat, clear divisions of responsibilities, but in the real life of the non-profit world they need to be overlapping, tumbled and mixed. Like bees in a bee-hive, the CH, the ED, and the board should all be involved in continuous, energized, often noisy collaboration. They overlap, they need and trust each other, and all together involved they create an unbeatable combination.

They are the key players who can make things work in the nonprofit world.

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