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Shared Wisdom for Successfully Leading Organizations

How a first-time non-profit CEO can develop the proper staff structure

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Before you can figure out your non-profit’s human resources needs, you will need to have a good sense of its business model, work culture, and business plan. A strong business plan will outline the objective(s) that you need to achieve and the key tactics you will employ. This will help you identify the key competencies, skills, and experiences needed in-house.

When you conduct an initial assessment of the current staff, start at the management level and work your way through the organization. With the staff you inherit, figure out what they are good at, what motivates them, and what their outcomes have been. You should have a preliminary sense of this from your own job interviews, when you asked the board leadership about the strengths and shortcomings of the staff.

Be advised that the external assessment given to you by people such as directors or donors is not necessarily complete and accurate. The external input should not override your own judgment. You should have access to personnel files and conduct interviews with your staff that are focused on their past performance. You may even have the benefit of speaking to the former CEO and any current supervisors.

In your interviews with the staff, you should ask questions that might reveal the high- and under-performers. A few good questions to consider are the following: What resources or supports have you received from the team that have made you more successful in your work? What is hindering your progress? What do you want to see changed?

Once you have taken a preliminary inventory of staff competencies, you can figure out your redundancies, gaps, and mismatches; and you can organize this information into a preliminary management structure. You will figure out which teams you need, which ones need to grow, which ones need restructuring, and which ones need to be eliminated. You will also look at the team leaders and determine who should be reporting to you directly. In your former job, you may have had more direct reports than is appropriate for a CEO.

In short, you are drafting a preliminary organizational chart. The structure should not be so elaborate that it obscures the clear lines of accountability. The decision-making responsibilities should be clear.

One major change for the first-time CEO is stepping away from day-to-day operations and focusing on strategic priorities. This includes making the switch from being a manager to managing managers. Mid-level managers are managing direct reports in the management structure and dealing with internal issues. CEOs will instead manage up (board chairs, and committee chairs and members) and out (donors and supporters, strategic and operational partners, and other stakeholders). Stay connected to your management team during this transition so you don’t isolate yourself and lose touch with the business of the organization.

Once you have outlined your management structure, you should have clarity on what work can be outsourced. Outsourcing should allow you to benefit from lower costs, increased efficiencies, and access to skills and resources that are outside your organization’s key competencies.

The essential tasks are those directly associated with your key drivers. These will require in-house competencies. The other activities necessary in running the organization can often be outsourced to a business whose key driver is that very task. For example, an organization whose purpose it is to provide a website that gives online support to other organizations may need to have in-house web-development and IT expertise. For most other organizations, IT or web-development skills may be things that should be outsourced.

In this initial assessment phase, you will decide which employees are indispensable, which need to be further engaged and developed, which you need to monitor closely, what skills and knowledge you are missing altogether, and which members of the current team need to leave the organization. This is always a tough thing to do, and one that new CEOs often put off because  they don’t want to rock the boat too quickly or because they want to give people a chance to prove themselves.

Sometimes a change of leadership works wonders, there is a special synergy, and things pick up. But usually the change is slow in coming; perhaps with hints of progress, but slow. And often the CEO waits far too long, so long that they develop a relationship with the employee, making the change even more difficult.

The best timing for making these personnel changes will depend on the organization. It is up to you as CEO to make these calls within the larger framework of the organization’s immediate and long-term needs.

Firing staff is always a disruptive process; this is particularly difficult for smaller organizations in need of extensive personnel changes. In the event that a number of people need to be let go, you may want to consider which parts of the work need to be put on hold until new staff is hired.

Once a person has been let go, there are established checklists, requirements, and protocols. Before you fire anyone, get the proper legal advice, particularly if the employee is part of a collective agreement. Think through the process of terminating someone’s employment, prepare the proper documentation, decide on a fair severance package, and minimize any potential legal action against the organization. You will need to decide who else should be told, and when, and have an agreed corporate narrative to share with staff and partners. Throughout, you are keeping your board chair well informed.

When someone is asked to leave an organization, they should do so promptly. This is the same for someone who has resigned. It’s tempting to try to keep the person as long as possible, especially if he or she was a good employee, but the reality is that when people resign, they usually check out mentally. There are always exceptions, but they are just that — exceptions. The majority of the time, once someone has been fired or has quit, you should not expect them to take care of the long-term interests of the organization.

The process of drafting a management structure assumes you will have the necessary latitude for making the personnel changes noted above. This is, of course, more complicated when you have contractual agreements with employees that are tough to break or when you are working in a unionized environment.

One of the concerns with letting staff go is the impact it will have on the morale of the remaining staff members, particularly when there are numerous personnel changes being made, or when someone being let go is a long-time employee or popular with their colleagues. As popular as an employee may be, the reality is that if this person has been doing a poor job, other staff members will have had to compensate for it. Their reaction may well be, “What took them so long?”

In general, while you can’t share the reasons for letting someone go with other staff members due to confidentiality and simple decency, you will have to engage them to ensure that the functions of the organization are being managed while a replacement is found. It is helpful for people to have clarity on your vision and plans for the organization so they understand how decisions are directly linked to them.

Franca Gucciardi: A few months into my tenure, Alan [Broadbent] suggested I think about outsourcing our accounting. I remember thinking what an outrageous idea that seemed. Around the same time, a former board director suggested I speak to a friend of his who was running an accounting business providing services to for-profits and non-profits too small to justify having accounting departments of their own. He put a proposal together, and I realized I could have the services of a professional bookkeeper, supervised by a controller and a senior account manager, for less than the cost of a full-time junior bookkeeper. In addition, because his business provides these employees with the development and career opportunities of the bigger accounting firms, I would be getting top-notch professionals on top of best practices in the field. In the end, it turned out to be one of the best decisions I made in my first year on the job.

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The role of the non-profit CEO in developing a strong governance model

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Good governance is not a one-size-fits-all solution. Once you have been hired as the CEO, you will want to make sure that the organization has a governance model that is appropriate to its size and scope. It is important to articulate this model to your board, staff and stakeholders to ensure buy-in and support. This model includes the structure and size of the board and its committees; roles of the officers, directors, and members; and reporting and decision-making procedures.

Successful CEOs manage their board to help it serve the organization effectively. Less successful CEOs manage their board to minimize its impact. Failing CEOs allow their board to manage them.

A well-governed, healthy organization can have only one type of board: one that will meet its fiduciary responsibilities for oversight and accountability. A board should not be involved in day-to-day work, as it must always have the impartial distance necessary for accountability. Once board members take on operating roles, the lines become blurred. It should be obvious to know who is watching whom. Just as staff cannot do the work and oversee it as well, the same is true of board members.

Maintaining a healthy degree of detachment from operations also allows directors the space needed to think of questions and issues that may not occur to someone who is intimately familiar with operations. For example, a board member might ask, “is this project worth doing at all?” — an unlikely question from a staff member who has just spent six months working on the project.

At the same time, a board cannot be so detached and irregular in its involvement with management that it does not have the understanding and, by extension, the authority to properly oversee the work of the CEO.

The skills and talents of individual board members should always be fully engaged to benefit the mission of the organization, but board members need not ever cross the line into management and compromise the integrity of the decision-making process. Unfortunately, it is quite common for CEOs of charities to ask someone to serve on the board with the intention of involving them in the operations.

For example, you may be tempted to put someone on the board because she volunteered to help you put together your IT plans or is willing to design and manage your website. A CEO of a small organization with limited resources might be so grateful and determined to ensure a continued commitment to the organization that he will nominate the individual to the board.

A better strategy is to establish a management committee for IT and ask the volunteer to chair the committee. You can find a role for anyone who is interested and has skills that will help your organization, but you must ensure that a volunteer is taking on an appropriate role that fits her skills, without ever jeopardizing the integrity of the oversight and accountability that the board provides.

Once you have made sure that your board is clearly separated from the day-to-day operations of your organization, your governance plan should include written mandates for the board that clearly state what is expected of directors. These should include the term limits of the positions, the responsibilities of specific officers, and the formal responsibilities of the directors.

The informal responsibilities should also be clear: for example, if a director is expected to donate at a particular level or is expected to attend a certain number of events.

You should also share the established calendar of meeting dates and times with forward agendas. Too often meetings are not planned far enough in advance or are rescheduled, which makes it difficult for directors, who are often very busy, to live up to their responsibilities. If they know ahead of time, they can make sure to be present.

Some boards have a document that is periodically circulated to members reminding them of the agreed-upon governance principles. Sometimes board members are even asked to sign the document to acknowledge that they’ve received and read it. This helps a board feel comfortable with the relationship between CEO and board. Periodically endorsing the agreed-upon principles will make sure the board has the opportunity to tell the CEO what it needs to live up to the agreement.

Another aspect of the governance plan is the size of the board and the structure of its committees. Neither should be cumbersome for the organization. For example, there is no point in an organization with a $500K budget having a huge board with a lot of committees because too many resources will be spent servicing the board.

The appropriate committee structure for an organization should be one that streamlines and focuses the decision-making process of the board. If the board can oversee the work, then there is no need for a committee. In the same vein, if the work relates more to programming, then the committee may not need to exist at all.

Read about Franca Gucciardi’s experience when she started her first CEO position:

When I started at the Loran Scholars Foundation, the organization had six committees (finance, fundraising, strategic planning, nomination, audit, academic programming), each with anywhere from four to seven members, and a board of 23 people. We had a staff of six. It was simply unruly. I was spending more time putting together reports and planning for meetings than doing the work. It was also a huge waste of time for the directors. The hours they spent preparing and attending the meetings could definitely have been better used in more tangible and productive ways. We initially cut the number of committees down to two: an executive committee and an audit committee. The executive met once between board meetings and took on many of the tasks of the finance, strategic planning, and nomination committees. The board could manage some of the work directly, and other pieces were management’s responsibility. A few years later, as we established an endowment fund and our investments became more complex, we established a separate investment committee.

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Your first 30 days as the new CEO of a nonprofit organization: meeting with stakeholders

Congratulations, you got your first CEO job! Now, what do you do?

First, avoid the temptation to make promises and set strategic goals in the first few weeks. This is a common impulse for new leaders, especially first-time CEOs with heroic notions. They run the risk of setting expectations that are too high, making promises that are unrealistic, or acting before thoroughly understanding the organization.

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Getting ready for your first meeting with the board chair

As soon as you have accepted the CEO position, you should plan to have a conversation with the person who is responsible for good governance and sets the tone for the board — the board chair. A key question to ask is why you were chosen over the other candidates who were interviewed for the position.

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How to prepare when interviewing for a CEO position

Interviewing for a CEO position must be a two-way conversation. The organization is interviewing to determine if the candidate is suitable. As the potential CEO, you must be strategic and use the interview to learn if the organization is one you want to lead.

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