Author: Carter McNamara

Posted on

Whose Capacity Should We Be Building Anyway?

Woman in checkered shirt teaching colleague using a macbook

In another sterling example of checking brains at the nonprofit boardroom door, I recently learned of a charity that is financially on the ropes.

Poor decisionmaking, weak leadership, the struggling economy, and ho-hum programming have this cultural entity (with a multi-million facility) on the verge of collapse.

No one is currently at the helm, and the board is hunting for a new chief executive. After a bumpy search, the choice is down to one of two candidates.

Candidate A has fundraising experience, but has never managed people, never served as the senior executive of any organization, and has never worked with an agency within the cultural sector. But the person is bright, likeable and local.

Candidate B is a seasoned E.D. with a track record of performing turnarounds at charities with a similar mission. This person, however, would be relocating from half-way across the country, and has an aggressive personality tinged with a helping of arrogance.

The search committee sums up their choice this way: Candidate A has a lot of potential and, we believe, could grow into the job. Candidate B could definitely do the job.

Slam dunk choice, no? After all, the charity is at the verge of shutdown.

But since Candidate B is not as “nice” as Candidate A, this group is seriously considering banking on “building the capacity” of Candidate A as a chief executive.

Am I missing something here? If this were a multi-million dollar company with stockholders, would this board even CONSIDER making the same choice?

Sometimes, real capacity-building is nothing more than engaging the full capacity of our brains … the ones we checked at the boardroom door.

Farewell, and fare well till next week …

——————

For more resources, see our Library topic Nonprofit Capacity Building.

——————

Posted on

Here’s Why Advisory Boards Are Often Useless

Wrong way signage

An Advisory Board (or Advisory Council or Advisory Committee) is a collection of people formed to advise members of a governing Board of Directors. The Advisory Board does not have formal authority. It cannot issue directives that must be followed as is the case with a governing Board.

There seems to be an increasing number of Advisory Boards. Far too often, an Advisory Board starts out slow and then stalls out completely, or very rarely meets and ultimately is not taken seriously at all.

An Advisory Board can be a tremendous complement to the effectiveness of the governing Board of Directors as it works to address a complex consideration or to undertake very specialized project. Those are the best reasons to form an Advisory Board.

However, sometimes Advisory Boards are used to try maintain formal and visible relationships with people who have particular strong status, for example, people whose terms have expired on the governing Board, leaders in the community, or people having highly respected skills. Those are usually not good reasons to form an Advisory Board – or at least, they’re not good reasons to expect much from an Advisory Board.

The influence that Advisory Board members have in their recommendations to the governing Board depends on the charter, or formal description of the Advisory Board. The most useful Advisory Boards are organized almost as carefully as committees on governing Boards. For example, for Advisory Board “ABC”:

  • ABC meets on at least a quarterly basis. Meetings are scheduled by the ABC Chair who also develops agendas for the meetings.
  • ABC provides written recommendations to the governing Board regarding operations and coordination of product DEF.
  • ABC is comprised of 9 members, each representing a major geographic area of constituents of Product DEF.
  • Membership of the ABC is selected on an annual basis by the governing Board.
  • ABC members serve a one-year term, which can be renewed two times.
  • ABC is facilitated by a Chair who is appointed by the governing Board. The ABC Chair serves a one-year term and is a member of the governing Board.
  • ABC recommendations are formed by a vote of the majority of the members of ABC.
  • Highlights of, and recommendations from, all ABC meetings will be documented in meeting minutes and provided to the Board Chair of the governing Board within 2 calendar weeks of the ABC meeting.
  • Operations of ABC are evaluated annually by a Committee comprised of 3 members of ABC and 2 members of the governing Board.

(The terms of the charter might even be itemized in a set of bylaws for the Advisory Board.)

It’s often best to have a member of the governing Board on the Advisory Board to ensure that the governing Board is always aware of the activities of the Advisory Board. That practice also ensures that Advisory Board members feel some legitimacy in their roles – that they feel that they’re taken seriously by the governing Board.

An Advisory Board is as useful as you expect it to be. If you formally charter the Advisory Board, then its members are more likely to realize that you take the Advisory Board very seriously. If you “park” people on the Board just to somehow keep a relationship with them and then expect that Board to somehow be useful, you’ll likely end up instead with a collection of people who just feel “parked.”

What do you think?

———————————————————————————
Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.

Posted on

What’s the Real Purpose of Word-Smithing Mission Statements?

A businessman looking up at a corporate building

It’s common that a client will want to start strategic planning with “updating the mission statement.” After all, that’s what a lot of experts suggest. Mission statements get a lot of attention from writers and consultants. Many of them assert that the statements should be highly inspirational and easy-to-read. They give examples of mission statements that roll off the tongue.

However, far too often, what usually occurs is a word-smithing session. “Should our mission include ‘transformational’ or ‘transcendental’?” “Are we ‘serving our customers’ or ‘collaborating with our customers’?”

Those session starts out with great energy and exhilaration, and planners greatly appreciate the facilitator’s guidance and presence in the planning. However, all that soon dissipates as planners become increasingly frustrated with not knowing which words to include. Soon they begin to wonder if the word-smithing really is providing any value to the process. They suspect there are more important matters to decide.

And that’s how much of the planners’ precious time is spent.

I assert that it’s often best first to answer – even to validate answers to – certain questions. The answers to those questions make it much easier to know what should be in the mission statement, and it makes the mission statement a true compass for the organization’s strategies, plans and practices.

Planners should first address:

  • What needs and wants exist among our customers? How do we know?
  • What needs and wants do we want to address? How do we know?
  • What group(s) of customers do we want to serve? How do we know?
  • What makes us different than our competitors? How do we know?

Sure, answering those questions is not as energizing or as exhilarating as fantasizing words on a mission statement, but the questions are a lot more useful.

Planners might do the word-smithing in a couple of strategic planning cycles, but they’ll usually start to feel that it’s not really planning, rather it’s just a way to avoid the hard work of answering the hard questions.

Word-smithing the mission statement might lend the illusion that it is indeed the heart of planning — but it’s not.

What do you think?

Here’s many more resources about strategic planning.

———————————————————————————————–
Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 763-971-8890
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.

Posted on

Be Careful About Proclaiming “Failed Management Movements”!

A manager talking to an employee

Last week, I got a call from a consultant who lamented the “failure of all those management movements.” As usual in these conversations, the caller went on to explain how his particular idea was what leaders and managers really needed.

That type of lament seems increasingly common in literature about the need for “transforming organizations” and “transforming society.” I think the lament is simplistic and even reckless.

There have been many major movements and models in management, e.g., scientific management, management by objectives, quality circles, Total Quality Management, Business Process Re-Engineering, One-Minute Managing, Self-Managed Teams … the list goes on.

I assert that many of these movements and models became integrated with the others and that many of them built on each other — they didn’t “fail” any more than a recent addition to a house was a “failure” because more additions were needed, or any more than therapy sessions were a “failure” because the person needed more therapy later on.

I sometimes wonder if the hyperbole from consultants and writers is as dangerous as the situations those people are trying to improve.

What do you think?

—————————

For more resources, see the Library topics Consulting and Organizational Development.

———————————————————————————
Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.

Posted on

Should Nonprofit CEO Pay Be Based on Outcomes?

A nonprofit CEO in his office

Last week, I did a workshop among nonprofit CEO Executive Directors. Some of them expressed great frustration at the exorbitant compensation of CEOs of very large, for-profit companies. They mentioned that many of the companies’ products were very poor quality anyway.

One participant offered a rather novel assertion that the pay of those CEOs should be based on how much customers actually benefited from the companies’ products and services. (She refined her assertion a bit by adding that compensation should also be based on performance of the stock and on some performance goals set by the Board.)

Another participant in the workshop ventured the question, “Then should a nonprofit Executive Director’s pay be based on how many of the outcomes were achieved by participants in the nonprofit’s programs?” (Remember that outcomes are the types of changes achieved by participants in programs, e.g., new knowledge, skills and abilities.)

That question produced a firestorm of indignation and assertions about how nonprofit organizations are very different than for-profits. I asked for a vote to get a sense for how many people believed that the E.D.’s salary should be based, at least in part, on outcomes. Only 2 out of 15 agreed. Then I asked for a vote of how many believed that a for-profit CEO’s salary should be based on some measure of customer benefits — 9 out of 15 agreed that should be the case for for-profit CEOs.

What do you think? Should a nonprofit E.D.’s salary be based somehow on outcomes from programs?

——————

For more resources, see our Library topic Nonprofit Capacity Building.

——————

Posted on

Is a “Working Board” an Immature Board?

A board meeting of working board members

(The following post applies as much to for-profit Boards as nonprofit Boards — many for-profit Boards, especially in family-owned corporations, operate as working Boards.)

A “working Board” is a personality of a governing Board. There is no clear delineation as to what’s a definitely a working Board or not. However, it’s commonly viewed as a Board where members are doing a lot of staff-related (or employee-related) activities. New organizations often have a working Board.

I sometimes get calls from consultants wanting advice about certain situations when they’re working with Boards. It’s not uncommon that they’ll comment that a Board is a working Board and therefore needs to mature to a “policy Board” where members attend exclusively to strategic priorities and decisions. I often disagree with that assumption.

It’s fine to have a working Board — as long as Board members are also attending to more strategic decisions. So it’s OK that they might be fixing the fax machine one day. However, later on, they should also be discussing the purpose of the organization and its most important priorities.

The personality of a Board depends more on what the organization wants to accomplish than on any natural order that the Board must evolve to a policy Board. The more the organization wants to accomplish in its markets or its communities, the higher the likelihood that more resources will be needed (including more paid staff) to do that, and the higher the likelihood that the Board will need more attention to governing the increasing range and complexity of resources. Thus, the more the organization wants to accomplish, the higher the likelihood that a Board will evolve from a working Board to a policy Board.

Some very smart people have decided that they’d rather their organization was “a rifle than a shotgun” — that it do a few things very well, rather than a lot of things not so well. Those people will have carefully scoped what they want their organization to accomplish using a limited amount of resources. So those very smart people might have a working Board — a Board that does not need to “mature” into a policy Board.

What do you think?

———————————————————————————
Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.

Posted on

What’s a “Mature” Organization?

Male employee gesticulating in an office space

I conducted a workshop two weeks ago in which a participant mentioned that some of the other participants in the room were not from “mature organizations.” He went on to explain that their organizations were still somewhat small.

I countered that it’s often an illusion to assess the maturity of an organization based on it size. I suggested that maturity depends more on the nature of activities in the organization — that a small or large organization can be immature if, for example, its internal practices are more reactive and crisis-driven than proactive and plan-driven.

I added, even that depends on the culture of the people in the organization. Some cultures don’t do planning in the typical “linear” approach that we so often talk about. Rather than establishing goals, objectives, responsibilities and deadlines, those cultures might do planning in more of an “organic,” unfolding and dynamic approach.

One of the most useful, recent perspectives on organizations is that of life cycles. The view is that, just like people, organizations must evolve through life cycles, for example, birth, growth and maturity. Life cycles apply to many systems, including products and teams. If a system does not successfully evolve to the next stage, it can stagnate or even decline.

I’ve sometimes wondered about the life-cycle theory — if an organization reaches “maturity,” then does it remain there forever, or does it regress to earlier stages whenever there’s a sudden crisis, for example, a major recession? Or, does that organization, by the fact that it’s mature, evolve through the recession in a mature way?

What do you think is a “mature” organization?

—————————

For more resources, see the Library topics Consulting and Organizational Development.

———————————————————————————
Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.

Posted on

When Good Words Go Bad

A man wearing grey suit typing on his laptop

“Capacity building” is a term from the Grantonese language usually referring to an organization’s systemic effort to secure ever greater amounts of money on a consistent basis. It is not to be confused with “sustainability,” another word from the original Grantonese, referring to that state of fiscal nirvana in which a nonprofit believes it will not have to worry about money for any foreseeable future. It is believed that this mythical state is the “pot” at the end of the capacity building “rainbow,” but as so few charities have ever come back to tell us about that perfect state of sustainability, there is little empirical evidence to prove it actually exists.

I admit I am biased when it comes to the use of these two terms. That’s because I am a lover of language, and a lover of the very essence – and presumed end — of the not-for-profit movement.

Thus, I would banish “capacity building” from all discourse on the topic of making change in the community and the world. For one, it’s not language I would use in the company of growing children sitting around the dinner table. And if I can’t use it there, what hope do I have of successfully using it to inspire busy, distracted adult volunteers sitting around the board table once a month (or less)?

As for “sustainability,” I simply find to be a sad little word, and for that reason would abolish its use in our sector. “Sustainability” admits defeat. It implies that our organization – alone or in concert with other community initiatives – has no hope of ever vanquishing the social or community “wrong,” or deficit, our charity seeks to “right.” It sets our organizational bar at being around forever rather than succeeding in making itself obsolete.

So I beg, dear gentle Reader, that you forgive me in advance for restraining myself from using those terms except when I’m traveling in Grantland, just as I only toss “ciao” about when in Italy, or “dog” when I’m watching American Idol.

Until next week, farewell and fare well …

——————

For more resources, see our Library topic Nonprofit Capacity Building.

——————

Posted on

How to Start Strategic Planning: Do a Plan for a Plan – Part 5 of 5

Woman thinking hard about her next strategic chess move

In Parts 1, 2, 3 and 4 of this topic, we reviewed the first 12 of the 15 questions to be answered during the “plan for a plan” portion of strategic planning. This Part 5 describes questions 13-15.

13. How will you get buy-in of members of the organization?

There seems to be growing cynicism about strategic planning. Far too often, the process is overwhelming and confusing for planners. Far too often, the process does not result in implementation of a relevant, realistic and flexible plan. The commitment and ownership of members of the organization is crucial to the success of the planning process and the plan. Consider these guidelines:

  • Show visible top-leadership support – the CEO and Board Chair should visibly announce the process and show their continuing support of it.
  • Explain if previous planning efforts failed and why – don’t expect members to simply ignore the past.
  • Explain why you are planning now and how it benefits the organization.
  • Involve those who will implement the plan – don’t somehow bestow the plan on the rest of the organization.
  • Tie planning to important issues – you won’t have buy-in of members to a grand vision if their hearts and minds are worried about current issues in the workplace.
  • Show how the planning is realistic – unrealistic plans are one of the biggest reasons for cynicism about planning.

14. How will you ensure implementation of the plan?

One of the biggest frustrations with planning is when it produces a plan that doesn’t get implemented.

  • Involve those in planning who will end up implementing the plan – that helps to get their commitment to implementing the plan.
  • When identifying goals, always ask “Are these goals realistic? How do we know?”
  • Include action plans in the overall plan – actions plans specify who will do what and by when, in order to achieve goals.
  • Assign specific people to monitor implementation of the plan.
  • Be open to changing the plan – plans are rarely implemented as first written.

15. How will you change the plan as needed?

Plans can be changed. They just need to be changed in a systematic approach.

  • Before a plan is formally approved, put “DRAFT” on each page of the plan. After approval, remove the word.
  • On each page, put a revision date, e.g., “Revision – April 15, 2010”.
  • If a change seems to be needed, propose the change to the appropriate leadership, e.g. the Board or the CEO.
  • When the leadership approves the change, then put a new revision date on the plan.

This post completes the series. To see Parts 1, 2, 3 and 4, click on the category “Plan for a Plan” on the sidebar.

What do you think?

Your thoughts about the plan for a plan?

Here’s many more resources about strategic planning.

———————————————————————————————–
Carter McNamara, MBA, PhD – Authenticity Consulting, LLC – 800-971-2250
Read my weekly blogs: Boards, Consulting and OD, Nonprofits and Strategic Planning.

Posted on

What is a “Nonprofit” Topic?

Two men talking about nonprofit topics

About fifteen years ago, I noticed that “nonprofit topics” almost always meant topics specific to nonprofits. I believed this was a misnomer and here’s why.

Back then, nonprofit topics usually referred to:

  • Public policy
  • Boards of Directors
  • Strategic planning
  • Programs
  • Fundraising
  • Volunteers

Back then, it struck me — as it does now — that there were a lot of other topics, usually seen as “for-profit” topics, that very relevant to nonprofit organizations. To mention just a few:

  • Leadership and supervision
  • Stress and time management
  • Advertising and promotions
  • Performance management
  • Compensation
  • Communications
  • Ethics
  • Insurance
  • Personal development
  • On and on and on …

So back then, I started what I called the “Nonprofit Manager’s Library” to include the nonprofit-specific topics, but the many other “nonprofit” topics, as well. (I remember numerous people asking me why those topics were in a library for nonprofits.) Since then, I’ve renamed the Library to the “Free Management Library” to more readily imply the full scope of topics in the Library.

Many more of us have recognized that nonprofits and for-profits have much in common with each other, as they do with government organizations, as well. I’ve learned that a small nonprofit is a lot more like a small for-profit, than a large nonprofit. Likewise, a large nonprofit is a lot more like a large for-profit.

As we recognize the many other “nonprofit” topics, we’re able to more fully understand nonprofit organizations and how to help them.

What do you think?

——————

For more resources, see our Library topic Nonprofit Capacity Building.

——————