Our firm has had the privilege of working with over 100 nonprofits organizations; from universities to homeless shelters, and everything in-between. There are three common lessons we repeatedly see in working with clients that we would like to share.
#1: BOARDS ARE NOT EXEMPT FROM STRATEGY
The board is the group that approves the strategic direction of the organization and then holds the CEO accountable for fulfilling the plan. Boards must also develop a plan for themselves to ensure they have the capabilities, resources, expertise, and talent to achieve future strategy. If the CEO is held accountable for executing the strategic plan, the board chair and board members must be held accountable for having the right people to best support the strategic direction. If both board and staff are not moving forward together, then the board could hold operations back because they can't keep up with the pace of change. Make sure the board has a plan to evolve too!
#2: BUSINESS MODELS NEED A REBOOT
Technology has been a major disruptor to big business and has recently started to chip away at nonprofits of all shapes and sizes. Higher education is under attack from rising costs and deepening discount rates, while students ability to pay is declining. Other nonprofit sectors are experiencing major disruption too. Soon human service organizations will be under attack from: sharing technology & automation, shrinking federal & state funding, and massive overhead. Many nonprofit sectors are about go through dramatic shifts in their service models. The way and manner in which services are delivered is changing now and organizations need to be proactive in designing viable business models.
#3: BOARD CHAIRS & CEOS MUST BE ALIGNED
The most important relationship in any nonprofit organization is the one that exists between the Board Chair and CEO. The most effective and powerful nonprofit organizations are the ones that have this power team sharing one-mind and one-mission. There are important questions to ask in developing this critical relationship: Does the Chair understand their role and how to move & develop the board? Does the CEO understand how to manage and lead strategic change? This team of two needs to ensure three things are happening to be effective:
- Both need to be candid about expectations for each other. Each must know their role and have defined boundaries together.
- Both must define the current situation (reality) of the organization to make sure they are operating on the same playing field. This means facing the brutal facts when making decisions for the organization.
- Both have to establish a clear way to communicate on a frequent and consistent basis. Speaking one week before the board meeting to create an agenda is not enough. Boards must be forward thinking, constantly planning, and continuously focused on developing governance. In order to achieve this alignment the CEO and Chair must always work together to organize their actions. Each has a different role to play in the partnership for ensuring a viable organization, and communication is a must.
We have learned many lessons from our clients and the three principles above are the most important factors for ensuring success, viability, and a healthy organization.