Board Development

Building Breakthrough Boards - Step 5 Evaluate

Step 5: Evaluate
“What gets measured gets improved” -Peter Drucker

Boards perform better when they are constantly evaluating their own performance and effectiveness. The board of directors should consider building a board plan-within-the-strategic plan. Once the board has agreed to its own plan, it will need to assess its own performance.

According to a recent McKinsey survey of executives and directors of nonprofit social-service organizations found that only 17% of the respondents felt that their boards were as effective as possible.

“We found that many nonprofit boards struggle with basics such as recruiting the right members and running meetings effectively. The first task, then, is to nail down the fundamentals—a clear vision, appropriate board membership, and effective processes—because these elements enable directors to avoid wasting a great deal of time and energy. Getting the basics right makes it easier for a board to undertake the hard work of providing true performance and management oversight and to adjust the priorities of both the directors and the organization. Generally, the key isn’t to do more but to focus more.” - The Dynamic Nonprofit Board, McKinsey Insights

To start building a more effective board, it is helpful to evaluate the boards performance, priorities, and function. Please CLICK HERE to download McKinsey & Company’s Nonprofit Board Self Assessment Tool - Short Form. For a more detailed assessment please CLICK HERE to contact us.

Building Breakthrough Boards - Step 4: Engage

Step 4: Engage
How can boards become more engaged in the success of an organization? How can we boost morale and excitement during meeting times and in-between meetings? How can individual board members bring their passions to the forefront and drive ideas?

These are several of the main questions that many organizations are asking. When a board of directors is producing results and moving in a forward direction morale will be high. Producing results is the basis of morale. When boards design a plan to support the strategic direction, then they have the roadmap to generate forward momentum and progress, leading to higher morale.

Effective board engagement is realized when board members are allowed to unleash their abilities and passions in the following three ways:

  1. Leveraging unique ideas and the individual desire to drive them to completion. Board members that care about the mission of their organization and the people it serves tend to generate all types of ideas for improvement. These ideas are critical for the CEO and Board Chair to cultivate because they are the #1 way to build engaged and excited board members to action. When board members feel they have ownership in the success of an organization through contributing their own ideas, then they will be committed to driving their ideas into action.
  2. Joining a committee that can leverage their expertise to support the growth, organization, and/or capacity building. Second to individual ideas, is the capability of the board member to fulfill a functional need for the organization. During the enrollment process in step 2, it should be made clear to the board candidate why they are being asked to join the board. If the board does not communicate effectively to the future candidate, it can lead to issues around expectations. Leveraging talents and skills in committees or task forces is an important way to boost participation. Board members should be asked to join committees where they can add value and utilize their unique capabilities.
  3. Representing the organization to the external world through being a strong steward and story teller. To build strong advocates and story tellers, board members need to experience the service and mission of the organization. Put board members into the shoes of the people being served to build a stronger understanding of the mission and program side of the organization. For example: if your organization serves the homeless, make sure your board members get to meet the individuals and families that are living in the shelters. Let the board members learn about the personal stories and journeys of the individuals being served, and build a reality to the obstacles and challenges they face finding housing, jobs, daycare, transportation, etc. These types of activities are what makes the mission real for most board members and inspires them to become powerful voices to the external world. 

Getting board members engaged requires the ability to connect the two different worlds of the boardroom and people being served. It is a process that requires attention to detail, relationship building, and planning. Keep board members engaged and managing their experience is not an easy task and can take a fair amount of time. Follow these three approaches and you can unlock the potential of board members and get them more inspired and engaged.

Building Breakthrough Boards - Step 3: Orient

Step 3: Orient
If you have successfully completed steps 1 and 2, you now have a group of excited new board members who need to learn more about the organization, determine how they can contribute, and get to know the other board members. Step 3, orienting the new board members, establishes the context for their experiences and ensures a positive first impression. The new board members have agreed to volunteer their incredibly valuable time, and it should be carefully and intentionally structured. In step 3 we will cover three things:

  • Approaching meeting #1
  • Assigning mentors
  • Engaging talents

Approaching meeting #1
The first meeting must make a positive and productive first impression. The board may be orienting and on-boarding several board members at a time. Regardless of how many new board members are attending, the meeting must be well scripted and organized. Many boards will host an orientation meeting prior to the start of the actual board meeting. It is highly recommended that the orientation be a separate meeting and standardized so that it becomes a turnkey operation in the future.

Orientation should not be just about providing information. It should also be a social initiation, enabling new board members to become acquainted with the CEO, existing board members, and other incoming members in a friendly environment. The new board members will be “drinking from the fire hose” in their orientation, so try not to overwhelm them with too much verbal information. The most important things for them to learn right away are who is on the board and what everyone does. 

A guidance manual containing key information should be distributed to each board member. It should include bylaws, strategic plan, board member job descriptions, board member contact list, committee responsibilities and members, attendance sheet (more on this next month), organizational chart, financials, important policies, and any other board training materials you may want them to learn. This is too much to cover in an orientation meeting, so it should be assembled and provided for review in advance. You can then further engage the new board members by pairing each one with an existing board member who will serve as a mentor.

Assigning mentors
If a board could do only thing as an orientation activity, that one thing should be to assign mentors. Consider the situation that new board members enter: they may not know many of their peers, may not have a grasp of what the organization does, and may be intimidated about speaking up for several meetings. A mentoring process will help to connect new board members with more seasoned board members and facilitate a deeper understanding of the organization and culture.

First, start by identifying the most suitable current board members to be mentors. Then assign each one to a new board member in a one-on-one relationship. The mentor will be tasked with sitting with the new member at all meetings, connecting with him or her between meetings, reviewing the board guidance manual with the incoming members, discussing the organization’s history, directing the new member to an ideal committee that can best leverage his or her skills, and being the point of contact for any questions.

The mentoring relationship should last one full year, by which time the new board member should be fully engaged and well informed. 

Engaging talents
New board members are asked to join a board because of the strategic value they offer to the organization’s future. Often we have seen new board members left on their own to figure out how to participate and where to engage. In the orientation process, leveraging the value of each unique board member must be undertaken intentionally. New board members do not understand the culture and potential ways to add value to it, so it is up to the board chair, CEO, and mentors to work with the new members and help them think through where they can contribute the most. This is a two-way conversation, in which the board and new members talk about their ideas for generating value and expectations. Use the skills and talents of the board members being enrolled to ensure that they are engaged to the fullest.

In next month’s nonprofit strategy report, we will discuss how to engage the entire board through meetings and committees.


Building Breakthrough Boards - Step 2: Enroll

In this Nonprofit Strategy Report and several to follow,  we will deliver insight into our 5 Steps for Building Breakthrough Boards.  The 5 steps are:

Explore: Finding the right board candidates (August)
Enroll: Ensuring a good match (September)
Orient: Harnessing passion and commitment (October)
Engage: Leading fun and exciting meetings (November)
Evaluate: Understanding how to succeed and produce (December)

Step 2: Enroll        
How do you ask someone to be on your board of directors? How do you know that they will be a good match? How do you know if they will be engaged? These questions can paralyze many CEOs and boards, preventing them from making progress by effectively recruiting quality candidates to join their boards.

In step 1 of Building Breakthrough Boards, we learned how to identify new board candidates who can best support the organization’s strategy. In step 2, we are going to reach out and make the ask. Boards may start with 20-50 names of prospective candidates on a list, which requires a process to vet and enroll them. This process can be broken down into three steps:

  • Vet the candidates
  • Meet with candidates
  • Ask candidates

Before you can start holding meetings with potential candidates, you need to have two things in hand. The first is an informational packet about the organization, which should include a brief overview and a board member job description. Second, you will need a process for vetting candidates to make sure that they are a good strategic match and have a passion for the mission of the organization. The vetting process can include a tour of the operations, meeting other board members, and/or questions about the candidate that will help members to better understand the individual and the potential future relationship.

Once the board has agreed on how to vet candidates, it is time to schedule meetings with them. Ideally, if the board engaged in step 1 by exploring prospective candidates, there should be a large list of potential candidates who match the organization’s strategic direction. Every board member should be assigned a handful of candidates to invite to a personal meeting. This will be a challenge because not every candidate will want to invest time in learning about the organization. Those who agree to a meeting might assume that the purpose is fundraising, and they may be pleasantly surprised when the topic of joining the board is raised. The first meeting is an opportunity to get candidates excited about the organization and to learn about their interests and passions by using the vetting questions. 

The enrollment process can take time because it is about relationship building. If you are reaching out to savvy candidates, it may take more than one or two meetings to gain an agreement to join the board. Be patient, persistent and resilient. When you feel that the candidate is a good match and demonstrates interest and passion about the organization, ask him or her to join the board. The ask can be as simple as: “Our board feels that you would make an excellent board member and have the expertise to support the strategic direction we are moving in. Would you be interested in being part of our journey and joining our board?”

Recognize that the process of building a breakthrough board can be quite lengthy. It can take a full year or more to add 4 to 8 new, high-quality board members, depending on the level of participation from the board and CEO.

The enrollment process can begin today for any board of directors. As with step 1, all that you need is the commitment and urgency of the entire board.

In next month’s newsletter, we will provide insight into how to orient new board members once they have joined the board.

Building Breakthrough Boards - Step 1: Explore

The business models of nonprofit organizations are changing fast, however the board of director's level of governance to match this shifting landscape is far behind the curve.

In this Nonprofit Strategy Report and several to follow, we will deliver insight into our 5 Steps for Building Breakthrough Boards. The 5 steps are:

  1. Explore: Finding the right board candidates
  2. Enroll: Ensuring a good match 
  3. Orient: Harnessing passion and commitment 
  4. Engage: Leading fun and exciting meetings 
  5. Evaluate: Understanding how to succeed and produce 

Step 1: Explore        
One of a CEO’s most important responsibilities is to ensure a partnership with the board for the purpose of consistently strengthening and growing the board. To achieve this, the focus should be on constantly exploring potential board candidates who could serve as catalysts for moving beyond the existing status quo. The concept that “water seeks its own level” aptly defines the importance of building breakthrough boards. To achieve the next level of growth, impact, and success, you don’t just want people who can settle in at your current level and maintain what you’re doing now, but people who can go up a notch, raising past performance levels to new heights.

For example: If a CEO of an organization with a $10 million budget whose operations are spread regionally across several cities and towns wants to break through to higher levels, then that CEO would want to explore potential board candidates who have experience in leading companies with budgets of $20+ million and geographic footprints at a state level or greater. The reason for doing so is that, to achieve this breakthrough, the nonprofit will need leaders who are experienced with higher levels of productivity and organization. The ability to achieve higher levels of success will come from the advice, resources, social connections, financial ability, and previous experience of those candidates who have “been there, done that.”

The process may not be very complex, but it does require the board to commit to these three points:

  • The existing board must understand and accept the need to change and evolve, so that they are committed to and engaged in the process of change.
  • Board development must be a key area of focus of all board meeting agendas, with a dedicated governance or nominating committee leading the charge. This will ensure a consistent, organized, and disciplined approach.
  • The board should have a clear understanding of where the organization is and where it wants to go in terms of its size and scope. This is the single most important issue in building a breakthrough board. With this road map in hand, the experience and expertise of the new board candidates can raise the entire organization to new levels.

The exploration process can begin today for any board of directors. The only prerequisite is commitment and urgency from the entire board. Having a transformational strategic plan can help to guide board-building discussions, and a list of names can be generated using the future vision and direction contained in this plan as context. 

In next month’s newsletter, we will provide insight into how to enroll new board members once you have identified potential candidates.

Building Breakthrough Boards

The business models of nonprofit organizations are changing fast, but boards of directors are far behind the curve in making governance changes to keep up with the shifting landscape.

We are seeing massive disruption in every nonprofit sector due to technology, regulations, and many other factors. Donors and foundations have been trying to encourage nonprofits to prepare for this disruption for the last 5-10 years. Unfortunately, the pace of change in all nonprofit sectors is very slow. Donors and foundations have been trying to influence change through their grant-making strategy, but that too has been slow to evolve. The trend is moving away from small ($2,500-$5,000) grants to larger, more impactful gifts. With the increasing average grant size comes a decrease in the total number of grants available, making competition for grants tougher than ever.

Funders are also looking to ensure that nonprofit organizations will remain viable in the years to come. As a result, many of them are focusing more heavily on the following four areas as part of their giving strategies:

    1. Mergers, collaborations, and shared services: Large numbers of nonprofits are fighting for the same philanthropy. These organizations must find ways to work together with other like-minded nonprofits to leverage talent, share resources, and improve cost-effectiveness.

    2. Business model changes that integrate technology: Greater capacity, better resource management, and improved service can come from technology solutions, which must be adopted at a quicker pace.

    3. Ability to measure impact and capture data: Nonprofits must be able to clearly quantify how their programs are moving the needle and fulfilling their mission. They must establish credible metrics and capture reliable data to support higher-quality decision making.

    4. Building capacity to ensure a strong and capable workforce: Funders recognize that nonprofits need to attract talent to achieve their mission. Most organizations are stretched very thin with staffing resources to tackle new initiatives.

These shifts in funding strategy are not enough to fully drive change. Nonprofit organizations must take on the challenge of becoming more dynamic in the rapidly changing marketplace. This journey begins by building a breakthrough board of directors capable of aligning their organization with future realities.

Great nonprofit organizations build great boards. Boards can either maintain the status quo or lead their organization to new levels of governance, management, and achievement. It is more important now than ever for nonprofit organizations and their boards to be dynamic and adaptable. The boards of the future will need to be more capable, savvy decision makers and stronger players in driving change and adaptation. Boards must be able to think beyond traditional governance to ensure the viability of their organization. 

In the coming five blog posts (August–December), we will deliver insight into our 5 Steps for Building Breakthrough Boards, starting with step 1 in August. The 5 steps are as follows:

  • Explore: Finding the right board candidates 
  • Enroll: Ensuring a good match 
  • Orient: Harnessing passion and commitment
  • Engage: Leading fun and exciting meetings 
  • Evaluate: Understanding how to succeed and produce 

Board Committee Overload

Is your board overloaded with committees? Do you have board members on 2-4 different committees? How effective can volunteers be if they are being overloaded from day one! 

We have seen organizations with 9-10 board members and 11 committees. Who would want to try to keep up with those demands as a volunteer? It is a recipe for disaster. Boards should consider having three to five committees depending on the size of the board. Our suggestion is to have three core committees, which are summarized below:

This committee is dedicated to discovering, enrolling, on-boarding, engaging, and succeeding board members on a consistent basis. This committee must also ensure participation, assess board performance, and hold other board members accountable to their commitments, and attendance.

The finance committee ensures proper asset manage, adequate reserves, financial oversight, budget capacity, and surplus investment. This committee should also be forecasting potential financial opportunities and threats based on the developments that reveal themselves from implementing strategy.

This committee monitors the outcomes and progress of the existing strategic plan to hold the board and CEO accountable to success. The committee also continuously plans beyond the current time horizon in the existing strategic plan. They also must ensure adequate resources through continuous philanthropic efforts to be able to provide the funds necessary for the CEO to carry out the strategic plan.

These are the three most important committees, and one could argue, the only ones needed for a nonprofit board. Some boards do utilize an executive committee, and in our experience, this tends to become a board-within-a-board, and can alienate general board members. There is no need for this type of committee in most organizations, just like there is little need for having 5-10 committees on any one given board of directors/trustees.

Think strategically and start to whittle down or phase out the number of committees your board has, and watch production and engagement increase.

Designing Transformational Strategy

Last month, our Nonprofit Strategy Report focused on the importance of developing engaged trustees for the board. In this month's report we are going to look at how to design transformational strategy. These are the three major levers that nonprofit CEO's need to be focused on consistently to break the status quo:

  • Developing Engaged Trustees
  • Designing Transformative Strategy
  • Developing Staff

Transformation is about creating a future that does not exist. It is about thinking differently and outside the scope of the existing business model. Designing Transformative Strategy is to look beyond what the organization is currently doing, and determining new ways of achieving the mission and goals.

There is a great saying, "If you do what you have always done, you will get what you have always gotten." This means that breaking the status quo requires bold thinking and action. It also requires strong leadership! 

There are three key steps to designing transformational strategy:

Step 1 - Assess

Gain a deep understanding of the business model of the organization. It is critical to know what drives the economic engine, who the real customer is, the value proposition to those customers, and the partnerships that support success.

This assessment will allow leaders to better understand their organization and how new ideas will impact operations. This will increase the ability to implement change with the staff in a pragmatic way.

Step 2 - Engage

Identify stakeholders internally and externally to the organization that will be engaged in the strategy design process. Stakeholders can include: Trustees, staff, donors, foundations, "customers", local or state government, other nonprofits, partners, vendors, and other important individuals or organizations. 

We engage stakeholders to understand where they see opportunities and threats for the organization. This is similar to crowd sourcing ideas from large audiences. The CEO should not sit in a room and try to think up a strategy or vision. This should be done through the feedback and insights of the stakeholders interviewed.

When we engage stakeholders to be part of the strategy design journey, we are enrolling them in the future success of the nonprofit organization. By doing this, we will have created ownership and buy-in to the future direction. The strategy design is co-created with multiple viewpoints, ideas, opinions, and different ways of thinking.

Here is an example of why engaging stakeholders is so important: Did you ever have a job performance evaluation? Performance evaluations can be done by a supervisor, which is the feedback and evaluation from just one individual. Now compare that to the different levels of perspective you would receive with a 360 degree feedback from your supervisor, peers, colleagues, and subordinates. The benefit of the 360 degree evaluation is going to be far more valuable because it is from multiple levels of perspective and from more than one source.

The same value can be attributed by engaging multiple levels of stakeholders during the strategy design process. This allows ideas to be shared that may become the organizations next strategic area of focus. It also generates a significant amount of momentum when transitioning from plan design to implementation. That momentum can help drive the change and transformation needed for ensure success.

Step 3 - Assemble

Once the assessment of the business model has been done and the stakeholders have been engaged, now it is time to put the data and ideas together. What we are looking for during this step is the ideas and opportunities that align and corroborate from all the interviews and data points. The more the feedback corroborates the more relevant and applicable the idea(s) becomes to the strategic direction of the organization. 

The future strategy design of the organization should be generated through the stakeholder feedback. This creates transformational ideas to assemble into a plan for the leadership team to implement and achieve.

Next Steps

Having a transformative strategy will inspire the staff towards new thinking, but there must be a solid staffing team to deliver the results. Developing a Staff Team is the #3 lever to success, and will be the subject of our July 2015 Nonprofit Strategy Report.