Where Do Boards Fit In?

Over the life of my career in the non-profit sector, I have been a curious and careful observer of the functioning and dynamics of Boards of Directors. Not only the internal workings of boards, but their relationship to the organization as a whole and how that is managed both by the board and by management.

One of the things that I’ve often contemplated is why, in many if not most instances, boards have taken on a role that is perceived to be external to the “real” work of the organization.  They are managed and approached as entities that have a role, but a role that is somehow at arm’s length to day-to-day operations and, therefore, board management is approached as something that occurs in isolation of other organizational realities.

To be clear, I’m not suggesting that boards should take a hands-on approach when it comes to day-to-day operations.  In fact, I am a huge fan of having governance policies that clearly outline the board’s role in key areas of the organization (e.g., HR, public engagement, and fundraising) and ensuring that those boundaries are implemented and respected.  However, few organizations, it would seem, take the time to understand and work into their strategic plan what it means to be governed by a volunteer Board of Directors.  Every Canadian non-profit operates with this reality, but how many take the time to unpack how to best and most effectively integrate the work and relationships with the members of a volunteer board into business and sustainability planning for the organization?

When these pieces are not explored, a host of issues emerge.  By far the one I’ve witnessed most often is board-management tension, where the board is perceived (because of their volunteer status and, often, competing time commitments) as not fully committed to their role and management is perceived as not respecting the value, expertise, and effort of the board.  Reporting to and seeking approval of the board can be seen as a time-consuming red tape process that eats up already scarce time in resource-stretched organizations.  Conversely, board members must find ways to reiterate their ultimate legal liability for the organization and ensure that organizational risk is minimized.  It is a push-and-pull scenario whose outcomes have real costs to the organization.

So, how does an organization begin to address some of these challenges?  Here are a few ideas to get started:

1.  Have a clear governance policy.  In this document, outline the critical pieces that describe and define the board’s role in the organization and their relationship to management, including:

a. Segregation of duties between board and management in key areas such as the development of vision and mission; strategic planning; program development; policy making; human resource management; financial management; fundraising; and advocacy and public engagement.

b. Expectations of the Executive Director, including a high level overview of the values, principals, and parameters that the board expects the Executive Director to employ when making decisions and engaging in organizational development.

c. Board processes and procedures.  It is important to clearly outline how the board operates so that everyone that participates in the organization understands the work the board does and how staff and other volunteers interconnect with that work.

2. Frame and approach the board as playing their real and critical role.  Many organizations take for granted that all management and staff members clearly understand the role of the board.  When management emphasizes the critical role that the board plays in holding ultimate legal responsibility for the organization, there is an opportunity for the board to be positioned as an integral component of the agency that impacts and is impacted by day-to-day operations, and not just as a necessary, if cumbersome, added layer to decision-making processes.

3. Apply volunteer management principals to board members.  High board turnover has similar impact to high employee turnover and feeds the perception that board members lack commitment.  However, like with staff, retention strategies must be in place to keep board members motivated to give of their time and talents to the organization.  The plain and simple reality is that board members are not paid and, therefore, their relationship to the agency – and their ability and motivation to actively participate in it – is different than staff.  Organizations are well-served to understand this and not begrudge it.  Finding ways to thank and appreciate board members is a worthwhile investment, as a high functioning board has direct and positive impact on organizational outcomes.

4.     Develop processes that work with the volunteer nature of boards.  In rare cases will you have a situation where board members can respond instantaneously to all issues that may arise between meetings.  Organizations would be well-served to have processes that are agreed upon between management and the board around how to prioritize and address these pieces.

5.     Ensure the board takes on its employer role as if it was a paid manager/supervisor.  This may seem contradictory to #3 (accepting that the board role is an unpaid position), but, particularly in this instance, being a volunteer does not preclude the board from ensuring a high standard of professionalism, which means taking its supervisory responsibilities to the ED seriously.  Just because the board is volunteer and offsite does not mean that the Executive Director should not expect to have a proper employment contract, job description, and performance reviews.  A consistent track record by the board of ensuring these pieces are in place will both reiterate the board’s role as employer and assist with job satisfaction and retention of the Executive Director, which can be a significant piece in building organizational stability, resilience, and sustainability.

6.     Include board roles and responsibilities into all organizational work plans.  Even if the board’s role is not hands-on in operational planning, by capturing what the board’s role is, it is an ongoing reminder that organizational management is a collaborative effort between board and staff and that operations do not occur in isolation of the board.

7.     Develop effective communication strategies between board and staff.  By effectively disseminating and sharing outcomes of board work, there is an opportunity to demystify board decision-making and to model transparency throughout the organization.

8.    Have functions that provide for informal contact between board and staff.  When board and staff have the opportunity to identify with each other as fellow human beings and collaborators in a common cause, the potential segregation that comes with role assignments can be broken down and commonalities can be recognized and built on for the benefit of the agency and the community it serves.

Policy and Sustainability

One of the things we often write and talk about is the interplay between different facets of an organization and the fact that each component of an organization interacts with and materially affects all other aspects: in other words, organizations function as complex systems where there is constant interaction of their multiple parts in sometimes random and unforeseen ways.

Looking at organizations through this complexity lens highlights the critical importance of policy development. In a world where non-profit organizations are almost continually dealing with issues of scarce resources, policy development can sometimes be seen as something peripheral to urgent sustainability issues: a governance piece that gets addressed either when policies become seriously outdated or when other, more critical matters are dealt with. The problem with this approach is that, because policy touches every aspect of an organization, a lack of and/or outdated policies may, in fact, be creating the more critical and urgent matters and, in fact, may be exacerbating the organization’s scarce resources. Instead of looking at policy development as a project unto itself – and an up-to-date policy manual as a “to do” item – it should be viewed as a foundational piece that can affect revenue development, HR management and retention, donor stewardship, and community engagement : many of the key performance indicators of an organization.

To highlight the impact that policy has on organizational outputs, consider what can happen in the absence of comprehensive policies. Employee burnout and low employee engagement due to unchecked work schedules and unclear performance expectations (which can lead to turn-over with very real costs to the organization); negative public perception of an organization’s financial management standards or employment practices (which can materially affect fundraising revenue); arbitrary Board and Management decision-making (which can consume endless hours of valuable organizational time debating and/or revisiting decisions and have critical impact on organizational efficiency, while creating ongoing organizational conflict).

The cumulative effect of these pieces can be detrimental to organizations, but often times the outcomes are not linked back to policy deficiencies (or other foundational issues). Fundraising shortfalls, for example, are often analyzed in isolation, with the focus being on the fundraising mix, fundraising materials and/or the fundraiser him/herself. The links between the efficiency and standard of operations, public perception, and fundraising may not be considered, but represent very real relationships. Where policy plays a critical part in establishing organizational standards, ensuring a point-of-reference for effective and efficient decision-making, and ensuring that the community experience with the organization is first-rate, it should be identified as an ongoing and critical priority area for organizations.

"Why Do Strategic Plans Fail?"

I was giving a presentation recently and, while fielding questions at the end, one of the participants asked me why I thought so many strategic plans fail.

It was an interesting question. Organizational idiosyncracies are a necessary component of analyzing the success of strategic plan implementation, but there are common identifiable factors that affect strategic planning outcomes.

First, what is success? And, for that matter, what is failure? Success and failure can be arbitrary and subjective assessments if the plan does not clearly define what success looks like. Specific, quantifiable, and achievable goals must be part of a strategic plan…and there must be realistic timelines associated with those goals. For example, to say “ABC Charity will grow its revenue by 10% in year 1 and 20% in year 2” may set the organization up to miss its targets before implementation even starts. What are the steps that need to take place to grow revenue? What are the barriers to revenue growth? Perhaps an identified barrier is an aging and stagnant individual donor base. A realistic measurable in year one might be the addition of 100 new contacts to the donor base, with no realization of revenue from those new additions expected until year 2. Being clear about projected outcomes, and the sequence in which they are expected to materialize, is necessary to ensure more objective and achievable measures of success.

Given more time, I could have spent some time unpacking what the gentleman meant by the word “fail”. I suspect what he was really getting at is “Why are so many strategic plans not fully implemented?”. Why do so many end up in a filing cabinet as historical reference for the next consultant?

Here’s our condensed attempt at an answer.

1. Ownership. It should be identified from the minute the decision is made to develop a strategic plan who will own the plan. A comprehensive strategic plan will likely engage all areas of the organization, so task ownership may be held by many individuals. But who owns the plan overall? Who will make sure it is sitting beside all of the key players as reference material at meetings? Who will ask the question of each Board decision: “How does this fit in with our strategic plan?” A champion of the plan has to be designated and can be one individual, a committee, or the Board as a whole.

Assignment of task ownership is also imperative: people must understand their roles and the timelines to which they will be held in completing tasks/activities. The plan champion has to be willing to hold individuals accountable for the pieces they own and be diligent about meeting timelines, and/or tracking progress when timelines need to be altered. In the absence of designated ownership/championing, Boards may assume that the ED/Management is monitoring development, while the ED may see strategic planning oversight as part of due diligence of the Board, for example. Assigning responsibility for plan oversight is a critical first step.

2. Practicality. You may have heard us say this before: a strategic plan must be rooted in a) a supportive macro-environment; and b) available organizational resources. Strategic planning contains elements of visioning, but it is not the same thing as visioning. It considers the ideal conditions that the organization would like to achieve, but plans for the steps required to get there in realistic ways: based on the human, time, and financial resources that the organization has available, and supported by trends in the environment in which the organization operates. You must fully research and understand organizational capacity as well as external factors affecting organizational development in order to develop an achievable strategic plan.

Practicality also means that implementation steps are a critical and fundamental component of the plan. In fact, we would argue, implementation should be where most of the plan is focused. If we’re answering the question “Why do so many strategic plans fail?”, we’d have to highlight that people seem to get excited about objective-setting: setting new goals, righting organizational wrongs, imagining change. But, in all of that excitement and goal-setting, it’s imperative to ask the questions: “Do we have the capacity to do that?” and “How do we do that?”. Or more specifically, “How do we do that and continue to deliver our core programs and services?”. Understanding and being diligent about laying out a clear implementation work plan and then effectively overseeing that work plan is critical to strategic planning success.

3. Simplicity. An effective strategic plan will be understood and achieve buy-in from stakeholders across the organization. It should be a clear, easy-to-follow path moving the organization towards its stated objectives. I have seen some complex strategic planning grids that, after a decade as a consultant, I couldn’t de-code, which left me wondering how busy people with overloaded plates in the organization found the time to translate these grids into practical organizational tasks and outcomes. In its simplest form, a strategic plan identifies an objective, outlines the tasks and activities required to get there, and assigns responsibility, timelines, and required resources to those tasks. If strategic planning is de-mystified and understood as a clear and concise map toward organizational goals, then buy-in, implementation, and outcome measurement will be much easier to achieve.

4. Consistency. This is a bit of a throw-back to item #1, but we’ve often heard that the transitional nature of Boards (and sometimes staff turnover) is a barrier to strategic plan implementation. The strategic plan must become a standard piece that transcends personnel change by ingraining it into meeting procedures and decision-making protocols. When working off an active strategic plan, it is useful to have an update on the plan as a standing Board agenda item or, minimally, as a standing report bi-monthly or quarterly. Where plan ownership has been established (as per #1), new staff and Board members should be oriented by the plan champion to use the strategic plan as a decision-making benchmark. Repetition forms habit and by ingraining the strategic plan into procedures and protocols, it will become a default point-of-reference.

The above list certainly isn’t exhaustive because organizations are dynamic…constantly changing and evolving, so the relationships, forces, and issues facing them necessarily contain an element of unpredictability that impacts organizational strategy. But plans that demonstrate clear ownership, practicality, simplicity, and consistency in their implementation – with a clearly laid path to identified and achievable outcomes – will unquestionably produce greater rates of success: whatever success is defined to be.

Grow Movement

Beyond our day-to-day activities as consultants, we are huge fans of the voluntary sector and love to share great ideas and concepts we see happening in the non-profit world. One that we've recently become familiar with is Grow Movement, an organization that offers business consulting to entrepreneurs in developing areas.

From the basic idea of using the phone as a means of connecting clients with consultants and a channel for transferring knowledge, Grow Movement has evolved, allowing business consultants from around the world to donate their services to entrepreneurs in developing regions: a simple concept with fantastic potential impact. Take a minute to read through their site and if you have a background in business, what a great way to be active globally without even leaving your home or office. Check them out at http://growmovement.org/index.php?option=com_content&view=article&id=62&Itemid=58.

On-Boarding

Board development is a key area of interest and discussion at MindBridge. Over the life of our blog no doubt we’ll cover a lot of ground on board governance and management, but we’ll start by talking about new member orientation, one of the key components of board effectiveness.

Inevitably, new board members (even the most business and board savvy) will face a learning curve: some will be new to the unique operations and realities of the organization; some will need information about the process of board governance; and some will be new to the voluntary sector as a whole. By having even a basic orientation program in place, organizations can demonstrate a pro-active approach to board development and engage board members right out of the gate.

One of the most comprehensive resources we’ve found (and our personal recommendation as a “must have” in your board orientation materials) is Industry Canada’s “Primer for Directors of Not-For-Profit Corporations” which can be found at http://www.ic.gc.ca/eic/site/cilp-pdci.nsf/eng/h_cl00688.html. This is an extensive reference document that covers director duties, liabilities, rights and powers, risk protection, and taxation. In addition to the primer, we also recommend that your new member orientation package include:

1. A brief organization backgrounder and key messaging document (it’s important that all people representing the organization use consistent messaging that accurately reinforces its mission and brand);

2. The organization’s constitution and by-laws (and Terms of Reference, if applicable);

3. The most recent annual budget and audited financial statements;

4. A summary of board liability insurance coverage;

5. The most recent strategic documents (including, but not limited to, current strategic plan, fundraising plan, communications/marketing plan, program development plans);

6. An outline of any board member expectations that are specific to your particular organization (e.g. board fundraising expectations, meeting attendance expectations, sub-committee participation expectations, etc.).

As soon as a candidate has been ratified as a board member, s/he assumes the responsibility and liability that comes with board governance and should, therefore, have fingertip access to at least this fundamental information. Of course, this can be supplemented with additional information (newsletters, annual reports, etc.), a tour of the organization’s facilities, and other activities that both engage new members and equip them to effectively contribute to the work of the organization. We’re big advocates of the idea that information and engagement are critical components of optimally-functioning boards, which is why new member orientation sets an important precedent and plays a fundamental role.

Why MindBridge?

Over the past few months, our company has transitioned from its original business name and brand (Schneider McLaughlin) to MindBridge Strategies, a name and brand that we are excited to market and build in the days and years to come.

In re-branding, we had to take a look at who we are as a company and what we want our brand promise to be. MindBridge captures our principles and philosophies about business and our vision for contributing to the non-profit sector. It represents:

• A belief that idea development, business development, strategy, and change all benefit from engaging many and diverse thoughts and perspectives. And a broader world view that we all have a lot to learn from each other.

• That there are endless opportunities to build, strengthen, and develop more effective linkages that benefit the voluntary sector: between profit and non-profit organizations; between government and non-profit organizations; between funders and agencies; between boards and staff. MindBridge is in constant pursuit of ways to creatively develop the relationships between and among the voluntary sector’s stakeholders to the ultimate benefit of the people that the sector serves.

• That there is a wealth of research and academic theory that lends itself to the development of the voluntary sector (as of late, we’ve had a particular interest in systems thinking and have been greatly influenced by the book “Getting to Maybe”). One of our goals is to understand how theory can be applied to the sector in practical ways that help to address ongoing challenges and contribute to great achievements for our client organizations.

The non-profit sector is complex in its engagement of many and diverse stakeholders and the MindBridge brand is a commitment to always looking for ways to bring the thoughts, ideas (and passion!) of those involved together in ways that will lead to innovation, resilience, and sustainability in the great organizations we serve.

What Are You Fundraising For?

On January 12th, when a devastating earthquake shook Haiti, social media websites lit up with everyday people putting calls out for donations on behalf of the Red Cross and other aid organizations. Within hours of the news breaking, you had to wait in a call queue to talk to a customer service representative at the Red Cross in order to make a donation...and all before the organization had launched any major PR campaigns asking for help.

Why the phenomenal groundswell of (largely unsolicited) support? Primarily, we’d suggest, because there was such a great and urgent need that people felt compelled to help pro-actively, and not because a telemarketer applied the “overcome-3-objections-before-letting-the-person-off-the-phone” rule. People saw that their money would have immediate impact: it would clothe someone, feed someone, provide someone with water that would literally be life-saving.

In this way, the public response to the earthquake in Haiti is a strong illustration of the inextricable role that programming and service delivery play in fundraising. It calls into question the contention that a cracker-jack fundraiser or dynamic development team is the panacea for organizations that are struggling financially and, instead (or at least in addition), challenges organizations to assess their core activities and determine the urgency and relevance of current programming to their target audience.

We’ve witnessed first-hand the opposite of the Haiti experience where groups have had long-standing programs that have lost their relevance and timeliness and, if they are generating any revenue, are doing so based mostly on the history between the donor and the organization. Clearly, this is unsustainable...donor databases have to be replenished and, therefore, history with existing donors has its revenue-generating limits. In other words (to borrow an Oprah-ism) this is what we know for sure: relevant, effective, and efficiently-run programs that fill a gap in service delivery are critical to generating sustainable revenue. Even the most creative fundraising campaigns can’t overcome the challenges of tired or non-existent programming.

We’ll suggest a few starting points for assessing your current program or determining the potential appeal of new programming:

1. Does it meet a specific, identifiable, and important need?

2. Will this program or service have broad application or impact?

3. Can your organization effectively carry the program or service out with its available resources?

4. Is it an efficient use of resources? What will the program’s outputs be relative to the resources it will require (financial and human; in other words, what will be the return on investment)?

5. Does it avoid duplicating what other agencies are already doing?

6. Can the premise of the program or service you are delivering be easily communicated?

7. Is the issue you are addressing timely; are people (at least some people) reading/thinking/talking about it?

8. Is there the opportunity for multi-party or multi-sector collaboration?

9. Would you give your personal money to support this program or service?

If you answered “yes” to most of these questions, then your program or services are likely well-positioned to attract donor support. But, a one-time” yes” doesn’t mean resting on your laurels over time. There has to be ongoing evaluation of program/service relevance and persistent creativity and innovation that allow the program to evolve and change with the times and the needs of your clients. If you find that your answers to the questions above start to fall into some gray area, it’s time to re-think their relevance and applicability so that at any given moment you’ll have a clear, concise, and high-impact response when someone asks what you’re fundraising for.