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I am continuing with my series on the practices of building innovation in the social sector of nonprofits, government and philanthropy. In this article, I want to describe five nonprofit leadership self-deceptions that stymie nonprofit innovation. Often practiced unintentionally, I have observed these self-deceptions have over my 20-plus year professional and consulting career. The first disclaimer is that there have been times when I was guilty of practicing one or two of these deceptions. Even so, calling out these detrimental practices is an important act of self-reflection. Thinking about what we do not do exceptionally well is an opportunity for leadership improvement. The second disclaimer is that I do not suggest that this list is a definitive catalog, nor do I claim the list is backed up by empirical literature but it is a practice-based list that is intended to be a leadership self-check in. The third disclaimer is that all references to nonprofit leaders in this post are composites and are not intended to represent anyone that you or I might know. Okay now let’s do some self-reflection.
Acting as if the Urgent is more Important than the Strategic: Probably the biggest self-deception among nonprofit leaders is to confuse the urgent with the strategic. I would be rich, if I had the proverbial nickel for every time I heard a nonprofit leader say, “I’ll think about strategy when things slow down just a bit.” Unfortunately, things don’t slow down and unless a nonprofit leader grabs the brake and intentionally slows things down long enough to think about strategy, then the urgent will surely erode the long-term success of the organization. While I am acquainted with more than one nonprofit leader caught in the cycle of urgency, one I leader I spoke to suggested “we need lots of irons in the fire in order to make one or two of them happen.” Yet the frenetic pace of this leader in pursing lots of irons fragmented her ability to pursue any of them well. This, in turn, led her to chase only harder and in an even more fragmented way. The outcome was that success continued to elude her. Chasing the urgent outside of the context of the strategic is a dangerous self-deception.
Being Comfortable with Incomplete Information and Understanding: There are times when it is critical for nonprofit leaders to act with incomplete information and understanding. I recognize that the ability for nonprofit leaders to act on judgment and intuition is a critical component of exceptional leadership. I am not talking about those times when a nonprofit leader must take a calculated “leap of faith” with incomplete knowledge. What I am talking about, however, is the ongoing practice of being comfortable with incomplete knowledge and understanding. For example, I recently was talking with the development director of a mid-sized nonprofit agency who lamented that his agency’s executive director was completely comfortable budgeting without having a clear understanding of the costs of programs and services. I am paraphrasing this frustrated development professional who said, “Our Executive Director simply relies on a back-of-the napkin estimate of revenues needed to support the current staffing level. He doesn’t care about accuracy or strategy but rather wings it. In fact, he is proud that the board of directors doesn’t challenge him and he jokes that if he doesn’t even balance his personal checkbook, then why should he sweat over the organization’s budget.” Unfortunately, in the short-term, getting by with inadequate information and understanding might actually work for many nonprofit agencies but as donors and funding agencies get increasingly more sophisticated about strategy, the practice of information “under-load” will become proportionally less tenable.
Creating an Echo-Chamber of Advisors: The scariest of self-deceptions, in my opinion, is for nonprofit leaders to surround themselves with a board, advisors and colleagues who have all “drunk the Kool-Aid” and will only tell them nice things about the organization and its leadership. The most effective boards or advisory groups are those populated with people who are very passionate about an issue and are less passionate about the organization. Many nonprofit leaders confuse the two and seek to find advisors who believe in the organization rather than the issue. The problem is that most organization leaders have blind spots, are too close to their programs and services, and embrace organizational half-truths and mythology and they need external advisors who are willing to challenge assumptions and the status quo. But when a nonprofit leader defaults to populating his/her advisory gene pool with the figurative “relatives and friends” of the agency, the leadership misses an opportunity. The unintended consequence of avoiding advisors and board members who are more organizationally dispassionate is to create an echo chamber. One echo chamber litmus test is to ask when was the last time that you had a challenging, difficult, or contentious conversation about the agency’s programs, practices and strategic direction with your advisors. If, as a nonprofit leader, you can’t still feel the remnants of discomfort from having your feet held to such a proverbial fire, then there might be at least some self-deception going on in your choice of board members and advisors.
Not Measuring what Matters: Another blind spot for many nonprofit leaders is in the area of not measuring what matters. Pop quiz: “does your organization measure a defined set of benchmarks on a routine basis and act in accordance with what the data reveals?” In my consulting practice, this is the one area where nonprofit leaders will often confess a shortcoming that is some variation of, “we are not effective at data-driven management.” Often such a disclosure is followed by the excuses about the time it takes to make sense of data, board apathy around using data, and the challenge of even knowing what data to measure. As a result, many nonprofit leaders default to cash flow projections, service delivery targets, and anecdotal evidence of client or funder satisfaction as measures of progress. While, these measures are better than none, they leave much room for self-deception. Process does not always equal progress. Accountable nonprofit leaders know that the data that matters relates to outcomes, impact and social change. Answering the question, “are we making an impact?” has to be the measurement bar that nonprofit leaders must rise to meet.
Mistaking Size or Age with Centrality: A final self-deception that is a handicap to nonprofit leaders is to confuse an organization’s stature, age or size with its relevance. Just because an organization has been around for 30 years, is the largest social service agency in the region, or once was proven as an “effective practice,” does not automatically equate with effectiveness, importance, or relevance. Back in the late 1990’s at the height of the “dotcom” era, I once read, “In a networked world, centrality is defined by fitness alone.” I have carried that principle with me ever since that time. In a social service sector, where donors are increasingly impatient for change, new nonprofit, b-corps and other hybrid organizations are proliferating as a challenge to the status quo. Increasingly, stature, size and/or age matter less and may even be seen as emblematic of failed social solutions. Nonprofit leaders can be deceived by falsely equating stature, size and age with fitness or centrality. Again, forward-thinking nonprofit leaders know that program outcomes and innovation rather than organizational entrenchment are the keys to future stability.
This blog post is a mild risk because it focuses on leadership deficits rather than strengths. Innately, we don’t like to acknowledge our weaknesses. Yet, at this moment in time, when resources continue to decline and social needs continue to grow, nonprofit leaders must be driven by evidence and not self-deception. I offer these five principles, hoping that the as a reader that you will invert them into the positive practices. Forward thinking organizations are data-driven, focused on outcomes, willing to prove those outcomes with data, and are open to outside constructive challenge. It is upon these foundations that innovative nonprofits will thrive.
As always, your thoughts are welcome.