This blog is a follow-up to a couple of emails I received in response to my last post about how useful the information was.  One question I received was “Do you have a checklist that we could use to help us in our next board meeting?”   You asked. I deliver. In this post I present “Ten Steps for Building an Effective Nonprofit Board: A Checklist for Action” This free 12-page PDF document is  not designed to be an exhaustive guide to developing and staffing a board. Rather is a practice-based assessment tool that summarized ten nonprofit board essentials that boards can use as a conversation starter about its strength and effectiveness. It also offers a short list of actionable ideas to improve board functioning for each element.

In addition to overviewing the ten principles, I included a board composition worksheet, a short bibliography, and an action planing worksheet. It is my goal to empower boards to excel through self-exploration. Yet I am also aware that there are times when you need a fresh, imaginative, and objective perspective. For those times, facilitation and Process would love to partner with your agency to meet your strategy and performance goals.

Download a Free Copy of :  

Ten Steps for Building an Effective Nonprofit Board: A Checklist for Action

Last week I facilitated my last board meeting as chair of Resolutions Northwest (RNW), Oregon’s largest nonprofit community mediation center.  With this meeting, I completed five years of service on the board as a member, treasurer and, for the last three years, board chair.  During my time on the board, the darkest days were those when the agency managed a turbulent staffing crisis and again, when it weathered the elimination of a longstanding contracted service program. The brighter days are those of late, where, in the last three years RNW has nearly doubled its revenues, expanded its facilitation and restorative justice programs, and has begun to engage volunteers and donors more deeply in the success of the agency.  With a newly developed strategic plan, solid community partners, and a deep commitment to keeping the strategic plan active and alive, I am leaving RNW as a vibrant organization well positioned for continued growth.  In this post, I wanted to offer some reflections on core attributes of a strong nonprofit board. I talk about these from the “blended” perspective of being both a nonprofit consultant as well as outgoing board chair. The article is a companion to an earlier post I wrote on nonprofit board performance (link here) and represents additional and somewhat overlapping principles that will help boards to be successful.  These principles include:

• Developing Organizational Depth: Most nonprofit board members are earnest in their commitment to support the organization that they serve.  Indeed the commitment to a mission is often the beginning of service on a board.  Turning commitment into effectiveness, involves helping board members gain organizational depth.  It is my belief that organizational depth is experiential and best gained by engaging board members in the core of the agency’s programs and services. As examples: job shadowing, volunteering at the program level, and conducting joint board/staff training sessions are some ways to provide opportunities for board members to gain organizational depth.

• Creating a Strong Board Chair – Executive Director Relationship: An anchor to the success of my board service with RNW was my developing a strong productive relationship with the RNW’s Executive Director.  Betsy Coddington and I developed positive working relationship that was, at various times, configured as collegial, coaching, and even confrontational.  The chair should not simply be the spokesperson for the executive director nor should it be vice versa. The relationship between board chair and executive director is based on relational authority and not positional authority. The board chair-executive director relationship is well articulated in a Journal for Nonprofit Management (linked here).

•  Understand Nonprofit Management: Early in my board experience with RNW, I saw firsthand the challenge of having a board chair who lacked a strong understanding of board governance and nonprofit operations.  Indeed, as a human resource crisis unfolded, the chair abruptly resigned, leaving the executive committee to move forward without him. Fortunately, other and I were able to step in to help. More than any other event I ever came across, before or since, this incidence left an indelible imprint of the importance of having board leadership team who understand principles of nonprofit management and governance.  It also underscored that this resident knowledge needs to be embodied in the entire executive committee and ideally across the entire board.  Indeed, building such understanding is the reason many boards set up mentorship programs, board development workshops and structure succession planning for leadership positions.

• Building a Board Intentionally: I posted a blog entry almost a year ago that outlined an approach to thinking about board membership (linked here). While today, I might broaden the concept of fundraising to include civic reach and use slightly more refined language (based on my evolving practice and experience) the outline of the post remains useful.  Building an intentional board is an ongoing process of the systematic expansion of a board.  The core expectation for all board members starts with an understanding of governance but beyond that expectation, a board should build membership around an alchemy of operations expertise, content expertise, and development expertise (a mix of resource planning, fundraising, and civic reach). Intentional board building takes longer than accepting any willing volunteer into board service. Intentionality implies that due diligence becomes more refined, recruitment more strategic, and that a board is willing to engage in thoughtful outreach to the community in search of strong board members.

• Staying Focused on the Strategic: As readers of this blog know, nonprofit strategy is a core theme of my consulting practice. So it should come as no surprise that I believe that effective boards are those organizing around strategy.  At one point in my tenure as board chair at RNW, we decided intentionally not to pursue a formal strategic planning process. We chose instead to spend a fraction of the time we would have spent in strategic planning to create one-two page strategic intentions that defined a short-term strategy across four operational areas.  The board then focused on these intentions and the made significant progress across all four areas that resulted in new programs, revenues, and focus for the organization. The strategic intentions served well as a “bridge strategy ” for a short operational period. Concurrently, we sent time building the capacity of the board and, once in place, we engaged in a formal strategic planning process to guide the organization’s growth over the next 4-5 years.   A relentless focus on the strategic is essential to advancing the capacity of nonprofit agencies.

• Establishing a Strong Advisory Network: My experience as a board member and consultant suggests that many boards often don’t understand the critical role advisors play in nonprofit management. I have heard many boards oppose investing in basic advisory support such as an accounting firm, information technology (IT) support, or a human resource (HR) service provider, even though such advisors are critical to risk management and effective governance.  Along with IT, HR, and accounting, over my years at RNW we established relationships with consultants for services such as grant writing and fundraising.  While with some initial resistance to overcome, the strategic use of consultants strengthened RNW’s organizational practices.  Effective boards recognize and value the support of external expertise.  Competent staff, an engaged board, and the strategic use of external consultants create a “three-legged stool” of support for an organization’s capacity.

• Measuring Progress: Effective boards establish clear accountability to themselves, the agency’s staff and to the larger community.  Self assessments, quality benchmarks, performance dashboards serve as tools to increase accountability and transparency.  By periodically stopping, assessing, and reflecting a board is in a stronger position to improve, adapt, and change.  I left RNW’s board just as we completed a board self-assessment that provided rich data to be used by the board as they begin a performance improvement process.

• Fostering Effective Board Operations. Of course there are other facets of developing a strong board such as creating a good operational structure, documenting relevant by-laws, effectively using of committees and formally evaluating board performance.  Unfortunately, many boards confuse strong board operations with a strong board but as this post illustrates, board operations are just one variable contributing to an effective board.

As the current political landscape continues to promise economic uncertainty and possibly even deep cuts to the social service infrastructure, nonprofits will need to adapt and change. For many nonprofits this ability to adapt and change will be directly correlated to the focus and strength of the agency’s board. Indeed, I suggest that only a strong and effective board is capable of designing and delivering the kind of strategic guidance that will be required to navigate the uncharted waters ahead.  While the list of effectiveness indicators in this blog is not necessarily complete, it does represent focused, actionable touch points that can serve as the basis of assessing the strengthening the effectiveness of a nonprofit board.  For any agency thinking about the future, these principles of effectiveness give a point of reference by which an agency can judge the strength and direction of its board.

As always your thoughts are welcome.

Resources:

Companion 12 page PDF:  Ten Steps for Building an Effective Nonprofit Board: A Checklist for Action

Further Study: To help think about board development, I would point you to a recent eNewsletter where I highlighted board development resources (link here).

Post Script: I would be remiss not to thank the current and former staff and board members of Resolutions Northwest who have helped shaped the organization as a power for good in the community.  And in appreciation to their dedication I encourage you to support the organization by making a one time or monthly gift to support peacemaking and conflict resolution in the greater Portland area.  You can donate here.

Fast forward to a few days ago. I was participating in a synchronous chat using Twitter on the topic of creating a “courageous nonprofit board.”  Twitter is an abysmal tool to have a meaningful conversation with forty or fifty nonprofit professionals, however, it was interesting to see the group spew out a steady stream of almost random 2-3 sentence messages.  While as coherent as the playground of a preschool, the messages passing across my computer screen did offer the opportunity for me to further self-reflect on the topic of board development.

In the past, I have written episodically on the topic of board development and, in this post, I wanted to put in writing some thoughts about an evolving framework for board development. While not complete, I hope it serves as some directional anchor points that nonprofit leaders can use to think about board development and performance.

The Oregon Attorney General has boiled Nonprofit Board service down to a 12-page booklet with lots of white space. Many nonprofit boards would do well to start organizing their operations around the core functions of care, loyalty, obedience, and oversight. However, once the basic structure is in place, it is important to get outside of the core and into the “white space.”  Indeed, once a board gets into the white space the pathway gets interesting as it in the white space where the metal of high performing boards is tempered. So what exactly is found in the white space? I would suggest the following attributes:

Commitment, Consensus and Community It is my fundamental belief that high performing boards cannot exist without a tacit sense of community. Board and staff will be successful in direct proportion to the degree that there is a shared sense of purpose and focus that is organized around a commitment and consensus (as in general agreement and not unanimity). In practical terms, it means building board membership first and foremost from the perspective of  the agency’s vision, mission, community and culture.  Without social connectivity between board member and the organization, the board will be challenged to excel.

Internalizing Theories of Change, Leverage, and Scale A second dimension of a high performing board is for members to understand how the agency seeks to effect change. It is essential that a board is clear about the social impact intended by the agency, specifically: 1) how the agency employs theories of change, 2) how the agency’s internal programs and services and its external partnerships leverage or magnify impact and 3) how the agency’s growth trajectory will ultimately scale the social impact.  Cultivating a strong understanding of the theoretical framework for the agency is not only an intellectual exercise but becomes the core language and frame of reference used by board members as they discuss strategy, performance improvement, and is the place from which the board makes decisions.

Understanding the Local Nonprofit Ecosystem A third dimension of a high performing board is for the board to understand the nonprofit and social service sector in general and possess a deep understanding of the local nonprofit and social service ecosystem. Understanding how the local nonprofit agencies, government, philanthropic organizations, citizens and business collectively work to address community needs, enables a board  to better use their civic reach to strengthen the agency they serve.

Engaging in Three Core Planning Processes One of the themes of my blog this year is to focus on the core nonprofit planning processes. As I have written before, strategic planning, evaluation planning, and resource development planning are three intersecting disciplines that serve as the strategy core for a board. Indeed, the simplest measure of board performance is the degree to which they invest time, energy, and resources in the three domains of nonprofit planning.

Organizing around the Long View A final dimension of a high performing board is to organize around the long view. It is my belief that high performing boards are measured over years and not months. Boards become high performers with an intentional and disciplined approach to developing a deep understanding of the agency it serves.  Such a board also cultivates learning and inquiry management practices that comprise an iterative learning-to-action cycle over time.  Culture, history and enthusiasm are grown with intentionality and patience. Strong boards take time to develop.

Most nonprofit board members have a passion and mission affiliation for the organization where they serve. Most board members also bring high-value skills and experiences that can support the growth the agency.  The task of leadership is to recognize the contributions of each board member and to weave together the individuals into a collective board that becomes more than the sum of its parts.  Offered in this post are germinal ideas that can be used to help nonprofit boards strengthen and clarify that process of weaving together a high performing board.

As always, your thoughts are welcome.

Based on literally dozens of conversations with nonprofit leaders, I find that many organizations are looking for a simpler framework for strategic planning.  In this post, I want to outline a strategic planning process that is versatile enough to guide an organization or team as they seek to engage in the thoughtful work of strategy.   In summary, the framework that I most often follow, is the process of 1) establishing the critical social need, 2) creating a compelling vision of how your agency can create a positive social impact by addressing that social need, 3) developing a relevant organizational mission, 4) developing system’s focused program strategies, and 5) creating measures and  outcomes to guide the plan implementation.

Establishing the Critical Social Need:  Every nonprofit should exist only in response to an unmet critical social need.  Unlike the private sector where the market may support companies selling consumables that may have little value, no value, or even a negative value, the nonprofit sector can only afford to support organizations that are positively impacting compelling social needs.  As a result, strategic planning begins by defining the unmet social need.  Such a community needs assessment can be based on existing data, expert opinion, surveys, a systematic environmental scan, or ideally some combination of these data points.

Creating a Compelling Vision of Tomorrow:  I have written before about the relationship between vision & mission and critical social needs.  Within the nonprofit sector and the philanthropy community that supports the nonprofit sector, there is an increasing trend towards defining and working towards a compelling social impact.  The focus on social impact makes it  increasingly less tenable for agencies to simply run “good programs” without creating social change. In this context of strategic planning,agencies should ask themselves, “what is the better, more just, and equitable tomorrow we are tying to create?”  A vision, in essence is the BIG WHY that defines the reason for the existence of an organization.

Developing a Relevant Mission:  An agency’s mission statement should represent a the “tactical  orientation of the organization that is closer to the social need being addressed address.   The questions that get to the heart of an agency mission might include ones such as: What programs and services is our agency trying to excel at?  What qualities of culture and community are we seeking to create?  How do we want to be known in the community? If folks seek us out, what are they seeking us out for?  By creating a clear mission you are answering the fundamental questions of the “What and How”  of the agency.

Designing System’s Level Strategies:  In between your vision of tomorrow and the mission you declare today is the “white space” of programs and services.  Strategic plans are not intended to the entirely fill the white space by fully designing programs  but rather is the space where an organization declares its commitment to strategies designed to create its vision of tomorrow.   The strategy “challenge” is to think systematically and systemically about the opportunities to foster change at the individual, community, and policy level to create a synergistic effect that magnifies the benefits of each individual program. It is also important for an agency to develop capacity strategies that will grow the organization’s ability to create a larger social impact.  For many organizations that implement “programs” the shift to thinking about community impact and public policy can be an exciting process of discovering new potential.    Indeed, the creative energy of designing solutions to compelling social needs has the potential of giving renewed inspiration and aspiration to an organization.

Creating Performance and Outcome  Measures:  It is only worth the time and energy to create a strategic plan if an agency is willing to ensure that the document is living, breathing and is used as the organizational compass guiding and anchoring decisions.  Ideally, as program strategies are created, the organization also takes time to establish  corresponding performance and outcome measures.   Answering the question of how an agency will monitor progress toward the objectives should be integral to strategic planning.  Similar to developing program strategies, the purpose at this level is not to create the actual performance measurement system (i.e., dashboard or report card) but to establish the benchmarks that will help provide assurance that the agency activities will stay focused on the strategic design. Later you can fully develop programs and outcome measurement more precisely based on further study and design.

I purposefully presented in this post a simplified strategic planning process. Unfortunately, on more than one occasion, I have seen (and heard from frustrated potential clients) how an overly complex process of strategic planning gets in the way of successful strategic planning.  Too often the textbook approach to strategic planning is cumbersome and emphasizes precise sequential steps, prescribed analysis measures (i.e., SWOT), meaningless revenue projection exercises and other artificial exercises that constrain thinking.

Don’t get me wrong, I believe that strategic planning is a process that requires intentionality, reflection and analysis –none of which are easy. However, I am a firm believe that social sector strategic planning requires a simpler more aspirational framework as represented by the five slightly imprecise and  iterative steps identified above.  Unlike a standardized corporate strategic planning approach Nonprofit and social sector agencies requires a social impact planning model that can dynamically address a wide range of social needs and accommodate a variety of organizational cultures.

A strategic plan that reflects the process from need to to vision and offers specific strategies and measures to guide implementation, will establish a framework to help an agency achieve success.  To be useful in creating such a strategic plan, a facilitator needs to, as Simon Sinek (external link), so clearly articulates create a compelling why, a disciplined how and a consistent what.  Applied to a strategic planning framework it suggests that a simplified approach to strategic planning coupled with a systemic facilitation process can assist nonprofit agencies to improve the social impact of their organizations.

As always, your thoughts are welcome.

This week I had the privilege of attending a community lecture for regional Arts organizations by Michael Kaiser, President of the Kennedy Center.  His topic was the economic challenges being faced by arts organizations and framed the lecture as the Arts in Crisis.  I went into the packed theatre expecting to hear the fairly familiar terrain that corporate donations are down, retaining major donors is more important than ever, diversifying your funding base is critical, and board involvement is key.   Some of that familiar ground was covered but Kaiser left the road and rose like a kite into the air. He first caught the gentle breeze and higher up leaped onto the mighty winds.  While he never directly said it, his is message was clear.  The crisis in Arts Organizations is not an economic crisis but it is a “crisis in thinking” and leadership.  He argued that strength and stability during these challenging economic times comes through transformative creativity and not through cutting budgets (For an awesome summary of the entire presentation check out Lisa Radon’s excellent blog).

As a performance improvement facilitator who works with a wide range of nonprofit agencies, I have seen this “crisis in thinking” over and again. Many nonprofit agencies are in their second and third consecutive years of budget cuts. Increasingly stressed staff (who can vaguely remember the concept of pay raises or benefit increases) are being asked to do more and more with the proverbial less and less. The gap between service costs and traditional revenues continues to widen and the compounding effects of sequential years of consecutive 3, 4 or 5% budget cuts are fracturing the integrity of many organizations.  Senior management and Boards of Directors in these organizations are becoming equally fatigued by constantly responding to an anemic resource environment.  So it is understandably challenging to walk into an organization and say, “stop trying to defend the gains you have made and start thinking using transformative creativity.” Yet this is the critical message for the nonprofit sector today.  Trying to reduce your way fiscal health undermines the organizational core and is the equivalent of burning your furniture to keep warm.  Unless you have lots and lots of furniture, in the end, you will be both cold and have nothing to sit on.

At the same time, I am not suggesting that conservative management of expenses is imprudent.  Indeed, I have seen innovative nonprofit agencies, gain efficiencies by renegotiating leases on space and/or equipment, outsourcing back office functions, and redesigning technology expenses at a considerable savings.  However, there comes a time and place where program effectiveness and, more importantly, the larger social impact of an agency is undermined by a myopic and relentless focus on reduction.  A theme that continues to serve my clients well is that success looks beyond the crisis at hand and stakes out ground in the future social impact of the organization. As I have written before, envisioning social impact requires intentional design of the “tomorrow” that an agency wants to create.

Helping nonprofit organizations get beyond the “crisis in thinking” requires a facilitator to work with teams across several domains that include the following:

Focus on Participatory Leadership:  My guess is that is that if I searched the web for the term participatory leadership, I would find that some consulting group has probably trademarked the concept.  However, what I refer to is not something out of a box or training program but is a the commitment to the ongoing study of leadership from the perspectives of vision, equity, culture.  Transformative creativity (or getting beyond the crisis) requires a compact between the layers of an organization where there is cooperative ownership, participatory systems and a learning culture.  I was recently reading a study by McKinsey & Company on successful transformations that described the critical role of balancing top down leadership with a culture of participation, equity and ownership across the staff and board.  Such cultures need to be seeded as a “big idea” and then cultivated by skill development and supporting systems. Indeed, I have facilitated more than one board-staff retreat where the primary outcome was to begin the development of a participatory culture.

Focus on Outcomes:  One of the revolutions within the nonprofit sector and philanthropy is a growing discontent with producing good results.  Philanthropists and leading nonprofit organizations want to make a larger social difference.  The coming wave of change (that will swell to a tsunami) is an increasingly myopic focus on social impact and outcomes rather than program impact.  This week I read a fantastic article by the Board Chair of Venture Philanthropy Partners (this article is the third article in a series he has been writing). In this article he minced no small words as he wrote: “Let me say this as bluntly as I can to nonprofits and funders alike: The challenge of managing to outcomes has little to do with systems, processes, or technology. The real challenge is that organizations cannot hope to manage to outcomes unless they have in place an engaged board; leadership with conviction; clarity of purpose; and a conducive, supportive performance culture.” The organizations of tomorrow are those who are focusing on creating social change that is larger than the results generated by programs.  A focus on outcomes asks, “How can we create a sum that is greater than the total of our parts?”

Focus on Mission, Vision and Margin: In my last post, I detailed the concept of mission and vision in strategic planning and in creating social impact models.  The point that I was making in that post was was underscored in an article on the Acumen Fund’s blog that discussed the role of mission, margin and mandate as levers to scale interventions and create social impact.  If you want a much lengthier discussion on the relationships of these concepts, I highly recommend the study of the book Strategic Giving: The Art and Science of Philanthropy by Peter Frumkin.  While I will warn you that Frumkin’s book is over 400 pages, it provides a depth of understanding about social impact and is a must read for any organization serious about transformative creativity. By focusing on the larger vision and placing mission and mandate in the context of a clear vision, organizations will, by default, move into strategic thinking rather than crisis thinking.

Organizations in the social sector face unique challenges in this lackluster economy.  Agencies that are focusing on defending their core also need to make room to think about how to increase capacity and effectiveness.  In seeking to navigate the twin challenges of maintaining and being strategic, facilitators need to realize that leadership, outcomes and the design process (in between the leadership and outcomes) comprise the foundation for transformative creativity.

As I have written previously, a functional board is comprised of members capable of serving four functions that include 1) governance, 2) capacity support, 3) content expertise, and 4) resource development.  This is a critical framework to understand as it serves as the foundation of a functional board. However, a high performing board requires a different level of operating. High performing boards are based on “the highest and best use” of the talents and skills of board members.  Most nonprofit organizations seek to recruit board members who are talented individuals who are often business leaders, critical thinkers, and community activists. Unfortunately, more often than we would like to admit, the use of such  talented board members is limited to review of policies and procedures, looking over budget reports for accuracy and assisting in fundraising events. While such board activities might define some of the duties of a functional board, a high performing board is defined by engagement in ongoing strategic thinking and strategic action. Reviewing meeting minutes, agency financial reports, and blessing changes in HR policy are necessary duties of a Board but if the balance of board meetings is consumed with such pedestrian administrative tasks, then the “highest and best use of board talent “is likely missed.

A classic Harvard Business Review article published over a decade ago, suggests that high functioning boards, discover, focus and organize around “what matters” (External Link).  According to this article, what matters is “harnessing the collective efforts of accomplished individuals to advance the institution’s mission and long-term welfare.”  It goes on further to suggest that the board’s contribution is meant to be strategic, “the joint product of talented people brought together to apply their knowledge and expertise to the major challenges (and I would add, opportunities) facing the institution.”  So, if this is the description of a high performing board, what does it take to create such a board?  From my experience and a review of the literature, I would suggest five starting points.

Assess where you are and define where you want to be.  The first task of developing a high performing board is to figure out where are the gaps in performance.  A Google Search will unearth several board self-assessment tools that range from overly simplistic to overly complicated. Such tools might be useful to help a board think about its governance functions, member commitments, or help identify “holes” in a board’s operating structure.  Such a self-assessment can be a good place to benchmark the strengths of your board operation but many of these assessments do not have a strong strategic intent.  An alternative assessment would be to benchmark practices against the variables presented in the Grant Thornton 2009 National Board Governance Survey for Not-for-Profit Organizations (External Link).  In my opinion, this survey offers a timely and more strategic perspective on board operations. A third approach to assessment is to shift away from a narrow assessment of the board and conduct a larger capacity assessment.  I have written elsewhere about capacity assessments and in that article I linked to a useful assessment spreadsheet (External Link).  A capacity assessment would help the board not only reflect in its strengths and opportunities but would also be useful in discovering the “what matters.”  Whichever route you take, knowing where the board is now will help identify the performance gap related to where you want to be.

Build the Board’s Skills:  I have argued before that board development starts at a board orientation but continues as an ongoing process of raising the skills and competencies of board members.  The reality is that board members become effective as they engage their heads, hearts and hands in the work of the organization.  To me, this calls for a meaningful development agenda that includes a) ongoing board training on topics related to governance and strategy, b) opportunities for boards to get their “hands dirty” in the work of the organization, and c) learning about the larger service context in which the nonprofit agency works.  Building board skills is a strategic and long-term process that is not segregated into an annual or semi-annual training event.  Ideally, participating in a strategic agenda for board skills building should be built into board practices and be built into the expectations of board service.

Engage Strategically:  A simple yet useful exercise to help gauge the strategy of a board is to do a quick content analysis of two sources.  First, examine the pre-meeting packets sent out to board members for the last three or four months and sort the contents into the two piles of administrative and strategic.  Second, review the meeting minutes for the same time period and highlight everything that is strategic in yellow.  The balance of the piles and the presence or absence of yellow highlights will give a board a good indication of how much of the board’s time is spent in administrative review and how much of the time is spent engaged in strategy.  The second part of the exercise is to ask the question, how much of the historic content was actually dependent upon face to face meeting?  For example, could board members review and approve fiscal statements and other administrative approvals after a simple review of emailed documents?  The answer is likely to be yes.  I am not suggesting that boards should conduct business by email rather I wanted to create a perspective of time.  If board members can read and approve by reviewing email attachments, then the time allotted at board meetings should be proportional. Simple administrative review should be done in advance of meetings and, when there are no concerns about the subject matter, such tasks should take relatively little time at a board meeting. Unfortunately, too many boards are conditioned to process the nuances of organizational administration, mistaking such administrative processing for strategy.  Board meetings need to be oriented around strategy and board members engaged in the work of solving big challenges of the agency and thinking strategically two and three years out.   Performance of boards would improve dramatically if administrative review were limited to a tightly narrated quarter or a third of a total board meeting time.

Measure Performance:  Another starting point for improving board effectiveness is to measure performance.  Too often a board will measure the performance of the agency and neglect measuring their own performance. At best, many boards’ self-performance evaluation is limited to evaluating the start and end time of meetings or the quality of the takeout food served at the event.  High performing boards create meaningful measures of board performance. While it might be tempting to measure performance by attendance, percent of board members donating to the agency, and the on-time completion of the executive director performance evaluation, these are fairly un-strategic measures. Strategic measures go further and might track such benchmarks as the regularity and content of executive or planning sessions, engagement of members outside of board meetings, or the percent of meeting time spent in strategy versus administration. Additional measures might be tracking the time required to recruit skilled board members or membership retention.  For many boards shifting to performance-based board management can represent a sea change in culture and is likely only achieved after carefully facilitated strategic conversations and thoughtful planning.

Get the Right People on Board:  A final starting point is to conduct a thoughtful review of board recruitment strategies.  Does the agency have clear board member job descriptions?  Are members sought out individually for skills and expertise? Do board members invest time in cultivating potential board members?  Many small to midsized nonprofit agency have difficulty staffing their boards let alone staffing their boards with highly qualified community leaders.  Having worked with many such boards, I will not underestimate the challenge of this task.  However, establishing a clear recruitment strategy and creating a meaningful board structure with the expectations of continual learning, performance-measurement, and strategic engagement will become reinforcing cycle that raises expectations and organizational optimism.   Energy and engagement creates energy and engagement.

Developing a high performing board is not a trivial task.  Indeed, I would contend that for many agencies, creating a high performing board may an intentional process that spans a year or more. However, despite the challenges of reinventing a board, facilitating a process to develop a high performing board is critical as nonprofits seek to thrive in the continuing economic uncertainty and instability.  High performing organizations of  tomorrow are those that develop and maintain high performing boards today.

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In my last post I asserted that the nonprofit organizations of tomorrow are being born out of the economic crisis of today.  In this current economic turmoil, there are many voices counseling the nonprofit world to increase “collaboration.” Unfortunately, many of these experts are using “collaboration” as euphemism for “merger and acquisition.”  However, unlike the opinions of these non-prophets (pun intended), I believe that the organizational tempering is less about “merger and acquisition” and more about vision, leadership, agility and innovation.  As a new operational model, authentic collaboration  needs to be grounded in sovereignty, aspiration, innovation and brought to life as a concrete operating strategy.  In this post, I wanted to outline what I consider to be the provocative questions that nonprofits (and nonprofit boards) need to consider before pursuing formal collaborations with other agencies.

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What are we trying to achieve through collaboration?  A first question that informs a discussion of collaboration is the fundamental question of outcome.  The expert perspective that “there are too many nonprofits,” may suffice as an efficiency justification for encouraging collaboration but for the individual agency struggling with the question of collaboration, efficiency is but one variable.  A nonprofit must clearly identify the drivers of collaboration.  The heart of the question is twofold.  First is a consideration of where an agency wants to be compared to where it is now.  In other words, what is the performance gap that needs to be closed?  The second question asks if collaboration is among the best ways to close the gap (systems-thinking knows that there is usually more than one “best way”).

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I would like to suggest that the question of outcome requires an agency to explore three dimensions of organization practice including its: Operating, Resource, and Social Impact models.  In the resources listed below,  I link to a couple of business planning documents that all discuss these three dimensions of practice.  Such and exploration ideally includes both inquiry and reflection.

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Resource Model: The current economic crisis sets up the  false dichotomy of a “merge or die” line of thinking.  “Our budget is shrinking, should we merge?” is one way to approach the question.  However, implicit in this approach is a scarcity mentality –namely, that there isn’t enough money to go around.  Illustrating this, I was recently talking to a colleague who made the blanket statement that he would “not encourage any agency to launch ambitious new plans in this economy.”  Scarcity thinking is one way to approach the resource model conversation but such an approach often misses larger conversations.  For example, I know an organization with heavy revenue concentration from stable long-term government grants.  It is also an agency that has a large number of volunteers, whom have never been asked for donations.  In the context of three straight years of government budget cuts, the stability of the organization was incrementally being threatened.  By revisiting the resource model of the agency, the decision was made to a build new revenue stream based on small individual donations. Two years into the plan the organization is on track to reinvent its resource development model.

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Operating Model: A second inquiry and reflection exercise is to consider an organization’s operating model.  Are services delivered effectively?  Can the system of operations be reconceived?  Such a conversation does not question the program strategy of an agency but looks for operating efficiencies. Conversations might focus, for example, on the value of collaboration to create “back office” efficiencies or the value of sharing space.

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Social Impact Model: the third conversation that informs the question of “what do we want to achieve?” is the conversation of social impact.  Here a group examines the heart of the organization through the lens of impact.  I can think of more than one nonprofit agency that has reinvented its programs and services to create a larger impact (or the same impact more efficiently).  Here is the greatest need for inquiry and reflection and, in my opinion, it is from this dimension of organizational practice where the best collaborative decisions are made.

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What are the models of collaboration?  Following inquiry and reflection, an agency needs to explore the various models of collaboration (and inherent philosophies of each).  In another post,  I identified five models of collaboration that serve as a good working outline of models.  (In the resources section below I reference a study documenting eight models). Too often groups think in polar opposites.  Merge and “go it alone” are simply two points on a scale of collaboration.  A thoughtful discussion of other collaborative models will help in articulating a collaboration strategy.

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What is the due diligence process associated with our collaboration? A third component of the strategic conversation around collaboration is to create a roadmap for exploring a specific collaboration model.  Making process a part of the initial conversation can help an organization get a clear picture of the scope of work, timeline and resources required to support the development of collaborative partnerships.  As with most organizational change efforts, developing collaborative relationships is subject to the old adage of: “fast, cheap, done correctly –chose any two.”   Collaboration, done correctly, takes dedicated resources of time and money and generally the faster you want it to happen the larger the costs.

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What does the collaboration process look like?  The final component of the collaboration conversation is to be visually clear about what the entire collaboration process looks like.    I have also written before about describing process from the perspective of visual learning.  In mapping out a process of collaboration, creating a visual understanding can assist an organization build a shared image of the change ahead. However, even if an organization chooses not to visually represent the plan, there needs to be a written workplan developed with clear milestones and markers of success along the way.

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Collaboration exists on many levels in organizations.  As this post is a  follow up to my last post, it is important to recognize that I am referencing collaboration that can fundamentally change the fabric of an organization.  Change that can lead to sharing space, affiliation or even merger is a deep process and is not the equivalent of collaborating with other agencies on a community event.  Embarking on the process of inter-agency collaboration is a major undertaking for any organization and carries with it the weight of seismic organizational change.  Facilitating collaboration requires more than simply running a good meeting and requires the thoughtful attention to inquiry, reflection, and process.

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As always, your thoughts are welcome.

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Resources:

The Process of Social Entrepreneurship: creating opportunities worthy of serious pursuit

Business Planning for Enduring Social Impact

Models of Collaboration Nonprofit Organizations Working Together

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Volunteer-based nonprofit boards are typically comprised of diverse representatives from the community who want  to make a contribution to a cause-based organization.  In smaller to mid-sized organizations it  likely that many new board members have not served on a board previously and often have a vague idea of what being a board member means.   In this context, a board orientation is an important “educational” event. Unfortunately, in zeal to adequately train board members, board  orientation sessions can spiral downwards into a mountain of data and presentation slides.  I have personal experience in such a “missed opportunity ” when I once was captive in a board orientation where the trainer actually powered through over eighty slides in an hour.  My butt was numb and my mind even numb-er and needless to say I learned very little  from the session.  So if massive quantity of slides makes a poor board orientation,   how does one facilitate a board orientation that is not a death march through random slide transitions on an overhead screen?  Here are three fundamental principles:

Spend no more than 12-14 “pages” on Board Governance.  Oregon, like many states produces a Guide to Nonprofit Board Service with the entire document spanning only 16 pages (including covers, front matter and a huge amount of white space).  If the State Attorney General’s Office thinks that the concept of governance can be distilled down 12-14 pages of content, then that becomes a good guide for most nonprofit boards. As a general rule, new board members can get the concepts of “duty” and “control” in ten-fifteen minutes of discussion, without having to explain Federal Circulars governing contract management.  Of course, my assumption is that we are talking about a stable nonprofit with a track record of good management practice, fiscal and program controls, and supporting policies and procedures.  Boards governing an agency in transition are another story.

Foster the sense that board members are vital connectors.  A Board orientation needs to emphasize the board members role as a connector. One of the few slides that I have used in board orientation workshops, places the board in between the organization and the community.  The theoretical discussion is simple.  The board has an internal role connecting to the agency mission, vision, staff members and CEO and is responsible for stewarding those connections.  Externally, the board connects to the clients, community and contributors, outwardly representing the agency to these three groups and connecting the interests and needs of the external groups back to the organization. At the recent orientation I attended, one of the practical exercises in making internal connections paired board members in groups of 2 and 3 and had them meet in a roundtable format with staff of the agency who represented the different organizational programs and services.  In an hour’s time, board members connected with each program of the agency and, more importantly, with the agency staff members. Board members reported making vital connections and understanding and praised the short, intense dialogue approach as more meaningful than slide presentations of the same material.

Provide connection to each other.  Another facet of board orientation is to outline the concept of networked governance. I have discussed this concept in another post and increasingly I am convinced that successful boards are those that approach governance as a network.  Fundamental to a network is the concept that relationships matter.  Another node in which board members serve as a connector is in their relationships with each other.  Orientation must provide time for board members to connect less formally.

Orientation is Process. Finally remember that, as with everything based on performance, the orientation of new board members is not an event but a process.  An intentional time set aside for orientation is a way to start embedding concepts into heads (by detailing program data), engaging hearts (connecting board member with passion and mission), and putting tools in hands (reference materials, by-laws, operating procedures).  That’s orientation. The hard work of building relationships, creating meaningful impact and engaging a high performing board is the ongoing work of board development.  This development requires the ongoing facilitation process that cycles and deepens as boards govern in partnership with the CEO, staff, and community.

Anyone can download some board orientation slides off of the web and present a training workshop.  However, bringing facilitation process into a board orientation shifts the framework from training to learning and this deeper pursuit will strengthen the board. Facilitating a nonprofit board is a journey of empowerment and the first steps along the road to success can be found in the strong grounding of the board orientation.

As always, your thoughts are welcome.

References

Creating High Impact Nonprofits

Board Governance as Leadership Summary

I once was talking with an executive director of a nonprofit agency that hosted an annual board retreat. She sounded exasperated as she described the situation this way, “Every fall the board has the same discussion, asking –so what do we do at our board retreat this year?” As we spoke I asked her what an ideal staff retreat would look like from her perspective. “Well,” she said, “we ultimately do make pretty good use of our time but it never seems intentional. More than anything else I wish the board was intentional about the annual retreat. I mean, after all, aren’t board retreats supposed to be big and strategic?” I proceeded to share with this director that retreats should be functional, intentional and big in relationship to the value of the desired outcome. In short, I suggested, there are likely four main frameworks for board retreats.
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Continuing Education: Throughout the year, boards often get bogged down with the multiple roles of governance and agency support. Board retreats can be great opportunities for continuing education. Education may relate specifically to board-related duties and may be driven by pressing or current needs, such as risk management, fiscal accountability or training related to the agency’s mission and goals. Short of a pressing educational need for the board, a continuing education retreat might be developed around expanding the general capacity of the board. Continuing education that focuses on marketing, communication, or conflict resolution could help expand the knowledge of members both in their board roles and in their broader professional roles.
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Connection and Community: A second framework for a board retreat is to use the time to focus on connection and community. With a connection and community focus, this type of retreat may be a joint event involving both board and agency staff. I have seen such retreats effectively used when an agency has navigated a major transition such as rapid growth or a significant crisis. Alternatively, a connection and community retreat may also be useful when a significant number of new board members are assimilating to the organization. Goals for such retreats may center on cultivating mutual understanding of agency’s programs, or to cultivate a shared passion for the mission, or can focus on creating connections between people. The process for such retreats may use team-building exercises, listening circles, story-telling or other interpersonal group processes to structure the time accordingly. Increasing community and connectivity can strengthen relationships for the year ahead.
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Celebration and Reflection: The third framework for a retreat is to celebrate and reflect. Different that a volunteer recognition party or a social gathering, retreats that focus on celebration and recognition are designed as catalyst events rather than motivational events. Retreats of this nature may be associated with a milestone like a 20th anniversary, the completion of a capital campaign, the successful merger of two agencies, or may precede a milestone event. This type of retreat differs from a motivational recognition program in the retreat serves as a catalyst for the planning and implementation of the next chapter. For example the frame of a recognition event is, “we have paid off our building thank you everyone for your dedication and hard work,” but the message for a celebration and reflection retreat would be, “we have paid off our building now it is time to develop a satellite office across town to expand out services.”
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Strategic Planning: A fourth framework is the traditional strategic planning retreat. The challenge of a strategic planning retreat is that it can’t be designed as an event but must be designed as one stage in the sequence of a strategic planning process. Single event-based strategic planning may produce a document but because the event has a beginning and an end, the plan often lacks the energy and movement of a staged strategic planning process. Strategic planning is not an annual event but is an ongoing iterative process. Having said this, however, making strategic planning a focus of a retreat can be a powerful focusing stage in a strategic planning if it is part of a larger momentum building process.
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The important consideration in designing an effective board retreat is to build the agenda around a single framework as the focus of the group’s activity. This is not to say that a retreat won’t have activities drawn from more than one framework (i.e., a strategic retreat with a team building exercise) but the key is to purposefully design the agenda to achieve a single goal. It is simply not realistic to spend five or six hours together and educate and celebrate and connect and develop a strategic plan. Effective retreats focus on one theme with the purpose of using the theme to move the organization forward over the next year. Common to all of these frameworks is movement. Capacity building is about moving your board forward. Connection and community establishes working relationships. Celebration and connection lay the foundation for new achievements. Strategic planning is about working towards the future.
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As is common to many of the posts on this blog is my foundational belief that an agency that breaks out of the routine and rethinks fundamental group processes will prosper and grow. Investing in strategic process design and strategic facilitation across all business practices will yield significant dividends and that includes investing the annual board retreat process. Focus and movement are for times when there is more at stake than running a good meeting.
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While there are literally dozens of books, websites and blogs devoted solely to the topic of nonprofit boards it is still a common phenomenon for nonprofits to struggle to identify the strategic composition and functioning of their board of directors. What kind of people should be included on the board? What business sectors should the board represent? What skills should be expectations related to fundraising and other contributions to the functioning of the organization? I would suggest that there are four critical conversations that are helpful to creating a strategic nonprofit board.

The first critical conversation is about the foundation of a nonprofit board is a discussion of the board’s role in governance. Governance has several dimensions the first of which is to provide strategic direction to assist the nonprofit fulfill its mission. Board members should bring, first and foremost, the ability to think strategically, systemically and systematically. The second most important function of board members is the ability to provide oversight. Inherent in oversight is the spirit of inquiry and active participation. Governance means that board members ask reasonable questions to ensure that the agency programs and operational practices are compliant with legal requirements, the agency’s mission, agency policies, and any restrictions placed on contributions by donors and other funding sources. Ensuring adequate fiscal control and appropriate use of funds is another governance function of a board. A final governance function is to ensure oversight of the executive director of the agency. The conversation about governance is to assess the strength of your board in ensuring these functions. Are the skills and knowledge of board members adequate to provide governance? How do you measure it? How do to re-measure it as the board membership changes?

The second conversation relates to the board’s ability to provide strategic guidance to the agency operations. Board members are not expected to serve as “quasi-staff” working for the agency as HR consultant, accountant, etc., however, as you consider the operational functions of the agency such as human resources, accounting, marketing/public relations, program planning and evaluation, and risk management, there is a legitimate question of does your board posses the skills and knowledge to help guide the agency to build a strong organizational capacity? The distinction between providing strategic guidance and serving as “quasi-staff” is important. It is temping for smaller nonprofits to try and identify board members who can provide pro-bono human resource or marketing experience but such a strategy can cause potential conflict of interest between the governance of the operations and the actual operations. Boards members can’t effectively govern and provide direct operational support. Board guidance questions, observes and reflects on organizational operations but rarely, if ever should the board get operational. Guiding the development of organizational capacity becomes more important during times of organizational growth or down-sizing and is also important during times of crisis or transition, such as when the executive director leaves the agency. The strategic board conversation then becomes about the adequacy of the board to provide guidance related to organizational development. Does the board collectively possess the skills (or have access to folks who do), when the board is needed to support organizational capcity development?

The third strategic board conversation relates to the board’s understanding and more importantly, content expertise related to the mission of the non-profit. If the organization mission is related to positive youth development or housing services, what level of expertise in those issues do board members have? Again the conversation is not about board members providing operational support to the agency but strategic support. Do board members understand the current and emerging trends related to positive youth development or affordable housing issues? Do board members have expertise to develop informed program directions or positive strategies that will support the growth and development of the agency as it seeks to meet the mission-driven needs in the community?

The fourth strategic board development conversation is about the board and fundraising goals and strategies of the agency. Conventional wisdom drives many nonprofits to seek, as the Holy Grail, influential board members connected to potential donors or at the least, board members willing to make an “ask” for money. Unfortunately this framework truncates the strategic discussion. In reality boards should seeks members who can provide strategic support to the fundraising mix unique to the agency. So, for example, if a nonprofit is heavily dependent upon government contracts the agency would benefit by board members who can help the agency provide maintain strong relations with the government agencies. Conversely a board that seeks to develop a strong community of small donors, a tactical approach for the board would be to seek board members with experience in grassroots community organizing, the use of technology-based social media tools, or small event planning.

Taken together, developing a strategic board requires several strategic conversations about governance, organizational capacity, content expertise and fundraising. These conversations should be supported by honest assessments of skills that comprise the current board. Out of such conversations comes a clearer strategic intent that informs board recruitment and can subsequently organize and focus board training and board operations.

Here is a link to a self assessment spreadsheet that I developed to support the start of conversations.