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Dear Friends:
Chief executive selection is one of the most important decisions that a board of directors ever makes. Yet most boards (happily) are not practiced at the process. Last month I offered a survey of the resources available to guide boards in their searches. This month I conclude this two-part discussion with some counsel on what organizational management background to seek in an executive director.
You have my best wishes for a good summer with time to rest and refresh. This monthly e-news will resume in September. Remember: Your comments and questions are always appreciated. Contact me anytime at davidnorgard@od180.com.
Peace,
David
Essential Factors in Effective Nonprofit Management
In my March e-news, I discussed the four-dimensional nature of the nonprofit organization (NPO). These four dimensions are:
- the program or programs;
- resource development;
- administration; and
- organizational design.
Within each of these four dimensions, there are several "management factors." I believe that if an executive director is to be successful in leading an NPO today, he or she will need to demonstrate skill and knowledge in all of these factors through a combination of work experience and education. I am not suggesting that an ED needs to be an expert in all these areas. (That would be ridiculous.) Yet an ED needs to understand the importance of each of them, how they relate to each other, what questions to ask about them, and what expertise along these lines should be sought in other lead staff.
Table # 1: Essential Factors in Nonprofit Managerial Leadership
| Program | Development | Administration | Design |
| Design & Development | Communications (External) | Budgeting & Finance | Mission, Vision, and Values Articulation |
| Operations Management | Community Relations | Facilities Management | Governance |
| Evaluation, inc. Outcome Measurement | Fund-raising & Donor Relations | Human Resources (HR) Policy & Staff Development | Long Range Strategic Planning |
| Marketing | Information Technology (IT) | ||
| Public Relations | |||
| Volunteer Relations |
Table # 2: Management Factor Descriptions
| Factor | Description |
| Development Factors | |
| Communications (External) |
Developing and overseeing public communications strategies in support of public and constituent relations (much more than serving as a “spokesperson”) |
| Community Relations | Developing and maintaining positive relationships with government officials, neighborhood groups, and community and professional associations (e.g. Chamber of Commerce) |
| Fund-raising & Donor Relations | Raising financial support from varied sources and cultivating relationships with current and prospective donors |
| Marketing | Developing and overseeing strategies in support of advancing the appeal of and demand for services rendered |
| Public Relations | Cultivating, maintaining, and sometimes defending a positive and consistent public reputation and image |
| Volunteer Relations | Attending to the recruitment, training, coordinating, and recognition of volunteers, including board members |
| Administration Factors | |
| Budgeting & Finance | Developing and monitoring budgets and proper financial policies and controls; ensuring timely and accurate financial reporting and analysis |
| Facilities Management | Acquisition and maintenance of physical plant and major equipment |
| HR Policy & Staff Development | Developing and monitoring personnel policies and providing for ongoing staff development |
| IT | Overseeing the acquisition and maintenance of necessary technical systems for the timely and accurate collection, distribution and analysis of relevant data |
| Organizational Design Factors | |
| Mission, Vision, & Values Articulation | Developing, refining, and updating statements describing the mission of the organization, its vision and values |
| Governance | Developing, refining, and updating articles of incorporation, by-laws and other similar organizing/governing documents |
| Long Range Strategic Planning | Developing plans identifying long range goals and objectives and means of achieving them |
...But What Are NPOs Actually Seeking?
Some Telling Survey Findings
In a survey I recently completed of 100 NPOS, it became evident that, in the aggregate, NPOs are much more concerned about some management factors than others. At the extremes are fund-raising and IT. Nearly 4/5 of all organizations expressed a concern for their next executive to have competency with respect to fund-raising. In contrast, only 1/10 of them expressed a concern for their next chief to exhibit some capability for managing IT - which is critical to effective fund-raising!
These two examples accurately represent the larger picture. The cluster of development factors averaged a score of 50 while the cluster of administration factors averaged a score of 38. As expected, nearly all those surveyed (94%) indicated an expectation that the new CEO would be knowledgeable about the NPO's program.
Implications of the Survey Findings
Of course, not every management factor is indeed relevant to every NPO, especially in equal measure. With respect to development, for instance, one agency may rely heavily on volunteers while at another; the only volunteers may be the members of the board. In a similar vein, in the administration area, physical facilities may be integral to the effective operation of some institutions (clinics, for instance) while other institutions may need no more than some rented office space to fulfill their mission adequately.
Nevertheless, it is critically important for a board of directors and its search committee to have a full and balanced picture of the responsibilities of today's NPO executive. Without it, it is safe to assume that what was left missing will eventually manifest itself in less than ideal circumstances.