Thursday, April 25, 2013

How Nonprofit Leaders Can Use Strategy and Technology to Enhance Organization’s Performance

Guest post by Harrison Coerver:

Many membership organizations and not-for-profits are struggling to maintain their relevance in today’s fast changing environment.  Unprecedented competition, higher expectations, accelerating technology, changing preferences and time pressures are all converging to create a challenging landscape.  At the root of the problem: weak, hidebound board leadership.

Given the strong role that not-for-profit boards have in directing their organizations, it is difficult for volunteer leaders to not to take responsibility for the plight of these groups.  Many boards of membership and voluntary organizations share three characteristics that hamstring their leadership.

First, most boards are not composed for performance.  Directors are selected based on who they know, what interest they represent or how long they have been hanging around.  Let’s face it; many on boards are along for the ride.  They have superficial levels of involvement and they engage in “social loafing” -- the propensity of those in large groups to default to a smaller group to carry the workload.  While there are leaders on boards, there are not enough of them.

Second, board leadership rarely holds themselves or their peers accountable.  Admittedly, it is difficult to challenge a non-performing director that is volunteering their time.  But, tolerating slackers marginalizes the efforts of true leaders intent on advancing the organization’s mission.

Third, tradition – not strategy – is the master of most non-profits.  This year’s board does what last year’s board did.  Officers perpetuate time-honored programs and legacy processes.  There is a lot of talk about “strategic boards” and “strategic thinking,” but most nonprofits are driven by convention and “the way we’ve always done it” mentality.  Traditions have a stranglehold on most tax exempts.

Membership, civic, and charitable organizations are in a race for relevance.  To win, it requires leadership that can craft and execute strategy: skillful, creative, and disciplined use of resources to achieve their objectives.  Strategy doesn’t just happen.  It requires leadership, focus, and work.  Successful nonprofits will embrace the following three approaches to succeed:

1. Small, competency-based boards with rigorous director selection
Most boards are too large.  They are cumbersome and consume an inordinate amount of staff time.  A five-member board is likely to be most effective in many cases.  And, directors need to be carefully selected based on predetermined criteria.  For starters, ask “What are the major opportunities and challenges we will encounter in the next five years?”  Then ask, “What kind of directors will be best suited to govern (“direct and control”) the organization given those opportunities and challenges?”

This takes time and effort, but think of the time and effort costs of underperforming boards.  It will be well worth the effort.  For those who pushback at a five member board, please show me a large board where the Executive Committee does not do the lion’s share of the work anyway.

2. Strategy-driven vs. tradition-driven governance
Boards that perform will recognize the risks associated with clinging to obsolete programs and processes that once served them well, but now threaten their relevance.  They will assess their true strengths and areas where they excel, and concentrate their scarce resources on them like never before.  To do so will require them to say “no” – something politicians can’t do, but leaders know they must.  Losing focus in today’s environment is a prescription for failure.

Directors on effective boards will eliminate waste by understanding the cost of an activity and effort that doesn’t deliver value or advance the organization towards its mission. They will eliminate unproductive effort, just as manufacturers eliminated waste in the production process to compete in global markets.  Many tax-exempts are overweight and out of shape, yet vying with lean and nimble competitors.

Non-profit leaders of tomorrow will know that purposefully discontinuing programs and activities that have outlived their usefulness frees up resources for innovation.  They can’t continue to add new services, events, and initiatives year after year without spreading resources too thin and marginalizing performance in all of them.  Leaders will learn that at times you need to “shrink to grow” as did General Motors when it eliminated Pontiac, Oldsmobile, Saturn, Saab, and Hummer to focus on Cadillac and Chevrolet.

3. The technology imperative
Many associations and non-profits have been slow to adopt technology in a world that is rapidly going digital.  Members, donors, policymakers, and volunteers alike are constantly using technology from apps to streaming video to social media.  They expect non-profits to use the same technologies they are accustomed to in their day-to-day lives.  Ignoring the imperative and potential of technology is a short cut to irrelevance.

Change is particularly difficult when organizations have decades of operating based on long-standing traditions.  But, as someone tweeted recently during my keynote speech, “If you don’t like change, you’ll like irrelevance even less.”  Association and not-for-profit leaders will understand the tradeoffs involved and make the necessary changes with a sense of urgency.

About the author:
Harrison Coerver is an internationally recognized strategy and planning consultant and bestselling co-author of Race for Relevance: 5 Radical Changes for Associations (www.raceforrelevance.com) and Road to Relevance: 5 Strategies for Competitive Associations (www.roadtorelevance.com).  He can be reached at harrison@harrisoncoerver.com or 239.281.1691

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