Leadership is Hard - RISK eNews

A SOURCE for Tools, Advice, and Training to control risks… so you can focus on your nonprofit’s mission.

April 23, 2014 With Thanks The Nonprofit Risk Management Center is deeply grateful to the companies that have signed on as Corporate Sponsors of our 2014 risk-themed conferences. In addition to our Corporate Sustainers, we are pleased to report that USLI and The Hanover Insurance Group, Inc. have enrolled as 2014 sponsors. Thank you! Visit our2014 Conferences webpage for location details, conference schedules, and online registration. Contact Kay Nakamura at (202) 785-3891 to discuss partnership opportunities. Leadership is Hard By Melanie Lockwood Herman This week I’ve been reading “The Hard Thing About Hard Things,” by Ben Horowitz, the former CEO of Opsware, whose company was acquired by HP for $1.6 Billion in 2007. What practical advice might a Silicon Valley tech executive turned venture capitalist have to offer nonprofit CEOs and risk champions? Brutal but helpful lessons from the world of startups, dot coms, and life on the fine dividing line between financial success and disaster. Like the corporate CEOs referenced in “The Hard Thing About Hard Things,” most of us leading mission-driven organizations awake each morning believing that we run great organizations. We yearn for opportunities to boast about our compelling missions and how we transform lives and communities. But I think Horowitz is right when he says that the true test of that belief is when the organization—and the CEO—have to do something truly difficult. Here are just a few of the “hard things” I learned from this provocative new book. No Excuses, No Self-Pity – In one of the shortest but most memorable chapters, Horowitz explains that when disaster strikes, “nobody cares.” His advice? Conserve the mental energy needed to rationalize the mess, make excuses for the mess, or engage in self-pity. Use the energy you have to “find the one seemingly impossible way out… Spend zero time on what you could have done, and devote all of your time to what you might do.” Recognize Good from Bad – The opportunity to make a difference is often touted by nonprofit CEOs attempting to lure talented professionals to their organizations. Yet are we being honest about whether our nonprofits—regardless of the warm feelings our mission statements convey—are really good organizations? Horowitz explains that in a good organization, “staff wake up knowing that the work they do will be efficient, effective and make a difference for the organization and themselves. These things will make their organizations both motivating and fulfilling.” In contrast, in a poor organization, “people spend much of their time fighting organizational boundaries, infighting, and on broken processes. They are not even clear on what their jobs are, so there is no way to know if they are getting the job done or not.” Which characterization fits the nonprofit you lead? If you’re not 100% confident that the “good organization” label applies, what steps are you taking to dispense with mission-wasting processes and eliminate the confusion and chaos you need to evolve to good? Take a Hard Look at the Numbers and the White Space – Today’s nonprofit CEOs are becoming increasingly obsessed with numbers. I recall a board meeting more than 10 years ago when one of my business-savvy board members urged our team to conduct an annual “ROI” process. Her suggestion, which seemed novel in 2004, is not an uncommon theme at today’s board table. But Horowitz cautions against focusing on the wrong numbers or looking at them in the wrong way. He describes “management by numbers” as “sort of like paint by numbers—it’s strictly for amateurs.” The frequent mistake that leaders make is to focus on short-term results while sacrificing future opportunities, or “downstream competitiveness.” He urges CEOs to look beyond the black box with the numbers to the intriguing “white space” that explains how the organization achieved those numbers. He reminds his readers that in many cases, qualitative goals may be an organization’s most important ones. Invite Candid Feedback Through One-on-Ones – According to Ben Horowitz, a common mistake made by tech CEOs is to engage in one-way conversations with staff. Whether it’s a performance review, pep talk, or opportunity to make a big announcement, apparently many CEOs prefer to hear the sound of their own voices to hearing feedback from direct reports and the rank and file! Horowitz challenges CEOs to make time for one-on-one conversations with staff. During these one-on-ones, the most important rule is the 90:10 rule: CEOs should do no more than 10% of the talking. Questions to help spark the conversation include: If we could improve in any way, how would we do it? What’s the number one problem with our organization? Why? What’s not fun about working here? What are we not doing that we should be doing? Share Every Burden You Can – Horowitz writes that “It’s easy to think that the things that bother you will upset your people more. That’s not true. The opposite is true. Nobody takes the losses harder than the person most responsible.” The author’s antidote to lonely despair when things go terribly wrong? “Share every burden you can. Get the maximum number of brains on the problems even if the problems represent existential threats.” Leaders of nonprofit organizations are fortunate that our missions attract smart and passionate staff and volunteers. It’s been years since I’ve heard any CEO complain about having a hard time recruiting top notch staff and brilliant board leaders. With the opportunity to work with and tap the enthusiasm, creativity and dedication of bright people, our missions know no bounds. But despite the talent at our doorsteps, leading a nonprofit requires making hard choices, choosing between sometimes painful alternatives, and never giving up or giving in when the going gets tough. You can reach out for help, look for opportunity in the face of disaster, but you can’t hide. Why? Because your mission deserves your commitment and fortitude to handle the “hard things” that are inevitable in the extraordinary world of nonprofit service. Melanie Lockwood Herman is Executive Director at the Nonprofit Risk Management Center. Melanie’s calendar of upcoming speaking engagements is available online. Also available are “hot topics” for workshops in 2014. Questions? Call Kay Nakamura at (202) 785-3891 to discuss Melanie’s availability as a keynote or workshop speaker. Suit Yourself Risk Management Training Each month the Center records a brand-new Risk Webinar featuring up-to-date content on issues that are top-of-mind for nonprofit leaders. The one-time cost for each program is $59, or apply to become an Affiliate Member to enjoy unlimited access to our “vault” of more than 100 hours of risk management training. Frustrated with the limitations of your annual performance review process? Learn what’s new in the field of performance management by purchasing this month’s program on Managing Risk in Performance Management. Next month’s program, on The Insurance Marketplace will be released on May 5. To purchase any recorded program or peruse the “webinar vault,” visit our 2014 Webinars page today.

Nonprofit Knowledge Matters | Perspectives on Nonprofit Leadership

Vision: Looking Back to Look Forward by Tim Delaney Most people know that the transitional month of January is named after Janus, the Roman god of beginnings and endings who looked both backwards and forwards at the same time. But how many of us know about the power of the Janus Effect? I certainly didn’t, until reading a brilliant book, The Leadership Challenge, by James Kouzes and Barry Posner. In it, the authors recount the Janus Effect research that can help nonprofits. Corporate CEOs were divided into two groups and asked to: “think of things that might (or will) happen to you in the future” and “think of things that have happened to you in the past.” In answering the questions participants were to list 10 events, attaching dates to each event. But the order of questions was switched. Group A was asked to think of the future first; Group B to think of the past first. When comparing results, CEOs in Group B – which first thought of the past – consistently envisioned twice as far into the future than those in Group A that looked at the future first. Since reading The Leadership Challenge many years ago, I’ve enjoyed tapping into the power of the Janus Effect in various ways that you can use, too. It doesn’t have to be elaborate. In fact, here’s how our staff at the National Council of Nonprofits recently invoked the power of looking to the past to sharpen our view of the future.

Lead In! by Jennifer Chandler In the popular book, Lean In: Women, Work, and the Will to Lead, by Sheryl Sandberg, the COO of Facebook, Sandberg urges aspiring leaders to “believe in yourself,” “give it your all,” and never doubt your ability to navigate conflicts between your personal and professional lives. By doing this Sandberg believes you can rise to a leadership position, and once there, make changes that will benefit others who come after you. While it may not be her primary message, she asserts that it is a leader’s obligation to leave the workplace a better place for those who follow. While spending a day with nonprofit leaders recently, I was reminded of Sandberg’s assertion. We were going through the familiar process of identifying challenges and opportunities for a SWOT analysis, when the discussion settled somewhat uncomfortably on the challenge of succession planning as a widespread challenge that no one wants to talk about, but everyone worries about. ​With the candor often shared by executive directors who are relieved to find themselves with peers, bonding over shared war stories, succession planning was described as “the one issue NONE of my board members will look in the eye” and “the biggest, baddest vulnerability we face.” Stories were shared about the death of a founder, leaving an organization in such chaos it almost closed its doors; the challenges of cross-training an organization with only three staff members; and the risks of being the one to raise the issue if you actually plan to stay in your job. It was clear that for this group of leaders, succession planning touched a raw nerve.  Read on for more leadership insights

Clean up! To start off the New Year with a clean slate, or at least a clean database, we invited Steven Shattuck ofBloomerang to share with us his tips on, “3 Ways to Clean Up Your Donor Database in 2014.” Your donor database is a living, breathing ecosystem. Contained within are thousands of individual needs, expectations and passions. Tapping into the unique giving personas of your donors is impossible when your database consists of one giant lump of donors, each of whom receive the same letter template via one communication channel. Those fundraisers who have mastered segmentationare able to communicate on an individual level, unlocking the true potential of every donor in their database. You can do it too, and the beginning of the year is a great time to get started. Read on for three ways to clean up your donor database for 2014

Nonprofit Knowledge Matters | The Leadership Lens

The Leadership Lens Editor’s notes, by Jennifer Chandler  My appreciation for what leadership is – and isn’t – has been sharpened lately listening to stories about first jobs. One young adult close to my family shared his experiences working for a leader who sounds like the antithesis of a "servant-leader." Hearing that young person's misgivings motivated me to search for resources about good governance and inspiring leaders, both of which are abundant in the charitable nonprofit community. Hence the theme of this issue of Nonprofit Knowledge Matters. Whatever your leadership lens, we hope these articles will offer ideas for discussions with your nonprofit peers about the leadership role charitable nonprofits play in communities, and the characteristics you aspire to demonstrate in your own leadership journey.   Advertisement Dynamic Leadership We expect so much of leaders. And leaders expect so much of themselves. But one person, or even a small leadership team, may have a blind spot. We’ve all read about the “wisdom of crowds” and the challenges of overworked, overstressed leaders making decisions. What if your nonprofit used a governance and decision-making process that made the organization smarter than any one leader/small leadership team? Read more in our guest post by Sheella Mierson. Can everyone lead? Nonprofit leaders take their role seriously. That’s why convenings hosted by state associations of nonprofits often include conversations about effective leadership. Paul Schmitz, keynote speaker at the recent Nonprofit Leadership Summit hosted by theNew Hampshire Center for Nonprofits, and author of Everyone Leads, has questioned the premise that leadership is only for a few. Another leader and convener of nonprofits in New England, Common Good Vermont (a Nonprofit Ally member of the National Council of Nonprofits), has taken up the mantle of leadership in a big way. Common Good Vermont aspires to weave leadership and citizenship into the fabric of the Green Mountain state so that leadership is not just something that others do, but something thateveryone does. Find out more aboutCommon Good Vermont's initiative in an article by Council of Nonprofits intern Molly Tilghman. Providing Leadership for Collaboration A new report from Grantmakers for Effective Organizations (GEO) highlights how funders can support nonprofits engaged in collaborations.Working Better Together: Building Nonprofit Collaborative Capacity lays out insights on the core capacities nonprofits need to effectively collaborate — including strong leadership and an open mindset, the ability to share power and responsibility, adaptability and flexibility, and strong connectivity and relationship building — and how grantmakers can play a vital role in building these capacities. As described in the report, key roles grantmakers can play include: helping nonprofits make connections with collaborative partners, offering core support (i.e., unrestricted) long-term funding, and providing other resources, such as technology, that may be needed to support and enable collaborative work.  Leadership to Change Perspectives on Indirect Costs Kudos to the many leaders in the nonprofit community who havesigned the pledge to educate donors and grantmakers about the fact that programs run by nonprofits require general operating funds to turn on the lights, process payroll, purchase liability insurance, and pay for a myriad of other “indirect costs.” Charitable nonprofits are also taking a leadership role in spreading the word thatgovernment contracts and grants should reimburse nonprofits for the indirect costs that they incur.  If your nonprofit provides services on behalf of governments, we think you will be interested in a new report from the National Council of Nonprofits, Investing for Impact: Indirect Costs Are Essential for Success. Even if your nonprofit doesn't have any government contracts or grants, you will still find Investing for Impact useful because it shares substantial research for board members and funders about the need to invest in core infrastructure to have a stronger nonprofit. The new report offers nonprofits ideas for how to explain to their government partners and private philanthropy that payment of indirect costs is vital to the effectiveness of the services provided, and for the sustainability of the nonprofit. The report includes practical solutions that governments at all levels can adopt to strengthen the government-nonprofit contracting relationship, ensure higher-performing nonprofit partners (and cost savings for taxpayers). BUT -- it’s up to charitable nonprofits to lead the way with the key messages in the report when negotiating with governments. Lead on! More resources on leadership Looking for leadership training? Visit the education calendar for your state association of nonprofits Looking for leadership experience? Learn about serving on a nonprofit’s board! Leadership succession - planned and unexpected Team Building Without Time Wasting