Tagged ‘executive director‘

When and How Executive Directors Leave

In the past month, there have been four big changes in nonprofit leadership. Jan Buchler, long-time executive director of The Parenting Network, completed a year-long transition to retirement that involved a significant length of time during which her successor, newly hired, was able to shadow Jan and become acquainted with her new community. The process culminated in a unique ‘fare welcome’ luncheon that gave a couple of hundred people the chance to congratulate Jan and be introduced to the new director. Artfully done, I thought at the time. I wish all nonprofits would be so careful and deliberate.

Paul Schmitz, the driving force behind or in front of Public Allies, also recently announced that he will be resigning in several months. Paul, the author of the book, Everyone Leads, and a very popular national speaker, is likely looking at other national opportunities. We don’t know, he didn’t say. The key thing is that he has given his board of directors a good long time to find a good replacement and made himself available for consultation about that process. Paul grew Public Allies into a major training and public service organization. He will be hard to replace, but the early heads-up bodes well for the organization’s ability to continue its smooth sailing.

Contrast that to two other local organizations, Community Advocates and Safe and Sound. In both cases, there were press releases that the executive directors, Joe Volk and Barb Notestein respectively, had resigned, one to take a job at a much smaller organization in another county and the other to ‘explore other options.’ Their departures were speedy, one planned for just two weeks hence and the other already occurred, causing a lot of raised eyebrows around town. What does it mean to have long time executive directors make such sudden exits? In both cases, interim directors were appointed pending an executive search and hiring of permanent replacements.

In cases like these where an executive director suddenly resigns, on his/her own volition or at the invitation of a board of directors, there are many things to worry about. Number one is the morale of employees. When the captain of the ship gets on a skiff and motors off to shore, the rest of the sailors wonder what will happen to them. Are their jobs safe? Is the organization in trouble? Will the new person be better or worse than the person who left? A popular director’s exit could inspire departures of other key individuals. Also, a perception of a leadership vacuum can fuel in-fighting and positioning for power within the organization. So, tending carefully to morale and keeping employees feeling engaged and important to the organization are really important.

Then, obviously, the organization needs to worry about the public perception of the leadership transition. If I’m a foundation director or government bureaucrat, I may be wondering a sudden executive departure means for the overall stability of the organization. Does the organization remain a good risk in terms of the investment of philanthropic and government resources? Will programs be run efficiently and effectively. Bottom line – do people in charge know what they are doing? It is extremely important that the organization’s leadership, especially its board of directors, meets individually with funders to allay any concerns and set the course for the future relationship. It is a very bad idea to allow funders to only know what they read in the newspaper.

I was a second level executive in an organization in which the executive director was suddenly fired by the board of directors. The remaining executive team regrouped into war footing, everyone taking on additional responsibilities, and trying to tamp down the extraordinary anxiety among staff regarding the change. It was a trauma from which the organization never really recovered. More strategic and careful thinking on the part of the board of directors would have protected the organization and its employees from unnecessary upheaval.

There are lessons in these recent leadership changes for everyone running a nonprofit organization. To put it bluntly, it’s not just about you. A lot of people, in an out of the organization, will be affected by a drastic leadership change. Take care with those decisions.  Think of the people around you, those you serve, and the long-term sustainability of the organization. And just be very, very careful.

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When All You See Is Red: What to Do When Your Organization Hits the Wall

Last week’s post talked about the tension between mission and money for nonprofit organizations.  My thesis was that mission is important but cannot flourish without sound money management.  Any nonprofit organization director who doesn’t understand that is kidding him or herself.  Financial management is not a pesky little detail of nonprofit life; it is central. 

#1 Rule: Keep the money straight.

So what happens when the money has not been kept straight?  One of two things happen:  either the situation is ignored, minimized and marginalized OR the situation is the impetus for new, better financial practices.

Like a smoker ignoring his hacking cough, glossing over nonprofit financial problems only leads to a worse situation.  Financial problems, like cancer, do not cure themselves.  But like cancer treatment, the cure for nonprofit financial problems is not easy or painless.

Steps to a cure (or at least rehabilitation):

1.  Professional diagnosis:  Because non-profit organizations are often small and mission-driven, they rely heavily on volunteers with limited time and, often, limited expertise. When the board of directors first begins to see a pattern of financial problems, that is the time to seek a professional opinion from someone outside the organization.  Virtually every community has nonprofit management technical assistance, this is the time to seek it out.

2. Management accountability:  The organization’s executive director and board of directors have to take ownership of the problem, accept responsibility for past practices, and make a commitment to improvement.  I subscribe to the school of thought that nearly every problem that can be named and claimed can be solved.  Unfortunately, it is very often the case that a nonprofit’s finances are a mess because the executive director has limited financial skills and a propensity toward denial.  Often, a board of directors, itself with limited time/skill, will aid and abet the director’s minimization of the problem.  Solutions cannot happen in this environment.  Accountability is a fundamental requirement of change.

3. Treatment compliance:  Getting out of serious financial difficulty is very hard even with the best professional advice.  Generally, a nonprofit in serious financial trouble needs to: a) develop a detailed remediation plan in consultation with the best advice available; b) fully implement the plan, doing the hard things like laying off staff, consolidating operations, reducing benefits and any number of other onerous things; c) communicate with funding sources so they get firsthand information about both the situation and the plan; and d) establish clear performance/accountability checks so the organizations stays on an improvement course.

 Is all this trouble worth it?  That depends. 

How valuable is your mission?

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