Association of Small Foundations

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• Association of Small Foundations
• Bet On Leadership
• November 10, 2005

BUILDING A STRONG FOUNDATION
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Workshop Agenda

• What is Leadership?
• Leadership Challenges Confronting the Sector
• Leadership Assessment Discussion
• Case Study Discussion
• Session Wrap-Up

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WHAT IS LEADERSHIP?
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What do you look for in the leadership of the
organizations that you fund? Why? 
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Thoughts on Leadership

• Leadership is about taking an organization to a
  place it would have not otherwise gone without
  you, in a value adding measurable way.
• -George Fisher
• No matter how good or successful you are or how
  clever or crafty, your business and its future
  are in the hands of the people you hire. To put
  it more dramatically, the fate of your business
  is actually in the hands of the youngest recruit
  on the staff...
• -Akio Morita
• Successful organizations in the twenty-first
  century will have to become more like incubators
  of leadership. Wasting talent will become
  increasingly costly in a world of rapid change.
  Developing that leadership will, in turn, demand
  flatter and leaner structures along with less
  controlling and more risk taking cultures.
• -John Kotter

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What is the Difference Between Leaders and
Managers

• The manager administers, the leader innovates
• The manager is a copy the leader is an original
• The manager maintains the leader develops
• The manager focuses on systems and structure the
  leader focuses on people
• The manager relies on control the leader
  inspires trust
• The manager has a short range view the leaders
  has a long range perspective
• The manager asks how and when the leader asks
  what and why
• The manager has his/her eye always on the bottom
  line the leader has his/her eye on the horizon
• The manager initiates the leader originates
• The manager accepts the status quo the leader
  challenges it
• The manager is a classic good soldier the leader
  is his own person
• The manager does things right the leader does
  the right thing

Source Warren Bennis, On Becoming a Leader ,
Perseus Books Group, 1989
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Management vs. Leadership
Management
Leadership

• Planning and Budgeting
• establishing detailed steps and
• timetables for achieving needed results, then
• allocating the resources necessary to make
• it happen
• Organizing and Staffing
• Establishing some structure for
• accomplishing plan requirements, staffing
• that structure with individuals, delegating
• responsibility and authority for carrying out
• the plan, providing policies and procedures to
• help guide people, and creating methods
• or systems to monitor implementation
• Controlling and Problem Solving
• Monitoring results, identifying deviations
• from the plan, then planning and organizing
• to solve these problems

• Establishing direction
• Developing a vision of the future--often the
• distant future--and strategies for producing
• the changes needed to achieve that vision
• Aligning People
• Communicating direction in words and deeds
• to all those whose cooperation may be
• needed so as to influence the creation of
• teams and coalitions that understand the
• vision and strategies and that accept their
• validity
• Motivating and Inspiring
• Energizing people to overcome major
• political, bureaucratic, and resource barriers
• to change by satisfying basic, but often
• unfulfilled human needs

Source John Kotter, A Force For Change...

• Produces a degree of predictability and
• order and has the potential to consistently
• produce the short-term results expected
• by various stakeholders (e.g., for customers,
• always being on time for stockholders, being
• on budget)

• Produces change, often to a dramatic degree,
• and has the potential to produce extremely
• useful change (e.g., new products that
• customers want, new approaches to labor
• relations that help make a firm more
• competitive)

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Strategic Leadership Model
Source Albert Vicere, The Strategic Leadership
Imperative for Executive Development, Human
Resources Planning, Volume 15, Number 1
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Stages of Strategic Leadership
Source Albert Vicere, The Strategic Leadership
Imperative for Executive Development, Human
Resources Planning, Volume 15, Number 1
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Market vs. Program/Service Mindset
PROGRAMS/SERVICES
MARKETS
Source Philip Kotler. Kotler on Marketing.
Executive Book Summaries. 2000.
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Market vs. Product Leader Characteristics

• Market Focused Leaders
• Organization Champion
• Are truly excited about the potential to serve
  larger and larger numbers of people with a
  specific program/service that they can bring to
  scale
• Can handle the complexity of leading multiple
  locations
• Run a tight ship and leverage assets to their
  fullest potential put right pieces in place
• Build first class leadership/management teams and
  delegate effectively
• Understands the concept of key performance
  indicators and regularly knows where their
  organization stands in this regard
• Quality is king
• Fact based decision making

• Program/Service Focused Leaders
• Innovation Champion
• Are truly innovative in their thinking and
  constantly looking for ways to do things better
• Care deeply about a particular constituency and
  desperately want to service all of their needs
• Never satisfied with the status quo quick to
  investigate new opportunities
• Typically run flatter organizations and empower
  subordinates to take risks
• Tend to invest in ideas, not people
• Numbers often arent their strong suit and as a
  result financial performance is often a secondary
  consideration
• Need is king
• Often make gut level decisions
• Risk-takers

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Industry Forces Considerations
Do other reputable organizations see this as a
potential new opportunity?
Is there a scarcity or collaborative mentality?
How competitive is the Current funding
environment?
Threat of New Entrants
Is the client base growing or contracting and
what level of subsidy is required ?
Who else is funding the issue at what scale and
how stable are these revenue streams?
Rivalry Amongst Existing Competitors
Power of Buyers (Clients)
Power of Suppliers/ Funders?
Threat of Substitutes
Are there alternative/different/better ways to
solve the problem?
Source Michael Porter, Harvard Business School
(slightly adapted)
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Five Forces Leadership Considerations

• Is the leadership aware of each of the five
  forces and where the organization is most
  vulnerable?
• Astute leaders are proactive about being
  responsive to external dynamics and realize that
  all forces arent created equal given a specific
  set of circumstances
• Management flexibility and adaptation is integral
  to leadership success organization charts and
  key roles/responsibilities should shift to meet
  changing dynamics
• Leaders should always balance the short and long
  term needs of the organization wise leaders
  think in terms of three horizons today, tomorrow
  and the future
• The five forces will always exist, even when
  relative competitive advantage is good, and
  should be an on-going part of leadership dialogue
• Todays challenge if properly managed is
  tomorrows opportunity strong organizations
  thrive/grow when others struggle look for this
  trend

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LEADERSHIP CHALLENGES CONFRONTING THE SECTOR
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What do you think the biggest leadership
challenges are confronting the sector? Why?  
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Pressing Leadership Issues/Problems Confronting
The Sector

• Rethinking the charismatic leader paradigm Does
  charisma always translate into performance?
• Supporting leadership vision/strategies with
  management infrastructure Are we investing
  enough resources in building management
  infrastructure?
• Building a highly functioning senior management
  team How much of an organizations success is
  still in the hands of one individual?
• Understanding and accommodating Lifecycle issues
  Does an organization reach a point where it
  outgrows its leadership?
• Succession Planning Who are the future leaders
  within the organization and how are they being
  cultivated?
• Avoiding burnout amongst top performers - Are we
  asking too much of our leaders?

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Rethinking the charismatic leader paradigmDoes
charisma always translate into performance?

• Be mindful that every leadership strength has a
  shadow (e.g., visionaries often ignore details
  effective administrators often lack vision, etc.)
• Look for patterns of over-promising and
  under-delivering what is the real track
  record?
• Watch for the tendency to explain away poor
  results rather than taking ownership and learning
  from them
• Many leaders struggle with the Ego challenge of
  being personally successful versus being
  successful through others (I versus We) Do
  they acknowledge and encourage the contributions
  of others?
• Is there a leadership team or just one real
  leader?
• Its important to know if the leader perceives
  success as a zero sum game or appreciates and
  encourages the successes of other organizations?
• Strive to actively pursue peer feedback on
  leadership performance
• Regularly test how well the leader knows their
  field and their marketplace and evaluate whether
  this is an evolving or fixed perspective?

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Supporting leadership vision/strategies with
management infrastructureAre we investing
enough resources in building management
infrastructure?

• In the sector there is often this tension of
  blue sky thinking versus what is doable
  expectations/outcomes need to be better grounded
  in business realities
• Program/Service delivery doesnt happen in a
  bubble the business management aspect of
  nonprofit work is often undervalued and
  underfunded
• As a community we need to stop viewing all
  administrative and indirect expenses as costs to
  be minimized rather than strategic investments to
  ensure long-term success focus on the end result
  rather than the means of achievement
• How are we addressing the common Infrastructure
  gaps Finance HR Marketing Operations/Administ
  ration Outcomes Technology?
• Funders and grantees need to be clear on their
  mutual perception of success and what it will
  take to get there? Scale and/or replication
  requires investment in infrastructure
• We need to challenge the nonprofit management
  tendency to multi-function and multi-task to a
  fault and believing this is always a good thing
• We need to accept the fact that management talent
  and effective systems costs

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Building a highly functioning senior management
teamHow much of an organizations success is
still in the hands of one individual?

• The norm within the sector is that what and
  why often falls under the purview of ED and
  Board, but the how and what is regularly
  left open to interpretation and/or poorly managed
• There is quite often lack of Board clarity and
  consensus on their role governance does not mean
  micro management
• We need to appreciate that EDs are often
  wonderful generalists with possibly one or two
  deep skill sets (i.e., fundraising), but
  ultimately a successful organization requires
  subject matter experts at the management level to
  manage money, fundraising, programs, HR,
  technology, etc.
• Sector clearly has a tendency to promote silo
  thinking as opposed to encouraging
  interdependence and coordination amongst various
  program/service areas people perform to
  perceived expectations
• We are often too dependent upon one individual to
  get things done as an organization grows there
  are obvious span of control issues
• Are we supporting the teambuilding with ?

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Understanding and accommodating Lifecycle issues
Does an organization reach a point where it
outgrows its leadership?

• We need to better understand what constitutes
  success for the organization, how this impacts
  the scope and scale of services delivered , and
  the talent needed to make it all happen
• Transitioning to different phases or
  organizational lifecycles requires different
  leadership skill sets once you understand the
  what the next step is to embrace the how
• There is a difference between smart growth and
  growth for growths sake what is the motivation
  and who is driving the process?
• Need for better role clarity and communication
  between board and ED regarding lifecycle issues
• The lifecycle issue is especially pertinent for
  start-ups which most often begin with an idea and
  minimal capacity, but quickly require support to
  actually get things done needs evolve over time.
• Mature organizations are often slow to adapt to
  changing circumstances

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Succession Planning Who are the future leaders
within the organization?

• Why do most ED searches end up picking someone
  from outside the organization? What is the price
  we all pay for this lack of continuity?
• Its a fact of business that most new leaders
  want to put their own stamp on an organization
  including within the first year or two bringing
  in their own key people we often dont lose just
  a leader, but many other key people as well,
• Turnover is a fact of life, but turnover of good
  people in a resource constrained environment can
  create major business/program issues
• Long term success requires long term commitment
  talent and potential is not always preferable to
  experience and knowledge
• Its an accepted fact in HR circles, that your top
  performers will leave if they feel there is
  minimal opportunity for growth and advancement
• Bottom line is an organizations success comes
  down to its people as the organization grows,
  its people must as well all organization and
  their funders must constantly assess if they are
  investing enough in their biggest asset

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Avoiding burnout amongst top performers Are we
asking too much of our leaders?

• We need to better appreciate the impact of never
  ending fundraising demands leaders are
  constantly balancing long term success against
  survival needs
• Funders and leaders need to understand that it is
  not only okay, but advisable to invest in
  leadership professional development
• Appreciate that leaders are often accommodating
  multiple definitions of success from a wide
  variety of sources the bar in constantly moving
  strive for better coordination with our funding
  peers
• Need to understand the real working
  relationship between the Board and ED?
• There is often a lack of a peer and/or mentor
  network No leader is an Island
• Due to current funding norms there is
  insufficient investment in organizational
  development and HR infrastructure all leaders
  will tell you that people issues take up a lot of
  their time
• Leaders constantly feel the pressure being
  expected to have all the right answers and ask
  all the right questions the job of managing
  internal operations while responding to regularly
  changing external events can be quite daunting
• In most cases, there will always be some level of
  difficulty with cash flow management and this
  ultimately has an impact on leader morale

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LEADERSHIP ASSESSMENT
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  What have been the most effective
strategies/tactics/tools you have used to assess
the leadership performance of your grant
applicants?
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High Level Leadership Assessment Tool
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Additional Leadership Assessment Questions

• Why have you funded this organization in the
  past? Were you satisfied with past results?
• Can the leader and his colleagues articulate what
  success is (both short and long term)?
• How would you define the leadership values and
  characteristics of the organization?
• How does the organization hold its leaders
  accountable for being effective in their role(s)?
  
• How is the Executive Director/President role
  defined in the organization?
• What seems to be the relationship between the
  board and the leaders? Is leadership behavior
  consistent with its rhetoric?
• How does the current leadership team stack up
  against the current and future needs of the
  organization?
• Is there an organization chart and if so, does it
  make sense from both a programmatic and business
  perspective?
• How is the organization structured in terms of
  senior team responsibilities?
• Is there a leadership team or reliance on only a
  few individuals?
• Does the leadership team work collaboratively and
  constructively with one another? (Note always
  press for examples)

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Additional Leadership Assessment Questions
(Contd)

• What are the major points of conflict within the
  organization and how does it deal with them?
• Does the ED operate in an environment where they
  can truly lead?
• What is the role of the Board? How do they
  interact with the ED and other staff?
• Are there job descriptions and formal evaluation
  mechanisms for staff in leadership and management
  capacities? If yes, do the process and tools make
  sense?
• Where and to whom does the leadership of the
  organization turn to for advice and counsel?
• What is the organizations attitude towards
  professional development, especially for senior
  staff?
• What is your overall perception of the ED (style,
  strengths, weaknesses, etc.) and does this fit
  with your perception of what the organization
  needs?
• Who steps in in the EDs absence Is there a
  viable management team?
• Does the organization have a track record of
  hiring the right people? If yes, how long do
  they stay?
• Who are the future leaders within the
  organization and what is the plan for their
  growth and development?
• How does the organization approach professional
  development at the leadership level?
• What is the plan to bridge any potential
  leadership gaps?

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Do you specifically fund leadership development
activities?  If yes, how do you go about doing
this? 
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CASE STUDY DISCUSSION
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Case Study

• 7 year old criminal justice national advocacy
  organization recently spun off from a 30 year
  old parent organization
• Charismatic leader who has 25 years of experience
  in the field
• Heavy reliance on consultants with most in-house
  staff operating at very junior levels of
  experience
• Senior staff turnover seems relatively high
• Very fluid organizational structure with heavy
  emphasis on ED to trouble shoot as needed
• Leader believes in staff empowerment, but also
  often struggles with issues of control
• Board is a minimal factor in the organization
• Highly collaborative model that leverages
  relationships at both the state and federal level
• Model is admired by funders/peers as one that has
  replication model to many other issues
• Organization can already point to several
  legislative successes however it is reticent to
  take credit for its accomplishments because of
  partner relationships
• Three major multi year grants coming to end in
  the next 6-12 months only one funder has
  indicated that the grant may be renewable
• Issue is becoming increasingly harder to fund,
  while cost of advocacy activity is increasing
  fundraising creativity has become more and more
  important.

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Case Study Questions

• How would you begin assessing the situation? Are
  there any obvious red flags?
• How would you determine and then go about
  prioritizing the leadership development needs?
• What learnings can you apply from this workshop
  to the situation?
• What types of assistance would seem to make the
  most sense?
• Other?

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Session Wrap-Up

• What did we learn today?

• What can we do with this knowledge?

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Ed Robinson President Founder Capacity Building
Solutions Inc. 301/624-5686 robin_ed_at_capacity-buil
ding.com http//www.capacity-building.com