boardsource profile of techsoup's 'co-ceo' model july 2011

The MyTh of GeneraTional Tensions 2

are Two — or even Three — heads BeTTer Than one? 4

GoverninG Toward The fuTure 8

froM raze To reBuild 12

Beach BuMMer 18

Insight and Ideas for Nonprofit Governance

Departments

eXecuTive’s corner 7 R asK our consulTanTs 16BooKMarK 17 R a Board MeMBer sPeaKs ouT 17

B o a r d M e M B e r®

VOLUME 20 | NUMBER 3 JULy 2011

2 ✴ Board Member® ✴ boardsource.org ✴ BoardSource ✴ July 2011 ✴

✴ f r o M T h e P r e s i d e n T ✴

In September, hundreds of nonprofit leaders will gather at the 2011 BoardSource Leadership Forum to discuss a critically important question: How do we chart the way forward for our organizations and their missions in our rapidly changing environment?

It’s a complex question, but one thing is clear: To succeed in a rapidly changing world, we

must first make sense of it. Unfortunately, the economic pressures of the past few years forced many of us to concentrate on our internal, financial issues rather than focus on our communities. Because our communities are the context in which we operate, it is critical to understand their changing realities and needs and then to come to grips with what that means for both how our nonprofits are functioning and how we are functioning as boards.

This includes but goes beyond asking how effective our meetings are, how well defined our roles are, or if we have the right policies in place. Governing toward the future requires us to challenge our status quo, welcome new ideas and experiment with them, consider and design new forms of leadership, identify these new leaders and prepare them for their new roles, ponder new governance and management models, consider expanding the narrowly defined concept of fiduciary responsibility for the wider concept of long-term sustainability, and be willing to learn from other sectors.

And it starts with envisioning our future. What will it look like if we do nothing different? What could it look like if we take conscious, intentional action to go from being just internally focused to examining the network we are connected to and creating new, vibrant organizations committed to realizing that future?

Governing Toward the Future

✴ T r y T h i s ✴

LINdA c. cROMpTONPres ident & CEO, BoardSource

Join the BoardSource Linkedin group www.linkedin.com/groups?gid=131626or follow BoardSource’s Twitter feed www.twitter.com/Boardsource

Providing leadership is the key is getting generations to work together.

“I’m tired of my generation being dissected by Boomers,” the 20-something young lady at the back of the room said, “as if I wasn’t in the room. How would you feel if a group of 130 Millennials were dissecting your generation — and you were one of only three Boomers in the room?”

She had an excellent point. The Boomers dissecting her and her generation were a group of people invited from business and academia to join key U.S. military figures in identifying its leadership development needs 15 years from now. The frustration of our Millennial was aired during a panel discussion that addressed the way young adults would be learning and processing training in 15 years. The panel did an excellent job of describing the generational differences that now cohabit the marketplace — great stuff about Boomers, Gen X-ers, and Gen y-ers (aka Millennials). One academic gave a masterful description of how technology has allowed a migration away from traditional lectures; our “information-pull” society is defining the pursuit of knowledge as “just in time, just enough, and just in case.” Generations, it was clear, view learning very differently: Baby Boomers read to retain, Gen-X-ers read just enough, and Gen-y-ers head for the Web or poll Facebook. The same academic made the provocative statement that students today would rather skip schooling and learn what they need to know on the job.

All this fed right into the Boomers’ fears, and there was an inevitable discussion about the work ethic of young adults and their inability to relate socially in a world where major transactions — breaking up with a girlfriend or boyfriend, confessing mistakes to a best

The Myth of GenerationalTensions

ANTONy BELLcEO and presidentLeader development, Inc.columbia, Sc

✴ July 2011 ✴ BoardSource ✴ boardsource.org ✴ Board Member® ✴ 3

friend, engineering some gathering — are often conducted as text messages. It was somewhere at this point that our exasperated 20-something broke into the discussion. She countered with the inevitable arguments of indiscriminate stereotyping, pointing out the evident discomfort that most Boomers have with rampant technology.

Unfortunately, both are right. Social media has at some level replaced direct social interaction; a greater dependence on social media does tend to make social interaction more awkward; and many Boomers have a hard time keeping pace with the bewildering pace of technological change.

But fortunately, all that doesn’t matter. At least, it doesn’t matter any more than any other tension in the workplace — whether it is gender, ethnicity, race, or simply personality. This isn’t to say that generational differences are not real, nor that we should ignore them. But it is to say that a much deeper issue is being obscured by the generational debate.

The big (real) issueThe deeper issue is poor leadership. This isn’t what Boomers want to hear (or, for that matter, Xers and yers in leadership roles). But there is plenty of research telling us that people quit bosses, not organizations. Millennials won’t quit because their Boomer bosses are technological dinosaurs. They’ll quit because they’re bad bosses. And Boomer bosses won’t keep their Millennials by becoming

technologically savvy. They’ll keep them by providing great leadership.

If you want to recruit younger people to your board (and retain them), the same truth applies: provide great leadership, and you will make generational issues irrelevant. And great leaders — both from the board and the executive suite — concentrate on articulating a compelling vision and seeking to understand the aspirations of the people they are recruiting.

Articulating a compelling vision presupposes having a deep passion for your organization’s mission, and for that, you need to know what accounts for your passion. Great boards are led by men and women whose passion is rooted in a strong and healthy self-awareness. They know their own strengths and weaknesses, but more important, they know their own personal aspirations and values. They know what matters to them, and they lead by values more than by charisma. Such authenticity and purpose, rooted in healthy self-awareness, is very appealing to X-ers and y-ers.

To their own self-awareness, great board leaders add an intimate knowledge of the aspirations and capabilities of the people they seek to recruit. They are students of the future leaders of their mission.

Great leaders take their cue from dorothy in The Wizard of Oz. She recruited three people to her team (or board) not by convincing them of the rightness of her own aspirations (getting back to Kansas), but by looking for a way to help them pursue their own aspirations in the context of her more immediate

goal (getting to the Emerald city). She didn’t cast aspersions on the Scarecrow’s aspiration for a brain, the Tin Man’s longing for a heart, or the lion’s insecurities about courage. But instead, she thoughtfully wondered how joining her in her pursuit could help them in their own pursuits. She was both self-aware enough to know her own aspirations and caring enough to listen to and accommodate theirs. She led a diverse group of people with aspirations very different from her own. But the obvious differences — generational, gender, and, well, species — didn’t interfere with her capacity to recruit and lead an effective team.

So what would I say to the 20-something young lady at the back of the room? I would — and when it came to my turn as a panelist, I did — tell her not to worry about secondary issues, such as generational tensions, but focus instead on the one issue that really matters: great leadership. Seek out and ally yourself with great leaders, I told her.

And to board members or chief executives recruiting 20-somethings, I’d give the same advice: pursue great leadership, and your board will become a magnet for talent across many generations.

ResouRce:

New Voices at the Table: Welcoming the Next Generation of Board Leaders; A BoardSource Toolkit. BoardSource, 2011.

✴ l e a d e r s h i P l e s s o n s ✴

Are Two — or Even Three — Heads Better Than One?“Yes,” say three co-chief executives.

“It’s lonely at the top” — or so say many chief executives of their leadership role. But what if you weren’t alone, if you shared the position with one or even two other people?

While relatively few nonprofits have co-chief executives, there are examples of successful partnerships at this level, including TechSoup Global (San Francisco), KdHX community Media (St. Louis), and Boys and Girls clubs of the portland Metropolitan Area in Oregon (B&Gc). Board Member recently spoke to daniel Ben-Horin of TechSoup Global,

Nico Leone of KdHX, and Lisabeth Marziello of B&Gc-portland to learn what prompted them to co-lead; to discuss the logistics, benefits, and challenges of co-leadership; and to gather advice for nonprofit boards and leaders considering this structure. “it can be a great thing for founders.” In 1997, 10 years after founding TechSoup Global (as compuMentor), daniel Ben-Horin no longer found his job satisfying. The organization had grown to the point where he was spending most of his time “shouldering the administrative burdens” that came with success and little time working externally, which

is what he enjoyed doing. “This was a real burn-out phase for me,” he says. “I felt I would not survive it unless there was some shifting of roles.”

Since then, Ben-Horin has worked as a co-cEO, first with phil Ferrante-Roseberry for almost 10 years and now with Rebecca Masisak and Marnie Webb. “The co-cEO model worked very well with phil,” explains Ben-Horin, “so the board and I decided to experiment with it further when he stepped down to take another position within the organization.” How do the three, who are about to reach their fourth anniversary



co-lead with Rebecca and Marnie, and phil before them, was an easy decision for me because I’d already worked with them as members of the executive team; they were known entities. Would I hire out for the position? I don’t know that I would do that. But this set-up has allowed me to continue working on the things that most interest me. It is a great thing for founders to consider if they are truly willing to share the leadership role.”

“it’s a great way to ease into a chief executive role.”Bev Hacker, now co-executive director of KdHX, is another leader who models a dedication to organization that is above ego. After spending several years at the helm of the media organization, improving its internal systems and business practices, she realized three things: (1.) the time had come for KdHX to expand its focus on its external community; (2.) she did not have the expertise needed to guide and manage that work; and (3.) Nico Leone, then general manager of radio operations and someone she had been working well with for several years, did.

“Bev initiated the transition to co-leadership,” says Leone, “which is an important reason why the board was comfortable with it. She and I also did a fair amount of research before approaching the board. This included having conversations with organizational development consultants and co-leaders in other organizations to get a sense of what worked and didn’t work and what issues they had run into.

“The board did ask us to develop a conflict resolution policy. While our first response — Bev can hit harder but I can run faster, so we’ll

as co-cEOs, divvy up the chief executive’s responsibilities? “It isn’t neat or set in stone,” explains Ben-Horin. “The basic division is commonsensical based on our areas of expertise, but nothing is siloed off completely. “We spend a lot of time together. There are a lot of decisions that we feel all three of us need to sign off on. That requires us to be truly collaborative and consultative people with each other, which means you sometimes don’t get your way. We try our best to express our views in the interest of the organization and trust each other to listen without a private agenda. It sounds a bit utopian but it works. you have to approach this kind of structure in the right spirit. If someone is angling for personal advancement, it’s not going to work. We’re trying to model collaboration and dedication to the organization that is above ego and hope that it permeates the organization.”

Ben-Horin is the first to admit that staff members do occasionally get confused about whom to go to for a decision, however. “yes, this does happen,” he says, “and sometimes, things don’t get moved forward or decisions don’t get made in a timely way because the staff members involved don’t feel they have full sign-off across the three cEOs. It would be disingenuous to say this isn’t a factor, but it’s a factor that we’re aware of.

“Having more than one chief executive is not a panacea; its great benefit is that it enables more intelligence at a high level to be applied to problems. But it depends on the collaborative nature of the people involved, which is not something that can be mandated in a job description. choosing to

work it out — was a bit of a joke, we haven’t encountered a problem that we’ve been unable to sort out. We make a strong effort to vocalize anything that is rubbing us the wrong way before it starts to fester, and we give each other feedback on what we can do better. Giving and being open to that feedback is critical. It also is important to us that the board evaluates us as a team and not as individuals. We don’t want to create the possibility of a situation developing that pits one of us against the other.”

In terms of duty and oversight, Leone oversees the more public functions of the organization — marketing, development, and programming; Hacker handles internal operations, including the financial, legal, and technological end of things. Everyone on the staff has a primary report. “We think this is critical, so no one is confused about which one of us to approach for assistance,” Leone says. “That’s not to say that we haven’t had a staff member try to play one of us off the other. There definitely are aspects of parenting that come into co-leadership!

“A day rarely goes by that Bev and I don’t talk, and we meet formally once a week. We have a pretty good sense of what falls within our own areas of responsibility and can be pressed forward on our own and what we need to sit down and hash out together. We do have different approaches to decision making, which is something we knew going in and have validated through personality and work-style testing with our full staff, but we tend to balance each other out. To make co-leadership functional, you’ve got to have a good sense of how each person communicates, works, and makes


decisions, and what each other’s hot buttons are. you’ll develop more nuanced understanding of each other over time, but this understanding is pretty critical to have upfront.” Only 34 years old, Leone considers co-leadership an effective way for a young leader to ease into a chief executive position. “Not to suggest that I don’t take responsibility for my actions and decisions, but it’s a different ballgame when the chief executive position is shared, whether in terms of stress, pressure, workload, or even having somebody at a peer level to talk to and bounce ideas off of. This structure provides flexibility, freedom, and support. It keeps Bev’s and my life more manageable and allows us to carve some time out for our personal lives, which is helpful and healthy. It also lets us focus on what we’re good at, those things we enjoy doing and get satisfaction from. Sometimes it’s hard for an organization to get everything it needs from leadership in a single person, particularly in a small organization where you don’t have specialized staff.“KdHX has gone through tremendous

change since Bev and I became co-leaders. We’ve made significant changes to our programming, launched a capital campaign, revamped all of our marketing and business architecture, implemented new processes, and been involved in several large national projects with the corporation for public Broadcasting. I don’t think any of these would have been possible and certainly not at the speed at which we’ve rolled through them if not for co-leadership. It’s allowed us to have executive level leadership on several serious projects pretty constantly over the past four years.”

When asked for advice on how to work with a board as a team, Leone says the key for him and Hacker has been to make sure the board thinks of, treats, and evaluates them as a unit. “Both of us present and interact at board meeting and are transparent with the members about what each of us does. We also communicate electronically with them between meetings rather than by phone so each other is in the loop.

The default is including the other. co-leadership would be difficult if we didn’t have a functional, trusting relationship with our board.”

“Together, we are able to connect to a lot of donors.”Joseph and Lisabeth Marziello have built their careers around serving as co-chief executives of Boys & Girls clubs in three different U.S. cities — thanks to a speech delivered by George Steinbrenner, the late owner of the New york yankees, at a B&Gc conference.Twenty years ago, while Lisabeth was working for a for-profit advertising agency and actively volunteering with B&Gc, she was inspired by Steinbrenner to work instead “for the good of the cause” with Joe, who was then the associate executive director of the B&Gc in Fullerton, california. “So we applied as a co-executive director team at the Boys & Girls club of Utica, New york,” says Lisabeth. “That’s where we started. But it was in Green Bay, Wisconsin, where people really began to recognize our strength as a team.”

Above, from left: Daniel Ben-Horin, founder and co-CEO of TechSoup Global; Bev Hacker and Nico Leone, co-executive directors of KDHX; Joseph and Lisabeth Marziello, co-chief executives of Boys & Girls Clubs of the Portland Metropolitan Area, with former Secretary of State Colin Powell.


operations, such as programming, finance/budgeting, facilities, and building and grounds; Lisabeth handles the external functions, such as marketing, public relations, board development, human resources, and new funding initiatives. The board evaluates them both as a unit and as individuals.

“We’re a good working team,” says Lisabeth, “because we trust and respect each other and know each other’s strengths and weaknesses. We first met when we were in college and have grown professionally together. In fact, we even share an office. When we disagree, we put on the tennis shoes we keep under our desks and take a walk to strategize and come up with a solution. And we don’t bring home to work, though we do bring work to home. It’s hard not to when you’re so passionate about what you do.

“Even though board members, donors, and staff have referred to us as ‘Mr. and Mrs. Boys & Girls club’ throughout our career, they also have commented that we don’t act like husband and wife on the job. Rather, we are role models, modeling a sense of family for the kids in our programs. There’s nothing mom and pop about us; we’re effective and efficient and deliver high-performing results, and that is what has won over the boards that we have reported to.”

ResouRce:

The Nonprofit Chief Executive’s Ten Basic Responsibilities by Richard c. Moyers. BoardSource, 2006.

In Green Bay, the Marziellos increased the organization’s budget and endowment significantly. “When we got there, the budget and endowment were $400,000 each, which is small,” Lisabeth says. “When we left, the budget was $3.5 million, and the endowment was close to $6 million. Because Joe and I are passionate about the kids and our mission, we are able to excel at raising funds. And, as a team, we have the ability to connect with a lot of contributors or donors. For example, if Joe personally connects with a donor more than I do, or vice versa, the donor has a choice of whom they want to build his or her relationship with — either Joe, me, or most time, both of us. This is an option that a single chief executive can’t bring to the position.”

It is the Marziellos’ ability to dramatically strengthen an organization that prompted the board of the portland B&Gc to hire the co-chief executives, and it hasn’t been disappointed. Lisabeth reports that she and Joe have increased the portland club’s operations by 221 percent and endowment by 288 percent, and they’re not done yet!

“The Marziellos are known for taking an organization from poor to great, financially and organizationally,” says Ken O’Neil, board member, “and our club has never been as strong as it is now. Their record speaks for itself, and, given the opportunity, any board would be foolish to not hire co-chief executives with this kind of prowess.”

Lisabeth and Joe have always divided the position’s responsibilities according to their areas of expertise and interest. Joe handles the internal

Is your board bored? Like many organizations, United church Funds is blessed with a board that brings valuable skills and experience to our meetings. Unfortunately, our classic fiduciary style of interaction was failing to mine the gifts our members bring to the table and, to be honest, boring our board.

Then we discovered generative thinking: a model of board engagement that opens the creative conduit and puts the power of all those skills to work for our organization’s future. After giving each staff and board member a copy of Governance as Leadership, we spent most of one meeting in energetic discussion of the fiduciary, strategic, and generative modes of board leadership. We agreed to add generative thinking components to our more traditional agenda, and our next meeting included all three governance modes. For the first time, we used a consent agenda to save considerable time and energy. We addressed several strategic decisions, then spent time in generative thinking.

We discovered that generative thinking does not come naturally for everyone but is instead a skill requiring practice. Members often wanted to reach a conclusion rather than allow for a free flow of ideas. For boards familiar with a more supervisory role — and for staff accustomed to a board that keeps its distance — developing comfort with the roll-up-your-sleeves style of creative, generative thinking will take some time.

But at United church Funds, our members remain committed to becoming a generative board. The value of garnering the best ideas from a great board will strengthen our work and mission for years to come.

A Spouse

dONALd G. HARTpresidentUnited church FundsNew york, Ny

http://www.boardsource.org/Bookstore.asp?Item=190


consider, for example, the charter schools that are challenging public education and after-school programs; the growth of artists who are working in for-profit entities rather than creating nonprofit galleries or performance space; and the Lc3, B corporations, and blended entities such as the Omidyar Network that combine for- and nonprofit enterprise and, through engaged/venture philanthropy, challenge established eleemosynary precepts to achieve social benefit. consider regional initiatives such as the STRIVE partnership in cincinnati, which is encouraging organizations

to align in terms of collective rather than individual organizational impact, and the increase in the number of cities pressing for formulas for payments in lieu of taxation. This later development appears to be more than the consequence of a decreasing tax base; it also may signal changes in norms and beliefs about the long-standing covenant between taxing authorizes and the nonprofit sector.

Where do nonprofit boards fit in these concerns and questions about today and the future? Are these issues on your board’s radar? What is the consequence if you don’t consider issues and questions such as these? Among the implications, four immediately emerge:

avoiding the tyranny of mission; the risk of confusing vision, mission, and strategyMission is the contemporary expression of an organization’s purpose; it is built on the values that drive it. Vision is what it will be like if the goal is attained; it is the force that holds people together in common endeavor. And, strategy is concerned with markets, competition, competitive advantage, and resources; it is the logic used to make the choices and tradeoffs necessary to relevantly pursue the vision and mission with impact.

Because mission is so deeply rooted in values, boards often struggle when changes in the external environment press for adaption. The tyranny of mission is seen in organizations relentlessly pursuing plans with aspirational goals that aren’t realistically aligned with evolving public needs, perception, or values; innovation; changing markets; competition; and resources. As the board of one of my client organizations asked of its management: don’t tell us what we can do, tell us what we can achieve equal to or greater than what we have demonstrated, including what it would take to do it, and nothing —including mission — is off the table.

The imperative of positive net financial margins and capitalizationOver the past decade, the work of researchers, The Nonprofit Finance Fund, and many of those involved in engaged philanthropy have demonstrated the consequences of poorly understood and deficient business models and undercapitalization. I’m often struck

What does the theme of the 2011 BoardSource Leadership Forum mean to you? We asked this question of several sector leaders who will be joining us at the forum in September.

There are stellar examples of nonprofit organizations making remarkable differences in this country. They have built or preserved untold national civic assets; advanced civil rights; improved circumstances for children, families, the elderly, and our planet; and made it possible for those who live in the remotest of locations to enjoy outstanding, live cultural performances, to name just a few of the many accomplishments. There is no question that the work of hundreds of thousands of organizations positively affects the lives of millions of citizens every day, every week, every year.

conversely, there is no denying that too many nonprofit organizations are not making a significant difference or underperforming in relation to need, public expectation, or their potential. There also are signs of public perception challenging existing covenants among nonprofits and society.

We see examples of new organizations and organizational structures challenging the mind-set and relevance of established nonprofits.

✴ G u e s t s p e a k e r ✴

Governing Toward the Future

FREd MILLERpresidentThe chatham Group, Inc.

www.boardsource.org/blf


with board members who say, when well into truly strategic or governance assessments, how much they didn’t understand about the financial drivers and their consequences and the difference this knowledge would have made in decisions. Inadequate cash flow, insufficient positive margin and reserves to fund reinvestment and innovation/growth limit the capacity of organizations to adapt and invest in the future. Focusing on building the balance sheet is as important as focusing on income and expense; a merely balanced budget is a canary in the coal mine for future distress.

assessing organizational independence with potential scale and impactHonest assessment of the alignment of vision, mission, programs, financial margins, capitalization, and impact provokes critical strategic questions: e.g., would an alliance for collective impact create greater public value; is the organization

fundamentally a program rather than an organization, and if so, should it merge, become acquired, or transfer its assets to another organization; does the value proposition attract the people, including board members, and funding to deliver at scale; can the market sustain the number of organizations in “the space?” Awareness of emerging knowledge is critical — such as a study commissioned by The columbus Foundation to assess that Ohio region’s Arts Market Sustainability. It found the current columbus arts sector viable as a whole but not sustainable given the current level of resources, immediately raising governance-level questions about viable strategies and what markets eventually decide.

ensuring the adaptive capacity of the boardEffective leaders in situations where fundamental change is needed begin by recognizing the adaptations they

must make, then determining what that means for their organizations. Recognizing that its external environment is profoundly changing, the board of one of my clients asked: To effectively govern, what will have to be different about our board in 10 years, and to get there, what will have to be different today? Like many leadership groups pondering such questions, the answers are most often in the composition and culture of the group and its capacity to have courageous discourse and action, not just in the group’s structure. Building adaptive capacity into board assessment is essential if boards are to provide adaptive leadership to govern into the future.

(Continued on page 10)


I have the privilege of leading Mobilize.org, an organization whose mission is to improve democracy by investing in Millennial-driven solutions. Our organization is entrepreneurial, innovative, and fast-paced. One of the opportunities and challenges that we face is to ensure that our leadership, at all levels, is able to respond to the needs of a growing organization. I like the phrase “Governing Toward the Future” because it’s very similar to what I try to do in my role as a chief executive, which is to lead toward the future. I think both phrases mean planning for what you’ll need (and what you want) while working with (and leveraging) what you have.

The most important factor that has allowed me to lead and plan for the future of Mobilize.org has been my partnership with the organization’s co-board chairs, Kari dunn Saratovsky and Stefan Hankin. day to day, I work very reactively, responding to my staff, funders, the press, partners, events, travel, etc. As I began to think about the true role of a chief executive — which is to think proactively about the mission, impact, and vision of the organization — I turned to Kari and Stefan. Together, we have developed a thought partnership as we’ve worked to envision the future of Mobilize.org.

Mobilize.org has been at the forefront of several strategic nonprofit collaborations

and recently negotiated several acquisitions. These opportunities have challenged the B.O.d. (as I affectionately call our board of directors) to govern toward the future and illustrate how important it is for boards to embrace the crucial role that they can and should play in aligning mission, increasing organizational effectiveness, and stewarding resources to ensure maximum impact.

In the past 18 months, the Mobilize.org budget has doubled and our staff size has tripled. In many organizations, this growth (while welcome) may have slowed the delivery of programs or adversely affected staff and performance culture. That did not happen at Mobilize.org. Under the leadership of and in partnership with our board, we had built scenario models, discussed consequences, and projected for the growth of Mobilize.org. When that moment came in January 2010, and we acquired the staff, programming, and assets of GenerationEngage, we were ready. And we’ll be ready again, as we make some exciting announcements later this summer.

In preparation for our recent wedding, my fiancé and I took dancing lessons. Among the instructor’s tips was this: Never plant both of your feet while dancing; doing so stops the momentum of the dance and makes it difficult to gracefully change direction. Leading a nonprofit is like dancing. By working proactively, governing for the future, and conducting visioning and planning exercises, Mobilize.org has been able to build and maintain its momentum, anticipate change, and take advantage of opportunity while remaining true to our vision.

Most governing today is reflexively tied to extrapolating past trends and projecting them onto the future. This has the effect of reducing stewardship responsibilities to the task of merely monitoring past benchmarks until they predictably reincarnate in the future.

To govern toward the future, this conventionality just will not do. Rather than projecting the past forward, we must project the future backward and apply ourselves to governing today against that future vision. This is required because the past assumptions that we have all grown accustomed to won’t apply as well in the future and are therefore less valuable as guiding tools of what’s to come.

On a global scale, examples of outmoded assumptions include predictability in weather patterns, in the availability and pricing of energy and food, and in the docility of poorly informed consumers. On an institutional scale, this means governing with guideposts that acknowledge: a) the dispersal of knowledge and decision-making power toward consumers and clients, b) the thirst of individuals for meaningfulness as employees, and c) the need for holistic approaches to stop “the war of the parts against the whole” and promote global sustainability, one institution at a time.

dAVId J. VIdALdirector of Research, Global corporate citizenshipThe conference Board

MAyA ENISTAcEOMobilize.org Board member, BoardSource


In addition to ever-present urgencies, boards must attend to the long haul. deliberations about the future seem like they can be postponed indefinitely, until tomorrow becomes today. Then, it’s often too little, too late. On the other hand, sight lines to the future are clouded as never before by the pace and unpredictability of change. As a result, strategic plans are quickly outdated. So what’s a board to do? Here are three suggestions.

First, look backward, not forward. Foresight starts with hindsight. Without common agreement about the past, boards are far less likely to reach consensus about the future. What best explains recent successes and setbacks? What has been the organization’s theory of change? What planned strategies materialized? What unplanned strategies emerged? The more boards (and staff) can make meaning of the past, the more likely story lines, clues, and patterns will surface to guide the future.

Second, board members need heightened sensing mechanisms — multiple means to detect precursors of change. Insights may result from institutional data, particularly leading indicators, or from intentional conversations among board members and staff about larger societal and generational trends and the political economy. However, the richest

sources lie outside the boardroom among employees, clients, suppliers, underwriters, public officials, and researchers. Board members should systematically gather and collectively analyze intelligence from people closer to the front lines. Insularity limits vision.

Third, board members and senior management need a large measure of humility. Most post-mortems on the recent collapse of the economy generally and Wall Street more specifically pinpoint undue confidence and unwarranted certainty as the central problems. perhaps even more relevant, a study of “Expert political Judgment” by philip Tetlock (princeton University press, 2005) concluded that “the dominant danger” associated with erroneous predictions and judgments was “hubris…the vice of closed-mindedness, of dismissing dissonant possibilities too quickly.” With the future so unforeseeable, sureness and “all-in” wagers seem particularly ill-advised. prudent boards will be open to counterarguments, contradictory data, paradoxical scenarios, and, yes, incrementalism. Board members will practice “self-subversive thinking” to borrow a phrase from Tetlock. Boards most certain about the future will probably be most mistaken.

editoR’s note:What does the phrase “Governing Toward the Future” mean to you? Send your thoughts to [email protected].

ResouRce:Transformative Governance: Insights on Nonprofit Governance from Linda Crompton of BoardSource. http://www.boardsource.wordpress.com

RIcHARd p. cHAITResearch professor Graduate School of Education Harvard University

www.boardsource.org/blf

12 ✴ Board Member® ✴ boardsource.org ✴ BoardSource ✴ April 2011 ✴


reach 31 members — was more of an observer than a strategic partner. Absolute confidentiality on delicate subjects was almost impossible, and a lack of term limits allowed little opportunity to bring on new members who could add value and expertise while challenging ideas. In a nutshell, the board was not performing its basic fiduciary responsibilities and needed to be restructured. As the chief executive, Jim Hinton, said, “presbyterian’s governance system was seen as a liability, not an asset.”

The governance transformationThe board began addressing its effectiveness by exploring the meaning of governance and the background and traits of an ideal board member. A key outcome of its discussions was the formation of a task force responsible for recommending initiatives necessary for a successful restructuring process. The ultimate goal of the task force was to ensure that the restructured presbyterian board became and remained a reflection of governance excellence.

Over the course of a year, the task force guided the board through a transformation that

• required all current board members to submit their resignations to be effective at the end of the year

• identified board members’ current level of commitment to serving on the board as well as potential candidates

• required all current and potential members to submit resumes and be interviewed to serve on the transformed board

• enhanced the membership of presbyterian’s other boards and board committees

• established a governance committee responsible for governance processes at an enterprise level

• yielded a diverse, balanced, effective board with 11 members, only six of whom served on the “old” board

The interview process was presbyterian’s initial foray into the world of competency-based governance. We designed the interviews to identify candidates who had the attributes, skills, and knowledge to govern effectively. Among the questions we asked: Why are you interested in serving on the enterprise board or another presbyterian board? What talents do you possess that will enable you to further presbyterian’s goals? What are your areas of interest? do you have experience serving on a board? And what do you think are the most important issues facing health care? We also evaluated skills surrounding strategic planning, organizational design, change management, technology, financial control, marketing, human resources, governmental affairs, leadership, and teamwork.

Wondering how to transform your board? Presbyterian Healthcare Systems tackled the process by requiring all of its members to submit their resignations…and that was just the beginning.

It is not an understatement to say that presbyterian Healthcare Systems (presbyterian) is a large and complex nonprofit. Founded in 1908 in New Mexico, it exists today to improve the health of patients, members, and the communities it serves. It is the state’s only private, nonprofit health care system and the largest provider of care, with seven hospitals, a statewide health plan, a growing multi-specialty medical group, and more than 9,000 respected employees. Its governance structure is composed of five boards of directors, eight boards of trustees, and one board of directors with fiduciary responsibility for the overall enterprise.

While the enterprise’s structure has changed several times over the years, it was not until the early 2000s that our boards of directors started to implement changes of their own to better meet the strategic needs of the overall organization.

The transformation began with the board of directors responsible for the overall enterprise. Until the early 2000s, this board grew in a linear fashion as members who represented presbyterian’s various communities were added. This approach resulted in a board that due to its size — 24 to 27 members with the potential to

MARy WIcKER director, Business Integrationpresbyterian Healthcare ServicesAlbuquerque, NM

Lessons LeArned

Presbyterian’s transformation to a competency-based governance model would not have occurred if it had not chosen to learn from past mistakes. If your board is considering adopting a competency-based model, the following guidelines can be helpful:

• Be mindful of the current and future

focus of the industry and organization.

• Gain stakeholder input.

• Link the competencies to best-known

governance practice.

• Hold board members accountable for

fulfilling competency expectations.

• Keep it simple.

has the necessary expertise to fulfill its fiduciary responsibilities and ensure that presbyterian’s mission is achieved.

The key steps of the Governance Excellence Maintenance cycle are

• identify the need to fill a current or potential vacancy on the board

• determine the individual competencies for which to recruit

• identify candidates who may possess the necessary competencies

• confirm a candidate’s interest and ability to serve

• conduct interviews that focus on the candidate’s resume and needed competencies (board members whose terms are ending and

are seeking reappointment are evaluated on these qualities rather than interviewed)

• recommend approval of the nomination and subsequent appointment of the ideal candidate

• evaluate and develop board members based on both the required competencies and individual competencies for which he or she was recruited

Once the GEMc was finalized, the governance committee presented it to all presbyterian boards. Use of all supporting tools, in terms of format and expected level of content, was non-negotiable. Required competencies also were

In many cases, the need for a diverse, balanced board superseded the selection of several very strong candidates. For example, of two bankers in the community who were interviewed, the board selected only one to avoid a finance-heavy board. After more than a year of using a purposeful selection process, the transformed board, as well as a newly established governance committee, was in place.

sustaining and spreading the transformationWhile the enterprise board focused on developing its collective effectiveness, the governance committee focused on spreading competency-based governance to the rest of presbyterian’s boards. The first step was to refine the tools and processes used to identify and select the members.

The committee established two sets of competencies: required and individual. Required competencies are considered a “threshold” for being a potential candidate and pertain to knowledge in the areas of governance and the health care industry, communication skills, and attributes reflective of integrity, dedication, and continuous learning. Individual competencies are considered areas of expertise that, in total, support presbyterian’s strategy and reflect the knowledge base required to govern a presbyterian board.

The committee then translated both sets of competencies into processes and tools used to recruit, select, and develop board members. Tools include job descriptions for board members, interview questions, nomination forms, evaluation forms, and development plans. We then aligned these tools and processes with the required competencies and incorporated them into what presbyterian calls its Governance Excellence Maintenance cycle, or GEMc (see illustration). The purpose of this cycle is to help every board maintain an optimal balance of members so that the board as a whole


GoVernAnCe eXCeLLenCe MA I nTenAnCe CYCLe

RecRuit

• Use Individual Competencies• Inventory to determine need• Review resume• Use Interview Competencies based on current knowledge• Identify Individual Competencies based on resume

Assess Needs

• Identify unique skills/knowledge of member/candidate• Complete competency inventory to determine need for recruitment and/or nominate existing members for reappointment election

evAluAte

• Review attendance at meetings and educational events• Rate required individual competencies• Complete individual Development Plan• Ask (re)nomination interview questions• Complete board evaluation

set expectAtioNs

• Review the board member job profile• Clarify required competencies• Clarify desired individual competencies

themes of RequiRed competeNcies

• Government Knowledge• Healthcare Industry Knowledge• Integrity• Dedication• Communication• Continuous Learning


legeNd

Healthcare; Clinical Quality

Community; Political

Customer Satisfaction

Transformation; Innovation

Corporate Leadership; Governance

Finance; Legal; Regulatory

Process Improvement

I nd I V IdUAL CoMP eTenCY WHeeL

considered non-negotiable, but the individual competencies could be modified to reflect the community. For example, we expected a board serving a smaller community to have a member who was the leader of a small to midsize organization rather than a member who led a highly complex organization.

To ensure that the GEMc was successfully implemented, we guided the boards and their governance committees through each piece of the cycle until their level of comfort with the processes and tools had progressed from dependence to interdependence.

Transformation as a continual processThe GEMc became part of the standard governance work for every presbyterian board and changed presbyterian’s overall governance system for the better. However, after using it in its original form for five years — years in which the state of the health care industry and presbyterian changed significantly — it was time to ask: Given all these changes, did the GEMc need a change?

We decided to gather feedback from all presbyterian board members, learning of both the GEMc’s value and opportunities for improvement. While the various boards were finding the use of competencies helpful in maintaining a balanced, diverse board, the tools for assessing current and needed individual competencies were not as helpful. In fact, our board members found them excruciatingly complex.

The chairs, vice chairs, executive management team, and staff support for each board then convened to discuss a proposal for facilitating — rather than complicating — the process to identify recruitment and development opportunities. The first agenda item was the need for standardized individual competencies that better reflected the current focus

and future direction of presbyterian. Given presbyterian’s more deliberate approach to being an integrated delivery system, it seemed appropriate that we standardize individual competencies for all boards, regardless of geographic location or the size of the community served. This would support the system focus and aid in every board’s succession plan.

The second item discussed by the group was the tool used to assess the 15 individual competencies, which was a grid. To facilitate the recruitment process, the group decided to decrease the number of individual competencies to seven and replace the grid with a wheel. Our boards now use the individual competency wheel (see illustration) to assess their current compositions as well as identify desired competencies of potential candidates by aligning names with the individual

competencies they exhibit.

presbyterian continues to improve its competency-based approach to governance. currently, we are redesigning the process for developing individual development plans to include both individual and peer input, exploring a competency-based approach for selecting board committee members, and developing a process for annually reviewing the validity of both required and individual competencies.

editoR’s note:

This article was adapted from Trustee, by permission, November/December 2010, copyright 2010 by Health Forum, Inc.

ResouRce:

The Board Building Cycle: Nine Steps to Finding, Recruiting, and Engaging Nonprofit Board Members, Second Edition, by Berit M. Lakey. BoardSource, 2007.


http://www.americangovernance.com/americangovernance/publications/T_workbooks.html


A Spouse

OUTI FLyNNdirector of Knowledge ResourcesBoardSource

our governance committee just recommended that the board invite someone who is related to a current board member to join our

board. is this an accepted practice; does it invite problems?

Effective governance can become a victim of nepotism when family members or close relatives work or serve together. The mere situation of having multiple family members

affiliated with the same organization can raise questions concerning accountability, conflict of interest, and an individual’s ability to make independent decisions. The board must be sensitive to these concerns.

One of the benefits of a diverse board is a multitude of perspectives. This kind of board tends to welcome new ideas and nontraditional thinking. Family members or even close friends who are eager to serve on the same board often share objectives. In a small group setting, this approach may hinder innovation and keep the board from exploring new avenues. To avoid nepotism, the board should pose the following questions:

• do we have well-defined criteria for board service? Are these applied to each candidate? Are we choosing candidates for their individual qualifications?

• Is the nomination process producing candidates whose qualifications and motives are genuine?

• do we have good processes in place to promote independent decision making?

• can we trust that couples and family members leave personal issues outside of the boardroom?

• can we discourage the formation of cliques by not recruiting couples or family members?

A

Q• Is our board small enough to be vulnerable if family

members with similar interests make decisions? Are we limiting diversity on the board by inviting members of the same family to join the board?

• If one member of a family or couple leaves the board will the other one follow suit?

• Is it unfair to focus on established relationships? couldn’t similar challenges affect other close friendships formed before or during board service?

• Are we discriminating against candidates on the grounds of their family or marital status?

It is perfectly understandable that in family foundations the board includes numerous family members from different generations. However, family foundation boards also should embrace diversity and bring in outside members to help balance and facilitate potential internal dilemmas. Similarly, some nonprofits are founded by a couple working together. It is not necessary for both to serve on the board as voting members, however. There are many other ways founders can be involved without turning the nonprofit into a family enterprise.

ResouRces:

“diversity, diversity, Everyone Wants diversity” by Terrie Temkin. Nonprofit World, September/October 2009.

Managing Conflicts of Interest: A Primer for Nonprofit Boards, Second Edition, by daniel L. Kurtz and Sarah E. paul. BoardSource, 2006.

The responses to the “Ask Our Consultants” questions are based on our consultants’ experience working with nonprofit boards throughout the country. If you would like to improve your board’s effectiveness, please consider contacting BoardSource’s consulting team for assistance via e-mail ([email protected]) or call 877-892-6293.

http://news-business.vlex.com/vid/diversity-everyone-69154252



Leadership transitions can be difficult at any time, but the challenge was magnified for the Memorial Health System board when, in a very short time span, we lost not only our chief executive but also our chief nursing officer and our chief financial officer. As a result, not only did the board need to ensure that these positions were filled with excellent candidates who would be able to provide vision and direction during an uncertain time, but it also had to manage any negative perceptions of the organization caused by such a large change. Although it wasn’t actually the case, to some, it looked like all the captains were fleeing a sinking ship!

To compound the situation, the board was aware that it needed to walk a fine line between its fiduciary responsibility to the community stakeholders and its responsibility to govern the organization. Boards exist to provide advice and guidance; it is the paid staff’s responsibility to run the operation on a daily basis. And yet, in a situation such as the one we faced, it can be difficult to resist the temptation to manage day-to-day business. Although at times it was a turbulent process, the board navigated the leadership transition successfully and with grace. And we did so by staying focused on our role and the mission of the institution.

MIKE L. EdMONdSBoard MemberMemorial Health System colorado Springs, cO

Generate Buzz!

✴ b o o k m a r k ✴

The term “strategic communication” describes the combination of plans, goals, practices, and tools with which a nonprofit organization sends consistent messages about its mission, values, and accomplishments. For board members, strategic communication involves big-picture thinking, a clear understanding of appropriate roles, and hands-on participation when appropriate. Specific roles for the board include the following:

• Provide the vision that guides communication strategy. Because the board’s job is to articulate and translate mission and purpose, it must have a clear view of the organization’s image, both actual and desired.

• engage in regular strategic planning. While the board usually does not have extensive hands-on involvement in developing a strategic communication plan, it does participate in the overall strategic planning process, which provides the framework for communication planning. A board member may serve on a strategic communication planning task force, and, in smaller organizations, the board may be more involved in the actual planning process.

• dedicate resources to implementing the strategic communication plan. Nonprofits should resist thinking it’s unwise to spend scarce resources on communication. Strategic communication can help ensure that the organization is making efficient use of staff time and expertise, even if it has limited funds. It also can lay the groundwork for generating increased support and ensure that even a small organization uses consistent messages to reach its most essential audiences.

• Monitor the impact of strategic communication efforts. As part of its responsibility for monitoring the overall impact of the organization and its work, the board ensures that strategic communication objectives are being met. It also should identify when existing communication approaches are no longer working and challenge itself and the organization to be open to new ways of thinking.

• Participate in repositioning the organization. When crises arise, new opportunities present themselves, or old strategies no longer work well, the board should support the chief executive’s efforts to re-examine the communication plan, safeguard the organization’s integrity and reputation, and take positive action. Board members should provide leadership for repositioning the organization, branding, and refining communication strategies and messages.

Learn more about these roles in BoardSource’s newest release, Generate Buzz! Strategic Communication for Nonprofit Boards, Second Edition, by Sally J. patterson. BoardSource, 2011.



✴ c a s e s t u d y ✴

Beach Bummer organization’s office. Frank peeked around the partition that provided a modicum of privacy but absolutely no sound absorption to see Millie, the organization’s board chair, peering into the office. “Hey you,” she said as he opened the door. “What are you doing here?” “Just trying to get some of my paperwork done when it’s quiet,” he replied. “I’m here every Sunday afternoon. Right now, I’ve got a grant proposal on my desk.”

“can’t that wait?” asked Millie. “It’s a beautiful day to actually enjoy a beach.”

“Nope,” Frank shot back. “The deadline is tomorrow, and I’m the development staff, remember?” What he didn’t, but was tempted to, say was, “and the volunteer manager, the director of education, and programming chief.” Thank goodness for Sarah, his assistant. But the

fact was, after six years, Frank had reached his breaking point.

“Actually, Millie, I’m glad you stopped by,” Frank said. “Let’s sit and discuss what Big Island Beaches is going to do when I leave in three weeks.”

“What are you talking about?” a shocked Millie replied. Frank took a deep breath and told Millie his news: On Friday, he had accepted a position with another nonprofit. “As much as I love Big Island Beaches and am excited about our new education center, I can’t keep up the pace any longer. This is a 24-7 job, Millie, and I’m worn out, simple as that. So, if you have a few minutes, let’s talk about next steps.” What might those next steps be? And what could have been done to prevent this situation?

Maybe Big Island was just too big. Or maybe the executive director position was just too big a job. Whatever the reason, Frank was exhausted. Here it was, a Sunday afternoon, and, once again, he was shackled to his desk. And this was after he had spent all day Saturday supervising a group of people who had volunteered to pick up debris along an isolated stretch of beach and Friday night hosting a fundraiser for the organization. Big Island Beaches was raising money for an education center to be built on waterfront property that had been donated to the organization. The ground-breaking was scheduled for next month. As Frank sat at his desk, he was feeling nostalgic and reminded himself that he had reason to be proud: His hard work raising awareness of the need to preserve the island’s beaches was about to pay off. Suddenly, there was a knock on the storefront window of the


GINNETTE cLARKBoard chairSpina Bifida Association of Northwest OhioMaumee, OH

The good news is that Millie and the board now have the opportunity to re-evaluate the executive director position and possibly add positions to meet the demands of the growing nonprofit. The bad news is that she and the board must find a way for the organization to keep up with Frank’s workload until a replacement is found. Millie should sit down with Frank as soon as possible to review his responsibilities and learn what exactly he is working on. In addition to a list of current projects, she should ask for a list of upcoming projects to ensure that deadlines are met and nothing gets forgotten in the transition to new staff. Millie then should assess these project lists and determine if she can coordinate volunteer staff to handle them on a short-term basis. She and the board also need to begin the process of looking for a new executive director. The board should have kept better track of the number of hours that Frank was working to adequately evaluate his needs. Frank should have told Millie about his work load as well. If either of them had communicated with each other a little better, a solution could have been found before Frank felt the need to quit.

ResouRce:

Assessing and Supporting Your Chief Executive; A BoardSource Toolkit. BoardSource, 2010.

This chief executive and board have been playing a game of “don’t ask, don’t tell.” It’s a losing game for both sides and can be avoided if everyone does his or her job. A lot of chief executives, particularly in small nonprofits, think it’s their job to do all the work. Not quite! It’s their job to make sure the work gets done and to be accountable for that work. Unless the nonprofit is very small, that means most of the work must be delegated to paid staff and volunteers. A chief exec-utive who can’t or won’t delegate hurts the cause. Martyrs shortchange their boards, organizations, and missions. Board members who think that their job is to simply show up at meetings and enjoy the organizational successes from the sidelines enable martyrs like Frank. It’s not always a comfortable role, but board members’ ultimate responsibility is to the organization and its mission. That requires understand-ing the scope and intensity of the work and helping the chief executive find and fund appropriate resource needs. What’s done is done. Frank is not going to stay. Trying to persuade him will only prolong the agony. Instead, Millie should call an emergency meet-ing of the board and appoint an acting chief executive, who almost certainly will be a board member. Starting immediately, the acting chief executive and anyone else on the board who has the time to pitch in should download all the institutional knowl-edge they can from Frank. That will help with the transition, but it will also help ensure that the game of “don’t ask, don’t tell” ends immediately.

NIyANTA SpELMANExecutive directorRainforest partnershipAustin, TX

Too often, highly committed nonprofit executives find themselves trapped in a cycle of “pleasing” the board rather than leveling with them about what it really takes to get the job done. Typically this occurs when board leaders are swept up in a passionate vision for a project that clouds their ability to assess and plan for the resources needed to meet the goal. To prevent this all-too-common scenario requires a commitment by the board and chief executive to honest and open com-munication and the setting of realistic expectations. The board chair’s role is to forge a professional working relationship with the executive. With Frank leaving a week before the ground-breaking, Millie has no time to waste. Together, they must assess the work to be accomplished in the coming three weeks and create a plan to ensure priorities are addressed. The board’s executive committee must meet to determine a transition plan and hiring process and craft a communica-tion plan. The committee should consider hiring an interim director to oversee the organization until a new leader is hired. A natural choice would be Frank’s assistant, Sarah, or an experienced consultant. The full board must discuss the situation, approve the transition plan, and deter-mine where individual board members can provide support. Key funders, con-tractors, and other partners must be noti-fied and provided with assurance that an effective plan is being implemented. It is imperative that the board hold an exit interview with Frank to learn what could have been done to prevent this situation and determine what changes are needed to prevent the next executive director from burning out in the same way.

MARy ELLEN JAcKSONExecutive directorNew Hampshire center for Nonprofitsconcord, NH

http://www.boardsource.org/Bookstore.asp?Type=ebook&Item=1118

®

BoArd oF d IreCTors

david nygren (chair)Principal, Nygren consulting

roxanne spillett (vice chair)President, Boys and Girls clubs of America

anne cohn donnelly (secretary)Clinical Professor, Kellogg School of Management, Northwestern University

John s. Griswold, Jr. (treasurer)Executive Director, commonfund Institute

linda c. crompton President and CEO, BoardSource

Maya enista Founder & CEO, Mobilize.org

carol Goss President & CEO, The Skillman Foundation

Phillip henderson President, Surdna Foundation

aaron hurst President, Taproot Foundation

Philip r. lochner, Jr. Director, cLARcOR Inc., cMS Energy corp., and crane co.

Kimberly roberson Program Officer, charles Stewart Mott Foundation

edward B. whitneyDirector, American Rivers, IRRc Institute for corporate Responsibility, The Wilderness Society, Early Music Foundation

sylvia yeeVice President of Programs, Evelyn and Walter Haas, Jr. Fund

EditorAnne Atwood Mead

contributing Editorsdeborah davidsonOuti Flynn

creative directorMonica Luchak

designerJason Lavinder

Board Member® (ISSN 1058-5419) is published digitally six times a year and distributed every eight weeks by BoardSource, 750 9th Street, NW, Suite 650, Washington, dc 20001-4590. Tel: 202-452-6262; fax: 202-452-6299; [email protected]; www.boardsource.org.

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