Operating in a Systems World – What’s a Board to Do?

Posted on May 31, 2016 by VMS

Today’s nonprofit organizations operate in a systems* world. Executive Directors who appreciate this reality spend significant time in the community sitting at systems tables and engaging in collaborative initiatives. Two major drivers of this external work include ambitious organizational visions and changing funder expectations. While senior nonprofit leaders are immersed in systems level work, what is the board’s role from a governance perspective? In this blog we explore some of that ways boards can think, act and govern differently to support their organization’s systems level work.

Many charitable organizations have articulated bold visions for community change that they cannot accomplish alone. Realizing these visions requires working with other system actors – individuals and organizations –across sectors and in some cases across geographic boundaries. By extension, organizations and their boards need to understand the broader system and engage more actively beyond the boundaries of the organization.

Traditionally boards have focused internally on organizational performance, health and stewardship. Such an internal focus doesn’t necessarily enable the organization to realize a bold vision. It’s time for boards to adopt a system mindset. This begins by better understanding the broader systems that their organization is a part of, and exploring how their organization’s contributions compare to, and complement, work being done by other organizations. Encouraging and supporting an organization to map service systems and actors in order to identify complementarities and duplication can be a good place to start.

Government funders are thinking more about how to improve the systems they have inadvertently created through historic funding practices. They have two significant concerns: first, many service systems are difficult to navigate, and secondly, government is unclear about its return on investment, and whether investments of public funds are making a difference. In an era of fiscal constraint, improving efficiency and effectiveness have become government mantras. Funders also want to know which organizations deliver results. Demonstrating impact based on evidence is an increasingly important aspect of sustaining funding. Part of the board’s work involves ensuring the organization allocates resources to evaluate the effectiveness of the organization’s programs and services.

Some government funders are asking grantees to consider how they contribute to systems change. Nonprofit organizations and their boards are challenged to assess what their organization, and others, do best. Many organizations, like the service systems they work in, have evolved organically, adding programs when new funding is available. This has led to diversification and a proliferation of multi-service agencies, some of which have strayed from their original mission and area(s) of expertise. In a competitive funding environment, where administration funding is scarce, some agencies rely on a patchwork of program funding to keep the lights on. This can make it difficult to acknowledge when another agency may be in a better position to take the lead on a new initiative. Yet in the interest of better system and community outcomes, organizations need to consider divesting some programs, collaborating differently, and focusing on core areas of expertise (see Wei-Skillern’s 2014 article).

Board members, as representatives of the community, may be well positioned to help an organization see itself in the context of the broader system. The board can support the organization in questioning assumptions and making tough decisions. What does the community need today? What is the organization’s core expertise? What does the organization do well? In some sectors, such as child welfare, government has directed organizational integration to rationalize and improve access to services. More recently, the provincial government introduced a “lead agency” model in children’s mental health. This outsources the challenging task of determining how to allocate funding to lead agencies working within the system. This model may give children’s mental health agencies more input into how to improve and rationalize the service system in the interest of children and families.

Mindset shift: from a focus on the organization to a focus on cause

Individuals vary in their ability to see and think about systems in part because it’s not widely taught. Making the system visible through mapping is one way to accomplish this. Other frameworks, processes and tools can assist people in seeing the system and shifting their focus from the organization to the issue it is trying to address.

When David Hughes was President and CEO of Habitat for Humanity Canada, he shared diagrams similar to the ones below when speaking at a session in Toronto. He indicated he used these to encourage and remind his board and staff to shift their focus from the organization to the cause; and to see the organization as part of a system of actors interested in solving a common problem related to Habitat’s Mission (this reflects Freiwirth’s Community-engagement Governance framework). These visuals are highly simplified maps of system actors.

The image on the right, with the cause at the center, reflects a “Collective Impact” approach. Collective impact involves bringing actors from different sectors together to clearly define a problem and common agenda (or cause); identify bold goals and shared measures; and explore how different actors connect and make distinct contributions. This work helps all involved “see” and better understand the system(s) they are part of. This approach is being used in Canadian communities to address poverty and create vibrant communities. Collective impact relies heavily on data collection and analysis to assess what is happening in the system, determine what’s working well/less well, and to surface emerging patterns. Benefits of being part of such an initiative include access to robust information about the cause and gaining a better understanding of other actors in the system and how each is addressing the problem. If an organization participates in a collective impact initiative, as governance leaders, boards should consider a variety of questions, such as: what areas should the organization take a leadership role in? What risks might the initiative expose the organization to? What role is our organization taking in the governance of this initiative? Does a memorandum of understanding clearly define the contributions of all parties?

The image on the right identifies clients as one of the system actors or stakeholders; and Freiwirth suggests they are the primary stakeholders in an organizational system. This reinforces that boards need to find ways to understand clients’ perspective on the organization and the systems it operates in, in the interest of better meeting their needs. While some organizations survey clients periodically and share the results with the board, others engage clients more actively in organizational decision-making. Some organizations engage clients in examining issues and co-designing solutions to the challenges they experience. Other organizations recruit clients and people with lived experience onto the board to ensure their experience influences decision-making. Boards that do so generally adapt their processes and support individuals with lived experience in sharing their experience and voicing their perspectives in the boardroom, a space that is intimidating for some.

Environmental scanning is a key tool that can help an organization, or group of organizations, identify and determine how to respond to systemic trends and forces impacting their cause. While many organizations scan the environment periodically as part of strategic planning processes, board members may be well-positioned to help an organization monitor and reflect on changes in the external environment on an ongoing basis. EDs and CEOs can share relevant information with their boards and invite boards to share their external perspectives and to anticipate the unintended consequences of proposed responses. Joint environmental scanning initiatives can be particularly efficient and effective in helping organizations understand the system as they benefit from the knowledge, information and perspectives of different system actors (our blog EnviroScan21 describes such a process). A board might host a joint symposium where the boards of different agencies can collectively explore the results and implications for different organizations and the system.

In a systems world boards have an important role to play in helping an organization focus on and understand the broader system. Some of the board’s work involves engaging with others in the community who share common cause. It is also about having different conversations in the boardroom –inviting all to focus on the cause and the system.

Questions

What critical conversations and questions do boards need to engage in related to governing in a systems world? The sample questions below are crafted for organizations that are just starting out, and those that are actively engaged in this process.

Fiduciary (oversight)

Strategic (insight)

Generative (foresight)

Do we have the skills, knowledge and resources to govern in a systems world? What do we need to learn more about?
What due diligence and risk analysis should we do before entering into collaborative initiative?What might be the opportunity cost of moving in this direction?

Who shares common cause with us that might help us accomplish our vision?

Who would benefit from our adopting a stronger systems orientation?

To what extent will participating in this collaborative initiative help us shift the system and meet our organizational goals?

What is our unique contribution?

What spaces might we create or participate in to engage others in thinking about the system?

How might we govern from the bottom up? Who else needs to have a role in governance and how might we engage them?
How might we govern with the system at the center?As the systems we work in become more integrated, how might we need to adapt our approach to governance?

*Definitions of “system”

“A system is a configuration of interaction, interdependent parts that are connected through a web of relationships, forming a whole that is greater than the sum of its parts.” (Holland, J. (1998) From Chaos to Order. Addison-Wesley.)

“Systems are composed of multiple components of different types, both tangible and intangible. They include, for example, people, resources and services, as well as relationships, values, and perceptions.” (p. 7, Abercrombie et. al, 2015).

Sandi Trillo and Ruth Armstrong, VISION Management Services

Recommended resources and references

A framework for evaluating systems initiatives. Build strong foundations for our youngest children. Julia Coffman. August 2007.

Collective impact. John Kania and Mark Kramer. Stanford Social Innovation Review, December 2010.

Engagement governance for system-wide decision making. Judy Freiwirth. Nonprofit Quarterly, Summer 2007.

In collaboration actions speak louder than words. Jane Wei-Skillern. Stanford Social Innovation

The Networked Nonprofit. Jane Wei-Skillern and Sonia Marciano. Stanford Social Innovation Review, Spring 2008Review, Spring 2014.

System mapping: A guide to developing actor maps. Srik Gopal, Tiffany Clarke. FSG publication. December 2015.

Systems change: A guide to what it is and how to do it. Rob Abercrombie, Ellen Harries and Rachel Wharton. New Philanthropy Capital (NPC) for the LankellyChase Foundation. June 2015

The Systems Thinker – online magazine: https://thesystemsthinker.com/

Vibrant Communities initiative: http://www.vibrantcommunities.ca/

O Leader, where art thou?

Posted on March 29, 2016 by VMS

We have been talking about succession planning* in anticipation of mass leadership transitions for nearly a decade in the nonprofit sector. When the subject arises, rather than pushing the panic button we tend to shrug our collective shoulders. How concerned do we really need to be? Numbers from “Shaping the Future – Leadership in Ontario’s Nonprofit Labour Force” are telling:

Nonprofit sector leaders
68% are between 45-64 years of age 72% are women 73% have a bachelor of arts or more (30% have a professional degree, master’s or PhD) 79% earn less than $100,000/year

In 2013, only 34% of organizations had a succession plan in place. That year, 55% of management hires came from within the nonprofit sector. Although 63% of organizations identify high performers, 44% of organizations reported losing high performers due to a lack of leadership opportunities. Perhaps more concerning, 27% of qualified internal candidates indicated they would NOT be interested in taking on the top job, a role that many associate with stress, overwork, burdensome administration, and under-compensation.

When the Chief Executive Officer (CEO) begins to think/talk about retirement, leadership transition planning should be underway. The information above could inform an organization’s approach to succession planning and leadership transition.

Nancy Axelrod urges boards to take a broad and integrated view of leadership succession planning. She notes that it, “Is not only about determining your organization’s next leader, it is a continuous process that assesses organizational needs, and creates a climate for an executive to succeed. An effective succession plan is linked to the organization’s strategic plan, mission and vision…”

What’s an organization/board to do?

At the system level, boards and leaders need to make leadership in the nonprofit sector more attractive to next generation leaders. This requires gaining a better understanding of what appeals to and motivates leaders from inside and outside the sector. Negative perceptions about various aspects of the role suggest the structure of organizational leadership might need rethinking, so that incoming leaders can succeed in demanding, multidimensional CEO roles.

At the organizational level, boards need to ensure that leadership skills and critical competencies are developed and nurtured throughout the organization. Strategic plans often highlight key skills and talents related to the implementation of strategic priorities. These competencies might be developed internally and/or recruited externally.

Three options

Hiring the right CEO is one of the most critical governing responsibilities any board undertakes. Boards must think carefully about what stage of development their organization is at and what type of leader they’re looking for – an innovator, builder, maintainer, transformer and/or collaborator?

Faced with the prospect of replacing a CEO, the board invests significant time and effort considering and implementing one of three options: hiring from within, hiring from without, or using the transition as an opportunity to restructure the organization and acquire a new CEO through integration. Considerations associated with each option are outlined below.

Hire from within

Opting to promote someone from within the organization to replace a CEO might be informed by several criteria. Organizations that are values-driven, effective and have a clear sense of their future would more likely sustain their trajectory by promoting an internal candidate. Often these organizations have been deliberate in using succession planning as a way to cascade values throughout the organization and to evaluate and develop staff (e.g. through formal training, special projects, mentoring). Key positions and related competencies are identified along with staff who have or can develop requisite competencies.

Boards of larger organizations sometimes encourage their CEO to groom/mentor a successor. A challenge inherent in this approach is board turnover; when the time comes, different board members may decide not to appoint the internal successor. This shift in approach may cause resentment in the person who was groomed but passed over. Some of these individuals, who are expected to mentor the new CEO, subsequently leave the organization and the investment the organization made in their development is lost.

In contrast, smaller organizations that lack the resources and capacity to offer professional development and internal promotion opportunities may be forced to look externally. These organizations may be the beneficiaries of the investments larger organizations have made in internal leadership development.

Hire from without

Most boards opt to open up the recruitment process to external candidates for comparison; after all, what if the best candidate is actually out there? Organizations are often overwhelmed by the volume of applications – from qualified and unqualified applicants. Those agencies that can afford to, often hire an executive search firm to conduct a professional search.

When a strategic plan outlines the need for transformational change, hiring from without may be a compelling option. Outsiders bring fresh eyes, different perspectives and experiences and may find it easier to introduce major changes since they are less invested in an organization’s history. Boards need to ensure that in addition to bringing a vision and creative ideas, the new leader has experience in change management.

Restructure the organization

Pressures to reduce duplication, integrate and amalgamate are decreasing the number of organizations in the nonprofit sector. As smaller agencies increasingly struggle to meet growing expectations for accountability, some amalgamate with larger agencies while others engage in joint ventures to deliver programs collaboratively.

Leadership transition presents boards with an opportunity to reflect on sustainability, the organization’s place in the broader system, and whether the agency should consider some form of integration. Boards sometimes appoint an interim CEO, to afford them the time and space to explore whether integration might prove the best way forward.

Leadership Transition

No matter what option is chosen, the board needs to play a more active role throughout the leadership transition process from recruitment to the end of a probationary period. The board and organization would benefit from bringing clarity to the direction of, and approach to, a change in leadership. After the appointment of the new CEO (with or without integration), the board’s work must continue in earnest. Well before the new CEO is appointed, the following strategies can be implemented to facilitate a successful leadership transition:

Define a shared leadership approach between the board and CEO as the foundation for a productive long-term relationship
Clarify the decision-making role of the CEO and the delegation of power from the board to the CEO
Consider what an effective change management process would look like to ensure a smooth transition with minimal disruption to services, clients and staff
Create a healthy and nimble culture characterized by open and honest communication.

Being proactive in creating a succession plan and process for leadership transition reduces the panic when the CEO announces his/her imminent departure. Be prepared to answer “O leader, where art thou?”

Questions

What critical conversations and questions do boards need to engage in related to succession planning and leadership transition? The sample questions below are crafted for organizations that are just starting out, and those that are actively engaged in, succession planning.

Fiduciary (oversight)

Strategic (insight)

Generative (foresight)

What kind of succession plan is in place? Is turnover anticipated in the next 2-3 years?

Can we afford to hire a recruitment firm?

How competitive is our salary scale – can we attract the leader we need?

What competencies do we need to move the organization forward in alignment with our strategic plan? Or to introduce a new strategy?

Should we be looking internally to maintain our organizational culture and strategy, or externally to introduce change and challenge our assumptions?

How important is it that the individual is highly aligned with our organization’s values and vision?

How might we restructure the CEO position? Do we need someone full-time?

Does this represent an opportunity for organizational restructuring, divestment or integration? Is there a leader at another organization we admire?

How far can we reach to recruit the skills we need – e.g. recruiting out of province/country?

What other opportunities for renewal does this represent?

*Definition: “Succession planning is an ongoing and strategic process…to identify, and then meet, the future requirements of the organization by preparing candidates who will become equipped with the necessary competencies to excel in a job.

Where no current employee has the potential to succeed in the intended role, the organization will create contingency plans (e.g. a budget for executive search services) as part of its succession management strategy to hire qualified people who currently do not work for the organization.” Succession Planning, Jack Shand, 2009.

Ruth Armstrong and Sandi Trillo, VISION Management Services

Recommended resources and references

“Companies Need Not Hire Outside CEOs to Stimulate Fundamental Change”. Jim Collins and Jerry I. Porras. 1994

“Daring to Lead 2011: A National Study of Nonprofit Executive Leadership”. CompassPoint Nonprofit Services and the Meyer Foundation. 2011

“Executive Transition Initiative”. Greater Milwaukee Foundation. 2006

Managing Leadership Transition for Nonprofits. Barry Dim, Susan Egmont, Laura Watkins. Pearson Education, Inc. 2011

“Nonprofit Executive Succession-Planning Toolkit”. Federal Reserve Bank of Kansas City. 2009

“Shaping the Future: Leadership in Ontario’s Nonprofit Labour Force”. The Mowat Centre and University of Toronto. September 2013

Succession Planning: Succeeding at Succession. Jack Shand, Canadian Society of Association Executives, 2009

Climb aboard the “A” Train

Posted on November 23, 2015 by VMS

Advocacy got a bad rap under the Harper government. The CRA’s audits of charities cast a chill on those voicing opinions at odds with the federal government. Although only one charity had its status revoked due to political activity (audits are ongoing), the prospect of an audit served to dampen dissent. Many, but not all charities, backed away from the advocacy work that is critical to systems change. The recent change at the federal level suggests that times are changing and the chill is lifting (see Time to Engage). We think it’s time to climb aboard the “A” train.

Community voices matter and CRA’s policy on political activities acknowledges that charities have a legitimate role to play in public policy, “Through their dedicated delivery of essential programs, many charities have acquired a wealth of knowledge about how government policies affect people’s lives.”. Furthermore, non-profit organizations’ advocacy efforts have translated into significant progress on social issues including reductions in drinking and driving (MADD – Mothers Against Drunk Driving); reductions in smoking (Cancer Care Ontario); and the protection of environmentally sensitive landscapes (CPAWS – Canadian Parks and Wilderness Society).

Combining Service + Advocacy

In Forces for Good, authors Crutchfield and McLeod Grant identify six practices of high-impact nonprofit organizations. All twelve of the organizations they identified as having created real social change engage in service delivery and advocacy. This was true of organizations that began by focusing only on services, as well as for organizations that started out focusing on advocacy work. The more organizations incorporated both functions in their strategy, the greater impact they achieved.

The authors characterize the combination as a virtuous cycle. Service delivery enables organizations to implement ideas and work closely with communities on the ground. Through this work organizations acquire an understanding of needs, as well as an appreciation of how existing policies inhibit progress and what new policies might accelerate it. This in-depth knowledge of communities and issues is something policy makers may lack. Policy makers may also lack insight into the unintended consequences of existing policies and programs, and what kinds of new policies might resolve the challenges they’re charged with addressing.

Canadian charities are permitted to engage in various forms of advocacy and to spend up to 10% of their resources on “political activities” that include a call to action (see Definitions below). Even charities viewed as prominent advocates rarely dedicate more than 5% of their resources*; of a potential spend of $20 billion, Canada’s nearly 86,000 charities reportedly spent $21 million (2012) or just over 1%**. If advocacy is key to impact, this is a significant missed opportunity.

Stories from the Field

“Successful advocacy is most often the result of a medium-to-long-term, focused, sustained and collaborative approach to advocacy” – Sean Moore.

Advocacy is a long game that requires long-term thinking and commitment. Progress can be slow and is not always easy to measure.

The Chief Executive Officer (CEO) of one organization we have worked with (Participation House Support Services, London and Area) spends significant time building relationships with government and others working in the developmental and health services sectors. His board supports this investment of time and effort. The CEO’s relationships with decision-makers are characterized by ongoing information exchange and feedback on policies and programs introduced by government. These conversations have built trust, and the CEO is able to work with others in community services to effect policy changes and build solutions. The organization’s board members are also engaged in conversation with government and community. Many are long-term members who are deeply familiar with the issues faced by the organization’s community. Those in government have welcomed the opportunity to understand board member perspectives as senior volunteers. Over the last few years the agency has supported individuals interested in self-advocacy, something that has enhanced individuals’ ability to share ideas and concerns inside and outside the organization.

In my thesis I focused on Sustain Ontario’s efforts to influence provincial food policy over a period of several years. The cross-sectoral alliance engaged in government relations and crafted policy solutions for government’s consideration. In part because they cultivated relationships with members of all parties, their efforts to share information, ideas, and policy solutions were given consideration by policy makers. Some of their ideas were incorporated into Ontario’s Local Food Act.

The Board’s Role in Advocacy

Although the Board Chair tends to be the primary spokesperson, board members can also lend their energy and expertise to an organization’s advocacy efforts by:

Giving permission: as the board did with the CEO above. This might extend to supporting investments in advocacy capacity building for the organization and its clients.
Adopting a systems mindset: considering the root causes impacting the organization’s work and all those invested in resolving the issue.
Amplifying voice: sharing issues and stories with stakeholders outside the organization.
Engaging decision makers: building relationships with local, provincial and federal politicians to better understand their priorities, values and timelines. Sharing information and possible solutions.
Identifying windows of opportunity: supporting the organization in crafting a timely and strategic response to an event that focuses attention on client or organizational issues.

Questions

What critical conversations and questions do boards need to engage in related to advocacy? The sample questions below are crafted for organizations that are just starting out, and those that are already actively engaged in, advocacy efforts.

Fiduciary (oversight)	Strategic (insight)	Generative (foresight)
As a charitable organization what issues CAN we advocate for? What percentage of our resources are we investing in advocacy? Are we reporting these correctly? How might we measure the return on this investment?	What specific issues might we advocate for that would make the biggest difference for our community and cause? What issues related to our cause are receiving significant public attention and how could we use that attention to expand awareness and/or get our issue on government’s agenda? What do we understand about these issues based on our programs/services /clients that would enrich the current discussion? How might we support our community in speaking out?	How is limited attention to advocacy a disservice to those we serve? What non-traditional ‘allies’ in the sector, in business, and government might be interested in working with us? What networks do board members have that would help us connect? What bold goal might incent others to act?

DEFINITIONS

Advocacy: CRA defines advocacy as demonstrated support for a cause or particular point of view. Advocacy activities may include public awareness campaigns, a representation to an elected representative or public official, participating in a policy development working group, among other examples. See also the link to CRA resource below.

This might involve: supporting, pleading, or defending a cause; expressing your views to create a shift in the environment, mobilize resources, change public opinion, or influence someone’s perception or understanding of an issue. CRA defines three categories of advocacy: unrestricted, limited and prohibited.
Unrestricted: charitable activities relating to and supporting the organization’s charitable purposes – e.g. public awareness campaigns, meeting with decision-makers
Limited: this includes political activities such as a ‘call to action’. Charities can devote up to 10% of their resources. These activities must be non-partisan and connectedto charitable purpose. Charities must declare these expenditures in their T3010 forms.
Prohibited: partisan political activities – e.g. directly or indirectly supporting a candidate

Lobbying: to undertake activities aimed at elected and/or non-elected government officials to influence them toward a desired action.

Public Policy: the intentions, decisions or actions of government. Public policy sets out the “what and how” of something that is to be done and may be expressed through laws, regulations, procedures or expenditures.

Government Relations: to monitor government actions or build relationships with elected and/or non-elected officials in order to increase their awareness about one’s cause and organization.

Sandi Trillo (lead author) and Ruth Armstrong, VISION Management Services

Recommended resources and references

Charity Case: How the Nonprofit Community Can Stand Up For Itself and Really Change the World. Dan Pallotta, 2012. And TED Talk: The way we think about charity is dead wrong.

CRA Resources for Charities About Political Activities

“Creating better public policy: the roles of Canadian charities”. Allan Northcott. The Philanthropist, Vol. 25.4. 2014

Forces for Good, Revised and Updated: The Six Practices of High-Impact Nonprofits. Leslie R. Crutchfield and Heather McLeod Grant, 2012

“Influencing public policy: Rules for charities engaging in advocacy. Calgary Chamber of Voluntary Organizations. Issue 7, 2009

**Political activity by registered charities in Canada. Elson, Kobrinsky, Marshall and Millan. Government of Canada presentation. February 1, 2014.

“Public Policy and the nonprofit sector” Susan Carter, The Philanthropist. Volume 23.4. 2011.

“Rebalancing society: Radical renewal beyond left, right and centre” (PDF). Henry Mintzberg, self-published, 2015.

“Secret of Scale – how powerful civic organizations like the NRA and AARP build membership, make money and sway public policy”. Peter Murray. Stanford Social Innovation Reviews, Fall 2013.

*Stephen Harper’s CRA: Selective audits, “Political” activity, and right-leaning charities. Broadbent Institute, October 2014.

Tools for Radical Democracy: How to Organize for Power in Your Community. Joan Minieri, Paul Getsos. Jossey-Bass, 2007.

Time to Engage – takeaways from ONN’s 2015 Conference: Nonprofit Driven

Posted on October 30, 2015 by VMS

This year’s Ontario Nonprofit Network (ONN) conference focused on opportunities for Policy, Leadership and Action. Three speakers issued challenges to the sector and instilled a sense of optimism about the role non-profits can play in Canada’s democracy. The federal election outcome certainly contributed to that optimism – it’s time to engage!

Rick Cohen, national correspondent with the Nonprofit Quarterly, delivered the conference’s opening keynote speech. Based on his observations south of the border he suggested that nonprofit sector organizations share a common mission: strengthening democracy. Nonprofit agencies closely connected to different communities are well-positioned to give voice to their communities and amplify their challenges and interests. Cohen noted that in the absence of rapid responses to community issues from organizations, social movements like Black Lives Matter have stepped in.

John Wright, Senior VP and Managing Director at Ipsos, helped participants consider the implications of the new Liberal majority government under the leadership of Prime Minister-designate Justin Trudeau. He highlighted messages Trudeau relayed in his first post-election media conference where he emphasized a commitment to greater openness and transparency, and to changing the ‘tone’ in government. Throughout the campaign, and in the post-election period, Trudeau has indicated he welcomes greater public engagement in government. Wright expects the ‘chill’ many non-profits experienced under the Harper government to change. He suggested non-profit leaders should take Trudeau up on his offer by reaching out to new MPs and offering to assist them in getting up to speed on issues. Wright reinforced that organizations still need to stay in touch with non-Liberals over the next few years.

Professor Henry Mintzberg closed the session on a somewhat less upbeat tone. He shared the essence of his most recent publication, “Rebalancing Society – Radical renewal beyond left, right and center”, a topic he’s been mulling over since 1991. Mintzberg suggested a better balance between the public, private and ‘plural’ (his proposed term for organizations in the third or civil society sectors) sectors is needed. Those in the private sector that benefit most from imbalance, although well-organized compared to those in the plural sector, are unlikely to implement the kinds of broad systemic solutions required. In contrast, those in the plural sector who are closest to citizens are in the best position to work across sectors to restore balance and fix broken democratic processes. He challenged the non-profit sector to work collectively to address the growing imbalance in Canadian society.

Sandi Trillo, VISION Management Services

Recommended resources and references

Forces for Good (2012): Authors Leslie R. Crutchfield and Heather McLeod Grant have identified 6 practices high impact non-profit organizations use to achieve extraordinary results. One includes advocating AND serving. The practices reflect their finding that greatness includes working outside the boundaries of an organization – with government, business, individuals and nonprofit networks.

Maclean’s interactive Visualization of Canada’s 42^nd Parliament: http://www.macleans.ca/shape-of-the-house/

Rebalancing Society – Radical renewal beyond left, right and center (2015) (PDF). Free download.

Samara-ONN Infographic (PDF): an illustration of how a broken democracy impacts communities and how non-profits have a role to play as bridge between communities and government to create a more vibrant democracy.

The Best Made Plans: On Crafting Strategy

Posted on October 21, 2014 by VMS

Strategic planning – most of us do it. Boards know it’s an important part of their direction-setting role. But how do we ensure we create the “best made plans”?

Organizational direction needs to be informed by ongoing strategic thinking and environmental scanning. Organizations operate in an environment characterized by VUCA: volatility, uncertainty, complexity and ambiguity (Bennett and Lemoine, 2014). In such an environment, more practitioners and academics question the value of formal strategic plans that are the most common expression of an organization’s ‘intended’ or ‘deliberate’ strategy (Mintzberg and Waters, 1985).

Although it is impossible to predict the future in a VUCA environment, being intentional in articulating the change an organization wants to make in society remains important, particularly when that change may be a long time coming. Planning timeframes have shifted over the years from 10-year plans, to 3 or 5-year plans. More recently, the pendulum seems to be swinging back with organizations examining what’s on the horizon 10-20 years out. Shorter-term plans identify the milestones en route to the more distant horizon.

Regardless of a plan’s timeframe, most boards recognize that checking in on progress (i.e. on the ‘deliberate’ strategies) and on shifts in the broader environment annually or semi-annually is key to identifying any ‘emergent’ strategies. An organization’s ‘realized’ strategy consists of a combination of the deliberate and emergent strategies that were ultimately implemented (Mintzberg, Ahlstrand and Lampel, 1998).

Visualization of strategies deliberate and emergent (ibid p. 12)

Developing Strategy

Intended and deliberate strategy is generally crafted in one of two ways – driven by the bold vision of a charismatic leader with a dream (think L’Arche Canada’s founder, Jean Vanier), or by an analytic approach, informed by the organization’s vision, data and evidence (e.g. socio-demographic shifts in the population). With an analytic approach the board might play a more active role analyzing relevant data to shape the vision and corresponding strategies. In both cases, ensuring goals and activities are aligned with the overarching vision and mission of the organization is crucial, along with ensuring human and financial resources are available to do the work.

The right people and relevant information are key inputs to strategy development. Jim Collins (2001), emphasizes the importance of “getting the right people on the bus”… or in this case, engaging the right people in strategy development. Even a highly skilled, diverse board cannot develop strategy alone – strategy must be informed by the experiences and perspectives of other organizational stakeholders such as staff, clients, partners and funders. Representative stakeholders are often consulted as part of an environmental scanning process, and are sometimes invited to co-design strategy with the board. Engaging organizational stakeholders in strategy development can build buy-in and support for implementation of strategic directions.

Tools to inform, craft and adapt strategy

Quality information is a critical starting point for strategy development. Gathering relevant information about the internal and external environment helps establish a common platform from which board and management can consider pathways to the future. Information gathering often focuses on internal data and sector-related reports along with stakeholder consultation processes. Information gathered may be synthesized in the form of SWOT (strengths, weaknesses, opportunities and threats), SOAR (strengths, opportunities, aspirations and results) or PESTEL (political, economic, socio-demographic, technological, environmental and legal) analyses.

These kinds of analyses help an organization uncover key issues, as well as opportunities and challenges. Organizations usually aim for 3-5 strategic priorities and directions to acheive their mission and respond to major issues and opportunities. Any more than that and organizational energy will be diffused. Regardless of the number, all strategies must be aligned with an organization’s vision and mission. Organizations need to ensure their strategies address a balance of internal and external opportunities and challenges.

Questions

What critical conversations and questions will help boards craft, communicate and monitor organizational strategy? The sample questions below relate to organizations at various points in the strategy development process. Many boards have a strategic plan in place and are focused on monitoring and adapting that strategy, while others are developing a new or updated strategic plan.

Fiduciary (oversight)	Strategic (insight)	Generative (foresight)
When were our Vision, Mission and Values last reviewed and updated? Do they need to be revised? Alignment – are our strategies leading us to the achievement of our vision? How will we resource our strategy – e.g. different revenue streams, re-allocation of existing resources?	Do our current priorities remain relevant in the changing environment? Why or why not? How might we do things differently to achieve greater impact? E.g. if we stopped doing X, what might we be able to do instead? What strategies are emerging within the work we’re doing now?	What assumptions do we hold about the way we do our work… does anything suggest that these assumptions are no longer true? What patterns are we seeing in the sector… and how might those patterns affect how we work and/or those we serve? What ‘strange bedfellows’ could bring new ideas to our thinking and work?

Strategic Thinking as a Practice

Strategic thinking feeds strategy development. Effective boards not only have the skills and capacity to think strategically, but make it a regular practice to do so. Critical conversations are one way to embed the practice into board meetings.

In the book Strategy Safari, Mintzberg, Ahlstrand and Lampel (1998, p. 128) frame strategic thinking as ‘seeing’:

Ahead: looking for what is emerging
Behind: understanding the historical context
Above: taking the ‘balcony’ or ‘10,000 foot’ view
Below: seeking what’s sprouting on the ground
Beside: removing blinders masking the broader system
Beyond: speculating about what’s on the distant horizon
Through: taking action on what you’ve seen and thought

When developing strategy, seeing in all these directions generates new insights, surfaces new opportunities and helps boards anticipate and mitigate risks of their best made plans.

Sandi Trillo and Ruth Armstrong

Recommended resources and references

“20 questions directors of not-for-profit organizations should ask about strategy and planning”. Hugh Lindsay, Canadian Institute of Chartered Accountants, 2008

Good to Great: Why Some Companies Make the Leap… And Others Don’t. Jim Collins, Harper Business, 2001

“Lofty missions, down to earth plans”, V. Kasturi Rangan, Harvard Business Review, March 2004

Moments of Impact: How to Design Strategic Conversations That Accelerate Change. Chris Ertel and Lisa Kay Solomon, Simon & Schuster, 2014

“Of strategies, deliberate and emergent”. Henry Mintzberg and James A. Waters, Strategic Management Journal, Vol. 6, 1985, pp. 257-272

“Off the shelf – How to ensure that your strategic plan becomes a valued tool”. Michael Burns, Brody, Weiser, Burns, Undated

Playing to Win: How Strategy Really Works. A.G. Lafly and Roger L. Martin, Harvard Business Review Press, 2013

Strategy Safari. Henry Mintzberg, Bruce Ahlstrand and Joseph Lampel, The Free Press, 1998.

“Strategic planning that makes a difference and that’s worth the time”. Susan Gross, Management Assistance Group, 2007

The Nonprofit Strategy Revolution: Real-Time Strategic Planning in a Rapid-Response World. David La Piana, Fieldstone Alliance, 2008

The Rise and Fall of Strategic Planning. Henry Mintzberg, The Free Press, 1994

“What VUCA really means for you”. Nathan Bennett and G. James Lemoine, Harvard Business Review, January-February 2014

From good to great: Board evaluation

Posted on September 25, 2014 by VMS

Governing, like managing, is neither an art, nor a science – it’s a practice*. An effective way to build governance skills is to reflect, assess, do differently and repeat. Board evaluation represents a process that helps board members enter this cycle. Especially if the process is well-designed.

One of the board’s core responsibilities is to build and sustain an effective governing body. To this end, conducting regular board evaluations is widely recognized as a governance best practice. It provides an opportunity to orient or remind board members of key roles and responsibilities, assess performance, celebrate success, and identify strategies for improvement.

While more boards are evaluating themselves and in some cases the performance of individual board members, not all processes succeed in moving the board from good to great performance. The process itself is often to blame, as many methods exemplify three common flaws.

First, the majority of processes rely strictly on self-assessment surveys: board members are asked to rate the board, themselves or their peers on a variety of dimensions. While self-reporting engages board members in a reflective process, well-intentioned board members are not always prepared to constructively critique their own, or the board’s collective performance. Ratings generally tend to be overwhelmingly positive, with the odd outlier. Evaluations that solicit input from other organizational stakeholders, such as the senior management team, can provide an alternate perspective or reality check.

Secondly, few evaluation tools ask respondents to provide evidence to support their ratings. Instead, ratings generally rely on board members’ memory and perceptions of what the board has/has not done. Steve Bowman of Conscious Governance recommends conducting governance ‘audits’ alongside evaluation processes to assess if the board has in fact developed, implemented and adhered to key policies and practices (see Related Resources at end). In conducting these audits, he has often discovered a significant gap between what the board thinks, or states, it has done (e.g. maintaining up-to-date policies, conducting a risk assessment) and the evidence to support these assertions.

Last but not least, many board evaluation processes conclude with a cursory discussion of the data gathered, without determining how the board will act on the results. If commitments are not made to do differently and address performance gaps, the investment in evaluation delivers a limited return. Determining up front what the board is prepared to invest in in terms of follow up action is important, and translating actions into a board workplan or development plan is critical. Only then can the board be held accountable.

Key Design Considerations

Every evaluation process requires leadership. Rather than leaving the task to a single champion like the board chair, it can be a great project for a task force or governance committee. This group, with support from the CEO and other board members, can define the scope of, manage and promote the process.

A board’s interest in evaluation, reflection and learning is reflective of its culture. Having an honest conversation early on about the focus, potential benefits and how much time, energy and other resources to invest contributes to success.

In addition to surveys, other data collection options warrant consideration. These include one-on-one interviews, focus groups, or group dialogues all of which enable the interviewer or facilitator to explore specific responses in more depth.

Multiple tools and templates for board evaluation are available online and they’re a great place to start. We recommend tailoring standard surveys so that they speak to a board’s specific questions and concerns – e.g. in addition to roles and responsibilities, your board may want to evaluate participation, contribution, governance structures, systems and processes.

Depending on available resources, a board may take a do-it-yourself approach or seek external support. An external consultant can help design and/or administer the process. A neutral party can assist a board in analyzing results and determining how to act on them.

Questions

What critical conversations and questions would help overcome common flaws and design an evaluation process in a way that will move the board from good to great?

Fiduciary (oversight)	Strategic (insight)	Generative (foresight)
What are our objectives for a board evaluation process? Do we want to focus on the board as a whole as well as individual directors? What kind of process would enable us to achieve our objectives? What tools could we use to gather evidence-informed feedback? How might others evaluate our performance – what measures might they use? Who else might we ask to evaluate the Board?	What dimensions and aspects of governance should we evaluate? What do we need to know about how we’re governing to know we can support our strategic directions and mission impact? How might we assess the difference we’ve made as a board? What are other boards doing that we could learn from? Acting on the results: What changes will we make – e.g. to our processes, structure, composition, focus? What do we need to ‘go to school on’ (individually or as a board)?	Do we really need to examine our performance… isn’t measuring organizational results and impact the most important outcome? How might a board evaluation carried out by the senior management team and/or clients contribute to a deeper understanding of our performance? If boards are expected to hold a big-picture perspective, how can we evaluate our role in the broader system? How can we turn evaluation into a stimulating game?

The reward

We’ve seen well-designed evaluation processes deliver greater clarity around roles and responsibilities, engage board members more actively, result in more productive board meetings, and improve collaboration between the board and CEO.

Embedding evaluation into the board’s ongoing work

If your board is genuinely committed to continuous learning, in addition to engaging in an evaluation process, we recommend experimenting with the following strategies:

Make time at the end of board and committee meetings to reflect on one aspect of the meeting and identify ideas for improvement – e.g. agenda design, participation, decision-making process.
Ask each board member to identify one high and one low point experienced at the meeting.
Conduct mini evaluations of board contributions – e.g. after a significant organizational event, after a task force completes its work, after a major challenge has been addressed.

On the Horizon

Some boards are high performing because they have the “right people on the bus in the right seats” (Collins, 2006). Would you consider evaluating individual board members and the leadership of the board? Some boards have been doing just that, conducting peer-to-peer evaluations. Board members are asked to evaluate one another on a number of dimensions such as: “makes appropriate and meaningful contributions informed by his/her knowledge and skills”. A neutral facilitator and confidential feedback conversations are key components of effective peer-to-peer evaluation processes.

The executive or governance committee might use the results of such an evaluation to inform decisions about renewing appointments and officer selection. Early adopters are continuing to experiment with and refine this evaluative approach to move their boards from good to great.

Ruth Armstrong and Sandi Trillo

*Henry Mintzberg made this point in his book “Managing”.

Recommended resources and references

35 Questions that will transform your board. Society for Nonprofit Organizations. Nonprofit World Volume 24, Number 3, May/June 2006.

Board Evaluation: Creating Strategic Performance and Effectiveness (Board Guru Handbook) by Tracy E. Houston, 2012.

Good to Great and the Social Sectors: A monograph to Accompany Good to Great. Jim Collins, Harper Business, 2006.

“How Good is our Board?” How Board Evaluations Can Improve Governance. Tim Plumptre, Institute On Governance, 2006.

Individual director evaluations: The next step in boardroom effectiveness. Jay A. Conger and Edward Lawlor III. Ivey, 2003.

Managing. Henry Mintzberg, Barrett-Koehler Publishers. 2011.

The Problem with board evaluations. Steve Bowman, Conscious Governance Online, 2008.

Eyes on the Edge

helping non-profit leaders think strategically

Operating in a Systems World – What’s a Board to Do?

O Leader, where art thou?

Climb aboard the “A” Train

Time to Engage – takeaways from ONN’s 2015 Conference: Nonprofit Driven

The Best Made Plans: On Crafting Strategy

From good to great: Board evaluation