Friday, October 24, 2014

ECFA Survey: “Healthy Governance: Not There Yet”

On the 10-point scale between “Micromanagement (1) to Healthy Governance (10),” almost 40% of CEOs, in the latest ECFA survey, rated their boards at 7 or less. The good news: 87% of CEOs hope to move their boards to an 8, 9, or 10 within the next 12-18 months. Board chairs and board members were slightly more optimistic.

The findings are from “Highlight #3” in the hot-off-the-press executive summary of the ECFA 3rd Annual Nonprofit Governance Survey. It’s available as a download to ECFA-accredited organizations and subscribers. (Click here.)  This 62-page treasure chest of insights and trends includes 10 highlights, 130 open-ended comments from CEOs, board chairs and board members, and 9 strategic observations.

The report also includes color commentary, suggested resources, and next steps for boards. For example, the report notes six insights on “How Do We Stop from Micromanaging?” from chapter 13 in Ram Charan’s book, Owning Up: The 14 Questions Every Board Member Needs to Ask.

“Directors must take responsibility for managing the board’s time. As much as management complains about the problem of micromanaging, they may be contributing to it by providing too many slides and unnecessary details.”

• “Asking questions of an operating nature is not in itself micromanaging, as long as the questions lead to insights about issues like strategy, performance, major investment decisions, key personnel, the choice of goals, or risk assessment.”

• “The board is there to make sure management has a plan and that it is executing that plan.”

• “CEOs don’t realize that they bring some of the micromanaging on themselves with their presentations to the board.”

• “Addressing strategic topics first puts directors at the right altitude for the entire meeting.”

• “Another best practice is for the CEO and other presenters to give the bad news on the first page in unmistakable terms then describe the whys and the context.”

In my experience, micromanagers on ministry boards rarely think about the spiritual implications of operating in the weeds. Here’s an eye-opener from Bruce Bugbee, author of What You Do Best in the Body of Christ: Discover Your Spiritual Gifts, Personal Style and God-Given Passion. A friend asked him this spiritually probing question:
“Why are you doing what others can do,
when you are leaving undone what only you can do?”

QUESTIONS: What are the agenda items and tasks that only the board can do? What are board members doing that others (staff and volunteers) can do? (Note: Nail this one—and you’ll likely see calling enhanced and micromanagement decline.) 

Monday, October 20, 2014

The Twin Tensions of Honesty and Inspiration

Following Team USA’s loss to the European team in golf’s biennial Ryder Cup competition last month, U.S. Captain Tom Watson took the blame. According to a statement issued through the PGA of America and carried in the Los Angeles Times, Watson confessed:

“I regret that my words may have made the players feel that I didn’t appreciate their commitment and dedication to winning the Ryder Cup." 
"My intentions throughout my term as captain
were both to inspire and to be honest.”

Even board members who are not golfers will understand that twin tension: inspire and be honest! Just look at the short list of board agendas: the CEO’s annual performance review, quarterly financial reports, strategic plans, leading indicators—all opportunities for accountability, affirmation…or awkward silence.

Watson’s statement reminded me of the hot-off-the-press executive summary of the ECFA 3rd Annual Nonprofit Governance Survey. It’s available as a download to ECFA-accredited organizations and subscribers. (Click here.)  This 62-page treasure chest of insights, trends, and strategic observations includes 70 open-ended responses to this question:
“As the board chair, what is the most challenging issue
you face when working with your CEO?” 

Note these two board chair responses:

   • “Personality style: I am direct; he prefers indirect, especially with criticism.”
   • “I am very blessed to have a great personal relationship with the CEO. It is never ‘enjoyable’ to deliver tough feedback, but I know it must be done. Fortunately, he is very receptive and allows me the freedom to speak what we, as a board, see as important feedback.”

Balancing the twin tensions of Inspiration and Honesty prompted this homemade quadrant for your next board meeting:

   • The best board chairs are Symphony Conductors. Inspirational—absolutely, but highly demanding to bring out the best in the orchestra (boards and CEOs); always honest (“speaking the truth in love”), but with the right pitch—if you’ll excuse the pun. 
   • TV Hucksters make lousy board chairs. Their “inspirational” flim flam is inauthentic and dishonest. CEOs can spot huckster rhetoric a mile away.
   • No better—an Incompetent Counselor. Honesty is expected of therapists, but so is empathy. No inspiration nor motivation—no change. Board chairs take note! It’s a delicate dance to confront the brutal facts, yet still be inspirational.
   • Finally, there is nothing worse than a board chair who leads as an Inept Steward. That’s “steward” in name only because the ineptness cancels out any semblance of stewardship. Board members who are led by inept board chairs must address the elephant in the room—today.

For the Christ-follower, being inspirational and honest should come with the territory. It’s often difficult, but 1 Thessalonians 5:24 (NIV) reminds us that “the one who calls you is faithful and he will do it.”

QUESTION: As the board chair, or a board member, what is the most difficult issue you face when working with your CEO? (See what 70 others said in the ECFA 3rd Annual Nonprofit Governance Survey.)

Thursday, October 9, 2014

Should Your Board Launch an Advisory Council?

Over lunch this week, three of us talked about the upside of launching an advisory council for a nonprofit ministry. A younger leader was seeking advice, the invited expert was an experienced advisory council member, and in between bites of a chicken sandwich, I facilitated the conversation.

There is helpful counsel on councils, and numerous cautions, in The Nonprofit Board Answer Book: A Practical Guide for Board Members and Chief Executives (Third Edition), published by BoardSource. (Note: The first edition was co-authored by Ted Engstrom and Bob Andringa.) In the chapter, “Should Our Board Have Advisory Councils?” the jam-packed wisdom includes eight helpful bullet points in just three pages:
  • Set guidelines for creating advisory councils.
  • Choose an appropriate name. (“Avoid names that use the word ‘board.’”)
  • Describe the group’s role.
  • Establish terms of service.
  • Provide for formal leadership. (“Volunteers often respond better when one of their own chairs an advisory council.”)
  • Plan for staff assistance.
  • Budget for any expenses.
  • Provide appropriate publicity. (“Guard against providing more publicity than is warranted.”)

Our expert at the table described both positive and negative experiences while serving on advisory boards. (He preferred the positive ones!) While not opposed to serving on advisory councils where fundraising (giving and getting) is expected, he stressed the importance of the ministry leader communicating that expectation at the get-go. 

Alignment with the organization’s mission—we all agreed—was critical. I prejudiced the conversation with a few more opinions:
  • Invite people to serve who already have a passion for your organization. (Use the principles on board recruitment from the ECFA Governance Toolbox Series No. 1:Recruiting Board Members.)
  • Ensure that each advisory council member has a “personal win” by leveraging his or her “3 Powerful S’s: Strengths, Spiritual Gifts and Social Styles.”
  • Inspire each advisory council member to establish an annual personal BHAG (a Big Holy Audacious Goal). Each member should dream big and bold: an introduction to a foundation, a creative real estate deal, a strategic plan wish list project, or something else that God has uniquely prepared this person to do or be for your organization.
  • Communicate quarterly with a simple one-page update (mail or email). And treat them as "insiders," so they are among the first to hear both good and bad news.
  • If possible, meet annually for a half-day, or even better, for an overnight retreat with spouses.
  • Highlight the work of the Advisory Council on your website along with photos and brief bios. (Assumption: your board of directors' bios are already featured there.)

As you steward the amazing work of the people God is calling to serve your organization (staff, board, advisory councils, task forces, volunteers, givers, etc.), continue to inspire these teams of Christ-followers with their holy calling! (2 Thessalonians 5:24, NIV, "The one who calls you is faithful and he will do it.")

How? BoardSource suggests you interview the CEOs of five organizations that already have advisory councils. Learn from their successes (and mistakes). James Belasco shared this wisdom in the Leadership Tip of the Day on June 29, 2010 (these daily email leadership tips are now available through the Hesselbein Institute).

“You can never do enough looking over the wall
to learn how to do things.
Seeing excellence in action helps individuals
visualize how they can do it for themselves."

QUESTIONS: Has your board invested 15 minutes or more in conversation over the value of launching an advisory board? Does your CEO have margin in his or her life to appropriately leverage the expertise of advisory council members? Who is responsible for spiritually discerning who might be invited onto the council?

Note: BoardSource also publishes a 36-page resource, Advisory Councils, by Nancy R. Axelrod. 

Monday, September 29, 2014

Board Member Getting: It’s Time to Demystify Fundraising

In my last blog, “Board Member Giving: 4 Types,” I launched a two-part discussion prompted by the ECFA 3rd Annual Nonprofit Governance Survey (watch for the Executive Summary this fall). The survey said there’s a big gap between board giving and the training of board members in fundraising and stewardship.

The Gap. The survey reports that “less than 42 percent of their organizations provide training to equip and inspire board members on the ‘how to’ of inviting others to give.” So there’s a big gap between expectations and equipping.

The Fix. (Actually, as you know, there is no “quick fix,” but there are best practices.) Here are some thoughts: 

First, leverage passion and giftedness.  Every Christ-follower does not have every spiritual gift. Yet, many leaders expect every board member to be competent fundraisers. Some are gifted in inspiring others to give; some aren’t. 

“Fundraising” is not a spiritual gift, of course, but I’ve noticed that some board members, with training and inspiration, can leverage their giftedness in leadership, administration, evangelism, even mercy and exhortation—to the benefit of kingdom resource development.

Next, let’s demystify fundraising. I was asked to discuss this subject with a board recently and so I started the session with a simple exercise. I asked the group to divide up into groups of two and answer this question:

“Describe a time when you experienced great joy
upon giving a financial gift to an organization, a church, or a friend.”

The stories were amazing! Smiles boomeranged around the room! The conversations were joy-filled. 

In that teachable moment many board members realized that generous giving is both God-honoring and personally uplifting. Many realized—almost an epiphany—that inviting another person to give generously is inviting them to experience the kind of joy that they had experienced. 

Inviting others into the joy of giving is a natural, friend-to-friend thing to do. It’s only unnatural when we allow Satan to cloud the purity of generosity with bad theology. 

So…rather than blame, shame, cajole or pressure your board members into being reluctant fundraisers, go slow. Invite reflection. Focus on joy, not obligation.

I know. It’s much easier to blog about fundraising than to actually do it. In R. Scott Rodin’s thin little novelette, The Third Conversion, he cautions Christian development professionals (and board members):
"This is a bad time to get good at doing old things. The new wine of this biblical way of raising ministry resources requires new wineskins."

QUESTIONS: Has your board or CEO created a “one size fits all” herd mentality that demands every board member must be a fundraiser—without thoughtfully leveraging the passions and spiritual giftedness of each board member? If so, how are you going change this? Could you individualize expectations so you’re aligning board work with the way God has uniquely made each person around the table?

Saturday, September 20, 2014

Board Member Giving: 4 Types

According to the ECFA 3rd Annual Nonprofit Governance Survey (watch for the Executive Summary this fall) there’s a big gap between board giving and the training of board members in fundraising and stewardship.

“CEOs and board members agree that all board members should be givers and encourage others to give, but…while a healthy 87 percent to 91 percent agree that board members should be annual givers—less than 42 percent of their organizations provide training to equip and inspire board members on the ‘how to’ of inviting others to give.”

This is a two-part issue—and so I’ll address it in a two-part blog. Here’s part one—to help your board assess and address board member giving.

As Max De Pree recommends, “the first responsibility of a leader is to define reality,” so I’m always on the hunt for precise labeling of strategic issues. Mark Dillon hit pay dirt with his descriptions of four types of givers in his book, Giving & Getting in the Kingdom: A Field Guide

Where are your board members—and where do you want them to be?

THE GIFTED GIVER (2-5% of givers) will show up at the dedication of a new building and ask, “What’s next?” Dillon says “the gifted giver seldom needs to be asked.”

THE THOUGHTFUL GIVER (15-25% of givers) tends to calibrate giving to current income “and rarely involves lowering their net worth to fund what they care about.” And, “They have joy in giving, to be sure, but often lack unbridled delight in investing resources for kingdom purposes.”

THE CASUAL GIVER (35-50% of givers) “possesses a vague understanding of their obligation to be faithful and generous stewards of their resources, but rarely seek out opportunities to give. They usually give in response to a specific request.”

THE RELUCTANT GIVER (perhaps 33% of givers) may be “an overly generous description, because many in this category give very little of their resources for any charitable purpose.” Easy to offend, they’ve had few, if any generosity mentors in their lives. Their parents were unlikely to be kingdom stewards either.

Dillon suggests specific and biblical ways to engage these four types of donors. In the section, “Big Ideas Attract Big Gifts,” he urges CEOs, pastors and fundraisers to engage givers at the front end of a project. “Big ideas are mission-centered.” He quotes one gifted giver,
“Please don’t come to me with an ‘order list’ already thought out,
where my only decision is how much to give!”

So…perhaps your board chair, your CEO and your senior development officer should thoughtfully (and confidentially) look at individual board member giving over the last two to three years—and “define reality” by slotting them into these four giving segments.  Then, prayerfully, make a plan if your reality check reveals you need to move board members into higher levels of commitment.

Caution! This is not a discussion about wealth—it’s a discussion about generosity and commitment. Board members will lack authenticity in inspiring others to give—if they, themselves, are not personally committed at a high level.

Jesus said in Matthew 6:21, “Where your treasure is, there your heart will be also,” and so many organizations invite people to serve on the board only if they are already in the generous givers circle. 

Many ministries define “generous” this way: As a board member, I will prioritize my giving so our organization is in the Top-3 of my annual giving. 

Again, this is not about wealth. Board members at all income levels can be generous with what God has given them. (That’s the brilliant premise of the biblical tithe.) Note: For more help on this, order the ECFA Governance Toolbox Series No. 1: Recruiting Board Members.

QUESTIONS: What kind of a giver are you? Does your board have written or unwritten guidelines on board giving expectations—that focus on priority (example: Top-3) versus an annual dollar amount? What’s your board’s next step in this area?

Friday, September 5, 2014

“Retirement Is Not in the Bible” – Or Is It?

This is not a theological blog, so I may be venturing above my pay grade here…but there’s a niche trend in evangelical circles that is expressed in a variety of ways. I’m not sure it’s biblical or Christ-centered. Some leaders write or speak (even pontificate):
  •  “There’s nothing in the Bible about retirement, so I don’t plan to retire."
  • “I’d rather burn out than rust out."
  • “My organization/board still needs me. There’s no obvious person to replace me.”

 Contrast these views with these scriptures:
  • “And the [instructions] which you have heard from me along with many witnesses, transmit and entrust [as a deposit] to reliable and faithful men who will be competent and qualified to teach others also.” (2 Timothy 2:2, Amplified Bible)
  • After Elijah “retired” to heaven, there was common agreement that “The spirit of Elijah lives in Elisha!” (2 Kings 2:15)

In my Bible, the relevant themes are:  coach, mentor, disciple, give away, prepare, empower, inspire the next generation, be God-honoring. There’s not much about: hold on, hold tight, protect your position [or your board seat], stay as long as you can, tell those younger leaders to learn patience.

I hope you’re talking about it. Some nonprofit CEOs (and pastors) hold on way too long and boards don’t have the guts to address the succession elephant in the room. It’s not an age issue, it’s a spiritual issue.
When will we allow the next generation
to be the leaders that God has called them to be?

Ditto many board members. Harry has been disengaged for three years—but no one’s having the difficult conversation with him.

The ECFA 3rd Annual Nonprofit Governance Survey (to be released this fall), with responses from almost 2,500 CEOs, board chairs and board members of ECFA-accredited organizations, addressed these issues with three questions:

Question: Does your board have a strategy for recruiting younger board members?
     Yes: 32.8%      No: 67.2%

Question: Do you have 1 or more board members age 35 or under?
     Yes: 36.5%      No: 63.5%

Question: Does your board have a written succession plan in the event of the CEO’s death, long-term illness or unexpected resignation?
     Yes: 34.5%      No: 65.5%

Benchmark your board’s practices against other ECFA-accredited organizations. What are you discerning from God about your CEO’s exit plan; and your aging board members?

Here are several resources:
   --New Voices at the Table: Welcoming the Next Generation of Board Leaders: A BoardSource Toolkit (PDF).

   --ECFA Governance Toolbox Series No. 1 - Recruiting Board Members: Leveraging the 4 Phases of Board Recruitment - Cultivation, Recruitment, Orientation and Engagement (view the introductory video)

QUESTIONS: Is “retirement” in the Bible? What is your board’s succession plan—and what is your specific plan for recruiting and inspiring the next generation of staff and board leaders?

Saturday, August 30, 2014

CEO Overassurance: “Far Rosier Than Reality”

I’ve asked dozens and dozens of seasoned CEOs and board chairs, “If you could get a do-over, what would you do differently in your early years of board leadership?”  

Here’s a collection of their thoughts—and insights from the governance literature:

A CEO told me: “I wouldn’t lie to my board!” (On the expressive side of the four social styles, this leader painted a picture far rosier than reality.)

The co-authors of Boards That Lead caution directors, “Most chief executives are constitutionally optimistic, and since by definition their role is to surmount challenges, the tenor they bring into the boardroom is likely to be relentlessly upbeat. Taking executive overassurance into account will aid directors in detecting nascent troubles ahead, but it is only one piece of a very complicated puzzle.” (Boards That Lead: When to Take Charge, When to Partner, and When to Stay Out of the Way, by Ram Charan, Dennis Carey and Michael Useem)

Another CEO, wishing she could revisit missed opportunities, responded, “I would spend more time with individual board members.”

“When asked what they would do differently, retired CEOs most often say, ‘I would give more time to developing the board,’” writes David L. McKenna in Stewards of a Sacred Trust: CEO Selection, Transition and Development for Boards of Christ-centered Organizations.

And here’s my answer to the re-do question: “I would have been more intentional in mentoring and inspiring board members with niche books. That would have created greater ownership of our vision and mission.”

“Avoid Management-by-Bestseller Syndrome that requires everyone to read this month’s trendy book. Instead, build a management library in your office and recommend specific titles to specific people for specific problems or opportunities.” (See The Book Bucket chapter in my book, Mastering the Management Buckets.)

You can create a life-long learning culture on your board by inspiring at least one board member, per meeting, to give a five to seven-minute book review on a key topic: governance, spiritual discernment, leadership, trends, risk, finance—whatever your need is.  Leaders are readers!

Carl Bard said, “Though no one can go back and make a brand new start, anyone can start from now and make a brand new ending.” (Wow. That’s the Good News!)

QUESTION: If you could get a do-over, what would you do differently in your early years of board leadership? What will you do in the next 90 days?