Build confidence in your future leaders - these are resources that must be invested in for the sake of sustainability

The 2014 Not-for-Profit Leadership Survey authored by OPTIMUM NFP and Growing People+Organisations, identified that 52% of respondent NFP CEO’s believed that whilst their management teams had strong technical capabilities, they lacked the leadership skills needed for the future.

The survey suggested that traditionally, managers were promoted or appointed into their roles for their technical or professional skills and they learnt to manage a team through trial and error. As suggested in the report, the high costs of staff turnover and the need to develop staff to achieve organisational goals meant that managers needed to have highly developed leadership skills more so than technical skills.

Emotional Intelligence, or EI as it is usually referred to, is very often seen as a necessity in leadership roles, especially when leaders are focusing on the implementation of change programs, where appropriate engagement with all staff is not only necessary, but also fundamental to the success of the change program.  EI has many facets including emotional self-awareness, emotional awareness of others, emotional self-management and control, emotional management of others, emotional reasoning, and expression.

Some authors suggest EI cannot be taught. Managers either have this skill or they don’t. Others suggest that whilst an innate leaning towards effective EI traits is prevalent amongst successful leaders, exposure to appropriate leadership and personnel development can either improve existing EI capabilities or at least expose potential leaders to a wide range of EI related attributes where in the right environment, and with the right mentoring, can over time, refine EI type skills.

In a potentially correlated issue, the Survey also found that 52% of respondents believed that their NFP’s inability to adapt to change was a risk to the sustainability of their organisation. A broader issue appeared to be the extent to which these organisations were change ready from a cultural perspective as well as from a technical preparedness level. In this regard the challenge for leaders is to understand what stage their organisation is at with regards its readiness to react to, and absorb change, identify the gaps, and then look to address them with a myriad of suitable approaches, before change is implemented. Of course when we talk organisational culture, be it for change readiness purposes or for general performance purposes, a leader’s EI becomes of paramount importance, given the role that the leader plays in both these issues.

Seeing the above issues in context, it becomes clear that leadership development training may become critical in addressing the challenging issues that face this sector into the future. Existing evidence suggests that traditional leadership development programs may have substantial shortcomings.  McKinsey and Co have identified four such shortcomings. These include:

• the fact that many of these programs overlook context by working on the invalid assumption that one size fits all;

• the fact that reflection is decoupled from real work, underpinning the absence of real-life application of acquired theoretical knowledge

• the fact that the need to change mind-sets which requires an associated change in behaviours is often overlooked, and finally

• the fact that such programs tend to overlook the Return-on-Investment aspect associated with the cost of such programs.

Alternatives do exist utilising an Action Learning framework. Action Learning as an approach for driving performance was originally proposed by Professor Reg Revans in the 1940s and over the years has led to significant international successes, especially in the NFP sector where the central focus on mission and values enables participants to develop relevant work-based solutions in their own organisations, whilst furthering their own personal and professional development. By doing so, the Action Learning process successfully addresses the shortcomings that McKinsey and Co has identified in existing leadership development programs.

OPTIMUM NFP is pleased to announce the launch of the Australian arm of UK based Action Learning international, which has successfully developed the Action Learning Question approach which is designed to aid leadership and personnel development, whilst focusing in the resolution of work-based challenges. These programs have been successfully running in the UK and Europe for the last 14 years in the commercial, public and NFP sectors, and have much to offer Australian not-for-profits.

Action Learning International is holding its public launch in Sydney on Wednesday 4^th June and limited places are still available to hear from the founders of the Action Learning Question program, Professor Richard Hale and Professor Joanna Kozubska from the UK. To register your interest in attending, please visit the OPTIMUM NFP web site and complete the online application, alternatively contact David Rosenbaum at drosenbaum@optimumnfp.com.au to indicate your interest.

Being a Not-for-Profit. Business vs Purpose - Is It Really a Contest?

I recently found myself embroiled in an online discussion that appeared to view the not-for-profit sector as necessarily being one that conceptually needed to be split two-ways. The initiator of this discussion appeared to be suggesting that on the one hand there were those NFPs who were larger and operated within a more corporate environment, whilst the other group of NFPs are those that are somehow more community based, potentially smaller, and are more ‘grass-roots’ orientated. 

The discussion centred on the perceived need for the ACNC, in the context of the current Federal Government’s recently introduced legislation which would seek to effectively close down the ACNC without necessarily identifying what, if anything, would replace it. The discussion centred on the pros and cons of the current ACNC in the context of what was needed, from a governance perspective, for the efficient running of this sector. A further dimension to this discussion was the role that consultants are playing in shaping the ongoing debate regarding the need for an additional regulator of the type and style of the ACNC.

There are different aspects to this discussion which are worthwhile further considering, especially in the context of a sector which everyone agrees, plays an important part in the economic and social life of the Australian community.

The importance of ‘community’ cannot be overstated. At this level it is worthwhile remembering that the role of this sector is important because of its very heavy focus on individuals. An American author writing about what is often referred to as the third sector (van Til – 2008), suggested that “society is best organized if voluntary organizations are numerous, effective, and thick in meaning”.  He further suggested that in a Western style democracy, there were only four institutional means of solving society’s challenges, namely governments, business, the third sector and finally, what he referred to as the “informal sector”, constituted by family and neighbourhood. This structure very much focuses attention on the distance between services design and delivery at a policy level and at a front-line service delivery level. 

The grass-roots service delivery approach that smaller third sector organisations espouse and are very good at delivering, must also be considered in the light of the economic realities that now face this sector, and will continue to challenge their very existence. 

A well known Australian academic who researched extensively the Australian nonprofit sector, the late Mark Lyons suggested that third sector organisations needed to carefully balance the need to maximise their financial bottom line without becoming purely bottom-line focused, indicating that profit was necessary to ensure sustainability and the ongoing provision of effective front-line services into the future. His call was for an appropriate focus on improving business performance within these organisations. His 2001 publication entitled “Third Sector” highlighted this business performance issue and the management practitioner conundrum when he stated “Over the past 20 to 30 years huge resources have been committed to developing understandings and techniques to improve business performance. But not all of the management techniques developed by and for business are directly applicable to third sector organisations. Third sector organisations have special characteristics that require their own solutions but little effort is put into developing best practice management for the third sector.”

The current and future economic reality within which third sector organisations operate necessitates the consideration and application of a wide range of commercial and managerial issues. These will not disappear in an attempt to change back the clock to an earlier era. The economy has changed and the social structures have changed. The challenge is to ensure that the changes required to be made by organisations in this sector are made in a way that focuses on the outcomes necessary to enhance the lives of those that rely on the services that this sector provide, whilst doing so in financially sustainable terms.

In this context, there is no substitute for sound governance practices and structures within third sector organisations. The ACNC could prove to be a very strong and effective tool for driving such governance frameworks across the third sector and its potential demise, in the absence of any realistic alternative is a negative for organisations operating within this sector as well as those who interact with it. If it is going to be replaced, the sector and those that involve itself with it should be given a detailed picture of what will replace it. Simply going back to what was in existence pre ACNC, may not suffice, especially given the challenging economic and social issues that Australia face and will face into the foreseeable future.

OPTIMUM NFP has been supporting not-for-profit organisations through the provision of strong nonprofit-specific governance related consulting assignments in areas of Risk Management, Strategic Financial Management, Strategic Planning, and Change Management. Contact David Rosenbaum for a free no-obligation meeting to discuss your not-for-profit’s requirements and how OPTIMUM NFP could assist.

Leadership Development - It Can Be Done Better

In the January 2014 edition of the McKinsey Quarterly, Pierre Gurdjian and Thomas Halbeisen, both Directors of McKinsey in Brussels and Zurich, identified the 4 key reasons why many existing leadership development programs failed. They identified context, reality, behaviour, and results, as characteristics that such programs fail to consider when designing and delivering these programs.  

• Context – this suggested that the one-size-fits all approach of many of these programs fail to appreciate that leadership itself is contextual in terms of the situational context of the individual organisation and therefore the actual circumstances that this leader finds themselves operating within. 
• Reality – there is a potential detachment within these leadership development programs between course material and the real-life issues and challenges that the leader is facing when they reappear at work, armed with substantial theory which then needs to be aligned to the reality of the leader’s own organisation. 
• Behaviour – effective leadership requires a sound understanding of individual behaviour and in many cases, such behaviour may need to be changed in order for that leader to be more effective in the work environment. But in the case of formal leadership development programs there exists gaps between current mindsets and the shifting mindset which may go unchallenged during the entire duration of the program, in the absence of specific and real application, as distinct to role-playing type activities. 
• Results – formal leadership development programs tend to be less focused on return-on-investment type evaluation of the actual program itself. The benefits gained from such programs cannot necessarily be evaluated directly back in the leaders own organisation, either from a quantitative or timing perspective, save the participant feedback approach. The nature of these programs generally precludes such quantitative assessment.

The Australian Business Deans Council Report (March 2012) entitled “The Future of Management Education Scoping Paper”, also identified a number of potential shortcomings with existing tertiary business education, both in terms of content as well as delivery. The Report stressed the “fundamental point that improved people management skills, including the constructive engagement of workforces, will be critical to the development of high performance workplaces.”

 

Datar, Garvin & Cullen identified in their 2010 publication entitled “Rethinking the MBA: Business Education at a Crossroads”, a number of unmet business needs in existing MBA programs, including: “the development of leadership skills, acting creatively and innovatively, thinking critically and communicating clearly, and understanding the limits of models and markets.”

Last month, OPTIMUM NFP in conjunction with Growing People+Organisations, released a report entitled “Not-for-Profit Leadership Challenges Survey 2014 Report” which also identified key Australian NFP challenges as the effectiveness of management teams, the ability of organisations to adapt to change, and the lack of general leadership skills amongst management teams, as the most pressing of leadership challenges in that sector. 

Interestingly, the Australian Business Deans Council report identified Experiential Learning and Action Learning Projects as one of the top innovations in teaching and learning methods and approaches that should be deployed as part of management education programs.

One approach to the development of leaders that addresses all the Leadership Development Program shortcomings identified above, and responds to those challenges identified by Datar, Garvin & Cullen, is the Action Learning Question program (ALQ), which has been successfully in operation in the United Kingdom, operating in the commercial, public and nonprofit sectors, with well documented and evaluated outcomes. The process underscores the experiential and action learning related comments of the Australian Business Deans Council.

OPTIMUM NFP is pleased to announce its involvement and launch of Action Learning International in Australia through the application of the Action Learning Question Program, first developed by Professor Richard Hale of Action Learning International. Richard will be in Sydney for the launch in early June. If you are interested in an advanced booking for the Sydney launch  please register your interest by contacting David Rosenbaum at drosenbaum@optimumnfp.com.au

 

Should you wish further information on the Action Learning International ALQ program, please contact David Rosenbaum or alternatively visit the OPTIMUM NFP website at www.optimumnfp.com.au and follow the link to Action Learning International.

What are the key leadership challenges for nonprofit organisations? - Read the 'Not-for-Profit Leadership Cahllenges Survey 2014 Report' to find out

What do you believe are the key leadership challenges for the not-for-profit sector? Are these challenges reflected in the effectiveness of your management teams? Are they impacted by the ability or otherwise of your organisation’s adaptability to change? To what extent do your leaders posses a good balance between technical and people skills? Is your board providing true value to your organisation? How effective are the teams within your organisation? Is your CEO the initiator and driver of change and if so how effective is this? Are your employees adequately engaged with the key priorities of your organisation? Does your strategic plan have an effective monitoring process that supports it? Is your internal communication processes effective and efficient? Does the culture of your organisation support the achievement of your mission?

In 2013, these were the questions that I, and a consulting colleague ‘Growing People+Organisations’, put to a wide cross-section of not-for-profit leaders throughout Australia via an online survey, and the results are now available in the recently released paper entitled “Not-for-Profit Leadership Challenges Survey 2014 Report”

Key findings identified in the Report included:

-          More than half the leaders surveyed believe they are challenged by the ineffectiveness of their leadership team

-          Just over half are concerned about their organisation’s change ability

-          More than half see their leadership teams lacking the required leadership skills

-          One quarter of leaders feel they do not have a Board that adds value

-          The majority of leaders see evidence of effective teamwork in their organisation

-          Two thirds feel that the management team rely too heavily on the CEO to initiate change

Comments provided by respondents also highlighted that the amount of change and the challenges in seeing through the complexities and ambiguities was their greatest worry. Additionally, there was a clear indication in the results that NFP organisations are going through significant change and rapid growth at present and need to adapt their approach using strategic and change management skills more. As a result more CEOs are looking to recruit leaders with those skills rather than just the technical skills they looked for in the past.

Finally, leaders saw a need for more leadership development, including building change management skills. With regards the Disability Care sector, whilst the provision of resources and funding for up skilling organisations and leaders had begun, there was clearly a need to ensure all organisations can access these resources.

The Report also identified a detailed suite of solutions available to address these challenges. OPTIMUM NFP in conjunction with the collaborating partner is well versed in dealing with these challenges with a wealth of experience that can be harnessed to meet the needs of your organisation.

Should you wish to receive a copy of the Not-for-Profit Leadership Challenges Survey 2014 Report you can either contact me via email or alternatively visit the OPTIMUM NFP website and request a copy through the ‘Publications’ tab. You can also contact David Rosenbaum of OPTIMUM NFP for a free, no obligation consultation regarding your organisation’s leadership challenges.