Revisiting Leadership Development in the Context of McKinseys’ 2014 Expose - and doing so from the Perspective of Nonprofit Organisations

In January 2014, an article appeared in the McKinsey Quarterly entitled “Why leadership-development programs fail.” They identified a number of shortcomings in current programs, including:

• 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.

In 2014, OPTIMUM NFP participated in the development of the Not-for-Profit Leadership Survey which 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. Whilst historical issues and challenges do exist with leadership development programs, approaches that incorporate Action Learning, are providing worthwhile benefits, and evidence does point to these addressing the shortcomings identified in the McKinsey article.

Additionally, Australian non-profits are experiencing a huge amount of change, brought about by a combination of internal organisational issues as well as a disproportionate amount of external environmental challenges. The former resulting directly from employees wanting more from their organisations in a climate of uncertainty around both employment and service delivery, whilst the latter resulting directly from a changing political landscape that is failing to underpin service delivery stability, let alone expansion, and a financial imperative that sees government policy more mindful of perceived budgetary imperatives than community well-being. The political focus on predominant economy-wide cost-reduction, without a corresponding increased focus on economy-wide revenue-generation, will continue to challenge activities within the non-profit sector.

So in this challenging context, what skills and expertise is required by managers of non-profit organisations into the future and to what extent does a skills gap currently exists?

A timeline of management developments over the last 50 years or so reflects a dual focus on organisational strategy as well as organisational leadership. This was evident in the works of Kanter, Porter, Peters & Waterman, Greenleaf, Covey, Hammer, Kaplan & Norton and many more. As the understanding of managing change came more and more to the fore, a focus on the individual in organisations as distinct to the organisational processes themselves became more prevalent. Management research and the associated academic research journals have become increasingly awash with such an emphasis, although the success of change management continues to elude many organisations.

The non-profit sector is not immune to these environmental events. Experiences in the commercial sector tends to mirror, or at least influence, events in the management of non-profit organisations, or at the very least there is a strong association which NFP leaders need to be cognisant of in their own deliberations.

So what are the attributes that are needed of leaders in the non-profit sector into the future? Based on my own Doctoral research and further informed through my consulting work with over 50 nonprofit organisations, I suggest that the sought-after attributes fall into two broad categories which I have labelled as ‘Thinking’ on the one hand and ‘Relationships’ on the other. Seems overly simplistic, but let me explain further.

Thinking involves lateral and medial thinking. The former is closely aligned to strategic thinking and is characterised by how well the leader can see the broader picture and incorporate ideas from a wide range of sources, not just what is in front of them at a particular point in time. In order to be effective at this type of thinking, leaders need very broad experience, not just in their own organisation or their own industry, but be able to incorporate broader experience to add value to the current challenge. 

Medial thinking focuses attention on the detailed issues necessary to bring scope and context to lateral thinking. Effectively it becomes the ‘How to?” of the “What if?” Here the leaders are focused on detail and the ability to actually deliver ideas and concepts to a point where their organisation can in fact function and respond to organisational and environmental challenges.

Related to ‘Thinking’ is the attribute of ‘Relationships’. I stress that this is related and not stand-alone. Without the ability to relate to a wide range of organisational stakeholders, whose complexities are well documented in the non-profit sector, ‘Thinking’ becomes redundant, at both levels. The key characteristics of ‘Relationships’ involve:

• the ability to effectively communicate at all levels of the organisation as well as to all stakeholders, 
• the ability to transcend limiting organisational structures where necessary and build effective in-house teams to resolve problems and challenges
• the ability to harness individual and collective organisational skills to achieve strategic and operational outcomes
• the ability to strengthen organisational capacity and individual capability

Consider your own organisation in the context of the above and where your leaders sit in this paradigm of Thinking and Relationships. What happens within your organisation to ensure these attributes exist and are being reinforced for both current and future leaders? How is learning accommodated for in this environmental context?

In the above context, there is a clear linkage between the attributes of Action Learning and the need to fill nonprofit organisational skills gaps, including the development of current and future leaders. As an experiential process of engagement Action Learning is premised on the following key characteristics:

1. Being evidence based and grounded in a proven theoretical practice based discipline;
2. A way of thinking about how one learns
3. Driven by organisational and business needs
4. Meeting the needs of the individual and the organisation
5. Designed for tackling current problems
6. Being action focused, and
7. Having a learning focus at individual, team and organisational levels.

OPTIMUM NFP runs numerous programs that support organisational learning and skills development across all levels of leadership and management, as well as programs that support organisational change. Further details can be obtained at the OPTIMUM NFP web site at https://www.optimumnfp.com.au/programs.html Alternatively, bespoke programs that respond directly to the unique requirements of your own organisation have also been developed and further information on these can be obtained by contacting David Rosenbaum at drosenbaum@optimumnfp.com.au or by ringing 0411-744-911

Developing leaders, expanding skills and coping with organisational change. These are interrelated activities and all fundamental to your organisation's future sustainability. Act now.

Developing Your Leaders and Up-Skilling Your Staff

OPTIMUM NFP announces the launch of its 3rd highly acclaimed and accredited "Action Learning Question Cross-Organisational Cohort" program commencing in early July 2016.

Nonprofit organisations juggle many competing priorities, especially in the current market, with each having an impact on their future. One of these stands out for those organisations who see themselves having a long-term vision, and that being the effort and budget needed to develop leadership and generally up-skilling their staff.

In a leading article in the January 2014 edition of McKinsey Quarterly entitled "Why leadership-development programs fail", 4 reasons as to why such programs rarely achieve what they set out to achieve were identified. These were:

1. These programs overlooked organisational context. As was highlighted in the article, "Too many training initiatives we come across rest on the assumption that one size fits all and that the same group of skills or style of leadership is appropriate regardless of strategy, organisational culture, or CEO mandate." The article went further by suggesting that "Focusing on context means equipping leaders with a small number of competencies (two or three) that will make a significant difference to performance ... We have found that when a company cuts through the noise to identify a small number of leadership capabilities essential for success in its business - such as high quality decision making or stronger coaching skills - it achieves far better outcomes."
2. These programs failed to incorporate reflection as part of the real workplace. As was highlighted in the article, "The answer sounds straight forward: tie leadership development to real on-the-job projects that have a business impact and improve learning." The article went further by suggesting that "The ability to push training participants to reflect, while also giving them real work experiences to apply new approaches and hone their skills, is a valuable combination ..." 
3. These programs underestimated the need to change existing mind-sets. The article suggested that "Becoming a more effective leader often requires changing behaviour. But although most companies recognise that this also means adjusting underlying mindsets, too often these organisations are reluctant to address the root causes of why leaders act the way they do." It further suggested that"Identifying some of the deepest, below the surface thoughts, feelings, assumptions, and beliefs is usually a precondition of behavioural change - one too often shirked in development programs."
4. These programs often failed to measure real results. The article suggested that "We frequently find that companies pay lip service to the importance of developing leadership skills but have no evidence to quantify the value of their investment." The article suggests that evaluation should be focused at both the individual level as well as at the organisational outcomes, indicating that "...monitor the business impact, especially when training is tied to breakthrough projects." 

OPTIMUM NFP and Action Learning International's Action Learning Question Program ("ALQ") has been developed to specifically address the issue of cost-effective leadership and staff development for nonprofit organisations. Context has been identified through the use of organisation specific challenges which need to be addressed and resolved during the course of the program, supported by the introduction of skill and leadership attributes necessary for such resolution. Reflection has been included as a distinct and iterative activity through both formal and informal processes, supporting skills and leadership development. Mind-Sets are challenged through the co-consulting processes of the ALQ, and Results are identified and evaluated though the final reporting processes derived from the ALQ.

OPTIMUM NFP in conjunction with Action Learning International launched the Action Learning Question program ("ALQ") in the nonprofit sector in mid 2014. The ALQ program has been running successfully in the UK for over 15 years, across nonprofit, commercial and public sector organisations. In the latter alone, over 200 participants have successfully completed the program over the last 3+ years. In Australia, the ALQ is being delivered as both an in-house program as well as a public program. The latter are known as Cross-Oragnisational Cohorts ("COCH"). The ALQ program, in both formats, responds directly to the challenges and opportunities discussed above and fully supports a more evaluative framework for assessing the effectiveness of organisational learning and development.

The first COCH completed in November 2015, whilst the second program is currently underway and is due for completion in early June 2016. The program has been recognised by the Australian Institute of Management Business School who, after rigorous review of content, structure and delivery methods, has accredited the program as 1 Unit (elective) towards its highly acclaimed 12-Unit Master of Business Administration (MBA) Degree.
The feedback from the first COCH was excellent and exceeded the expectations of those that attended. The second program is heading in the same direction with participants currently very enthusiastic about the process. A third program will be launched shortly for commencement in July 2016. Places for these programs are limited to ensure the best outcome for attendees.

Whilst registration forms will be available shortly on the OPTIMUM NFP website, you can register your preliminary interest by contacting David Rosenbaum at drosenbaum@optimumnfp.com.au or you can contact David Rosenbaum on 0411-744-911 to discuss the program in more detail to determine its applicability to you and your organisation. The flexible design and format of the program enables interstate participants to involve themselves in Sydney-based cohorts.

Visit the OPTIMUM NFP website at www.optimumnfp.com.au and click on the "ALQ Workshops" tab to read the testimonials from the first program and to obtain information as to the structure and process of the COCH generally.

Letting Your Employees In and The Impact on Leadership

Interesting article in the October 2015 edition of the AIM magazine on page 12, entitled "Time to Open the Books". In light of some recent client assignments it raised in my mind the question of what and how much do employees need to know, or should know, about the broader business, as distinct to the narrower view of what is going on within their own teams, departments, work groups etc. And of course in light of the frequent mantra regarding change management, where building the case for change and setting the scene is considered a pre-requisite for success, how does not 'letting them in' or giving them the broader context, fit that story?

There are other issues here of course, which revolve around keeping your employees engaged and, to a very great extent, excited about what is going on in the organisation, and, more importantly, engaging them in the organisation's future by chasing innovation, efficiency and effectiveness. Additionally, as the article eludes to, what about their emotional well being. A substantial part of an employee's life is focused around their work, so an environment that encourages enthusiasm surely can only be one where engagement is seen in the broader sense rather than the more narrower sense.

One of the key challenges in this approach to employee engagement and inclusion is, of course, the ability for organisational leaders to cope with a changing landscape where leadership is not seen as having all the answers and 'directing' staff, but rather seeking broad input into organisational challenges, recognising that a wide range of requisite skills exist right through the organisation, and diffusing the 'management' process. In many organisations such skills are not necessarily harnessed or even known, let alone sought and embraced. Potentially this begs the question as to the role of such areas as Human Resources - where I often suggest that operational and transactional approaches provide little value-add to the organisation, whilst strategic approaches should really be the focus.

Have organisations truly embraced this openness, as distinct to saying they do but practically they do not, or are some still operating within a historical paradigm of hierarchy and power, as distinct to a flatter, inclusive leadership and management culture?

How does your organisation function in this aspect?

The CEO Roundtable Launches

“The quality of a leader cannot be judged by the answers he gives, but by the questions he asks.” [Simon Sinek]

OPTIMUM NFP is pleased to announce the launch of the CEO Roundtable “(CEOR”), designed exclusively for CEOs of nonprofit organisations. This professional learning forum supports the ongoing development of CEOs through facilitated discussion and peer support

Being the CEO of an organisation is often referred to as a lonely position. The business challenges are coupled with the organisational challenges, which in turn are overlayed with the challenges of simply being the leader.

Would you like the opportunity to meet with other CEOs to

• have a sounding board when your work as an organisational leader challenges the status quo?
• Share your experiences, discuss challenges and collaboratively seek solutions?
• Challenge your thinking so that you achieve better organisational and personal outcomes?
• Benchmark yourself and performance through open and honest reflection?
• Seek strategies for supporting, developing or improving your Board’s governance?

The CEO Roundtable will:

• Be professionally facilitated with a structured agenda that combines free flowing discussion with focussed attention to pertinent issues, ensuring a positive experience for all
• Offer a confidential and emotionally safe environment in which you can exchange ideas, challenge your own and peer thinking
• Hear from invited guest speakers who are recognised experts in relevant fields when appropriate to the group’s needs
• Foster and support new and existing professional networks

How the CEOR will work?

• The CEOR will comprise a series of 10 monthly professionally facilitated sessions, each of 3-hours duration
• The agenda will be structured to provide for reflection on achievements and information sharing; identification of challenges and issues pertinent to the sector with solutions focussed discussion and; specific topic discussion
• The group will be self governing and responsible for setting key components of the agenda for each meeting

Where will the CEOR sessions be held?

• Sydney sessions will be held at the offices of the Australian Institute of Company Directors and the Australian Institute of Management. These sessions will be fully catered.
• Melbourne, Brisbane and Adelaide sessions will be held in similar venues with full catering available

David Rosenbaum is an internationally accredited facilitator and a highly experienced consultant to Government, commercial and in particular, the Australian not for profit sector. Within a professional learning framework, David’s group facilitation skills successfully foster peer support, increase positive networking outcomes and encourage individual personal and professional development.

What is the financial commitment to become a member of the CEOR?

• Annual membership of $3,100 plus GST covering 10 CEOR sessions.
• Membership fee becomes payable in full upon registration
• To ensure the integrity of the group’s intent, participants are encouraged to commit to regular personal attendance. Proxies cannot be used to cover absences

For further information, contact David Rosenbaum of OPTIMUM NFP or visit the Website and click on the tab entitled "The CEO Roundtable"

What's in Store for 2016 at OPTIMUM NFP?

Welcome to 2016. Wishing all readers of The OPTIMUM Newsletter a Happy, Healthy, Safe, and Prosperous year ahead.

2015 was a very special year for OPTIMUM NFP as it saw the successful implementation of the Action Learning Question Public Program (marketed as the Cross-Organisational Cohort) following its formal launch in mid 2014. The success of that launch and that initial Program, has resulted in a second public program commencing in mid February 2016, with interest levels such that places for this second program are filling fast. My website contains feedback from the first public program (click on the Tab entitled "ALQ Workshops"). In-house Action Leaning Question Programs are also being discussed with numerous organisations, and these are expected to come to fruition during 2016.

In addition, I was offered the opportunity to join the Australian Institute of Management as a Facilitator in their fast developing Graduate School as part of their highly accredited MBA Program, where I am currently involved in the delivery of two units, namely Managing Financial Resources and Strategic Organisational Change. The former further supports my keen interest in developing financial expertise amongst non-finance professionals, whilst the latter further extends my interest in change management as a result of my current PhD research.

And finally, 2015 saw me obtain preliminary confirmation of the publication in an international peer-reviewed academic journal of one of my key papers related to my PhD research. This paper presents the actual findings of the research and is hopefully the first of a series of 4 such papers that, depending on the peer review process, could see all published during 2016. As these papers are published, I will be keen to share them with interested readers of this newsletter, as they have direct impacts on the nonprofit sector with regards the management of successful organisational change.

These achievements and activities all feed into the quality of consulting input that OPTIMUM NFP continues to provide its clients.

In 2016, OPTIMUM NFP will launch the "CEO Roundtable", designed exclusively for CEOs of nonprofit organisations. It will be a professional learning forum that supports ongoing development of CEOs through facilitated discussion and peer support. Details including registration forms will be available shortly and interested CEOs can pre-register their interest by contacting David Rosenbaum direct. The CEO Roundtable will be launched in Sydney, Melbourne and Brisbane.

During 2016, The OPTIMUM Newsletter will seek to cover many relevant topics for this sector, so keep a watchful eye out for those that may be of specific interest to you. It is currently anticipated that topics will include, but will not be limited to the following areas:

• organisational learning
• role of strategy in organisational learning
• innovation and how to find it and encourage it
• assessment tools for reviewing board performance
• culture assessments for change readiness
• mission/market tension in nonprofits

There will also be ongoing updates as to progress with the Action Learning Question Program including attendee feedback.

2016 will continue to be a year of challenge for all of us, economically, politically, and socially. I look forward to The OPTIMUM Newsletter being a source of relevant information that can assist, in a small way, your organisations, and your personal path through these challenges.

Contact David Rosenbaum on 0411 744 911 or at drosenbaum@optimumnfp.com.au to enquire how OPTIMUM NFP could assist you and your organisation in achieving stated goals and objectives.

Developing Leadership and Measuring It: The Action Learning Question Program Could Be A Way Forward

Recognition as to the effectiveness of Action Learning as applied to the development of leadership skills, has been highlighted by two well known and internationally accredited academics and leadership practitioners, Michael Marquardt (Professor of Human Resources and International Affairs at the US based Elliott School of International Affairs and Program Director of Overseas Programs at George Washington University) and H.Skipton Leonard (Faculty member at the Carey School of Business at John Hopkins University). In a 2010 publication entitled "The Evidence for the Effectiveness of Action Learning", as published in the Action Leaning: Research and Practice Journal, they identified four reasons to support their conclusion regarding the impact of Action Learning in this field, being:

1.    Action Learning encourages people to take responsibility and action to achieve a desirable result or goal;

2.    Action Learning provides a disciplined process for reflecting and learning;

3.    Action Learning allows people to work on the specific skills necessary to get things done through people, and

4.    Action Learning provides people with the direct and indirect feedback necessary to learn complex leadership skills along the way.

Having considered the strengths associated with Action Learning as it applies to the development of leaders within organisations through either formal in-house leadership development programs or through less formal development, the question of measuring the success or otherwise of leadership development programs becomes the next issue to be addressed. In a recent edition of the MITSloan Management Review, Gandossy and Guarneri (Principal and Research Consultant respectively, from the US based Hewitt Associates, human resource consultants) reported that research from the top tier of US based companies identified the development of a range of holistic measures that addresses key organisational stakeholders namely, people managers, business leaders, HR professionals, and key organisational talent. These measures included, but were not limited to the following:

• identifying when key talents would be ready to move onto new roles within the organisation
• understanding the extent to which leaders take responsibility for their own development and that of their people
• identifying how leaders contribute to the development of talent as a corporate resource
• understanding the extent to which leaders 'walk the walk' on effective leadership behaviours
•  identifying the business trends that most influence leadership strategies within the organisation, and
• understanding the link between our leadership development programs and the internal supply of qualified candidates.

The real linkage that appears to be highlighted throughout the discussion presented by Gandossy and Guarneri relates to the extent to which an organisation can ensure that the leadership development programs are aligned to actual business needs as distinct to being abstract and somewhat detached from the organisational imperatives that need to be addressed.

The design of the Action Learning Question Program ("ALQ") addresses such needs by operating at the dual level of developing your staff but doing so in the context of resolving very real organisational challenges that, left unresolved, will hinder organisational efforts towards future and long term sustainability.

The 2015 public ALQ Program, referred to as Cross-Organisational Cohorts, (which recently concluded in November 2015) proved highly successful and delivered real solutions to the organisations that were represented, and real value to the individuals involved in the cohort.

Similar programs with bespoke ALQ Program structures are commencing in March 2016 as in-house ALQ Programs. These are developed for medium and large organisations that are, from a resource perspective, able to accommodate unique Learning Sets necessary for an effective program. Whilst structural elements are uniquely developed in these instances, both the in-house and the cross-organisational cohorts all operate under a common ALQ framework.

The support provided by the Australian Institute of Management ("AIM") has added further value to both the Cross-Organisational Cohorts, as well as the In-House Cohorts. AIM have identified the rigour and value of the Program, and have agreed to recognise completion of the Program (through undertaking a multi-tiered written assessment process) as one Credit Unit towards their highly acclaimed 8-Unit Graduate Diploma of Management and their 12-Unit MBA programs. Whilst this accreditation path is not compulsory, it provides a very sound base to support ongoing education and staff development - a very valuable process for organisations. 

OPTIMUM NFP in conjunction with Action Learning International Ltd. is currently preparing a further Cross-Organisational Cohort to commence in February 2016. Given the success of the recent Program, and the detailed expressions of interest received from five prospective cohort members to-date, it is recommended that you lodge your interest as early as possible, as these Programs are designed for a maximum number of participants of eight per Program. You can register on-line at www.optimumnfp.com.au (ALQ Workshop tab), or contact David Rosenbaum at drosenbaum@optimumnfp.com.au or on 0411-744-911 to register or to discuss the nature of the Program and how it may benefit your organisation, as well as yourself.

As the Principal of OPTIMUM NFP and Senior Consultant and Head of Relationship Management and Program Delivery for Australia at Action Learning International Ltd., I am well placed to structure a program that responds to your organisation's requirements. With the advent of both the Cross-Organisational Cohorts as well as In-House Cohorts, all organisations, irrespective of size, can now consider the practical benefits resulting from participation in an Action Learning Question program to solve sticky organisational challenges whilst simultaneously developing the leadership skills that your organisation will need in the coming years.

Contact David Rosenbaum at drosenbaum@optimumnfp.com.au or 0411-744-911 to discuss how an Action Learning Question program can assist your organisation achieve its objectives.