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.

Aligning Learning and Development with Organisational Strategic Priorities

Much information exists in the public domain regarding the trends in learning that are impacting organisations of all sizes and in all sectors, not to mention the challenges that these bring to tertiary institutions as well, in terms of both course design and delivery. The massive explosion in technology, both from an application as well as from an enabler perspective are impacting the ways in which people engage within learning and education and respond to the varied opportunities that have now arisen. This represents challenges for organisations not engaged in the process and for those individuals who do not wish to take responsibility for their own learning. On the other hand, it represents opportunities for those organisations seeking a better return on their training investment dollars, and those individuals who recognise the benefit of active engagement with the training and development process.

The UK's Open University's Institute of Educational Technology has identified a number of trends and opportunities in the world of learning, which when considered in the context of measuring organisational outcomes for training and development, provide some potential opportunities for work-based learning programs. Two of the key ones that organisations across all sectors can consider are:

• Focusing on 'double-loop learning' where learners focus not just on what they are learning and exploring and working out how to solve the problem at hand but also, through a reflection process, they consider how they can become more effective in the process, enabling application of the current problem solving process to future problems. This has organisational implications insofar as such a learning process can be the foundations for knowledge-sharing across the broader organisation.
• First-hand experiences can be amongst the most powerful learning experiences and can be applied to both individual learning as well as organisation-wide learning. In the case of the former, processes and procedures need to be put in place to maximise the individual impact, and the ability, time and context for reflection to underpin this value. From an organisational perspective, story-led materials that are tailored to, and form the base of, organisational learning, ensure that work-based experiences are shared across a wider platform, placing story-telling as a key organisational tool that can deliver learning that fits the requirements of the organisation by maximising engagement.

Whilst learning and development opportunities have been identified through such sources as the UK's Open University's Institute of Educational Technology, recognition of the possible gaps in organisational learning and development were discussed in a recent edition of MITSloan Management Review, where the focus of recent research in a number of commercial organisations pointed to the need to develop corporate learning and development programs that link directly to the organisation's strategic priorities. Key outcomes of that research resulted from the research question of "How can corporate learning programs more effectively develop leadership talent?" The findings pointed to 3 key issues which were:

1. there was a need to align the learning agenda with the CEO's strategic agenda
2. there was a need to create governance mechanisms that linked learning to the rest of the business, and
3. there was a need to direct capability-building efforts too those that mattered most to the organisation.

Viewed in this manner, the research pointed to the importance of focussing less on how learning is delivered and more on linking content and structure with the organisation's strategic imperatives.

One thing is clear from the above discussion. Past methods of evaluating the effectiveness of learning and development expenditure within organisations can no longer rely on an outdated performance measure of staff attendances at 'off-the-shelf' or standardised 'training packages' delivered outside the organisational context, divorced from the organisational reality. Given the way people learn and the tools that exist to support learning, mean the lack of understanding of the true organisational and individual value-add of such training, can no longer be justified, especially in the non-profit sector where financial resources remain challenged.

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.

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.

Support Mechanisms for CEOs - Why are they important?

The challenges for nonprofit CEOs and equivalent positions is immense and even more so in the current environment of economic uncertainty, political instability (especially in an election year), organisational change, and, in the context of nonprofit disability service providers, the changing nature of their business models in response to the movement away from a supply-driven market to one that is responsive to the demands of consumers in the form of the NDIS.

This scenario places heavy burdens on the CEO and equivalent positions as they face these challenges whilst maintaining ongoing service levels, addressing organisational sustainability, and dealing with boards that may not be necessarily skilled in identifying or addressing the strategic challenges that need to be understood and faced.

In August 2013, Forbes Leadership polled 200 CEOs and board directors and noted a range of collective concerns which were reflected as themes from the survey. These included:

• the need to get help with handling conflicts
• the need to further develop talent within their organisations
• the need to establish improved motivational skills amongst their executive teams

Whilst these were seen as major challenges within these organisations and ones that needed to be addressed by the CEO, there is ongoing recognition amongst organisational leadership, that active CEO groups could greatly impact the effectiveness of CEOs as they address these and many other related challenges including responding to such questions as:

• as your organisation grows, how do you maintain an inspiration to innovate and not dampen enthusiasm amongst your managers and staff?
• how do you encourage creative thinking in your organisation to foster growth and development?
• how do you promulgate your organisation's mission, vision and core values?
• how do you ensure that vision is being correctly interpreted in your organisation?
• how do you achieve organisational alignment through all levels of the organisation?
• how do you ensure your own growth and development?

CEO groups can be effective in improving the overall effectiveness of CEOs, ensuring improved organisational and personal outcomes, and this is why:

1. There is always more than one way of looking at a problem or a challenge. Obtaining broader input is necessary to ensure that you overcome any myopic tendencies.
2. A small supportive group can develop into a community of trust which can underpin an "off-the-record" type of engagement, allowing you to speak your mind freely without fear of repercussion.
3. Diversity within such groups ensures that input into your challenge is based on perspectives that you may not have or even able to see at given points of time.
4. The role of the CEO has often been described as a lonely one for various reasons. There can be an understandable tendency to be somewhat isolationists in your thinking. This can be balanced by the recognition in seeing your group as a small but safe 'community'.

OPTIMUM NFP recently launched its CEO Roundtable in response to the individual challenges associated with being a CEO and in the context of the organisational implications associated with the CEO performance. The CEO Roundtable ("CEOR") has been designed exclusively for CEOs of nonprofit organisations as a professional learning forum to support ongoing development of CEOs through a facilitated discussion and peer support process. The CEOR supports CEOs by:

1. being a sounding board
2. sharing experiences and challenges whilst collaboratively searching for solutions
3. challenging your thinking purely for the purposes of getting better organisational and personal outcomes, and
4. benchmarking your own performance through personal and group reflection

The CEOR is based around 4 foundational pillars:

1. FACILITATION  - it is professionally facilitated with a structured agenda that combines free-flowing discussion within focused attention to agreed pertinent issues
2. CONFIDENTIALITY - meetings take place in a confidential and emotionally safe environment enabling easy exchange of ideas
3. EXPERTISE - guest speakers with required specialist expertise will be invited as appropriate and as agreed to by the group
4. NETWORKS - fostering and supporting new and existing professional networks 

CEORs are being introduced in Sydney, Melbourne, Brisbane and Adelaide. For further information regarding the CEO Roundtable, visit the OPTIMUM NFP website at www.optimumnfp.com.au and click the tab entitled "CEO Roundtable" which provides further information as well as an online registration process. Alternatively, you can contact David Rosenbaum on 0411-744-911 or at drosenbaum@optimumnfp.com.au to make further inquiries.

Public Action Learning Question Program - Launch of 2016 Cohort follows Successful 2015 Program

Action Learning International in conjunction with OPTIMUM NFP is pleased to announce the launch of its second public Action Learning Question Program in Sydney in February 2016. The highly successful first Program commenced in mid 2015 and feedback from participants reflected the value that they saw in the Program. 

“The ALQ has been a wonderful opportunity to holistically address an organisational issue for me. The supportive environment and being able to access the knowledge and experience of a diverse group of people has been very positive and rewarding. Both the organisation and I have benefitted from the ALQ process.”         Anna Buddo, General Manager, Hunters Hill Ryde Community Services who participated in the Program

"David and Richard facilitated an excellent program.  As a professional facilitator myself, I had high expectations and they were met on every occasion the group met.  They were empathetic and stretched each participant on the program in the right way, so we grew and worked on our 'wicked problem' at our own pace."    A Management Consultant who participated in the Program

“The ALQ program is an organisational problem solving process where contributory factors and possible solutions to a problem are defined through a questioning and reflective process with other group members. The guided group discussion offers a rich source of thoughts for consideration, sparking new ideas for dealing with organisational and personal change.  The program has influenced my thinking to undertake a deeper process of building organisational strategy that I believe will assist NADO through its transition to the National Disability Insurance Scheme.”            Denise Heath, CEO, NADO Inc

“The ALQ was excellent in providing a framework to help me think through some business development challenges with my consulting business. I found the mixed cohort of commercial and not-for-profit sectors to be quite effective.  Input came from a variety of perspectives, which helped to frame some old challenges in a new way. The program was very effective at helping prompt me into new thinking.”        An HR Consultant who participated in the Program

This program embraces Professor Reg Revans’ widely accepted proposition that learning is best considered as a combination of programmed knowledge combined with insightful questions generated in groups known as action learning sets. In this manner, action learning is grounded from a proven theoretical practice, is organizational and business driven, aimed at addressing the needs of the organisation by tackling what has been termed ‘wicked’ problems, whilst being action and learning focused. 

Within this framework, the ALQ (“Action Learning Question”) program represents a process by which action learning is structured and undertaken within a defined time-­period, utilising a range of specifically created tools and resources, with the specific twin objectives of solving organisational challenges whilst developing organisational skills and expertise. This is referred to in the prevailing literature as the Return on Investment Model of action learning, and is to be applied to individual work-based challenges of the participant’s organisation. 

The program includes 6 structured sessions, of varying time periods and a mixture of face-to-face and virtual formats, conducted over a 3-month period. Ongoing contact is maintained with all participants by the program facilitators as well as amongst the participants using a Yammer communication platform. Participants are expected to apply various activities throughout the Program within their own work environments, working towards resolving the key issue that they bring to the Program. 

The program has been accredited by the Australian Institute of Management towards their Graduate Diploma in Management and their MBA programs.

The Program is scheduled to commence in mid-February 2016 and places fare limited to a maximum of 8 participants. 

For further information and to register on-line, visit www.optimumnfp.com.au and click on the 'ALQ Workshops' tab. (In-house ALQ Programs are also currently being run. Contact David Rosenbaum on 0411-744-911 to discuss the applicability of the ALQ Program to your organisation)