Governance Models for the Nonprofit Sector - Are Current Options All There Is?

Many models of governance have been attributed to this sector in Australia - but are they all that exists and are they enough to carry this sector forward?

The Australian Stock Exchange model that is referenced in the Principles of Good Governance takes a very 'legal' and 'regulatory' approach with its emphasis on rules, relationships, systems, processes, control and mechanisms. It looks at things from the perspective of formality and rigidity and whilst it refers to relationships, it does so within a very limited notion of formal relationships, and in so doing keeps the board in an arms-length relationship with constituents. In many cases it keeps board members, other than the Chairperson, at arms length to the CEO as well. In such a legalistic and formal model the prospect of a wide range of stakeholders to potentially feel disengaged is possibly quite high.

This model is however the one that appears to formally address many of the governance challenges that currently exists within the corporate world and perhaps, if adhered to in both principle and practice, would hopefully overcome many of the excellent examples of very poor corporate governance application that we have all become more and more familiar with in the Australian commercial world. Well known names have been embroiled in the aftermath of poor governance.

Another model often quoted in Australia is the Tricker model which seeks to delineate, along a mufti level plain, between functional aspects of inward and outward looking activity, past, present and future focus, and conformance and performance type activities. These plains are further categorized by reference to the key board functions of accountability, strategy formulation, supervision of executive activities and finally policy making.

But the question remains - is the way board governance handled in the nonprofit sector delivering for the 'communities'  that they serve, in terms of outcomes being consistent with those community expectations, and for that matter, societal expectations, or are we falling short because the focus is potentially too heavy on the legal and regulatory requirements that support the prospects of legal liability should something go wrong?

Is innovation being somehow starved for the sake of legal fundamentals? Whilst there is no doubt that efficient well run nonprofit organisations must be a fundamental aim of all who work and interact with these organisations, is there another way of delivering this whilst maintaining the confidence of those who fund these bodies?

Small to mid-sized incorporated nonprofits are experiencing massive resource challenges and yet boards remain, in many cases, stuck within the framework of complete separation between executive and managerial demarcations. In this manner, are nonprofits in Australia getting the most out of their boards?

The Role of Leadership in Change - An Action Learning Approach

Management and Leadership are two very different concepts requiring very different skill-sets. Management is characterised by such activities and responsibilities as planning & budgeting, organising & staffing, and controlling & problem-solving. In executing these responsibilities, effective managers attempt to produce a degree of predictability and a sense of order.  Leadership on the other hand is characterised by such activities as the establishment of organisational direction, aligning people with vision and strategy, and motivating & inspiring. In many respects it is these bigger picture issues that underscore organisational change. Indeed, much has been written in management and organisational literature connecting leadership styles to stages of organisational change.

One clear certainty is that successful organisations require leaders and managers to display the combined attributes mentioned above, irrespective of the extent of change or indeed the level of continuity being experienced at any time during the life of an organisation.

Underpinning this discussion of leadership, are the wide range of interpersonal skills that enable individuals within an organisation to effectively work with others. These skills include:

-          Self awareness which comes from a clear and realistic understanding of your own strengths, weaknesses, ambitions, and needs;

-          Self regulation which comes from an understanding of how you control your actions and reactions and take charge of your emotions in the process;

-          Motivation which comes from understanding the mechanisms that drive you to achieve and to exude a passion and enthusiasm for your work and for the success of your teams, departments, divisions and organisation as a whole;

-          Empathy which comes from displaying a clear understanding of your fellow staff and being able to weigh the ability to consider and acknowledge others with the more global needs of the organisation’s mission and vision , and

-          Social skill which, whilst associated with empathy, comes from your ability to relate to, and work effectively, with other people.

Action Learning recognises the important link between leadership and success in the challenging environments that organisations now face, and will continue to face over the coming years. Management literature identifies a number of roles that leaders must increase their abilities in to underpin this success. These include:

-          the ability to think in systems terms

-          the ability to act as change agent

-          the ability to constantly innovate

-          the ability to act as servant-leader

-          the ability to take on a wide range of concurrent tasks

-          the ability to be both teacher and mentor, and

-          the ability to be visionary and to communicate that vision

In the context of the leadership skills identified earlier and the abilities discussed above, Action Learning has emerged as one of the most effective and powerful tools in developing the necessary competencies and experiences to support the leadership roles of the modern organisation. Through the Action Learning approach of working with real problems, a reflective inquiry process, a commitment to action and the focus on learning within the organisation, Action Learning contributes to the critical leadership skills that are one of the key enablers of organisational change.

OPTIMUM NFP launches its inaugural “Action Learning as a Change Management Strategy in the Not-for-Profit Sector” Workshops on 14^th May 2013. OPTIMUM NFP has been applying Action Learning to organisations in the NFP sector as a means of addressing the various challenges of initiating and working with organisational change. Currently, this sector faces many challenging times and must respond to these in a timely yet effective manner. Change in these organisations is ongoing and will continue to be into the future.

This Workshop is based on research papers submitted to the Academy of Management (America) and the British Academy of Management for their 2013 conferences as case studies in the application of Action Learning in the NSW NFP Sector. The Workshop will provide both the theory of Action Learning as well as its practical application. Participants will be involved in designing and participating in Action Learning programs, the aims of which will be to enable participants to lay the foundations in their own organisations for future Action Learning activities.

Action Learning is an effective approach in directly assisting organisations in this sector to not only deal with change, but to develop capacity and capability, ensuring organisations become more ‘change-ready’. As Principal of OPTIMUM NFP, David Rosenbaum’s consulting work in this field is further supported by his research pursuits in change management where he is currently undertaking PhD research in the management of change in the Not-for-Profit sector via a longitudinal qualitative study at a major Sydney not-for-profit hospital.

For those interested in gaining further insights into Action Learning and how it can be applied in your own organisation, visit the following link to download the Workshop Information as well as the Workshop Registration Form. http://www.optimumnfp.com.au/news-letter/34-the-role-of-leadership-in-organisational-change-an-action-learning-approach.html

Given the practical nature of the workshop, numbers are strictly limited to a maximum of 18 participants.

For any further queries regarding Action Learning, contact David Rosenbaum at OPTIMUM NFP.

The Arab-Israel Conflict

This blog usually focuses on matters related to the Not-for-Profit sector. That is what I am genuinely passionate about and that is what my area of expertise is. Occasionally, I tend to comment on other matters, for no other reason, other than they get me going, positively and negatively. Some matters make me prick my conscious and really get me thinking. And so, I give my opinion. The Arab-Israeli conflict is one of these matters.

I come from a Jewish background. My late parents, who both passed away within the last 15 years or so here in Australia, survived the Holocaust and lived through the horrors of the concentration camps, as many of their ilk did. They also lost their entire families which, from what I understand, consisted of large numbers on both my mother's (albeit 1) and my father's side. They very rarely spoke of them. Once again, this is not a strange phenomenon amongst those European Jews who survived. Many lost large numbers of their family.

I am not a practicing Jew as I have some issues and challenges with organised religion - but that is a very personal view, but rather see myself very much as a spiritual person, with a personal focus on making sure I leave this world in a better way than when I came into it, for the sake of my children, their children and humanity generally. This is probably something I will never achieve, but hey, might as well continue to give it a go.

The extensive reading that I have undertaken of the Holocaust events (and very substantial indeed), what led to it, what followed from it, and of course what occurred during it, gave me an insight into human behaviour and what humans are capable of, both good and bad. And there does exist a great deal of both, in all races, in all cultures, in all religions, and in all times.

I always felt that Jewish people were special, because of what they suffered and for how they survived, for what they have achieved, and of course, for what they should have learned. And this is where I find myself getting quite depressed about the current state of Israeli politics, especially with regard Israeli aggression towards the Palestinians. In fact, I would suggest it is more than merely aggression. It is disgusting and I go out of my way to ensure that people who know me, understand that there is a very substantial difference between being a Jew and being a Zionist. The political and religious dichotomy should be clear.

One of the key messages of the Holocaust, is that peoples of all shapes and sizes must have hope in their future and in the future of their children and beyond. They must be treated with dignity and they must have the ability to be responsible for their own destinies and their own futures. I always thought, naively obviously, that by experiencing what the Jews of Europe experienced during WWII, Jewish people would never treat other human beings the way the Nazis treated them. Seeing what the Israeli's are doing to the Palestinians in the modern era, makes me realise the extent of my naivety.

I remember back in the late 1980's having a conversation with an Israeli, in a professional context. During the conversation we started talking about the Holocaust, but for the life of me I can't, to this day, remember how it came up. As we got deeper and deeper into the issues, he indicated to me that the European Jews brought the Holocaust on themselves because they allowed themselves to be led to the slaughterhouse, and did not fight for their lives. He then indicated that it was the modern Israeli citizen and soldier who would never allow that to happen and they will continue to treat the Palestinians and the general Arab world in the manner that they, are in order to protect Israel and to ensure that the Holocaust never ever happens again.

My conversation with this individual ceased at that point, as I realised that there was no basis for a logical, or calm, discussion with him, given that nearly all of my parents relatives perished in that event and here was this guy telling me it was their own fault. Better to withdraw from such a conversation rather than to merely inflame things! He was getting rather hot under the collar I recall.

There are two elements to this story that are both sad and frightening.

Frightening was the fact that this man was a high school teacher back in Israel and was apparently, at the time, on 'secondment' to an Australian based Jewish day school at the time. I pity his students, both here and in Israel!

Sadly, this conversation took place in the 80's. It would appear nothing has changed!

I doubt if it ever will.

Continued building of settlements on the West Bank ensures - in fact guarantees, that no 2-State solution is possible - and guess what - the Israeli's do not want the solution and it's time that Australia and the United States and other allies realise this. But Jewish political influence reigns supreme!

I am not pro-Palestinian or anti-Israel per-se. Both these nations need to live in peace and in harmony, side-by-side. Both peoples have rights and they both have obligations. But the world must see the balanced solution with a balanced mind. Otherwise I fear for the future of my children.

Once again, naively, may I suggest that the reasonable elements in Palestine and the reasonable elements in Israel get together and nut this out and that Jews who live in New York and Sydney and Melbourne stay the hell out of the issue. May be then we might get some positive outcomes.

Talking About Change – Let’s take a look at what works in your organisation rather than what needs fixing

My interest in change management has been driven by my varied experiences across the for-profit and not-for-profit sectors where I have been involved in the management of many change initiatives, all generally driven from a top-down response to a broad range of external environmental challenges. These experiences have been further reinforced by an exposure to the management of organisational change from a consulting perspective within the not-for-profit sector, where the challenges of such change are potentially further ‘complicated’ by a number of sectoral characteristics that both enhance and inhibit the process.

This progression of experiences has fed into my PhD research where I am investigating change management within the Not-for-Profit sector, and given the size and disparate structuring of this sector, am focusing on a case study approach at the Seventh Day Adventist Hospital in Sydney, where I have been given the opportunity to study the change program which supports the implementation of their E-Clinical Pathways systems. In this manner, the research is longitudinally based, which makes this research somewhat unique in the context of change management research, especially given its not-for-profit focus.

In the context of change management, I have written often in the past, about Action Learning as a ‘tool’ that I have been actively involved with in the support of change programs across the not-for-profit sector. Stemming from an Organisational Development response to the challenges of change management, it underpins my professional focus that people within organisations are best able to respond to these challenges once they are provided with appropriate frameworks and structures that can guide them. In this manner, substantial focus is afforded to building organisational capacity as part of the change, and not merely focusing on progressing through the change in isolation of longer-term considerations. In other words, sustainable change becomes the focus as distinct to purely a particular and discrete change outcome.

In this context, a further approach for consideration, and also stemming from the Organisational Development approach to the management of change, is a process referred to as Appreciative Inquiry. This approach considers change from what is referred to in academic parlance as the “Positive Model of Change”. Whilst Action Learning may be viewed from a ‘deficits’ perspective, that is, focusing on the organisation’s problems and how they may be solved so that it functions better, Appreciative Inquiry works more from the perspective of what the organisation is doing well, with a view to understanding what these things are, deconstructing them to better understand them and then seek to replicating them in other aspects of the organisation. In this manner, an Appreciative Inquiry approach has five distinct phases, being:

• Initiating an inquiry to focus on what the subject of change may be within the organisation,
• Inquiring into best practices that exist within the organisation,
• Discovering themes and deconstructing these practices, 
• Envisioning a preferred future whereby members examine these themes, challenge the status quo and reconstruct a future vision, and then finally 
• Designing and delivering ways to create that future view.

One thing to keep in mind regarding these approaches, namely Action Learning and Appreciative Inquiry, is the fact that both conceptual and practical overlap exists and these two approaches to the management of change are not necessarily mutually exclusive, rather, elements of each can be utilised within an overarching framework to manage many planned change programs.

Change is ubiquitous and requires considered application in order to foster enhanced organisational capability so that sustainability of change, as well as the organisation’s readiness for ongoing change, can both be achieved.

David Rosenbaum’s research and practice within the change management arena can be readily applied to solving your organisation’s change management challenges. Contact David to further discuss how Action Learning and Appreciative Inquiry may prove valuable to your organisation.

David Rosenbaum can be contacted drosenbaum@optimumnfp.com.au or visit the web site at www.optimumnfp.com.au

 

Challenges of Not-for-Profit Sector Organisations - An Overview

In my PhD research on change management in the not-for-profit sector, I have identified a range of unique challenges faced by this sector. Organisations within this sector face ongoing sustainability problems which are directly linked to full or partial government funding which places them at risk of being responsive to ongoing political bias and the associated challenges of managing the ongoing conflict between issues of mission, and practicalities of operational and organisational sustainability, especially within religious based not-for-profits.

The ability to attract, maintain, and develop human resources, places ongoing strains and stresses on the constancy of programme and service delivery for not-for-profits. This issue specifically threatens those not-for-profits operating in the broader human service sectors of disability, mental health, and aged care. Additionally, the use and application of hybrid performance measurement criteria for those not-for-profits operating commercial and quasi commercial activities, in competition with for-profit organisations, test their management capabilities at both executive and board levels.

The demanding business environment that many in this sector have faced over extended periods of time, has jeopardised ongoing program funding, and placed heavy demands on service delivery, threatening the continuity of segments of their operations. This has been further compounded by a unique reliance on a diverse volunteer pool which challenges many in managerial and leadership functions within this sector, and places significant strain on their organisation’s abilities to achieve strategic and operational goals, within given timeframes.

In this context, the need to understand and deal with large, varied, and dispersed external and internal stakeholder groups, continues to strain not-for-profit human, financial, and capital resources, placing even further management constraints on these organisations, and potentially focusing attention away from their predominant service, and program delivery objectives. Moreover, these organisations tend to have complex revenue generation models, which reflect the varied sources of funds that need to be managed within a complex and often multi-skilled environment, where their ability to attract the full gamut of skills is already under sharp focus.

In amongst these NFP organisational issues is the multi-dimensional focus of not-for-profit management, which must have more than a unilateral view on purely bottom-line and associated shareholder value outcomes.

Many of these challenges are global characteristics of not-for-profit organisations, for example, regarding issues of revenue generation models in the United States, performance management difficulties in New Zealand, the United Kingdom & Europe, leadership and management ideological challenges in Scandinavian countries, and governance related challenges, especially within not-for-profit hospitals in the United States.

Associated with this broad range of challenges are the cultural attributes of those working within this sector. Those committed to working in this sector may do so because of a perceived connection with a broader societal good and the lack of private gain or profit at the organisational levels and their own perceptions of being human change-agents that become integral in changing the lives of those that rely on their services. Integral in this view is recognition of the pivotal role that such human service type organisations are now playing in society as part of an integrated four-pillar institutional service provision network encompassing government, not-for-profits, business and family networks. The above framework sets the cultural context within which the not-for-profit sector operates and provides insight into the challenges that lay ahead during processes of transformational change.

With a wealth of practical and research based experience, OPTIMUM NFP has developed a range of core capabilities in the servicing of Not-for-Profit sector organisations. These include:

• Change management where Action Learning is applied as a change method working across the organisation, and where organisational readiness for change is assessed at key points in the change program; 

• Strategic Risk Management where bespoke Risk Management Frameworks are developed around unique organisational characteristics

• Governance assessments where the effectiveness and efficiency of NFP boards are independently assessed, recommendations identified, and training developed to strengthen board functioning.

These core capabilities have been applied to such NFP organisations as The AIDS Council of NSW, Ausdance NSW, Australian Catholic University, The Australian Centre for Posttraumatic Mental Health, The Australian Diabetes Educators Association, Catholic Community Services, Centacare Broken Bay, Cure Cancer Australia Foundation, Eastern Respite & Recreation, Family Resource & Network Services Inc., Flintwood Disability Services, Koorana Child & Family Centre Inc., Meat & Livestock Australia, and Nepean Area Disabilities Organisation Inc.

Contact David Rosenbaum of OPTIMUM NFP to further discuss how OPTIMUM NFP can add value to your Not-for-Profit organisation.

The Alan Jones Debacle– What responsibilities do we all share as intelligent people?

There are a number of issues in this sad and sorry tale that disappoint me in the context of seeing myself as a reasonably intelligent Australian.

Firstly, there is the ridiculous notion expressed by Alan Jones that if he was aware of the fact that the event he was speaking at was not private, he would have not made the comments that he had made. At the same time he indicates that his 58 minute tirade was unscripted and unplanned and entirely off the cuff. On that basis how does he now indicate what he would have planned to say or not? 

Everyone knows what he thinks of the ALP and its leadership. He has expressed this openly for the last 2 years and used similar language in different contexts throughout that period.

This leads me to the second issue. Alan Jones is a very intelligent man and has maneuvered his way around public life for many a decade. He knows what to say and when to say it. As a very effective opportunist, he knows when to strike and when to pull back – swordsmanship is his forte. The time-frame hear was exquisite. Make the comment, feel the temperature and then quickly apologise. As evidence of this approach, see the amount of airtime this has and will get over the next few days and beyond. And what does that add up to? – AUDIENCE. And what does audience add up to? – RATINGS. And what do ratings add up to? – ADVERTISING DOLLARS. Even his apology was actually designed to add fuel rather than to portray a meaningful heartfelt apology from a man who knew exactly what he was saying, where he was saying it and why he was saying it. The apology was qualified (as all superficial apologies are!)

This leads me to the third issue. As intelligent people what do we do? Not listen to his radio rants? Ignore his radio station? Don’t give him oxygen? Don’t advertise on his station? Reject the shock-jock approach to public discourse? 

All Australians, especially in New South Wales (as Alan appears to have less of a following in other Australian States) need to have a serious look at themselves with regard this issue. The death of a parent is not an avenue for political advantage. We should ALL denigrate this. It is un-Australian and not in the public interest. Everyone should be speaking out and putting an end to this ongoing, unintelligent garbage that appears on our public airwaves and perpetrated by shock-jocks who rely on such public opportunities to pursue their own very self-centered interests.

All leaders in this country, political, commercial and religious need to support a return to values based discourse – unless, it is of course, in their interests not to, for whatever reasons they may have!