Loading summary
Transcript1 lines
- [00:00]
A
How many of us would realistically take a job where in the interview the board said to us, we think there's a 35 to 70% chance that we're going to force you out at some point? That's the reality of this job. And here's what I want you to remember. Most executive directors aren't removed because they were incapable. They're removed because something did not get addressed for too long. And that's our area of opportunity. Foreign. Hey friend, this is Dolph and I am glad you are here for the relaunch of the Successful Nonprofits Podcast. Relaunch Week includes three brand new episodes with one being released each day on Tuesday, Wednesday, and Thursday. And while the podcast back catalog has more than 300 episodes for you to download and learn from, this week's episodes and all future episodes will focus on helping nonprofit chief executives navigate the complexities of their work. And now, here is the episode you downloaded. Welcome to the Successful Nonprofits Podcast Friend. I'm Dolph Goldenberg and I'm a consultant, coach, and confidant to nonprofit leaders across the country. And today we are going to talk about something that most people in our sector don't say out loud. A lot of executive directors don't get to leave on their own terms. A few years ago, I found myself in a boardroom. Not at the end of a chief executive's tenure, but at the beginning, and I was watching the hiring decision unfold because of my consulting work. I have been in that boardroom with a lot of boards as they interview their final candidates and really make a decision about who they're going to hire. After both of the final candidates for this one organization had finished their interviews and their presentation and left, the only people in the room were the board members, the search consultant, and myself. Out of the two candidates, one was clearly stronger than the other. But there was a problem. The candidate who was head and shoulders, the best option, had been forced out of a previous role. Now, to their credit, that candidate had been completely transparent about it throughout the recruitment process. No spin, no deflection, just pure ownership. And when the search consultant called that organization to get a reference, guess what? The organization story and the candidate story lined up perfectly. But still, in that meeting, the board was hesitating. They spent 30 or 45 minutes hemming and hawing. Oh, we know this is probably the best person, but what if they really aren't going to be a good executive director? What if they just present well in the interview process but are going to be a Terrible leader. So I turned to the search consultant. She was sitting across the room from me. And I said, before you answer this, I'm going to write down a number. What percentage of executive directors do you think are forced out or terminated? She paused. She looked up at the ceiling. She looked around at the board members. And then, as if she was about to say something dirty that we just don't say in polite society, she said in a low Voice, probably about 70%. I flipped over my paper and I held it up. I had written the exact same percentage on my paper. Now, let's reality check that. Afterward, I actually did a little bit of research. I could only find one study on nonprofit chief executives and the percentage of them that are fired or forced out. And that very limited data says it's closer to 35 or 36%. Specifically, that study indicated that 29% are forced out and 7% are terminated. But here's the thing. That number is almost certainly underreported, because in our sector, we are very good at making departures look mutual, even when they're not. So whether it's 35% or more than a third of all Chief Executives, or 70% more than 2/3 of all chief executives, here's the truth. It's not rare. It's not an outlier. And this is a real risk in your role as executive director. And if you are an executive director or you aspire to become one, you need to understand why this happens, why chief executives get forced out. And here is the simplest way to understand it. Boards don't remove executive directors because of one issue. They remove them because they've lost confidence in the chief executive's ability to manage and lead the organization. That's it. Everything else is just how the loss of confidence accumulates over time to result in the person being forced out. And in my experience, that tends to show up in five patterns. Those patterns fall in the areas of people, finance and operations, self sabotage, death by a thousand cuts, and not growing with the organization. I'm going to start with people because, frankly, it is probably one of the most common reasons why chief executives end up getting forced out. And the reason it's one of the most common is because all problems at the end of the day are people problems. Oftentimes it's the relationship with the board. Sometimes there's too much communication, other times not enough communication. There's a sense that there's a lack of transparency. And by the way, often when that's the case, it's mutual. The executive director feels like the board's not transparent enough and the board feels the same way. There's tension and conflict and misalignment. The way that I see this come to a head most often is a long term board chair steps aside or steps down. They've been your board chair for three, four or five years. You've developed a great rapport and working relationship with each other. You know each other well, you're practically friends. You're not because they're your board chair, but you are practically friends. And in steps, this new person who has a very different style, sometimes a little more caustic or a little more abrasive. And it's a real shock to the system. So often I see that being the catalyst for the pupil problems with the board. Other times though, it's staff. And here's where it gets tricky, because the board thinks you're doing great and the staff has a completely different experience. And when that gap becomes visible, it can become jarring and destabilizing for the board and your relationship with the board. I could spend an hour or more just talking about the people issues that cause the board to have a lack of confidence. But I want to keep this podcast down to 20 minutes or so. So I'm going to move on and we're going to talk about finance and operations. Now, most of us who become executive directors, we did not climb the ladder through finance or operations. We normally came up through programs or we climbed the fundraising ladder. And whether we like it or not, that means when we get to the top position, regardless of how we got there, we end up in that executive director seat without, without all the knowledge and skills that we need. We have a steep learning curve and boards are usually fine with the learning curve. But honestly, more often than not, they don't know about it. They don't realize that there are skill gaps, and they don't realize it until something breaks. It could be a cash flow issue, which of course is short term. It could be something more systemic like consecutive annual operating deficits or, or compliance problems or audit problems. And as those operational cracks suddenly become visible, especially when it seemed like everything was going fine up to that point, the question shifts from is the executive director doing a good job? To is our chief executive in over their head? That's a hard question to, to recover from. Sometimes what we will see is that an executive director does not grow with the organization. You've built something, you've grown it, you've succeeded. Maybe you've taken an organization from a half million dollar organization to a $2.5 million annual operating budget, or from a $3 million organization to a $10 million organization. Well, that larger organization, guess what? The executive director or chief executive job looks a lot different. As your organization grows, it will require that you either adopt some practices or you step up in those practices. And that is delegation, building systems, and structure so the organization can operate without you and learning to lead through others, not through doing. And if we don't grow at the same pace of our organization, we eventually just have the organization outgrow us. And if your board is doing their job, if they're being good governors of the organization, they'll have some conversations with the chief executive, who clearly stayed in place as their organization has grown. But if the chief executive can't catch up, they need to be good governors of the organization and they need to make change. To me, self sabotage is one of the most uncomfortable things that we might talk about, but we need to have the conversation, because sometimes these. The issues aren't external, they're internal. I have seen executive directors who believe the rules don't apply to them, and consequently, I've seen them treat staff poorly, use organizational resources inappropriately, sometimes even embezzlement, and also sometimes falling into some really unhealthy coping mechanisms with alcohol or. Or drugs. Here's the tricky part about all of those. They don't blow up immediately. They accumulate and they add over time until one day it catches up and we've dug a hole for ourselves that is so deep, we just can't recover. Now, you might be saying to yourself, hey, Dolph, I hear you as you talk about those four big areas. But I think oftentimes it's a little bit of everything. And that's true. And that's why I call the fifth one death by a thousand cuts. And this is how it usually happens. It's not one big failure. Although admittedly, someone who's embezzled, once they get caught, that's typically one big failure. But usually it's not one thing, it's several smaller ones that happen either at the same time or successively. It could be some staff tension and then a financial hiccup, like a cash flow crisis, a strained relationship with your board. And sometimes, then maybe we start to adopt some coping mechanisms that aren't really that healthy. And that might not always mean, like turning to alcohol or drugs. That might mean, for example, starting to shut down in meetings with the board and with staff and starting to say, I know what's best for this organization and to stop listening. Individually, those are all manageable, but together they create a narrative. And the narrative in the board's mind and the board's deliberation becomes maybe this isn't the right leader for us anymore Friend, before I share what you do about this, we're just going to take a quick break. It is hard to believe that these are the first episodes that I have released in about a year, but I am glad that you are here for the relaunch of the Successful Nonprofits Podcast. During my recording hiatus, I stepped back and asked what I most wanted to share with you and other leaders in the sector. And friend, here's what I realized. After nearly two decades as a permanent or interim executive director and a dozen years coaching chief executives and their boards, I have a lot to share with people who are doing that job right now. And that's why, going forward, this podcast and my email newsletter is going to be focusing on nonprofit chief executives. And the timing here really matters. Many chief executives and their organizations are under immense pressure right now. Government funding is shrinking, demand for services is increasing, the political climate is just exhausting, and let's face it, the chief executive role has only become lonelier and more stressful. In my consulting work, I've worked directly with 65 or 70 chief executives and hundreds of board members. As a consultant or chief executive, I have tackled most of the major and minor issues you could face as a leader, and I want to help you propel your organization to new levels of success. So if there is an issue you would like me to cover either on the podcast or in my email newsletter, please email me@dolphuccessfulnonprofits.com if you're listening on a streaming app that allows comments. You could also just drop it in the comments. Remember, friend, my goal is always to help you and your organization thrive. Welcome back, friend. Before the break, we talked about the five key areas where we see boards lose confidence in their executive director. And those five areas are people, finance and operations. Not growing with our organization. So really becoming a victim of our own success, self sabotage and and death by a thousand cuts. And I promised you that when we came back from this break, I'd share with you what we can do about it. So if you're still with me, you might be thinking, okay, Dolph, how do I not become part of that 35% or 70% statistic? And there are four practices that I see in leaders who have long successful terms and long leave on their own terms. The first it's radical Self awareness. The higher we rise in an organization, the more you live in an echo chamber. People agree with you, they support you, they reinforce your thinking. Now, this is not just our staff. This sometimes includes our boards, our funders, our community leaders. And if you're thinking to yourself that you're not in an echo chamber, I want to ask if you've had people laugh at a joke that's really not that funny. When I've been an interim executive director or an executive director, or even as a board member, I'll tell a joke and people will laugh at it. And I think to myself, gosh, that joke wasn't really laugh out loud. It was humorous, but not a laugh out loud, even in a mild way. And when those things start to happen, we start to lose perspective. And the question becomes, how are you actively challenging your own thinking? For example, are you separating yourself in your head and thinking, that joke wasn't that funny, or that idea I just suggested wasn't that amazing of an idea. If it had been presented to me, I probably would have had some questions and probably some tweaks or changes to that idea. The reason we have to actively challenge ourselves is because self awareness isn't passive, it's discipline. Along with that self awareness, we have to have hard conversations. If something feels off, guess what it is? When I was sharing with you that sometimes as an interim executive director, I might say something that I think is funny and people lightly laugh out loud. Or I should say politely, not lightly, but politely laugh out loud. And on my best days, I challenge that and I say, hey, I appreciate the laugh, but it wasn't really that funny. And by doing that, I'm acknowledging that there's a power indifference that it wasn't that funny. I'm also acknowledging I'd rather people not tell me I'm funny when. When I'm not. It also means that if I don't understand something, I need to take a step back and admit it and ask someone to explain it. Oftentimes that might be a direct report. Who wants to share something that's pretty technical with me, it's in their area of subject matter expertise, but not mine. Instead of just nodding my head and pretending like I know what they're talking about, I need to slow them down and I need to ask them to. To explain it. And sometimes I'll even say, hey, you know, this is so not my area of expertise. Will you please explain it to me like I'm in fifth or sixth grade? And that I find is very useful because it helps, again, reset that power. It's me saying, you're the expert. You're like the teacher here. I'm the fifth grader. I need your help in understanding this. And lastly, if a relationship is strained, it's not going to fix itself. If I have an incoming board chair who I've not gotten along with very well, guess what? If I don't step in and try to really repair that relationship, I'm not going to have a great relationship with my board chair. That's just the way it is. So those really successful chief executives who, who have long tenures and get to exit on their own terms, they go toward those hard conversations, not away from them. And they do it with vulnerability. Additionally, successful chief executives, they commit to lifelong learning. They have gaps in their skills and their knowledge and their experiences. You do too, and I do as well. The difference is whether we hide them or we address them. And sometimes, as the chief executive, that means really looking at those gaps again. What ladder did you climb up? Did you climb up programs or fundraising or finance and operations? And if you climbed up programs or fundraising, you probably reached the top seat without understanding finance. This might mean that you can read an income and expense statement, but when you look at a balance sheet, you're not really sure what you're looking at. You don't really know what equity means on that balance sheet. You don't really know even necessarily why it's called a balance sheet. It could be that when your finance person hands you those bank reconciliation statements to review, you're not 100% certain how to review them. I'm going to make myself vulnerable here. When I first became a chief executive back in 2003, so I was recording in 20, 26, 23 years ago, I knew how to read an income and expense statement, but I didn't know how to read a balance sheet or for that matter, what I was looking at when I was handed the bank reconciliation statements. And for years, I just faked it. I just acted like I knew when I really didn't. That was to the detriment of my organization. I did not lead or manage that organization as well because I did not fully understand its finances. Thankfully, at some point I had a treasurer who, inside the finance meetings, recognized that I really didn't understand the balance sheet and also that maybe I needed some help on my bank recs as well. He did an amazing job, and every meeting he teached me one or two things. But he wouldn't just do it like singling me out. He'd teach it to everybody. And all of our skills went up. But had I taken the time to understand that gap and fix it earlier, I would have been more productive in those finance committee meetings and in leading and running that organization through way more of my tenure. Sometimes, though, it's not always finance. Sometimes it's building those people. Management skills. In the nonprofit sector, so often we become a manager for the first time because we were an incredibly good individual contributor, and our bosses looked at us and said, hey, you're doing great. We're going to give you a person to manage. But they did not provide us with the coaching, training, and support necessary to be a good manager. And you know why? That's generational. And I don't mean like, oh, the older generation doesn't provide coaching and support, and the younger generation does. What I mean is, when they became managers, they weren't provided with the training, coaching, and support. And that goes back over generations and generations. Only now are we understanding the importance of making sure that before we allow someone to do a job independently, we help ensure they have the skills necessary. That means, though, that if we've become the chief executive and have not had any kind of formal training in how to be a good manager of people, we need to go get some, because our practice in that area could improve. So what this means, tying this back to those tough conversations, is being willing to say to our board chair and maybe even our staff, hey, I realize I have a gap in this specific area, and here's the plan that I've developed to address it. That not only builds vulnerability, shows you're willing to be vulnerable, and builds transparency, it also builds confidence. And boards that are confident in you, staff that are confident in you will follow you. The last practice that I see successful executive directors do is they get support because executive leadership, it can be isolating. You can't always process things with your staff because, well, they're not your friends and they work for you. And you can't always process things with your board because, once again, they're not your friends and you work for the board. And that's where coaching comes in, not because something is wrong. A number of my coaching clients have had years of success before they come and they seek coaching. Sometimes they want to break through a plateau. Sometimes, as their organization has grown, they want to make sure their organization does not outgrow them. Oftentimes, going and seeking coaching is a sign, a good sign that you are a successful leader. So, friend, I started with a big number, 70%. Maybe it's only 35%. But whether we're talking about a third of chief executives being forced out or 70% of executive directors being shown the door, it's a high number. How many of us would realistically take a job where in the interview the board said to us, you know, we think there's a 35 to 70% chance that we're going to force you out at some point? Most of us would view that as a mistake. Most of us would view that as a job we did not want to take. But that's the reality of this job. And here's what I want you to remember. Most executive directors aren't removed because they were incapable. They're removed because something did not get addressed for too long. And that's our area of opportunity. Because if we are willing to to stay self aware, to have the hard conversations, to keep growing and to get support, you can dramatically increase the odds that you will have a long and successful tenure and that you will leave on your own terms. That, my friend, that's our show for the week. I hope that you have gained some insight to help you and and your nonprofit thrive. And here's the disclaimer. I'm not an accountant nor an attorney, and neither I nor the consulting practice provide tax, legal or accounting advice this podcast. It's for informational purposes only and should not be relied on for tax, legal or accounting advice.