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Nonprofit Management

The Five-Minute Nonprofit MBA

Among all the differences between nonprofits and the corporate world, one contrast that is often overlooked but influential is the path to executive leadership.

If you’re a nonprofit executive, chances are that you embarked on that path because you were committed to your mission, not to the art of management. This is the reverse of the pattern in the corporate sector, where many aspire to leadership positions first and often move between industries in pursuit of those positions.

For the corporate executive, the emphasis on the art of leadership—along with the industry recognition that these skills are financially valuable—means that there are a plethora of MBA programs available for professionals in almost any stage of their career. While nonprofit-focused MBA programs are only starting to emerge, it’s hard to imagine the executive director of a typical small- to mid-size organization being able to attend. There are the financial costs, of course—how many grassroots NPOs can afford to pay off a new executive director’s student loan for an MBA?—but there is also the high cost for the ED of taking one’s eyes off the mission and making a lengthy educational pit stop.

For the foreseeable future, most nonprofit executives will continue to have to learn the nuts and bolts of management on the fly.  Some good professional development programs can help lay some groundwork (for example, see in my home state CompassPoint’s offerings in the SF Bay Area and the Center for Nonprofit Management’s in Southern California).  But EDs still have to take constant responsibility for building their sills.

Many of my clients are engaged in this process, and I compiled a list of resources to help them. It doesn’t cover “sexy” topics like strategy, vision, and change management; it covers the basic competencies involved in managing people:

  • recruiting
  • developing staff
  • retaining talent
  • performance reviews
  • empowering initiative
  • and (gulp), termination

The art of executing these competencies well may not be glamorous, but any leader who lacks these skills—nonprofit or corporate—is destined for pain.

So, if you feel like you need some help, here are some resources for your own self-teaching.

Recruiting

The biggest factor in any manager’s ultimate success or failure happens at the point of hiring. Getting the “right people on the bus” (to use Good to Great and the Social Sectors author Jim Collins’ term) is an art form. Here is a quick intro to that art (the article’s point about the importance of a succession plan to drive recruitment is especially insightful). For more practical tips, here is a list of 10 good recruiting practices. One of the ways that nonprofits can broaden their search without having to hire a search firm is to leverage social media: Read about how to better use LinkedIn in hiring.

Developing staff

Once your talent is on board, you need to consciously and strategically develop your people. A recent study by Bridgestar revealed that nonprofit managers especially fail to carry through on this front, despite good intentions and recognition of its importance. Bridgestar also has produced some helpful guidance for nonprofit managers that want to improve their on-the-job development programs.

Retaining talent

Losing great people is a consistent source of pain for nonprofit executives. Some of this pain can be avoidable. One of the best books on the skill of talent retention is Love ’Em or Lose ’Em: Getting Good People to Stay. The book provides research from top organizations, as well as 26 key practices, many of which are quite possible even for a small nonprofit. New research, like this study from the University of North Carolina business school, suggests that the way new employees are introduced into an organizational culture influences their likelihood of staying.

Performance reviews

Getting your team to move in the same direction, with each person performing well, requires a rigorous process of employee review. Yet I have found that nonprofits (especially those too small to have an HR person) consistently skip this process—some employees go years without a formal review. Here is a good introductory primer from Success Factors, a leading HR firm. If you wish to dig deeper, I recommend the excellent book Transforming Performance Measurement, which contains a winning mixture of anecdotes, hard research, and insightful analysis.

Empowering initiative

Almost every leader says they desire initiative, and many leaders complain that their staff is too passive. Assuming that you have the right people on board, the real problem might be the management style. Northwestern University’s business school has produced an interesting study on how important it is for some managers to learn to “do nothing.” Another article from the Harvard Business Review on the art of delegating can serve as a diagnostic mirror for managers. For those that want to grasp how to better personally connect with staff in a way that releases initiative, read the best book on the subject: Primal Leadership: Learning How To Lead With Emotional Intelligence.

Termination

Unfortunately, at times managers have to carry out what is the hardest act for most: terminating an employee. Whether this happens because of budget cuts (an increasing reality in our fiscal climate) or employee underperformance, termination is filled with many land mines and requires skill. A good starting place is this very useful introduction, “How to Fire an Employee the Right Way.”  If you are embarking on a termination process without in-house HR expertise, make sure you’re covering all the legal bases. Finally, if you anticipate that the termination conversation will be particularly contentious with the employee in question and/or with the remaining staff, it is worth formulating a thoughtful plan. For those facing that situation, I recommend Difficult Conversations: How to Discuss What Matters Most, a classic book that is the product of the world-famous Harvard Negotiation Project.

 

Read more stories by Curtis Chang.

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COMMENTS

  • Jean DeSouza's avatar

    BY Jean DeSouza

    ON October 11, 2012 08:55 PM

    This is so very true. Unfortunately most nonprofit executives get into the drivers seat without many driving lessons. While dedication to a cause is important, it is not enough. There is a plethora of poorly managed nonprofits getting by with demoralized, underpaid, overworked and burned out staff. It is rare that nonprofits invest in systems, professional development or succession planning.  Most days are about putting out fires. All of this comes from the top where all too often the person is charge is clueless about how to manage a company.

  • Franics Eberle's avatar

    BY Franics Eberle

    ON October 12, 2012 04:52 AM

    It is great to read this “5 minute” MBA for nonprofit leaders. Having been a non profit leader for many years much of this is true and I have experienced it. The lessons come hard. I have read books on business and leadership and have taken several courses to help in my “business” acumen. It has helped but I still have gaps. One area left out of this piece is the interaction of the nonprofit leader and their Board of Directors. Unfortunately many non profit boards are not professionals and hence they too lack knowledge about business strategies and can even reject them as being too business like for a nonprofit. this can undermine the leader and their efforts to improve the effectiveness of the business aspects of a non profit. Leading a non profit is challenging in so many ways. Thank you for this.

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