CEOs: Employment - Get It In Writing

By Virgil R. Carter

Resources for CEOs and aspiring CEOs may be few and far between.  In this article, and for the next several weeks, we will focus on some key insights for those in the chief executive’s role and those wanting to become a CEO.  We start with perhaps one of the most critical documents:  the CEO employment agreement.  Here are five critically important elements, among others, for a supportive and successful term as a chief executive: 

1. Duties:  Are the roles, duties and authority of the CEO clearly stated?  Is it clear the CEO is singularly responsible for staff, budgets, contracts, and other operational essentials?  Can these duties be changed, and if so, by whom and how?  Are changes (change of duties, change of role or authority, reorganization, merger, acquisition, cessation of operations, etc) considered as termination for good reason?
2. Compensation, benefits & annual review:  What is the base compensation?  What are the types of variable compensation, e.g., bonus, commission, etc.?  Are other types of compensation appropriate, e.g., one-time (moving, relocation, etc.) and/or recurring (car, travel, business club, etc)?  Will compensation be established and maintained as “market rate” and how will market rate be determined annually?  Who participates in the decisions about CEO compensation?  Does the association’s standard benefits package apply to the CEO?  How is CEO annual performance planning and evaluation conducted?  Who leads the annual CEO review process?  Who participates in the process?
3. Term & renewal:  Is there a reasonable initial term of employment?  When and how will the initial term be extended or renewed?  Who participates in the decision?  What if there is no formal action to renew the initial term—does it renew automatically, or is it considered involuntary termination?
4. Termination:  How will unfavorable “termination for cause” be defined?  How will other types of favorable terminations (voluntary, involuntary and for good reason) be identified and defined?  How are the termination definitions linked to compensation, benefits and any special termination pay-outs, e.g., termination in first year of employment, termination after first year, involuntary termination, for good reason, etc.?
5. Restrictions:  Are there personal or professional restrictions on the CEO while employed, and/or upon termination?  For example, can the CEO teach, write, do research or other similar activities, while employed?  Upon termination, can the CEO immediately work for another association in the same geographical area?  Can the CEO immediately approach employees of her/his former organization about career changes?

Thinking carefully about these key parts of your CEO employment agreement, and reaching mutually agreeable resolution with your volunteer leaders will help to establish your credibility as a senior executive.  It will also make your life a lot more enjoyable.  Good luck!

Try Doing One Thing at a Time

Virgil Carter

Are you feeling overworked and overscheduled in our multi-tasking world?  Have you gotten to the point where “multi-tasking” is not a positive term?  Writer Tony Schwartz describes this situation in a recent Harvard Business Review blog network article, “The Magic of Doing One Thing at a Time”. 

“Why is it that between 25% and 50% of people report feeling overwhelmed or burned out at work?” he questions.  “It's not just the number of hours we're working, but also the fact that we spend too many continuous hours juggling too many things at the same time.”

With great perception Schwartz notes, “What we've lost, above all, are stopping points, finish lines and boundaries. Technology has blurred them beyond recognition. Wherever we go, our work follows us, on our digital devices, ever insistent and intrusive. It's like an itch we can't resist scratching, even though scratching invariably makes it worse.”

But there’s even greater effect on our human resources.  Norris goes on to point out, “But most insidiously, it's because if you're always doing something, you're relentlessly burning down your available reservoir of energy over the course of every day, so you have less available with every passing hour.”

So what can we do?  And what steps can our organizations take to support higher productivity and more innovative thinking?  Norris suggests three policies worth promoting:

·         
      Do the most important thing first in the morning, preferably without interruption, for 60 to 90 minutes, with a clear start and stop time. If possible, work in a private space during this period, or with sound-reducing earphones. Finally, resist every impulse to distraction, knowing that you have a designated stopping point. The more absorbed you can get, the more productive you'll be. When you're done, take at least a few minutes to renew.

·          Establish regular, scheduled times to think more long term, creatively, or strategically. If you don't, you'll constantly succumb to the tyranny of the urgent. Also, find a different environment in which to do this activity — preferably one that's relaxed and conducive to open-ended thinking.

·          Take real and regular vacations. Real means that when you're off, you're truly disconnecting from work. Regular means several times a year if possible, even if some are only two or three days added to a weekend. The research strongly suggests that you'll be far healthier if you take all of your vacation time, and more productive overall.

What’s the lesson learned?  It’s to engage in work by being fully engaged for defined periods of time.  And when one is renewing one’s energy, really renew.  Try doing one thing at a time!

How Leaders Kill Meaning at Work

By Virgil Carter

As your organization’s chief executive, you probably think you know what’s important—what’s Job One.  And you probably do.  But do you know what may just as important as Job One?  “Call it Job One-B”, write authors Teresa Amabile and Steven Kramer.  In their article, “How Leaders Kill Meaning at Work”, published in a recent McKinsey Quarterly edition, the authors suggest that “enabling the ongoing engagement and everyday progress of the people in the trenches of your organization…” is a key to helping your staff to make progress in meaningful work.  This, they say, is the single most important event that can deeply engage people in their jobs.

 The two authors point out that the first fundamental requirement for employee job satisfactions is “that the work be meaningful to the people doing it”.  They go on to note that people are more creative, productive, committed and collegial in their jobs when they have positive inner work lives.  This positively affects the bottom line of the organization as well.

A sense of purpose in the work and consistent action to reinforce it, “has to come from the top”, not just frontline supervisors, Amabile and Kramer write.  They describe four traps that lie in wait for senior executives; traps that drain the meaning from the work of the people in their organizations.

 Mediocrity Signals:  Most non-profit organizations have a lofty purpose and mission that aspires to greatness.  But are you inadvertently signaling the opposite through your words and actions?  Despite executive rhetoric about being innovative and “the gold standard”, is your organization consumed with being ordinary?  Does your staff feel they are doing mediocre work for mediocre reasons? 

Strategic “Attention Deficit Disorder”:  Monitoring an organization’s external environment in order to make strategic moves is a common trait of senior executives.  Thinking about where the organization should go next is an important responsibility.  But does your organization start and abandon initiatives so frequently that employees neither understand the initiatives, nor have sufficient time for execution to determine whether the initiatives are working?  Does each year bring in a new themed strategy?

Corporate Keystone Kops:  Early silent film movies depicted the Keystone Kops, who were fictional policemen so incompetent that they ran around in circles, mistakenly bashed one another and fumbled one case after another.  Many senior executives who think everything is running smoothly in their organizations may be completely unaware that they preside over their own version of the Keystone Kops.  When coordination and support are absent within an organization, people may lose their sense of purpose and stop believing that they can produce something of high quality.

Misbegotten “Big, Hairy, Audacious Goals”:  Management researchers Jim Collins and Jerry Porras have written of the value to organizations of developing “big, hairy, audacious goals (BHAG), as a bold strategic vision statement which has powerful emotional appeal.  It’s possible, however, that the BHAGs are grandiose, containing little relevance or meaning for people in the trenches.  They can be so extreme as to seem unattainable and so vague as to seem pointless.  The result may be rising employee cynicism and plummeting productivity.

 The writers conclude their article by noting, “As an executive, you are in a better position than anyone to identify and articulate the higher purpose of what people do within your organization.  Make that purpose real, support its achievement through consistent everyday actions, and you will create the meaning that motivates people toward greatness.  Along the way, you may find greater meaning in your own work as a leader.”

5 Nonprofit Trends to Watch in 2012

By Virgil Carter

It’s early in 2012—spring is officially here and our spirits are uplifted.  So what will the coming year hold for nonprofits?  Is there good news or not-so-good news ahead?  “5 Nonprofit Trends to Watch in 2012”, authored by Nell Edgington on http://www.socialvelocity.net/blog/ offers the following annual predictions which she defines as “probably a bit more wishful thinking than actual predictions”:

·         More Open, Engaging Organizations:  Smart nonprofits are getting better at engaging armies of supporters. In order to do that, they have to cede some control. Nonprofits that can allow volunteers, donors and advocates to engage their friends in their own way will unleash a growing army of support for their organizations.

·         Smarter Boards:  I am an endless optimist when it comes to nonprofit boards of directors. Boards are, for the most part, dysfunctional, but I believe that they are getting smarter and more effective. I think boards will start asking more and better questions, increasingly put themselves to their highest and best use, focus more on strategic issues as opposed to day-to-day tasks, empower their staff leadership to take the organization in more innovative directions, and start putting their money (and their networks) where their mouth is.

·         More Honest Communication between Nonprofits and Their Donors:  Oh yes, I do, I do believe it. The nonprofit sector’s proclivity to endlessly beat around the bush, tell donors what they want to hear, and sugar-coat the truth will start to wane in the New Year. Because the reality is that a severely under-resourced nonprofit sector is the new normal.  That truth is harder and harder to hide. Nonprofits need more money for infrastructure, more and better staff, and technology. And they need their donors to step up to the plate and fund it. 

·         More Strategic Approaches to Solving Social Problems:  It’s increasingly meaningless for nonprofits to talk about the “good work” they do. In order to attract donors, nonprofits must be able to articulate what they do and how it results in change. This necessitates an overall strategic approach to their work. From creating a theory of change, to developing on a comprehensive strategy, to raising the money required to execute on that strategy, to aligning money and mission, to evaluating their efforts, to translating their evaluation into a compelling story, nonprofits have to get more strategic. Those organizations that take a step back and create, and fully integrate their organization into, a long-term plan will be much more successful and sustainable.

·     More Financed Nonprofits:  As part of this more strategic approach, nonprofits will (must) move towards a broader, more strategic approach to funding their work. They will realize that the hamster wheel of chasing receding dollars in a scattered approach just isn’t going to cut it anymore. As the fundamental economic restructuring that we are currently experiencing continues, nonprofits must create a financial model for their work.  The financial status quo just will no longer work in the nonprofit sector.

Edgington concludes by saying, “I’m not a fortune teller, but I am an optimist. I have tremendous hope for our great nonprofit sector. We may be in the depths of an on-going, structurally transformative recession, but it in no way is the death knell for the nonprofit sector. It is simply an opportunity for nonprofits to get smarter, more honest, more open, more strategic, and more sustainable. And that’s exciting.”

That is exciting, don’t you agree?  Do you and your organization see opportunities ahead?  Will your organization be moving in any of these directions in 2012?

Buddy Can You Spare a Dime?

By Virgil Carter

Does your nonprofit organization, or your foundation, actively engage in fundraising?  Are donors an important audience for you?  If so, you know that the resource development world is a challenging one, particularly since 2008 when the economy slowed and unemployment increased.

“Five Steps for Winning Conversations With Donors”, by Cody Switzer, published in a recent issue of The Chronicle of Philanthropy, offers some insights on positive and productive interactions with potential donors, based on an interview with Laura Fredericks, a fundraising consultant.  Fredericks says she has noticed a disturbing trend, “Too often fundraisers use the same formula to seek a gift, whether they are asking for $10,000 or $50,000, instead of tailoring each interaction with a potential donor to the person’s interests and values.

Conversations with donors are too important to use a standard template, Ms. Fredricks said. A guarantee that fundraisers are doing the right thing:  They should be a little nervous every time. Otherwise, it’s a sign they are coasting.  Fredricks offers five steps for improving conversations with donors: 

·         Know exactly what you want:  Before you contact a donor, you should have an idea “how much, how many, how often, and why” you want their gift, Ms. Fredricks said.

·         Prepare the conversation:  Before meeting with a donor, script out what you’d like to say, with an emphasis on open-ended questions. “These questions can help put a donor at ease and stir conversation”, Ms. Fredricks said. One of Ms. Fredricks’s favorite questions is, “When was the first time you remembered it was important to give back?”

·         Deliver with confidence:  It’s important to smile when you’re communicating with a donor, even if it’s over the phone or through e-mail. Listen to their responses to questions: Do they mention family or a hobby frequently? This can tip you off to the values that are important to them and allow you to adjust your approach. Mirror their language, and keep your requests for donations short and to the point.

·         Clarify your results:  “At the end of each conversation, repeat what you see as the results back to the donor to make sure you completely understand each other”, Ms. Fredricks said. Use a sentence starting with, “I heard you say today that …” and allow the donor to respond and correct you. If a donor gives you an adamant “no” about making a donation, ask why. ”Can I ask why it is you don’t want to give?” is the language that Ms. Fredricks recommended.

·         Plan the next move:  If the donor is still unsure about giving, set a timetable with him or her to check in again, but phrase it as a question. ”Can I get back to you next week?” or “When would be a good time to get back to you about that?” are both effective, Ms. Fredricks said. If the donor does agree to give, you should still set a next goal, with a date, and record it along with all the other information your group has about the donor.

Fundraising is always challenging, but these steps will help increase your conversations with donors and help build those important long-term relationships your organization is seeking.

Strategy for Unpredictable Times

By Virgil Carter

A traditional approach for organizational strategy is based on the view that with sufficient analysis, organizations can make reasonable assumptions about their markets, financial and human resources, technology and customer services, and be successful.  Any unforeseen elements can be addressed through strategy adjustments every few years.  Said differently, strategy for many organizations may be based on internal decisions about what the external world looks like.

But what if the future is unpredictable?  What if an organization’s internal views and preferences just don’t align with the external environment in which the organization finds itself?

 Author Lowell L. Bryan, in an article in a recent McKinsey Quarterly, “Just-in-time Strategy for a Turbulent World”, points out that “…globalization and technology are sweeping away the market and industry structures that have historically defined the nature of competition… (making it) impossible to predict, with any confidence, which markets a company will be serving or how its industry will be structured—even in a few years hence”.

 Bryan suggests an alternative to traditional organizational strategy:  a “portfolio of initiatives” intended to achieve favorable outcomes for the entire enterprise”.  He writes “usually, these initiatives will be organized around themes focused on achieving particular aspirations, such as increasing the reach of the enterprise, entering a new but related industry, or achieving the greater efficiencies.  Portfolio effects increase the likelihood that some of these aspirations will be achieved even if many others fail”.

 According to the author, a successful portfolio-of-initiatives strategy involves “creating enough initiatives offering high returns relative to the risks taken to enable a company to meet its aspirations and outperform the expectations of the markets.  The process requires the CEO and management team to “keep an open mind about where the company may be headed”.  Inherent in this approach is the understanding that “future decisions and future outcomes are likely to vary enormously from initial hypotheses”.  Bryan concludes his article by noting that “Most of the critical decisions involve subjective judgments that, unlike those generated by more deterministic strategies, will be informed by not just the highest-quality staff work but also the knowledge gained as time passes”.

 Are you operating in unpredictable times?  Perhaps a portfolio-of-initiative strategy is for you!

Using a “Third Team” for Organizational Effectiveness

By Virgil Carter

Non-profit organizational achievement is traditionally thought of as volunteer leaders, on the one hand, and staff executives, on the other, with the Executive Director playing the role of moderator and facilitator between the two disparate and often conflicting groups.  In a recent article “The ‘Third Team’ Approach to Board Effectiveness”, by Denis Mowbray and Coral Ingley from the Auckland University of Technology, appearing in Strategy + Business’s January 27, 2012 publication, gains are seen when a subset of volunteer directors and senior executives share knowledge and ideas.

Mowbray and Ingley note “…most…research has focused on the board as one team and the executive ranks as another, with the CEO or managing director seen as playing the role of moderator between the two disparate and often conflicting groups. This study — part of a larger project examining how boards affect performance — challenges that approach, with evidence that the highest-performing firms use a third team composed of a mixed subset of directors and executives who share and enhance knowledge and ideas.”

The authors studied 64 organizations (43 corporate and 21 not for profit) in New Zealand and Australia, including several in the top 50 on the stock exchange indices of those countries.

The study revealed that in both types of organization, corporate and not-for-profit, high levels of leader–member exchange within a third team, showing evidence of trust, loyalty, and respect, were a sign of high-performing organizations but not of lower-performing organizations (which had either ignored the concept or failed to implement it effectively).

However, “to simply say that having high levels of [staff-volunteer exchange] is sufficient for high performance would be misleading,” the authors write. Their broader study is examining a number of other factors — team effectiveness, knowledge gathering, and the use of intellectual capital — that also seem to play a role in how boards affect organizational performance through the third-team approach.  “The results show that across sectors, NFP and corporate, [and across] all individuals…the elements of confidence, trust, respect, loyalty and obligation…are consistent within the [third teams] of high-performing organizations” and are inconsistent at lesser-performing companies that either don’t utilize third teams or employ them ineffectively.

Bottom Line of the study:  A so-called “third team”, comprising both board members and executives at the top of an organization’s structure, can facilitate the kind of information flow and interpersonal respect that results in better firm performance.  Could your organization benefit from a “third team”?