Leadership Through The Integration Of Mission And Strategy
| Posted in Management on Oct 4, 2010 by |
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Over the last decade, nonprofit organizations have been operating between shifting targets of mission fulfillment and financial accountability. Both activities are crucial to the success of any organization; however, there are often times these outcomes find themselves at odds with one another. Mission is not strategy and accountability necessitates hard fiscal choices that affect the populations that we serve. This requires our organizations to become more efficient, more effective and more innovative in order to integrate the responsibility of our missions and the promise of sustainability to our funders.
One of the areas in which investment in organizational capacity building has the greatest impact is clearly in leadership development. Leaders working at their highest level affect not only their own missions, but also impact public policy, resource generation and the image of the sector as a whole. When public perception and social policy change for the benefit of those we serve, effective leadership ultimately improves the human condition for all.
Historically, nonprofit organizations have reached out to the business community to provide their leadership skills as board members and key volunteers. These gracious supporters have provided us with great skills and talents in financial accountability and human resource management from their for profit sector experience. However, boards tend not to look for the same business skills when choosing leaders for day to day operations. Executive Directors, for example, tend to be individuals who have passion and experience with a cause rather than experience in operations, marketing, product development and collaboration. This is often the case for founding Executive Directors, as well as, those hired by well-meaning boards. The dissonance in the board/executive relationship becomes obvious very quickly. Nonprofit administrators become frustrated with board members who don’t focus enough attention to the organization’s mission and board members become frustrated with administrators who lose sight of their charge to meet key goals and objectives.
No organization can be truly successful until it translates its mission into a coherent set of actions that are executed successfully over a period of time. In order to follow this path, leadership development in nonprofit organizations must integrate mission and strategic operations at both the board and executive levels.
Focusing on this combination of elements assures that our sector stays true to its contract with the communities we serve, while assuring the most effective attainment and management of resources that our funders are demanding.
In order to do this effectively, we must clearly embrace the purpose and core values of our stated mission, or in for profit terminology, fulfill the promise of our brand. Without this step, we not only alienate our financial stewards, but we also lose credibility with the clients we serve. Because our mission is our word, the trust that the community places in us is ultimately a social contract. To lead effectively, a complete understanding of our organization’s perception within the community and client satisfaction is critical. Often this involves being receptive to evaluation of our operations at the 360 degree level; involving funders, clients, volunteers, and community leaders in assessing our competitive advantages and disadvantages within the larger social context.
From this base, leaders can then begin to develop strategies to move their organizations toward a vision which builds upon current strengths to assure longer term sustainability. Many of these strategies for organizational assessment can be taken directly from our friends in the for profit sector. For example, understanding your nonprofit’s place in relation to other organizations that provide similar services can open the door to new collaborations and potentially new funding sources. Knowing the costs for your organization to provide its services encourages competition and efficiencies of scale. Lastly, understanding the ever changing needs within the social marketplace can create opportunities to expand services. This encourages program innovation and process improvement, which, has the ultimate potential for diversification of funding sources.
The challenge for leaders during this process is putting these “business” strategies into real world actions while meeting human need. Many capacity building efforts fall through at this stage because leaders in nonprofit organizations can easily find themselves in a double bind. In an effort to manage limited resources, many “working” boards get caught up in the mission driven activities normally performed by paid staff that they forget they are responsible for larger strategic activities for the organization. This endangers organizations by tilting the balance of leadership to the executive while burning out the board. Many “policy” boards forget that an organization is more than their balance sheet and are limited in innovative problem solving capacities to address the mission component of their work. This tilts the balance of power toward financial outcomes rather than people.
Effective policy making (defined here as rules and guidelines for decision making) allows organizations to implement planned strategies and actions in the most efficient way under the guidelines of their core values. It reduces the need for crisis management and opens the door to routine activities and smooth daily operations. In nearly all cases, organizations that consistently operate in crisis are those whose leaders struggle to make decisions in a timely and purposeful way. In order to create an environment which promotes effective policy decisions, leaders need to be educated on their roles and responsibilities within the organizational structure, but they also need a strong understanding of how the organization fits into the larger social environment in which it operates. Evaluating community needs, competitive service providers and client satisfaction have to be a standard part of the policy making process for competent decision making to occur.
The ultimate charge of leadership in our organizations is to leverage scarce resources to best address critical needs within the community. In practical terms, leaders make determinations daily about where and how an organization spends its time and money. These activities are commonly called resource allocation. There are levels of priority when determining where resources are to be allocated: the essential and the strategic. Essential costs are those involved in general operations such as rent, payroll, and categorized administrative activities. On the other hand, strategic costs, while not specifically tied to day to day operations, are distinct expenses that help an organization remain viable and sustainable within the social marketplace. These expenses are often within a strategic planning process and are typically not placed within a line item in a nonprofit’s budget. Because resources within our organizations inevitably become scarce, effective leadership skills are critical when making the choices about which initiatives should be prioritized when the inevitable occurs. Effective leaders look for ways to create efficiency in administrative costs, to diversify into new funding streams, and to maintain momentum and enthusiasm for the long term vision; while trying to maintain a competitive edge.
The integration of mission and strategy is a delicate balance within the nonprofit sector. Developing leadership training, for both boards and executives, that marries passion and compassion for our community’s needs with traditional skills of business management is becoming the new standard within the sector. Philanthropists are now pursuing social ventures with the same vigor and enthusiasm as venture capitalists pursued internet startups in the nineties. The days of funding “good” only because it is the right thing to do are past. The days of making investments in sustainable operational models to create positive social change are here to stay. Leadership is the human capital which determines success or failure in this new environment. Is your organization positioned to lead?
Janelle Barker Gibson, MSW is an Adjunct Professor at Washington University Brown School of Social Work and President at Change Makers Consulting, LLC, a St. Louis nonprofit consulting firm.
Tags:
Nonprofit Organization Leadership Mission Strategy Capacity Building
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