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Pulling It All Together: Components of Strategic Leadership

Organizations can become transformative

This is the third article in a four-part series on strategic governance. Part onepart two, and part three are available online.

In previous articles in this series, I have highlighted several leadership characteristics of strategic organizations that I believe nonprofit organizations must embrace in order to assure future success. The following is a summary of them.

Create a Productive Board/CEO Relationship

The board and chief executive are a team, working together to assure future strategic success. The board employs the CEO to execute strategy, not day-to-day operations.

Adopt a Future-Focused Orientation

The board and CEO focus on the future. Other members of the management team and operations staff focus on the present, assuring optimal quality in the services that are provided today.

Define and Achieve a Social Return on Investment

Our primary customers are those who pay the bills. Strategic organizations have a clear understanding of what their customers expect. For nonprofit organizations, it is social return on investment.

Demonstrate Value by Achieving Impact

Strategic organizations clearly define, measure, and publicize impact. Impact is not the result produced in individual programs. Rather, it is the larger result to which individual programs contribute, such as how effective organizations are at working with individuals to achieve optimal levels of independent functioning.

Plan for a Different Future

Too often, the minutes of board meetings reflect extensive consideration of current operations and related challenges. Or the discussion focuses on maintaining and expanding existing programs, sometimes assuming, without adequate documentation, that they remain relevant to community need and the organization’s future. This blocks capacity to consider a future that may be different from the past and stifles innovation—something all successful organizations must strive for.

Achieve Marketplace Alignment

Focusing solely on solving the problems of today only assures that there will more problems to solve tomorrow. We often assume that if we did more of what we’ve done in the past—only better—problems will be resolved. More often than not, the problem exists because there is misalignment between what we are doing and the expectations of our current environment, which are now different from earlier times. External focus is necessary in order to determine if misalignment exists. If that is the case, efforts must be directed at achieving congruence between marketplace expectations and organization resources.

Listen to Outside Voices

We must listen to our marketplaces more than we now do. That means boards and CEOs must spend significant time listening to the voices outside of the organization. Our tendency is to build our future on the experience of the past and rely on internal resources to advise us on what is and is not working. It is this internal focus that mutes the messages coming from the larger environment that speak to the need for change. Successful organizations evolve as they understand the changing expectations of their marketplaces.

Be Transformative

Strategic organizations are transformative organizations. They look beyond current experience to anticipate future trends and opportunities. They ask, “Why?” and evaluate answers within a future oriented context. They expect to change.

An example of strategic-driven transformation is the recent merging of the Children’s Museum of Richmond and Commonwealth Parenting. The Children’s Museum operates through three sites in Virginia: Richmond; Short Pump, which is 20 miles west of Richmond; and Chesterfield, which is 14 miles south of Richmond. Commonwealth Parenting is a 30-year-old organization that provides parenting education programs in Central Virginia. For its 2012 fiscal year, the museum reported an operating budget of $3.5 million and 36,000 visitors.(1) For its 2011 fiscal year, the parenting center reported an operating budget of $221,000. It serves an average of 3,200 families annually.(2)

Each has distinct expertise. The museum provides meaningful learning experiences for children. Commonwealth Parenting provides education programs for parents. Our traditional orientation would suggest that Commonwealth Parenting seek a merger with an organization similar to itself, another nonprofit in the human service field. Why did its leadership decide on this interesting and innovative opportunity? And what was in it for the museum?

The benefit for Commonwealth Parenting is, perhaps, obvious. Through this merger, the organization will have access to an increased number of parents from a larger geographic area. In addition, the nonprofit is able to expand its impact beyond its service-specific competency. In a recent article for the Richmond Times Dispatch, Commonwealth Parenting Board Chair Samantha Otero noted, “We know we have had a great deal of impact for a very small budget, but we could all see the possibilities of taking the quality product we offer and promoting it through the regional reach of the children’s museum.”(3)

The museum, on the other hand, believes that it is not enough to provide hands-on learning experiences for children. The museum also wanted to provide value to the children’s parents. The article goes on to note that, for that reason, the museum has been “working at expanding its impact, including deepening its efforts at parent and caregiver education,” since 2009. Karen Coltrane, president and CEO, says the benefit of combining resources is to achieve a larger impact. “They have knowledge around parents. We have the size and scale.”

I believe that, to thrive in the future, organizations in the nonprofit sector must reevaluate their missions and their values within the larger society. From the beginning of our history, nonprofits have been viewed as the heart and conscience of the community, serving the poor and disenfranchised. But will that be enough to assure our future? I’m not so sure.

For the most part, we are now viewed as organizations to be invested in, not donated to. There are high expectations for results, or value for the investment made. Our marketplace is extremely volatile and will likely remain so for the foreseeable future. No one else is taking responsibility for our future, so we must assume that responsibility ourselves.

I believe that, in the future, the successful nonprofit organizations will be those that view themselves as entrepreneurial resources strengthening the social fabric of the entire community.

What does it take to achieve this paradigm shift? I think it requires a:
commitment to strategy as the primary driver for
our organizations, willingness and ability to visualize our future as different from our past, capacity to stretch beyond our traditional relationships and partnerships, and clear focus on creating value to justify the investment made
in us.

This is our challenge—and our opportunity.


ENDNOTES:

1. The Children’s Museum of Richmond’s operating budget is available on its IRS Form 990. The number of visitors was published on its 2012 Impact Report.
2. Commonwealth Parenting’s operating budget is available on its IRS Form 990. Its number of families served is available on its website.
3. The full article “Children’s Museum of Richmond merges with Commonwealth Parenting,” which was published Oct. 5, 2013 by the Richmond Times Dispatch, is available online.
 

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