Policy Governance and Tone at the Top – When Nonprofits Fail

Friday, May 23rd, 2014

Nonprofits are failing at a high rate (e.g., Flanagan, 2012; Nonprofit Trends, 2014). Despite strategic planning and fund development, supporting resources are not available to many nonprofit organizations. You and I may be familiar with the relentless begging of most nonprofits. Yet, if the organization’s mission is compelling and the business model is sound, why do nonprofits have problems attracting resources? If organizational leadership (i.e, the board of directors) cannot determine the underlying cause of business failure, then the problem may be the process of decision-making or making judgment. Are decisions based on intuition or reasoning? Can Policy Governance provide boundaries for rational or reasoned decision-making that underlie better business outcomes for nonprofits?

Yes, IF the board is committed to using their policies and following PG principles. John Carver provided a framework of governance that can help a board define its job and the job of management. PG is built on what are comfortable and known – organizational values. Organizational values are expressed in policy and policies are organized around the work that needs to be done. However, PG is far more than creating a new set of policies. The PG model goes beyond the boardroom and applies it to everyone in the organization that touches the population or consumers served. PG means that everyone in the organization has a commitment to achieving the desired future state or Ends. Everyone in the organization is aligned with organizational values and constantly seeking better ways of attaining the Ends. That alignment and commitment is what attracts resources to an organization.

In my 23-year career of either working for boards or counseling them, I’ve never seen Policy Governance® (PG) fail. Conversely, what fails is the board process. Board process refers to the culture of interactions in the boardroom. Policy Governance creates a framework for sound decision-making and robust assessment for making judgments. What it doesn’t do is dictate culture or how a board should interact. Think about it. Ground rules in any social interaction make a difference but they don’t work if people don’t commit to them or follow them. PG also takes practice, practice, practice. PG is powerful. But a board needs the skill that comes through practice to use it to its fullest effect.

PG works. But only if the board has the will to make it so.

See Flanagan (2012)
See also Nonprofit Trends (2014)
See Carver & Charney (2004) The Board Member’s Playbook

Geographically dispersed boards

Thursday, March 1st, 2012

 

Most of my client teams (board and staff leaders) are geographically dispersed. As an organizational and governance consultant, I give them the value of my expertise in organizational structure, policy development, and implementation. Usually I end up working as a leadership coach as well. When the client board and staff meet face-to-face only once or twice a year, communications and consistency is a challenge. In some cases, the entire board never gets together face-to-face.

I talked with Keith Ferrazzi who is an expert on relationship development. When I asked him if geographically dispersed teams can work together effectively, he asserted it was absolutely essential for the team to get together face-to-face at least once (personal communication, June 15, 2010). I believe he is correct. The ability to see someone’s facial expressions, gestures, and body language helps you interpret what you hear in that person’s voice and read in their emails. It’s also more difficult to get angry with someone you’ve met.

Working with a board is challenging in the best of circumstances, but working with a virtual, geographically dispersed, or technology-networked board creates unique group process problems leaders need to recognize. Forging a cohesive team from individuals in the same building is challenging. A dispersed board team faces multiple difficulties of time, distance, social, and cultural differences. Subgroups form and sometimes this leads to in-group versus out-group conflict and competition. Dispersed teams need to establish shared norms and agreement for common action toward overarching (i.e., superordinate) goals.

Shared norms start with setting ground rules about communication and how conflicts will be resolved. Conflict is normal. That’s why it’s so important to establish how your board will deal with conflict before it happens. One rule you should have is to avoid prejudging each other. Listen first (or read email first) as an advocate, as though you will need to defend your fellow board member’s position.

Everyone on the board brings a unique set of information, resources and knowledge. After setting the ground rules, the board needs to fully discuss the benefits of sharing mutually. The enhanced ability to generate knowledge, stimulate creativity, and increase efficiency through diversity is a major advantage. Diverse points-of-view make for better decision-making. A full discussion helps board members learn how to value diversity and share the wealth of knowledge and skills available. From this sharing, trust is built.

Setting ground rules, communicating and sharing mutual knowledge help create trust. But for everything to work, everyone on the team needs to take responsibility for the board’s success. If things aren’t going well, take the initiative to suggest an alternative communication tool — teleconference, data conferencing (Skype, NetMeeting, etc.) — that allows for simultaneous discussion. The more variety, the better.

No matter what’s going on, be sure that you stay upbeat. Nothing helps a board work together better than proactive, positive board members!

Lessons on Policy Governance® from The Little Red Hen

Monday, January 24th, 2011

The Little Red Hen was an industrious little hen. From a few seeds, she had a vision of a beautifully golden, richly fragrant loaf of bread.

Along the way, she tried to enlist others in the barnyard for help to plant the seeds, take the wheat to the mill, and bake the bread. All who were asked said, “Not I!”

When the bread was done, she asked who would help her eat it. Of course, everyone wanted a piece.

The course of Policy Governance can look much the same. In the beginning, planting the seeds and developing the framework for better governing practices is a lot of work. But in the end, the board has a practical and robust system for managing its work. In the end, everyone wants on board!

A client said, “We had trouble filling board seats and getting board members excited and engaged before we started governing by policy. Now that we’ve had a few years of success, everyone wants to be a part of it.”

One person had the vision of how governing by policy could improve the effectiveness and efficiency of board’s work and create a transformed, successful organization. Once the seeds were planted and the bread was baked, the sweet smell of success attracted everyone.

Does Policy Governance take a lot of work? Yes.

Will Policy Governance make a difference in your success? Yes.

Will everyone take part in the creation of a transformed organization? No. (Just ask The Little Red Hen).

Is having a board organization that everyone wants to be part of worth it?

Well, you need to answer that question for yourself.

Update to: Cooperation, collaboration, or coopetition…whatever works.

Sunday, May 16th, 2010

An update to what was written here. This group is still together but we’ve moved beyond Policy Governance to conceptualizing what it takes to create beneficial change in organizations that results in better communities and healthy societies. We are now called The Xylem Group and our new website will be live soon!! If you are a thought leader about what it takes to measure corporate accountability and sustainability, please stay tuned. I want to invite you to join the dialog and discussion with Xylem. In upcoming blogs, I’ll show you where I’m going to join dialog started by others.

Policy Governance practitioners and users are a small ecosystem in the realm of governance. To move Policy Governance consulting from a collection of individual consultants into the next generation, several individuals have banded together in a cooperation experiment called The Governance Corporation. What is behind our cooperative enterprise is developing and evolving the practice of Policy Governance. The main idea is investing in expanding core capabilities through collaborative learning and reinvesting returns into the ecosystem to provide a place for future generations of practitioners.

By pooling development of leading edge governance practices, we believe clients will receive the benefits. Our collaboration will lead to clients having a competitive edge through effective governance. We believe the rewards to the client are products, services, and practices that no one of us could bring individually; or at an affordable price to the client. Our cooperation, collaboration, or coopetition is not just for our mutual benefit but for the benefit of the clients. It’s a win-win-win situation. I win, my colleagues win, you win.

Go to the Governance Corporation website, if you’re interested in watching our experiment unfold. Check out our blog. I’ve started a rant on the current state of governance. Add your comments, join the dialog, or start a debate! All are welcome.

Governance is a new word to many

Friday, January 29th, 2010

An acquaintance asked me yesterday what I do. “I work with board and executive leaders on a system of governance that helps them get rid of time-wasters and makes the most of the talent in the organization.” My acquaintance said that governance was a new term to her.

For those who are new to the concept, Tom Friedman offered an excellent quote in his New York Times Op-Ed column of January 5, 2010. The quote is “from Dov Seidman, the C.E.O. of LRN, which helps companies build ethical cultures, and the author of the book ‘How.’ ‘You have to enlist and inspire people in a set of values. People need to be governed both from the outside, through compliance with rules, and from the inside, inspired by shared values.’”

Sound like good governance to you?

So, what’s stopping you from practicing it? The problem I’ve encountered is that too often, bright and capable peoples’ skills and talents are wasted in board meetings discussing whether or not to purchase new office furniture or how many pieces of collateral were distributed at the last fundraiser. Discussions like these are about looking backward rather than creating a vision for the future. Discussions like these enervate, rather than inspire.

Are you tired of operating in a model of scarcity (not enough time, not enough money, not enough people…) and ready to move toward a model of abundance (stop focusing on the past, getting rid of the time-wasters and envisioning what you can achieve)?

Policy Governance® offers a system for governing boards to ensure that they are complying with outside rules and allows them to spend more time discussing what inspires the organization. Policy Governance gets the board beyond what is to what can be.

Democracy is messy

Thursday, January 28th, 2010

Last night, President Obama said that democracy is messy.

Democracy is messy. Governing boards represent democracy in action and the complexity of the process of representing diverse owners. That’s why governing boards need every available tool in their toolbox. Policy Governance® represents the most comprehensive body of thought on board leadership and governing.

Caroline Oliver cites Couto and Guthrie:

“Mediating structures are a prerequisite to democracy. They preserve the liberty of citizens to act on public matters apart from government. They permit their members representation and participation in the sociopolitical arrangements of the neighbourhood, community, nation, or state.”

Oliver goes on to say this: “If owners don’t know what boards are talking about or why, if they don’t understand who does what and why, how can they possibly participate? Boards are key agencies in society, bringing democracy to the highest level of every organisation. It is their job to define and demand organisational success and standards of ethics, the law and prudence on our behalf. This is true board leadership and we need it more than ever.”

On a deeper, personal level, I’m convinced that if boards set a better example for governing then there is hope for democracy worldwide. That’s my mission. My theory is that getting the message to governing boards has the potential to create an accelerated learning track in the United States to better governance and improved democratic process.

Boards empower the owners to govern without actually needing everyone to sit at the board table. To do the job right, Boards need the right tools. Policy Governance can boost organizational success and the quality and level of board decisions. Policy Governance will not be the right choice for every board, but it should be a choice.

Policy Governance (PG) is a registered trademark of Dr. John Carver to preserve the integrity of the governance system, not for financial gain. Policy Governance is free to anyone.

What do nonprofit governing boards do?

Tuesday, February 17th, 2009

Defining governance is not easy. If you google “definition on governance,” you will find over 500,000 entries. Governance is a generic term with applications in information technology, Website management, research, corporations. I’ve found that how the term governance is applied in various disciplines is somewhat confusing. That’s why a simple definition for nonprofit board governance may not be enough to gain clarity and understanding.

For nonprofits, relating the process and practice of governing to a familiar or commonly shared experience helps. In my post “On board service“, I use ships. In April, I wrote an article for the Charity Channel Nonprofit Boards and Governance Review. In this one, I use the train analogy. It seems I’m attracted to transportation analogies when describing governance!

From the review in Charity Channel:

Executive Directors who dump a pile of financials in front of board members, expecting them to have the background and expertise necessary to make heads of tails of them, are not meeting their obligations to the board, according to the latest NBGR article by Sherry Jennings. Taking the point of view of a new board member, she writes, “Most of the financial information was incomprehensible to Martin. What was nagging at Martin was that he didn’t feel like he had a complete ‘picture’ of what was going on. The information he had plodded through last night seemed like a box of spare parts.”‘
In If I’m Not Running the Train, How Do I Know We’re On Track? the author uses a down-to-earth story-telling method to drive the point home and offer up the solution.

Caroline Oliver (brilliant author and consultant on governance) likens practicing good governance to riding a bicycle. You need to take the appropriate steps and practice to do it right. She said that the traditional approach to governance is okay but it’s a bit like pushing the bicycle along rather than riding it. Riding a bicycle is difficult at first. One needs to learn a new way of balancing and may fall a few times. But once one is confident and dancing on the pedals, it feels effortless and like flying (another transportation analogy!)

From Caroline’s reflections:
“Most of us want practical solutions and would prefer to skip the theory bit. However, the boards that tend to excel in the way that they practice governance are the boards that have an idea of what they are doing and why – in other words – the ones that have a good theory!”

I would add a good process and good balance.

See Caroline’s article on Creating a Board Dashboard, also at the Charity Channel and her new book Getting Started with Policy Governance

Governance Solutions

Thursday, August 23rd, 2007

WHAT’S ALL THE FUSS ABOUT GOVERNANCE?

We Need “New” Solutions

People seem to believe that the status quo still isn’t working because they are still looking for “new” solutions. I’ve been in the nonprofit world for over 17 years and the same problems keep coming up. The spectrum runs from “my board is micromanaging” to “my board members are disengaged.” CEOs continually tell me about the need for their boards to become future-focused as opposed to functionally operational boards. Why, after all these years, are CEO’s still seeking solutions these problems when a perfectly good one has been there all along? It’s called Policy Governance®.

Muddle is an Acceptable Way of Life

Most boards and CEO’s don’t have a good grasp of governance. Governance is not management although nonprofit boards have a tendency to think of themselves as “uber managers.” Among those who are aware of Policy Governance®, there is still a great deal of misunderstanding about what Policy Governance is and is not.

(Download a concise description of Policy Governance — go to http://www.policygovernanceassociation.org/index.html and click on the #3 Quick Link.)

The term governance is used very broadly in the nonprofit world. CEO’s tend to become focused on tactics to manage board behavior – instead of seeking a system or process of governing. That’s why CEO’s are as frustrated with board politics, meddling, micromanagement* rubber stamping, etc. as ever. One CEO summed up this frustration by saying: “We’re kidding ourselves if we think we can set up a process [that is sustainable.] Living in chaos is normal.”

Reflections from a PG Perspective

As Policy Governance professionals it’s clear we have a lot of “undoing” to do. We need to overcome the perception that Policy Governance is a “cookie cutter” approach which causes it to be dismissed out of hand without any dialog on how it can lead to eliminating the chaos and creating an effective board of directors. In part, my fellow consultants and I think this is due to the perception that a model is a die-stamped, rigid structure.It’s unfortunate that the term governance is being used as a generic term to describe everything from organizational development to operations and web content management.

The term governance is used so generically, this is going to be a tough one for Policy Governance. It may be like trying to preserve a brand name like Kleenex and differentiate it from other tissues, but is worth some discussion. Give me your thoughts.

*(for a great article on micromanagement go to:http://www.help4nonprofits.com/NP_Bd_MicroManage_Art.htm