A charismatic founder with a powerful idea and the wherewithal to raise money and support usually shapes an organization according to his/her style of leadership and personality. As the founder must have a board, most recruit one that will be as little involved in the management of the organization as possible. Trusting the integrity and vision of the founder, board members lend their good name and reputation to vouch for the organization, maintain a generally hands-off disposition, and mostly engage with the founder on strategy and big ideas. The oversight that comes from, or should come from, the board of a more mature organization (i.e., approving and periodically reviewing an overall plan, finance and risk management, assuring consistent and appropriate management and personnel practices, and conducting a periodic performance review of the chief executive) is usually absent, or minimal.
The compelling vision of the founder often attracts talent. But founders tend to be idiosyncratic in their management style—reading and editing every line of one staffer’s memos, while perhaps granting license to another staff member to operate with minimal oversight. In the best of circumstances, the result of this approach is to create a rich and stimulating environment for a talented staff to do their work. Those who need help get it; those who don’t are left to innovate and grow while having the founder available to them as a vital resource in moments of crisis, risk, or opportunity.
At its best, this is a type of organizational environment in which great work can be accomplished. A compelling and skilled founder who supports creative thinking and action and mentors talent, a hands-off board, an energized culture and staff, great flexibility in organizational structure and rules, and tolerance for risk taking add up to a great incubator for great work.
But the strength of this type of organization is also its vulnerability: It is built around the founder.
When the founder departs, funders will inevitably question whether the successor has the skills to assure continued, strong performance. Where in all likelihood the founder raised funds by dint of his/her compelling vision and personality, the successor will have a different burden. Funders will ask, is there a governing board that is actually governing? Are there board members who complement the needs of the organization—subject matter experts, management experts, fundraisers, and networkers who can gain access to funders and influencers? Is the board on top of the work of the organization? Is the new leader managing staff and measuring performance to the satisfaction of the board? Is the staff accepting of the new leader?
With the emergence of a board that is more engaged and governing to a greater degree, the chief executive and staff will need to produce more meaningful measures for the board. Where a treasury report and an outline of initiatives may have sufficed in the past, an active board will recognize this is no longer enough for their informed oversight. As suggested in the simple wisdom of the children’s book, “if you give a mouse a cookie, he’ll want a glass of milk…” Even with a minimal approach, all concerned will likely find themselves measuring and accounting for their activities to a greater extent than before. The new chief executive will need to create more structure and clearer and consistent measures while also maintaining creativity and innovation. Easier said than done, because the instinct of most everyone involved will be that this new order will degrade creativity.
Experienced observers will be concerned that the talented staff that prospered in the creative hothouse of the founder will chafe at submitting to this more measured oversight. Dissent in the organization will be noticed. One common occurrence is that the new leader is revealed to be out of step with others in the organization on a given policy or strategy. Evidence of this dissent gets noticed by outsiders. It is a kind of dog whistle, heard by those who understand its meaning.
Another conspicuous result of this transition is that more people will be involved in shaping and influencing the organization, where previously it was mostly filtered through the founder. The sum of those parts will likely be a different whole, and a different means to achieve that whole.
The building of a more active and diverse board and the increased scrutiny of funders and supporters also often bring with it other potential complications. Fundraising by the new, not-the-founder chief executive can be challenging. Some funders have agendas beyond just supporting the mission, and those differing agendas are more likely to surface in this period. New initiatives, difficult choices, different levels of risk—decisions that ideally are shaped within the organization may also be pressed on the organization from the outside. As the principal fundraiser, the new leader may find him or herself in the middle of these forces—staff on one side, a funder or potential funder on the other, and also new views and potential strategies arising from a sometimes larger and almost always more active board. For a staff that has prospered under the protection of a strong founder, and produced great work as a result, the imposition of these forces can be jarring.
All too often, the founder has resolved organizational challenges idiosyncratically: a long-serving, stuck-in-their-ways senior staff member is allowed to coast, a budget-draining program is continued to accommodate the wishes of an active few, select employees work from home on Friday while others cannot, and so on. These accommodations made sense in the personality-driven culture of the organization. They almost always do not make sense when the new leader focuses on organizational performance and a unified strategy.
Just understanding these forces will help, but that is not sufficient. Board committees and a leadership team will likely be the settings in which these challenging issues are addressed. While these committees and teams may already exist, chances are that they were not functioning at this level. The seminal decisions went to the founder, and now they need to go here. And while it may be impractical to reveal the full discussion and debate within these committees, receiving input from and giving feedback to those staff not involved at this level will be very important.
To maintain the productive culture of the organization, everyone must be able to trust that these new, ordered decision making processes work and can be depended on, particularly in difficult moments and on difficult issues. Be assured that if they are not, they will know. Truth will out.
I have seen many founder-led organizations make this transition, begrudgingly accepting the new order as a means of continuing their good work. But a begrudging acceptance is not sufficient. Each constituency—the board, the new chief executive, the staff, funders and coalition partners—will benefit from having a common understanding of how things will work going forward. The (now more engaged) board will want a clear analysis of a new strategy, including those idiosyncratic circumstances the founder has left behind. The new chief executive will want assurances from the board that it will support the implementation of this strategy. And staff will need to be asked to contribute to this analysis, and then be informed as to the new strategy and standards. The time and effort expended towards communication and understanding is but a small percentage of the wasted time and frustration that will arise in their absence.
A new generation, and a new day
There is also a generational factor that suggests an even greater urgency to understand and adapt to these dynamics. Many nonprofit organizations have traditionally operated with a top-down, hierarchical structure under a leader/founder through whom all decisions flow. Now, the founders and longtime leaders of these organizations are retiring. Their staffs and their successors are of a generation that places a greater value on teamwork and transparency—and is resistant to the “because I said so” authority of the top boss.
Factoring for these values in a leadership transition, and building a communal ownership of the results of that transition, is vital. There is less of a need for a new leader who embodies all the answers; rather, the need is for new and emerging leaders to promote honest and nimble processes that work and that are dependably used by all concerned to achieve a coordinated result.