This column comes from the summer 2019 edition of the Nonprofit Quarterly.
Dear Nonprofit Whisperer,
I was just brought into a homelessness organization to try to create compliance systems out of what is currently a lot of informal and chaotic (although so far successful) activity. I have been given the job of instilling a compliance culture as we (literally) move out of the executive director’s private house to another setting. The organization just got its first big grant, which has some rules attached. The director purposely brought me in from the corporate sector—and I certainly have the background in making rules that stick—but I worry about implementation in a culture that, so far, has not shown much interest at all. Even the director hasn’t shown keen interest in the details of how this will get done. How do I start? With a handbook of compliance measures? Do I need to set some kind of a base in the culture? There are only five employees at this time, but it feels like more.
Dear Compliance Setter,
What you are really managing is the shift of the organization from its first—or “founding”—stage to its second stage of development, which is characterized by the need for more management coherence and better systems all around. I might, therefore, as a start, consider dropping the word “compliance” in favor of “building systems to help our organization achieve its mission.” And you are right: Immerse yourself in the base of this organization’s culture—its programs and successful activities—and then carefully plan for a shift that maintains what is working in its programs while introducing the need for more accountability.
Sign up for our free newsletters
Subscribe to NPQ's newsletters to have our top stories delivered directly to your inbox.
Typically, first-stage organizations are very on target with regard to strategy and programs. These come first, and board and staff are passionate about ensuring that the work on the ground meets the needs of constituents. Often—but not always—leadership and staff are aligned around the needs and the work to be done, and communicate informally. The work is underscored by a sense of shared values, vision, and mission.
A new source of funding requesting more accountability, a change in founding leadership, or new staff asking about things like personnel policies signals the nearly inevitable shift toward more organizational structure and systems. Sometimes groups are unaware of this; rifts appear in the fabric of “togetherness,” and tensions arise between the more informal staff and those seeking more structure. It sounds as though your group knows intellectually that it needs to shift and become more compliant and accountable but does not yet feel it in the bones.
How do you start? Tread lightly. Don’t assume that the lessons from the corporate setting will translate—especially with a staff of five people. First, read the literature available on nonprofit lifecycles. There is plenty of shorthand on the web, and Susan Kenny Stevens’s handbook Nonprofit Lifecycles: Stage-Based Wisdom for Nonprofit Capacity will provide a more thorough view.1 Please note that nonprofit organizational development experts/consultants tend to debate the number of “lives” a nonprofit goes through, and as the nonprofit ages it can be in several lives at the same time. Your organization is at the classic first- to second-stage transition. It is also one of the more difficult passages, as a smaller staff of informal, deeply committed coworkers and volunteers can feel they are losing “their family” as more systems, staff, and funding are added. Consider sharing readings about this transition with the staff and the board of directors so that they “gain knowledge” about the transition that is happening. Let them discuss the shifts they themselves are witnessing—bringing knowledge to a description of the current reality. Let them talk about their fear of change or loss, and balance that with what is to be gained. Another way to approach this is to talk about how the organization and its constituents might be at risk due to lack of compliance.
Use the change that is happening to begin the change in systems and processes. Discuss the move to a new office and what that means. What kinds of systems and norms would staff like to see established in the new work space? Use their ideas as the basis for the office handbook that will inevitably get developed; it will be easier to accept if they have had some part in its development. Discuss the new funding source, name where accountability and compliance have to change to meet the needs of the funder, and concentrate first on those changes or any place where the organization is at high risk.
Even in small doses, the group will fear a loss of old patterns and work habits; let that surface. All of the above speaks to your real role of managing change, not just instituting more compliance. Take a look at the Change Cycle™ Series, which provides a tool to help people in your position in the workplace manage change (information can be found at changecycle.com2). The series should provide insight to you and others on staff about why they feel resistant to or fear change that otherwise makes sense or is necessary (being more accountable to a funder, for example).
Once the first steps in shifting the organization start—again, this means education about the inevitable changes, discussion and feedback, and piloting more compliance where it is already needed (office space/funding sources)—other shifts toward more accountability will begin to flow, and you will be able to create a checklist by priority of those areas that most need focus. This kind of pacing will help you and others to manage change practically and emotionally in balance with maintaining quality of program and “successful activity.”
- Susan Kenny Stevens, Nonprofit Lifecycles: Stage-Based Wisdom for Nonprofit Capacity (Long Lake, MN: Stagewise Enterprises, 2001).
- See Ann Salerno, “Change @ Work,” The Change Cycle™ Series, accessed May 29, 2019.