Leadership Matters Provides Insight for the Right Time for Nonprofits to Expand Management Teams
Submitted by: Birnbach Communications, Inc.
(OPENPRESS) March 12, 2008 -- Adding a senior management position can benefit a nonprofit organization, but it can also be costly and create new challenges. Bridgestar, a nonprofit initiative of the Bridgespan Group dedicated to attracting, connecting, and supporting executive leaders for the sector, addresses the timing and strategy for expanding the management team in the March issue of "Leadership Matters." The insights from the featured article, "A New Seat at the Table: When Is It Time to Add to Your Senior Management Team?," are based on Bridgestar's extensive work with nonprofit organizations recruiting at the senior level.
Additionally, Bridgestar announced the redesign of its home page and the launch of a new portal, Recruiting Nonprofit Leaders. Bridgestar's fourth portal along with ones focused on chief financial officers (CFOs) and chief operating officers (COOs), and individuals seeking to change careers and explore the nonprofit sector, the Recruiting Nonprofit Leaders portal aggregates all of the organization's articles, content, and tools on recruiting best practices in one easily accessible experience. The new portal is designed to offer the right tools to help users develop and implement a thoughtful hiring strategy, helping them create the right match between their needs and the people potentially interested in the position.
"Knowing when to create a new management position is a balancing act. If an organization doesn't bring someone on at the right time or approach the process in a thoughtful way, it can run into problems. On the other hand, if the organization accurately assesses its needs, creates consensus about the new position, and develops strategies to address inherent challenges, the new hire can provide tremendous value to the organization," said David Simms, managing partner, Bridgestar. "This month's article is designed to help guide nonprofits through the process. Bridgestar's new portal is a complement to the article, in that our insights and time-tested tools are helping organizations with actual hiring best practices."
The March issue of "Leadership Matters" provides insights into the best timing for bringing a new member of the senior management into the organization. Following are developmental milestones that may prompt an organization to create new senior-level positions:
• The organization needs to offload some top-level responsibilities from current senior managers. Senior managers may find that they are spread too thin or are spending too much time managing internal operations to be able to focus on other areas and opportunities.
• The organization is in a period of expansion and needs to increase its resources to meet growth goals. Winning a major new source of funding, expanding into new programs and geographies, or increasing the number of people served often requires additional senior-level resources to keep operations running smoothly.
• There is a skills gap or a need to supplement the skills of the management team with other expertise. Senior managers need to ensure that all key areas of the organization are represented around the table.
• Senior managers realize that a certain function needs to be elevated to a strategic level. For example, when one organization reached the $25 million level, senior management realized that it needed to add a director of human resources (HR) to the executive team. While basic HR activities had previously been handled by an HR manager, the executive director (ED) recognized that strategic HR leadership was now needed to bring the organization to the next level.
The article addressed several potential obstacles to expanding the senior management team, including:
• Cost concerns. The expense of adding a senior position is a key concern and often difficult to justify given the cost restraints that nonprofit organizations face. Adding a new position creates a recurring expense and falls in the overhead category that is particularly difficult to fund through traditional means. The article cites Allison Devore, executive director of StreetWise Partners, who noted that "It's hard to secure and sustain funding for this type of position even if the organization can demonstrate both a need and a record of strong performance."
• Potential impact on the culture. When a new role is carved out, it generally reduces the breadth of another executive's. It may also add a new layer to the organizational chart and some middle managers may feel they have less access to the ED and COO or that the organization is becoming too bureaucratic. In the article, Teach for America's former COO Jerry Hauser noted that when the organization created this COO position, "It was a big shift to put a layer between everyone else and Wendy [Kopp, the president and founder.] Some people were happy because they knew they would get more attention than Wendy could give, but some people were worried about losing touch with Wendy and felt some anxiety about the 'demotion' idea."
The most effective way for organizations to address these concerns is to consider the specific tradeoffs of adding a new position and make a decision about regarding the timing. If the need is for more than one position, the team should prioritize among them to decide which they should add first. The most effective approach is to involve key internal decision makers in the process, and have them reach a consensus about the best course of action. Next, the management team should make the case to key external shareholders, such as board members and funders.
Terry Kellogg, ED of 1% for the Planet, made a case for new positions by dispelling some commonly held myths about what it takes for nonprofit organizations to be successful, saying, "If you look at successful startup companies, the vast majority of them have senior management teams at the outset. That's how they get the work done that needs to get done quickly and in a sophisticated way, even from the very beginning. I think it's unfortunate that the same is not necessarily the case with nonprofits."
The article noted that another way to persuade decision-makers that the new hire is worth the expense is to quantify the benefits and make them as concrete as possible. For example, if a new senior position is expected to free up 20 percent of the ED's time for fundraising, the organization might be able to increase its fundraising expectations accordingly.
The current issue of "Leadership Matters" is available at: https://www.bridgestar.org/resources/newsletters/2008/march2008.aspx
Each month, Bridgestar's newsletter, "Leadership Matters," focuses on a nonprofit leadership recruiting- or career-related theme. Available to Bridgestar members (or, for a complimentary subscription, please email email@example.com), "Leadership Matters" is part of a robust portfolio of offerings that includes a job board listing more than 200 executive positions across a range of service areas including the environment, human services, elder services, human rights, and youth services. Bridgestar has assisted many organizations in finding new leaders through its talent-matching services, which include executive recruiting and related advisory activities.
Bridgestar (www.bridgestar.org), an initiative of the Bridgespan Group, is a nonprofit organization providing talent-matching services, content, and tools designed to help organizations build strong leadership teams and individuals pursue career paths as nonprofit leaders. Bridgestar's goal is to attract, connect, and support senior talent, leading to greater organizational effectiveness and social impact.