It is estimated that there are over 300,000 not-for-profit organizations* operating in Canada. This number includes: charitable organizations, such as the Heart and Stroke Foundation and Community Living organizations; trade associations, such as the Roofing Contractors Association; professional groups such as the Institute of Chartered Accountants; professional regulatory groups such as the College of Teachers; business groups, such as the Chamber of Commerce; and quasi-government boards, such as the Blueberry Council or the regional health boards.
What these not-for-profit organizations (NPOs) all have in common, and what distinguishes them most from for-profit organizations, is that NPOs are generally led by a highly pro-active board of directors. This difference has enormous implications for the skills, abilities and characteristics that are required in the senior staff person hired by the board of directors to head the staff organization.
Imagine working in an organization where your “supervisor” changed regularly and without fail, every year. Imagine working as the head of an organization where you were responsible for overall administration and performance, but not for setting the strategic plan and major goals of the organization. Imagine working in an organization where many, perhaps the vast majority of your “workers” were not paid any remuneration, could come to and go from the workplace whenever they chose, and could semi-retire at any time without providing any forewarning.
Welcome to the world of the chief executive of a not-for-profit organization!
Are there skills and abilities that differentiate not-for-profit chief executives from their counterparts in the for-profit world? Absolutely! In addition to the skill-set that one would seek in the chief executive of any corporate organization, such as visionary and financial management skills, there are other important abilities that are especially needed for a not-for-profit organization. Three significant requirements for the not-for-profit chief executive are the ability to be a team player as well as a team leader; the ability to continually exercise diplomacy; and the ability to act as a coach to others in the organization, both up and down the organizational pyramid.
As a team player, the chief executive has to work closely with the volunteer board of directors in developing the strategic vision, strategic plan and major goals of the organization. This requires a cooperative approach that can be quite unlike the process followed in for-profit corporations where the chief executive may make these major decisions alone. In addition, as a team leader, the chief executive has to work to motivate the volunteers serving on the board and on committees without being able to offer financial incentives to encourage good performance and often without the ability to remove under-performers. This ability to get the collective group of staff and volunteers all performing at a maximum level within the constraints of the not-for-profit environment, is an important aspect of the chief executive’s role.
Diplomacy is a vital skill in not-for-profit management. Successful not-for-profit chief executives are accomplished at advancing their organization’s interests by working co-operatively with a diversity of other not-for-profit organizations, with business, with government and with political leaders. These chief executives will continually be forging and maintaining alliances with “like-minded” organizations in order to advance their own organization’s agenda. At the same time, within the not-for-profit organization itself, diplomacy will be needed in dealing with volunteers, as well as with the general membership and other stakeholders. While catch phrases used in the business world, such as “quality is job one” and “our strength is people” and “the customer is always right” may fall from favour and be dropped from the corporate world’s lexicon, they continue to be central to the successful operation of not-for-profit organizations.
Coaching is important in corporate organizations in order to develop future leaders within the employee ranks. But coaching normally involves providing guidance to those who will at some future date, follow the “coach” up the corporate ladder. Coaching in the not-for-profit world certainly includes this important work, but it also involves providing guidance to those who occupy the very top echelons in the organization. Coaching the members of the volunteer board of directors on media relations, on how best to inter-act with politicians and the political bureaucracy and on how best to fulfill their legal and governance responsibilities is an important function of the not-for-profit chief executive.
Make no mistake about it, corporate management skills are important for chief executives in the not-for-profit world. But the chief executive of a volunteer organization needs more. The chief executive cannot succeed without motivating and leading a unique team of paid and unpaid people. The chief executive cannot succeed without exercising superior diplomatic skills, when dealing with constituents, stakeholders, political masters and allies. The chief executive cannot succeed without being a coach for both the staff and the volunteers in the organization. Finding the right leader, who possesses the abilities of a successful corporate chief executive, as well as the additional abilities required in the not-for-profit world, is one of the unique challenges of the volunteer board of directors.
*Author’s Note: The generally accepted definition of a not-for-profit organization is that it is an organization that does not seek, as a primary organizational goal, to generate a profit (often called a surplus) on its operations. This does not mean that the not-for-profit organization cannot make an annual profit. Indeed, I advise not-for-profit organizations to generate a surplus on their activities, wherever possible, so that the organization will have the funds available to undertake, from time-to-time, those important projects that have no possibility of breaking even.