Foundering

“So what’s your boss like?” I asked a friend, who had recently taken a position at a nonprofit.

“Well, you know. He’s a founder.”

My friend then listed the adjectives describing his boss: “Creative. Dynamic. Charismatic. Visionary. Brilliant. Funny. Inspiring.” Also, “Meddling. Obstinate. Egotistical. Defensive. Controlling. Annoying. Demanding. Distracted.”

Some of my best friends are founders. If you’re one of them, I promise you that this is not about you in particular. Maybe not even you in general. I can also say that I have deep respect and sympathy for founders. Without founders, we wouldn’t have the dynamism and creativity and impact that characterize the nonprofit world.

But it’s the rare founder who can transition easily into becoming a good manager. It’s a cliché to point out the contrasting personalities needed to be a successful entrepreneur-founder and to be the manager of a mature organization – but like a lot of clichés, it’s based on a core of truth. Organizations often outgrow the founder’s managerial talents.

That said, I know some founders who have defied the odds and remain effective after two decades or more at the helm. Drawing lessons from their example, here are some hints for our founder friends to help them be the best possible leaders for the organizations they’ve created:

1)     Remember that you are not the organization, and the organization is not you. A little emotional distance is a healthy thing. You may be the personification of the cause to the public, and that can be very helpful in some ways, especially for raising money. But the organization is no longer a start-up, and it is no longer a one-person show. Remember to credit your staff. Share the decision-making. Don’t interpret critiques of the organization as personal attacks. Remind yourself that changing established practices is not a rejection of you, but simply a way of improving how business gets done.

2)     Try, try, try not to micromanage. At one point in the organization’s history you did it all. You now lead a different, larger, more sophisticated organization. Don’t forget that times and technology have changed. Don’t forget that you have skilled staff members in place who crave a sense of ownership. Remember that if you second-guess the staff they will feel undermined and belittled. And don’t hold the purse-strings too tightly: let people manage their budgets without having to run every expenditure by you. (You’re the CEO, not Mom or Dad.)

3)     Realize that the overall success of the organization under your leadership does not mean that you’re equally good at everything you do. One real challenge for you and other founders is to get a clear reading on your strengths and weaknesses. You have been in charge virtually your whole working life, and it’s not easy for staff to tell you when you’ve screwed up, or to suggest changes. Obviously, the board should be doing a thorough annual evaluation, but boards tend to treat founders with a reverence that weakens the evaluation process. One founder friend of mine, aware of how the board defers to him, recommends that his organization hire a consultant every few years to do a complete 360-degree evaluation of his performance. I think that’s a great idea – and I’m not only saying that because, well, I’m a consultant.

As I have written before, no leader is good at everything. The CEO who is brilliant at making a pitch to a corporate funder may not be as effective at encouraging a young and self-doubting staff member. A leader who can formulate the big-picture vision may underestimate the challenges that will arise in the execution. An executive director who tirelessly works to promote fairness and opportunity for the organization’s clients may be the same person who plays favorites in the office. But it can be very difficult for the the CEO to get a fix on her own strengths and weaknesses. This makes it particularly important for the CEO to seek candid feedback and to do some honest self-analysis. Focus on those responsibilities to which you bring unique skills. And keep in mind that simply because you enjoy doing something or are very experienced in doing something doesn’t mean you’re particularly good at it.

4)     Don’t forget that you are in a powerful position. Thomas A. McLaughlin has written about the remarkable power of a nonprofit CEO within an organization – greater, he claims, than in any workplace other than a sole proprietorship. McLaughlin asserts that a nonprofit CEO is more powerful within his organization than, say, the CEO of General Motors is within hers. In corporate America there is a paid board of directors with a vested interest in the success of the company. (Board members are shareholders, after all.) The corporate board can provide a hefty counterweight to the CEO, whose power is also limited by the harsh reality of quarterly financial reports, daily share prices, public scrutiny, and the marketplace. A nonprofit CEO, on the other hand, reports to a volunteer board that is highly unlikely to look for trouble, and the measures of success are less clear. Most of the information a nonprofit board receives actually comes from the CEO. You as the nonprofit CEO have more or less free rein. Don’t abuse it. Don’t lord over the staff. Hold yourself to higher standards than your board does.

* * * * *

A founding CEO should bring the same degree of scrutiny, creativity, and vision to looking at his organization — and his place in it — as he did many years before in creating the place. Founders need to work consciously not to undermine the success of the organizations they love. Those who fail to make the necessary adjustments will see their organizations falter and their own reputations tarnished, and they run the risk of being remembered with the saddest and most preventable of judgments: “They just stuck around a little too long.”

Copyright Alan Cantor 2014. All rights reserved.

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4 thoughts on “Foundering”

  1. I have seen these issues up close and personal . I would suggest that in the for profit world that the picture of an independent active board is a little pollyanna -ish . Some boards are lapdogs. Often the CEO and the chairman of the board titles are held by the same person. When I become benevolent dictator of the world it will be disallowed for one person to hold both positions.

    1. I agree with you, Stefan, and we’ve certainly witnessed plenty of abuse in the corporate world. Best practices now call for the CEO and Chair to be different people, but even where that’s the case, it doesn’t mean that the boards are truly independent. There’s a lot of mutual back-scratching going on, as the CEOs tend to serve on one another’s boards.

      Given that that’s the case, it’s all the more reason to pay attention to what Tom McLaughlin says. If, in fact, corporate boards — as imperfect and coze as they are — are a stronger counterweight to the CEO than nonprofit boards, then that’s saying something about nonprofit boards.

      Thanks, as always, for weighing in!

  2. Nice piece, Al. I was once ED of a nonprofit whose founder had recently passed. I was often energized by folks who would say that my ideas were in line with the founder’s spirit. Occasionally, I would get pushback when there was a perception that my actions were not in keeping with (to borrow from Constitutional law ) Founders’ Intent.

    A very effective counter strategy – frame a proposed action within the specific context. Do so by:

    -Defining the action – What is the proposed activity?
    -Identifying the value proposition – How will doing this advance the mission?
    -Verifying intellectually that the Founder was the kind of person who wanted to maximize this type of value.

    If the course of action survives this sniff test, you have a very strong case to iterate within your various collaterals – and in face-to-face chats with donors. I actually like occasional pushback because it forces mental bench presses, The result is a stronger and more articulate case.

    A very powerful coda is, “What we are doing is extending the Founder’s vision in ways he could only dream of.” I wish I could bold the quoted text. Said it a bunch of times, Always gets a nod. Pulls from the past (inspiration of vision). Focuses on the future (emotional appeal of aspirations). Invites endorsement to act today (let’s extend the founder’s vision in a way that makes it relevant going forward).

    I have to think that this approach has implications for extant founders who want to see their vision outlive them. Ask her: Why did you create this organization? Will your grandkids feel pride in successfully sustaining your intentions 50 years from now? What can we do now to ensure your grandchildren’s anticipated pride?

    As said earlier, nice piece. Made me reflect. Hopefully a small takeaway for the community from my .02.

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