Evaluating the Chief Executive

Are performance reviews really necessary?

Many of the nonprofit chief executives we meet lament that they do not get enough ongoing feedback from their boards, or receive regular annual performance reviews.  It’s hard for leaders to achieve their personal best when they lack feedback on which to base their development.  This is particularly true for chief executives, who can be more isolated than other nonprofit executives.

Once a new executive hire is in place, it is critical for the board to provide a comprehensive evaluation at the end of the first year. Going forward, board leadership should commit to regularly evaluating the chief executive.  Unfortunately, many boards fail to do this, missing key opportunities to enhance the leadership of the organization. Over the years, board chairs have shared a variety of reasons for this:

“We know she is doing a good job, so we just tell her informally 

and give her a salary increase.”

 “It takes too much time, and it’s too difficult because we are not there to 

observe him day to day.”

 “We don’t hear any complaints from staff or funders, and the organization runs

 in the black, so why do we need to engage in a time consuming formal process?”

Boards may think they know how the chief executive is really doing, but they frequently lack comprehensive information that presents a full picture of the chief executive’s performance.  Staff who report to the executive director rarely contact board members with feedback unless the individual exhibits egregious behavior.

Conducting an annual review of the chief executive is an important component of good board governance.  Working with the chief executive to ensure that performance review systems are in place for all staff is  a nonprofit management best practice. Most importantly, however, evaluating the chief executive can provide helpful information that will enable the leader to grow and develop their skills and competencies.  Why not choose to have a leader who is continually learning and growing, and has rich feedback to help shape that growth?

One simple, yet effective way to evaluate the chief executive is through the use of multi-rater, or 360° feedback.  Rich and balanced feedback is gathered from peers/colleagues, direct reports, the board chair (or whoever directly oversees the chief executive), and external stakeholders. The process can include a survey, individual interviews or both.  Feedback can be gathered anonymously or openly.  Obtaining a set of rich and robust feedback for the chief executive can be invaluable to that person’s growth and development.  And, it sends a strong message to staff and the extended board that the organization takes performance management and leadership development seriously.

It is important to introduce the feedback process thoughtfully and appropriately, so everyone understands the purpose and structure of the process.  Finding an appropriate tool and structure for the process is also critical.

The Essential 360 Leadership Assessment is an online multi-rate feedback survey that enables boards to evaluate their chief executive in a cost effective way.  Available from Rosewood Consulting Group and TransitionWorks, the survey is easy to administer and collects a rich set of data on eight key areas of leadership competence:

Personal/Interpersonal Interactions

Communication

People Orientation

Team Orientation

Stakeholder Orientation

Strategic Orientation

Productivity/Proactivity

Professionalism

 

The survey also contains several narrative questions designed to provide comprehensive feedback and recommendations about the leader’s strengths and developmental needs.  We work with you and your chief executive to implement and manage the feedback process.

To learn more about how to effectively evaluate the Chief Executive and The Essential 360 Leadership Assessment, contact us.

by Lesley Mallow Wendell

Partnership for Strategic Stewardship: Chief Executive and Board Chair

Today’s nonprofit organizations operate in a more challenging environment than ever before.  Survival and success depend upon effective, innovative leadership, and productive board/staff relationships, while anticipating and planning for the future. As changes in leadership are inevitable throughout the life of organizations, it is critical to plan ahead. Successful organizations have the stability and the resiliency to respond to changes in both their internal and external environments.

One of the most important ingredients of a successful organization is the strategic stewardship between the board chair and chief executive. In partnership, these two leaders are jointly responsible for the stability and sustainability of the enterprise. This relationship has clear challenges and opportunities which will determine the strength of the partnership. When this partnership is not operating smoothly, we have seen  organizations placed in great jeopardy. Everyone is impacted by the dysfunctional dynamics of an obvious power struggle, as the strength and resiliency of the organization suffers.

Best practices indicate that at the time that a new chief executive or the new board chair assumes their role, the two key leaders would benefit from joint coaching, to clarify expectations on how they can best work together as a team, and create a strategic stewardship.

To enhance the interface between these leadership roles, it is useful to set up formal practices that help both leaders discern between organizational and personal issues to create transparency in their communications. The following suggestions are provided to help ensure an effective partnership:

  • Determining jointly the frequency and focus of meetings to be held between the chief executive and board chair; always record the highlights of these sessions and share with executive committee.
  • Agendas for board meetings developed jointly by the board chair and chief executive.
  • Board chair in consultation with the chief executive, when appointing (or suggesting to the board) chairs for various committees and a slate of officers.
  • Clearly written guidelines about the roles of staff when they provide ongoing support to board committees.
  • Regular board training sessions that define the roles of board chair and chief executive, at least bi-annually.
  • Rotate the board chair position every two-three years to ensure new and fresh perspectives in the role expertise.
  • Developing board chairs by selecting vice chairs who demonstrate requisite leadership.
  • Clearly written performance expectations and outcomes for evaluating the chief executive, with an approach that ensures 360 feedback from all key reports and stakeholders, on regular basis.

Why not begin every new partnership with a conversation about joint expectations?

Authored by Priscilla Rosenwald

Naming the Internal Successor: Stepping up from CFO/COO to CEO

In selecting the next chief executive to lead a nonprofit organization, search committees often limit their expectations to how the role could be continued without making waves. They often make a hiring decision based on institutional knowledge, rather than future challenges.  Inherently, they focus on keeping the status quo, and select the internal COO or CFO candidate, who had not developed or demonstrated the ability to lead.

A robust succession plan would have served as a roadmap for talent management, prior to the leadership transition; unfortunately, countless organizations often have not provided the executive coaching to enable the internal CFO or COO to succeed as CEO in an external leadership role.  From our recruiting experience, we suggest that in the process of assessing talent for a leadership transition, the board would be wise to keep the terms leader and manager quite distinct – if the board wants the next chief executive to create new ideas, and engage stakeholders in revenue generation.

CFO’s and COO’s are good managers, adept at overseeing resources through planning and organizing the activities and operations of the organization – while CEO’s are leaders that challenge the process, inspire shared vision, enable others to act, model the way and encourage commitment internally and externally. Often the CEO and CFO/COO have worked as a strong complementary team, with clearly defined internal and external roles. This partnership is often endorsed as “successor planning”.

When the unprepared internal candidate has been selected as successor to the chief executive, the COO-turned-CEO or CFO-turned CEO often departs after a limited and frustrating tenure. The search committee must then engage once again in a long, expensive search process and manage stakeholder and community confidence.

Nothing is more central to a dynamic organization than its capacity to cope with complexity, ambiguity, uncertainty and change. In this era of rapid change, it is imperative for a nonprofit organization to be more future-oriented, more concerned with selecting the proper direction and selecting the most capable leader.

Today’s nonprofit leaders have to be capable of dealing with revenue generation and sustainability issues that demand courage, decisiveness and action. This makes the distinction between leadership and management quite critical to an organization’s succession planning, as distinct from successor planning.

Authored by Priscilla Rosenwald

Fundraising During a Leadership Transition

-by Priscilla Rosenwald
Fundraising during a leadership transitionHow important is maintaining a strong fundraising pipeline?

Every organization has the potential to go through a leadership change and emerge with organizational and financial strength. The transition provides a unique chance for the organization to manage change by establishing good leadership practices and engaging internal and external stakeholders while demonstrating an environment of resiliency. Read more »

Kickstart your transition. Today.

transition_art_1

The departure of a long-time leader is a prospect that few nonprofit organizations and their boards care to contemplate. It’s all too easy for organizations to grow overly dependent on that one charismatic leader – typically a founder – who built up the edifice of the institution, its funding and even its board.

But change happens. At some point, if the organization survives, the leader will leave. Often the writing is on the wall long before a resignation letter is penned and a retirement party planned. Some leaders burn out, and their exit is an overdue opportunity for the organization to move on. Other directors have done exceptional jobs in leadership and discover new opportunities and challenges on the horizon they want to take on.

Often organizations postpone leadership legacy planning because neither the board nor the leader wants to provoke the anxiety that can happen just by introducing the topic. In reality, leadership legacy planning belongs in every strategic discussion. Including leadership legacy planning as a regular part of the organization’s conversation begins to minimize its negative impact, and the fear it invokes.

Those are just some of the reasons that organizations postpone leadership transition planning. We compiled more from our insights working with nonprofit organizations in the new book, When Leaders Leave: A New Perspective on Leadership Change. We note that poor decisions, or decision avoidance, can lead to stagnancy and a complacency that adds to the challenges the organization faces in achieving its vision and mission.

When the inevitable can no longer be avoided, and the wheels are in motion towards new leadership, organizations must not delay. There’s no time to waste once it becomes known that the founder or long-term leader will be exiting the organization. It’s time for active transition planning. As we illustrate in a chapter in When Leaders Leave titled “Kickstart Leadership Transition,” active transition planning should start 12 to 18 months before the chief executive departs.

This planning is usually done by the leader in collaboration with the board, the board’s transition planning committee, and/or with guidance from an external transition consultant.

Many more navigation tools for how an organization should approach the shoals of leadership transition are in the pages of When Leaders Leave. But if you know how quickly the damage of a poorly planned transition can start compounding, as we have learned, you will start the process today.

Homework beckons for nonprofit boards

Studying up on succession plans can help organizations ace their biggest test

Our kids are going back to school; perhaps our board members should, too. Long before next Spring’s board retreats, members of nonprofit boards should start doing their homework about their organization’s leadership transition planning. Read more »

Nonprofit Leadership Transition: Sustaining Organizational Success When a Founder or Long-Term Leader Departs

Nonprofit organizations are predicted to transition their chief executive at a staggering rate for the foreseeable future. Many of these organizations are led by founders, or long-time leaders who have functioned as founders.
Download White Paper.

This document is featured on the Pennsylvania Nonprofit Report website.

Evaluating the Chief Executive

Many of the nonprofit chief executives we meet lament that they do not get ongoing feedback from their boards, or receive regular annual performance reviews. It’s hard for leaders to achieve their personal best when they lack feedback on which to base their development. This is particularly true for chief executives, who can be more isolated than other nonprofit executives.

Read more »