The CEO's Survival Kit
ASSOCIATION MANAGEMENT, April 2005
By: Walter P. Pidgeon, Jr.
A new study of top executives underscores the importance of relationships in making - or breaking - a career in association management.
A full-page advertisement appeared in The Wall Street Journal several months ago with the headline "The New CEO: Rethinking the Corner Office." The ad said, "Once a coveted job, being a CEO is not what it used to be; in 2002, nearly 40 percent of CEOs were fired for poor performance, up 25 percent from 2001." Here are a few additional facts from the ad:
- With shorter grace periods and higher performance bars, results rarely meet expectations.
- Often those who solve problems or exploit opportunities earn the board's confidence and the top job. But when the future is different from the past, yesterday's stars are unlikely to be tomorrow's heroes.
- Corporate governance now means taking personal responsibility along with personal consequences.
- The CEO sets the tone. The personality at the top becomes the personality of the corporation.
- The person who runs the show matters.
Wow. This one-page advertisement basically captured the landscape that chief executives are facing in today's environment. And the summary applies equally to the for-profit and nonprofit communities.
If the ad is correct, then what is the difference between the CEOs who succeed and those who fail? The answer seems to lie in the types of leadership that are dispensed. Successful leaders are action-oriented. They are capable of anticipating and embracing change, and they love every minute of the process. Successful CEOs understand that the game they play requires sacrifice, flexibility, innovation, and imagination, and they know when to take calculated risks to survive.
To uncover the secrets of attaining and retaining a CEO position in an association, I began a research project in the fall of 2003 called the National Study of Not-for-Profit CEOs. With ASAE's support, I obtained valuable data from more than 100 association CEOs. In addition, I conducted personal interviews with 12 CEOs of national associations to verify the study findings. I also drew on my professional background as CEO of four national organizations. All of these findings and practical applications are found in my book, The Not-for-Profit CEO: How to Attain and Retain the Corner Office (2004, John Wiley and Sons).
The book applies my findings to the entire CEO life cycle. This cycle includes aspiring to be a CEO, capturing the corner office, surviving the first six months as a new CEO, and then figuring out how to move on to even greater leadership responsibilities. The key to CEO success, however, often occurs between these stages, when leaders must concentrate on hitting home runs in the environment in which they currently find themselves.
Your immediate goal should always be to do well in your current position, even when you feel it is merely a stepping stone to your future. This success is often contingent upon how well you motivate your key volunteers and staff. Following are some ways in which the CEOs who participated in my study dealt with the human equation.
Bringing out the best in the board
The study uncovered an interesting pattern among CEOs who have retained their positions. Their achievement was less dependent on their technical skills or on their ability to achieve organizational goals than on the work they did and close personal relationships they formed with key volunteer leaders.
A lot has been written about the board-volunteer relationship and how both sides need to work equally well with each other to create the proper environment. The onus of this relationship, however, sits squarely on the shoulders of the CEO. You need to create a culture that encourages the proper blending of roles. Here are several ways to do so:
Recognize that achieving the right balance of power is never easy. I have been a staff member and a CEO of associations where the governance structure was so bent that neither the CEO nor the volunteer leadership benefited. Consider these two extremes:
1. A volunteer-driven culture that does not allow the CEO or staff to do anything without major involvement from the board of directors — the classic micromanagement syndrome.
2. A CEO who dictates to the volunteer leaders what needs to be done and exactly how they will do it.
Both extremes are counterproductive. Several of the CEOs who participated in the study noted that team effort was one of the keys to success, with volunteers and staff working together to fulfill the mission of the organization.
Generally, I have been blessed across the years to hold professional leadership positions in nonprofit organizations that understand the importance of teamwork. However, I also have been involved with a few organizations that didn't have a clue in this area. The clueless organizations usually have poorly developed cultures. This is often the result of a constituency that is too diverse and never agrees on anything or weak leadership on the volunteer or professional side.
In the case of a diverse constituency, there is only a 50/50 chance that the people within the organization will ever agree on anything. The best solution may be to split into two separate organizations or to find a way to run two or more suborganizations that report to a federated board with limited functions.
In the case of weak leadership, the solution lies in taking appropriate measures immediately. These could range from letting ineffective people go to defining the necessary leadership requirements and figuring out how best to obtain them.
Adapt the governance structure and practices to the job that needs to be done. My current association, the U.S. Sportsmen's Alliance in Columbus, Ohio, has an effective structure. The board was designed to attract high-level volunteers who would establish policy and help seek funding. As CEO, I am given full responsibility for the day-to-day operations. In our case, this clear governance structure is vital to fulfilling our mission, which primarily focuses on legislative, educational, and legal work that requires making dozens of quick decisions daily.
One unusual aspect of my association has enabled us to encourage team effort without affecting the balance of power. The senior vice president and I, both members of the professional staff, have voting rights on the board. Traditionally, nonprofit CEOs are ex officio or nonvoting members of the board, and no other staff member has a place on it at all. But at the U.S. Sportsmen's Alliance, I sit at the head of the table next to the chief elected officer. And the senior vice president acts as the secretary to the board. Our board averages roughly 15 members, so our two votes could not possibly change any outcome that the volunteer members want to endorse. However, this arrangement does provide the opportunity to nurture the team approach.
Never underestimate the importance of being trustworthy and providing leadership. The executives who participated in the National Study of Not-for-Profit CEOs knew that their ability to retain their positions was, in large part, due to their capacity to work effectively with their volunteer boards. To do this, they came to the table with certain professional and interpersonal skills. When asked to rank the essential qualities of a CEO, their top two responses were integrity and trust and leadership traits. Three other top qualities: administration and fiscal management ability, staff management skills, and good writing skills.
Don't let the size of your board overwhelm your mission. Consider the following statistics from the for-profit community:
- The average for-profit board size is 10.9 people.
- The largest for-profit board has 31 members.
- The smallest for-profit board has three members.
Think about it: Multibillion-dollar conglomerates are being administered by no more than 31 directors. In contrast, associations seem to favor large boards, perhaps in hope that a larger board will produce greater influence, volunteer support, and funding.
I was once the CEO of a nonprofit organization with a board numbering into the hundreds. It was a zoo every time it met. It took more time than it was worth to prepare and conduct the meetings, which produced little or no meaningful results.
My suggestion to CEOs who are stuck with large boards is to try to quell the concept through a strategic-planning exercise. If this does not work, see if you can change the large board into a board of delegates that meets yearly, and then assemble a small action-oriented board made up of your best volunteers. That is what I did with the aforementioned association. In that case, we had an executive committee of fewer than 30 members that we converted into the board of directors.
Associations that are light on their feet, action-oriented, and truly want to make a difference generally have small boards that meet a couple of times a year. In between these meetings, they put their board members to work actually doing something to further the cause of the organization. If you have selected the right people for the board of directors, they will have little time to go to meetings or discuss theory. Put them to work where it counts — where the action is.
Use your volunteers wisely. Associations with successful ongoing volunteer recruitment programs work really hard at it. The best volunteer experiences are enjoyable and truly help to fulfill the organization's mission. I am a great believer that everything we do for volunteers has to contain an element of fun and yield meaningful results. If a volunteer position can't do both, it should be refined or dropped.
As CEO, you bear a major responsibility for ensuring that your volunteer process is well managed. For specific advice on this, my book contains an entire section devoted to attracting, maintaining, and recognizing board members so that their service is personally rewarding as well as effective for your organization.
Making the most of staff
Although the volunteers and the board need to be major priorities for a CEO, it is the staff who will help to fulfill a number of key functions that measure your success or failure.
Some administrators put extreme pressure on their employees to get results. And often these types of supervisors do get results — for a short time. Ultimately, however, people revolt. True leaders understand that different things motivate different individuals. Find out what these things are. It is up to the CEO, as a motivator of staff, to set the tone and refine the culture through the following steps:
1. Get to know the players. Understanding the people who work for you is an ongoing process. They do not stay the same; they are evolving constantly even though your impressions of them may remain static. One of the challenges you face, especially with staff members who stay with the association for a long time, is to keep up with the changes so that you can approach and coach them properly.
2. Shake up the structure. This isn't a task for a CEO who has just arrived. Make major changes only after you fully understand your association's core goals and what really needs to be done. Once you've been in place for a while, you may discover that staff members are devoting more time to secondary priorities than top priorities. If you suspect that's the case at your association:
- Conduct research to determine the major priorities.
- Review staff functions to determine how they relate to the priorities.
- Meet with staff to verify the validity of your findings.
- Develop a new draft staff structure.
- Meet with each department head to present your new structure and ask for advice.
- Meet with key staff to present your second draft and ask for advice.
- Meet with the entire staff to present your third draft and ask for advice.
- With the assistance of key staff, present the restructuring plan at your next board meeting, illustrating how the new structure will help to better serve the mission of the organization.
Whatever you do, never make the structure static. Keep it flexible.
3. Involve your staff in the decision-making process. Don't fall into the trap of becoming the sole decision maker. Every member of your staff has a hand in the functions that make up the association. Most of them can tell you which programs and products are effective, which should have been dropped 10 years ago, and what new programs are needed — if only someone would ask them. Use your entire staff team as a powerful advisory group.
4. Open minds to new ideas. Once you begin to involve your staff members in the decision-making process, a strange thing happens. The staff will buy into the direction that you are headed, and better yet, they begin to provide ideas on how to get to the destination.
5. Listen. The members of your staff are your eyes and ears. They need to be able to express themselves and provide solutions to their problems. Listening is 80 percent of the leadership process.
6. Don't hide anything. If a problematic situation comes up, the staff will either find out or conjure up a story that is far worse than the reality. The staff have the right to know about how the association is running, the funds that are being raised, the volunteers who are recruited, the programs that are being developed, and so forth. Telling staff members everything makes them more loyal, team driven, and more like trustees. They will cross over to other departments, without being asked, to lend a hand and help make sure the association succeeds.
7. Question everything. I had a mentor who always told me to "listen with the third ear." What is said is often not as important as how it is said or what is unsaid. Asking questions is one of the most productive things that a CEO can do. You become more aware of what is going on and help advance the given project or activity.
8. Delegate. Understand that you can no longer do everything — even if you won the CEO position by being an aggressive player in a particular area that still needs to be covered. You have to find a way to delegate to other players. This does not mean that you will never get involved or provide expertise. It does mean that you cannot run your old function and the entire operation at the same time.
9. Don't allow closed doors. I rarely close my door. The wide-open-door policy strengthens the team-coach approach.
10. Recognize each staff member. All of these steps are really just ways of recognizing the staff for what they do. However, a formal recognition process is needed as well. Although I believe in motivating the staff throughout the year, nothing beats the ultimate annual recognition: increased compensation.
Employee recognition is a daily effort that requires constant attention. How you talk with your staff is a form of recognition. Compliment work that is done well, and if work needs improvement, return to your coaching mode to provide the needed support and guidance.
Facing future challenges
The executives who participated in my study cited three main challenges that CEOs will likely encounter in the decade ahead.
1. How to make use of technology to save time and money while better serving members.
2. How and where to find revenue to replace dated sources.
3. How to market the perceived value of an association to current and prospective members and donors.
As daunting as these challenges are, you, as CEO, have a small window of time in which to turn negatives into positives by increasing the strength and vitality of the association you lead. You cannot do this alone, however. Establishing and maintaining a healthy relationship with your board and other key volunteers is vital from the first day you become the CEO. Your role is not merely to report to these volunteers. Your charge is to motivate them to do great things.
And don't ignore your staff, as they are the primary vehicle to move your association into the future. Gain the staff's confidence and be the clear leader of the pack, with the ultimate goal of developing a staff that will follow you anywhere. To retain the corner office, you must act as an astute agent of change by creating an exciting and productive team that works together for the common good.
Walter P. Pidgeon, Jr., is president and CEO of the U.S. Sportsmen's Alliance-U.S. Sportsmen's Foundation, Columbus, Ohio. This article is adapted from his book The Not-for-Profit CEO: How to Attain and Retain the Corner Office (2004, John Wiley and Sons).
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