by Lou Feldstein

A recent satirical report in the online publication, The Onion, suggests that “the single act of pretending one’s life is not in complete shambles … works. ‘Even when everything is coming apart at the seams and disaster is almost certainly imminent, putting up a good front for friends and loved ones makes everything better.’” While the Onion’s report was written (it appears) tongue and cheek, its premise is grounded in the works of social commentators like Malcolm Gladwell and Norman Cousins who suggest that putting up a positive front leads to happiness and success. Although fantasizing about a better life might work well for individuals, it is not an effective strategy for organizations.

Professional fundraisers will attest (even when doing the opposite) that appeals based on positive messaging of what can be done, or is being done, are usually more successful and effective than the “woe is us approach.” Although such an approach is logical in the fundraising arena, when it migrates to governance, well, “Houston, we have a problem”.

Regrettably, far too organizations practice “strategy by pretend” in order to not upset volunteers, donors and most importantly, board members. That is … until it is too late. While such positivism is critical to the success of effective branding and fundraising, many organizations have found themselves in deep financial and operational trouble because their leadership wore rose colored glasses. Rather than practicing organizational oversight, they believed their own messaging, and pretended that everything was okay – even when it wasn’t. Any volunteer or professional who toils in this sector of the world can cite a litany of organizations who match this description.

Successful nonprofit and faith based organizations (as well as countless businesses) are usually built around the juxtaposition of two basic premises – hope and reality. Well functioning organizations not only believe in what they are doing – they also have in place strong governance systems that, while passionate about the mission, view their operations through critical and realistic lenses. Conversely, it is those governance systems that rely primarily on the passion and hope of what the organization delivers, that inevitably learn they are in serious short term and often, long term trouble.

The strongest organizations are those who not only build upon “hope” but who also have established oversight systems in place that recognize the financial, programmatic and operational realities of the organization. While most board members are recruited to serve based on passion for the mission, once these members step into their roles it is incumbent upon them to look past the smiles, laughter and good feeling reports – the feel good aspects of volunteerism – and recalibrate their focus on being responsible for running a business. To paraphrase former President Ronald Reagan, good board members truly fulfill their responsibility when they “trust, but verify”.

Organizations that are blessed with solid and invested leadership, inevitably have greater programmatic impact, stronger fundraising and longer, more successful futures. Nevertheless there are organizations, both large and small, that struggle along, delusional to the reality that their long term success is less than assured. Board members show up to meetings celebrating their organization’s programmatic successes, giving of their time, donating their money, but rarely asking the hard questions, or focusing on the less “fun” aspects of the board meeting like financials. That is, until they are called to a special meeting months or years later only to learn that while God may provide, the Almighty does not pay the bills.

Pretending that everything is okay is never a healthy leadership philosophy or an appropriate operational strategy.

While good governance alone does not eliminate all of an organization’s problems it does go a long way in alleviating the circumstances that lead to weak organizations. There are three key factors in measuring the strength of an organization’s governance system (and thus the overall health of an organization). Each of these build upon the other. Together, they make a strong system. If any of them are missing, the entire system is considerably weaker (imagine a three legged stool with only two legs) and prone to ongoing struggle or ultimate collapse.

1. Succession Pipeline: An organization’s next chair must already be identified and in place, when the current chair steps into his or her role. The same can be said for each chair of a major committee. Anything less is a clear warning sign of multiple other serious organizational issues. Denial is futile. If an organization does not have its pipeline in place it is time to start asking, and honestly answering, some very hard questions.
2. Time is NOT money: While the saying goes that “time is money”, time does not pay the bills. More and more nonprofits and faith based organizations struggle with issues associated with having board members who give time and not money (often rationalizing by saying these members have to “give or get”). Most nonprofits have volunteer opportunities for people who are great workers. The Board of Directors (the ultimate fiduciary and legal entity) is not the place. While this may sound politically incorrect, healthy organizations have something in common – most of their Board members should be giving at some of the highest levels.
3. Job Descriptions: Strong organizations give their board members clear job descriptions (prior to the person being asked to serve on the board). Most of us are very familiar with the scenario of asking someone to be on the board and being told, “Don’t worry, you really don’t have to do anything.” Wrong!!! Being on a board is a responsibility with potential legal consequences. Every board member needs to know beforehand what is expected of them and be held accountable for filling his or her responsibilities.

There are of course multiple other criteria that can be utilized to assess the strength of an organization (and its governance structure) but these three are in my opinion the MOST critical. It would be difficult to imagine a strong organization that doesn’t practice these. It is easy to identify weak organizations that don’t follow these practices.

Few people want to spend their volunteer time dealing with crises and problems. Having strong governance systems doesn’t eliminate the potential for such problems, but it does significantly diminish the long term impact of such situations. Fewer problems ultimately lead to happier and more involved volunteers and thus stronger and healthy organizations. That, and not pretending, is what brings true fulfillment and joy.

Louis Feldstein is the Founder and CEO of Dynamic Change Solutions, LLC a change management consulting practice focused on nonprofit and faith based organizations, academic institutions and mission driven businesses. He can be reached at lou@dynamicchangesolutions.com.

cross-posted at Dynamic Change Solutions.com