The Well-Rounded Executive

To be a well-rounded executive, it is important to understand all of the various aspects of running an organization. In this resource, the Giersch Group provides a simplified roadmap of what every nonprofit Executive Director (ED) should focus on for the running of the organization.

A well-rounded executive can use the model below as a template to understand the areas that require attention.  The areas that will be covered are the board of directors, operations, fundraising, and the program. The executive is usually hired for the program, but a well-rounded executive is someone that can manage the board of directors and the operations in addition to the usual focus on the program.  What this model urges the Executive Director to do is to embrace the other areas beside the program, and manage each efficiently.

Board of Directors

When approaching the board of directors, it is necessary to recognize that this is a complementary relationship. The entire organization is dependent on the Board and the Executive Director, so it is imperative that they are both strong and they work together.  It is not uncommon to have a weak board of directors with a strong Executive Director, or vice versa. The overall goal is to make both strong and so they positively impact each other.

Often, the board members are executives with for-profit companies and have a fundamental focus that is geared toward the for-profit business world.  This can be a benefit to the Executive Director because it provides expertise in unfamiliar areas – usually the operations. These complimentary skills enhance the learning opportunities for you and bring complementary skills to the table.  

The underlying challenge with managing the board is that most of the professionals on your board don’t really know as much as you do about running a nonprofit, though they may feel that they do.  While business people will be the first to say that running a nonprofit is nothing like running a business, they often proceed to act as if running a business somehow qualifies them to know everything about running a nonprofit.  The board members bring skills that are complementary to yours, but not necessarily overlapping.

Humility and confidence are essential for an Executive Director’s proper treatment of a board that is strong on business acumen but light on nonprofit experience. Be self-confident, and utilize your board whenever possible. Realize that you have much to learn from them, and they also have much to learn from you.

Constantly offer opportunities for your board to learn how to do their job better.  Board retreats, training days, seminars and conferences are all ways to help your board members increase their nonprofit expertise.

On the other hand, if you are an Executive Director who is the founder and the major donor of the organization, then your relationship with the board may have a different tone.  When one person is the major donor, the Executive Director and the Chairman of the board, of course, this changes the board dynamics dramatically. The goal for the Founder in this case is to build a true board of directors who have a meaningful impact on the organization and are not merely “yes men.’  

Operations

Under operations are the areas required for the smooth execution of all the various tasks of the organization.  Operations include:

1. Finance and Accounting
2. Human Resources
3. Marketing
4. General Administration

There is nothing wrong with being the ‘jack of all trades’ and a ‘master of none’ when it comes to operations.  The point is that the Executive Director has to reach a minimum level of competency in each area for which they are responsible.  Because the ED is hired for passion and experience around a certain program they often outsource or even simply ignore the operations side of the organization.  This is a major pitfall. The ED must fully understand the depths of their organization, which includes the day to day operations and administration.

1. Finance and Accounting

Financial statements are the pulse of the organization.  A well-rounded ED should not only be able to read financial statements, but must understand what they mean and how to base future actions on them.  It should be your goal to improve your understanding every month. This is where the Executive Director’s career is made. If the nonprofit ED comes from a humanities background, it’s imperative that the executive learns this facet of the operation.  

Some of the key areas of competence in financials for a nonprofit Executive Director would include:

• The difference between cash and accrual accounting.
• Producing monthly financial statements for Management Discussion & Analysis.
• The proper preparation of budget to actual reports.  
• Making spending decisions based upon the budget.
• Making quarterly adjustments to the budget.

A good place to start is to read the Giersch Group's resource on Financial Statements for Nonprofits.

2. Human Resources

People are an organization’s most important asset.  The board and the ED need to be focused on hiring, training, and managing talent.  There are three ideas to build off of for an organization’s human resources to be successful:

1. Study the art of managing people. We often think the skill of managing people is as natural as making friends, when in fact it is much more complicated.  The ED probably knows less than she thinks she does about managing people. There are many books and articles on management of people.  
2. Know the law. For over 100 years, law has governed and protected the employee.  Be ethical, and be cognizant of employment laws and you will be respected by your staff and as an organization.  
3. Love your people.  You have to want to make their development and growth your own personal goal.  You must believe that if they fail, you fail, and that their success is your success.

3. Marketing

In the nonprofit world, marketing more specifically refers to Public Relations, increased name recognition, and reporting.  Perhaps the main issue here is the publishing of an Annual Report, see the Giersch Group's resource on Nonprofit Annual Reports.  But many of the traditional marketing skills apply to a nonprofit as well, such as advertising and integrated media strategies.  It pays to learn as much as you can from the business world about good marketing. Of course, that goes without saying if you have a fee-for-services program such as membership fees or performances.  

4. General Administration

There are countless other tasks that fall under “general administration”, such as maintaining relationships with vendors, securing and managing office space, attending to legal, banking, accounting and tax issues as they arise, putting out fires and paying attention to new opportunities.  The key here is that the ED has a grasp of all of these various issues, and creates a way to monitor each of them. “That which is monitored, tends to improve.” So actively monitoring all of these issues help keep you on a steady growth trajectory and avoid those unwelcomed surprises.

One of the fundamental traits to being a well-rounded executive is that you must fully understand that which you are charged to manage.  You should maintain a minimum level of competency in every area you are responsible for. Going back to a characteristic necessary with the board of directors, the executive must exude confidence.  This confidence will radiate when everyone throughout the organization recognizes that their leader really knows what he is talking about when it comes to the inner workings of the organization.

Fundraising

While the Operations section is the area that gets the least love from most Executive Directors, fundraising can be a difficult and frustrating task for many Executive Directors as well. The ED must embrace fundraising as a calling.  Fundraisers have often been compared to salesmen and vice versa and each are thought to be undesirable jobs. We’ve all had bad experiences with salesmen and fundraisers, but the simple fact is that fundraisers and salespeople make the world go round. Without someone making a sale or raising the funds, all activity would grind to a halt. With that said a well-rounded executive sees the value of fundraising and recognizes the need to embrace this task, study the craft of fundraising, and master it.

Be a cheerleader for the organization and inspire everyone to fundraise in their own way.  If the Board of Directors is not helping, try to figure out a way to inspire the whole organization and the staff to get them actively involved.

Program

More than likely, the program was the reason you were hired, the program is the reason you wake up every morning.  This is the area you have a passion for. If your organization is a school, you love education. If your organization is a museum, you eat, sleep, and breathe art.  And if your organization is a soup kitchen, you have a passion for helping those in need of food. For most EDs the program area is a slam dunk, so more focus will be required on the other areas of the organization.

There is one specific case in which this may not be true.  There is a movement among nonprofits of hiring retired executives from the for-profit sector to run major nonprofits.  These executives will soar in operations, but often find their challenge in program and fundraising. For these EDs, learning the program is most important.  These transplants from the for-profit world will learn about the program through their own staff and constituents.

A well-rounded executive will look at financials, give performance reviews, monitor marketing, measure growth in key indicators, stay on top of administrative issues, and will maintain capacity for the other areas of the organization as well.

Even though an Executive Director has decided to focus on being well-rounded and attacking all of these issues, there are two temptations they must avoid: either trying to do it all themselves, or outsourcing it all to others.

Neither approach is right because if you take on all the responsibility you will surely fail eventually.  Executive Directors that take on every role end up burning out, more times than not. Perhaps that is the least harmful outcome, since the executive does not have the expertise to take on every area of operations, major mistakes can occur.  

On the other hand, if you hire people to handle all the things you do not understand, it creates a situation where a part of the organization is running blind because the executive does not understand how that section is run.  Too much outsourcing leads to unpleasant surprises and a feeling that “it’s someone else’s responsibility”.

Regardless of where your expertise may be, a well-rounded executive is focused on delivering in every area.  She is passionate about the program, but also competent in operations. She is proactive with the Board of Directors, and embraces fundraising.   

The Giersch Group can help you become a Well-Rounded Executive. The Giersch Group offers General Executive Counsel Services to work in collaboration with your organization to provide fresh insights and objectivity. This service is an excellent method to reflect with you every month on the current and projected financial status, donor and constituent relations, and provide a fresh perspective on the topics that influence the key operational functions of a nonprofit organization.  By diving into specifics, the nonprofit executives are given professional advice that may be applied throughout the entire organization to lead to a more efficient fulfillment of the mission.

Articles for Further Reading

1. Other resources on the Executive Director’s role:
1. Role of the Executive Director: http://www.abanet.org/barserv/library/h/job_descriptions/4638.pdf
2. Role of Nonprofit CEO: http://www.managementhelp.org/np_progs/ceo/ceo.htm

For more information, please visit the Giersch Group at http://www.gierschgroup.com/ or contact us at prosper@gierschgroup.com