Latest / Nonprofit Launch Plan Podcast for Startup, Small, and Growing Nonprofits / Nonprofit Leadership: Building a Strong Executive Director and Board Partnership (Ep 45)
Transcript
- Matt Stockman (00:58.338) Hey there, apologies, but I've actually been down with the flu for the last couple of weeks. Matt Stockman (01:03.776) And as you can tell, my voice is pretty shot. So this is a replay, one of the more popular episodes from early in the life of the podcast. It's my interview with CEO Bob Lonac on the relationship between the executive director and the board of your nonprofit. Hopefully you enjoy and hopefully I'll be back next week. So that's really the board's responsibility, is keep it financially healthy and keep a great functioning CEO. Welcome to the Nonprofit Launch Plan podcast for startups, small and growing nonprofits. This podcast exists to help you build your nonprofit from the ground up on a strong foundation. So every episode we give you the frameworks and the tools and the personalized guidance that you need to create lasting impact. My name's Matt Stockman. I'm your host, thrilled You're here at Nonprofit Launch Plan. We believe that every nonprofit has gotta be operating at peak performance in six key areas in order to be successful. And those six areas are leadership, development or fundraising. Marketing programs and services, operations and finances. So on every episode of the podcast, we talk about a topic that is core to one of those six areas, and sometimes all of those six areas all at once. Now, before we jump into today's episode in the topic I've got for you today, if you just found the podcast, take a moment to subscribe right now so that you don't miss the next episode. And also, as a quick reminder. It's really easy to get some free time on my calendar. You can just go to nonprofit launch plan.com and click on book a call. It's free. There's no obligation. I would love to hear everything that's happening as you are starting your nonprofit journey or wherever you happen to be at in your nonprofit journey. Now, today I am stoked to be able to introduce you to a special guest with me on today's episode of the Nonprofit Launch Plan podcast. My guest is Bob Nik. Bob has a long career in nonprofit leadership, including 30 plus years with the organization Young Life. Bob was also the COO of the International Justice Mission, which is based in Washington DC and also spent 13 years, and this is where I met him. Bob was, uh, 13 years as CEO and President of Krista, a family of nonprofit ministry organizations that's based in Seattle, Washington. Bob is also the author of a book called Live Large Seven Lasting Lessons for Navigating Life's Twists and Turns. And he's a consultant that specializes in working with organizations. On the relationship between the CEO or the executive director and the board of directors, and for startup and small nonprofit leaders, this is a crucial relationship that is important to set up properly from the beginning. So if you are at the beginning of your nonprofit journey, or you're new in your leadership role in a nonprofit, I think you'll find a few really practical ideas and principles in the podcast episode today from Bob to help you set up a clear relationship. And clear boundaries and functions of the CEO of the organization or executive director or whatever the title is, and the board of the nonprofit and also. If you're inheriting a board structure that maybe you didn't have anything to do with setting up, you're the new leader, or you are a new board member, this conversation today will shed some light on how to create a healthy relationship between a board and the executive director or CEO of the nonprofit so that the relationship exercises the power that it holds. And also, I'll pause the conversation at a couple of points throughout the episode to be able to recap and synthesize some of the thoughts and ideas. So I'm excited for you to hear it. Without further ado, let's jump into the conversation with my author and my friend Bob Lunik. So, well, let's start at the beginning then, Bob, just kind, kind of help, uh, um, a listener to the podcast to understand if they're just starting in their nonprofit journey. Can you kind of help break down the fundamental differences that you see that there are in roles between the CEO or the executive director, the person running the operation and the board of directors? How are those different? Well, believe me, when it comes to founding, I've had some, you know, recent experiences with people that have had great ideas. Mm-hmm. I think probably a real vision and they, because they're those kind of people, they have friends around them, and those are the first people that they asked to be on their board. Mm-hmm. And, um, neither side knows anything about what boards are supposed to do and what founders and CEOs are supposed to do. They just have a passion for the ministry. So I think the first thing that really helps if you either work in the mission or you work on the mission. So working in the mission is you do the stuff which everybody gets involved to wanna do. That is. Whatever it is that means, you know, when I was way younger, I was a young life leader. Well, you working in the mission was like leading a young life club. You go to the place you find kids, you talk to 'em about Jesus, you raise money, you do all this stuff that's working, uh, doing mission. Mm-hmm. Well, working on the mission has to do with planning the future. There are some deep, difficult questions right away. That I see always raise their head. Mm-hmm. I think the number one thing is when I ask people, how are you gonna mo know if you succeed or not? What's the purpose and how do you know what that's gonna be? Um, and then the same is for the board. What's the purpose of the board? One of the things that also helped me, uh, in life was reading a book called Blue Ocean Strategy. I don't know if you're familiar with that book. I'm not. Tell us about it. Well, I'll tell you who started a blue, blue ocean strategy business. Mm-hmm. Amazon. Nobody else is doing it. Right. So if you, you have no competition, you got a lot better chance of succeeding. Yeah. The same thing is, is true in God's work. You know, I fell into a big ocean strategy ministry, um, called the International, uh, justice Mission. Their goal was to change the way the church thought about God's heart for justice. That fell out of favor with the church about a thousand years ago, and nobody really thought about justice as a ministry. Mm-hmm. Well, Gary Hogan founded it. They had a few leaders. They had three people on the board, and uh, I came along and thought, man. This is amazing. Nobody else has done this. And actually we, we more than doubled the size of it every year for the five years are there? Mm-hmm. It went from, um, about a, I think about a million dollar budget, and today I think it's over a hundred million. Wow. Now you can't go to a church without anybody saying God's heart for slavery, God's heart for rescuing, you know, forced prostitution. Right. That was all started by IJM. So you get the idea about the blue, blue ocean. Yes, absolutely. Now, so then what if somebody comes along and says, well, I, I'm gonna start a ministry to meet lead people to Jesus that are 30 years old or more, well join the crowd, right? Um, I'm gonna start a new church. There's, there's the ultimate not blue we strategy. Right? Now that doesn't mean you couldn't dream up a new way to have the church. Right. But if you're just doing the same thing down the street, it's gonna be a tough. Tough deal. To start up when it comes to adding board members, what should an executive director, somebody in a CCE CEO role, what should they be looking forward in initial board members? Well, it should first of all have a very clear idea what the job description for the CEO is, okay. And what the job description for the board is. And what's the purpose? See, most people join a board because they love the idea and they wanna contribute to the mission. Hmm. They don't wanna contribute to being on the mission. They want to do the mission and 'cause they came to a meeting or they know the person or whatever. Right. They don't know anything about a board. So founders and CEOs, okay. Their job is to paint the vision. And develop the strategy by themselves. And because think of this, look at the Bible. How did God call people? He didn't call groups. One by one. One by one. He called Moses. He called Abraham, he called whatever it's like and spoke to him and people, they say, yeah, God spoke to me. Okay, that's good. If God spoke to you. Said he, you want you to do this, that's fantastic. Write it down, get your vision out, and then find people that that either know are willing to be trained to be on the board. Because the board's job is very simple and strategic itself. That is to hire the ceo. Mm-hmm. And to evaluate the CEO every year on how they're doing on the outcomes of the organization. All right. A couple of key points to spotlight here at this point in this conversation with Bob Loick. First, it's important that as a nonprofit leader, you recognize the essential difference between working in the mission and working on the mission. To Bob's Point, working in the mission. Is doing the actual work that your nonprofit has created for, that's the drilling of the wells, feeding the meals, teaching kids to read, helping teenage moms, all that. Working on the mission is casting vision, creating strategy and processes that guide the nonprofit and working on the mission. Is the sole function of your board as the CEO or executive director. You've got a unique role, especially early in the life of a nonprofit, to kind of switch hats to at times work in the mission, handing out the meals, and also work with the board in working on the mission. And it's important that the CEO and the board are both understanding of the unique differences of working in and working on. The other key takeaway is Bob's recommendation of the book Blue Ocean Strategy. This is a book that came out back in 2005, which I've just now picked up at his suggestion since the recording of this conversation. It's written by W Chan Kim, and the goal of the book is to shift the focus of businesses away from competing in saturated markets with a lot of competition, otherwise known as Red Oceans. To creating new market spaces, blue oceans, in other words, where you can thrive without a lot of competition. And as a new nonprofit leader or a board member, it's really crucial to know that from the get go. How unique is your nonprofit? What specific and unique niche does it fill? And if it's not particularly unique, that's fine, but the growth curve early on could be a lot slower to build. Also don't miss what Bob said about the difference between the job description of the board and the CEO or executive director. The job of the CEO is to cast the vision of the future because of the work the nonprofit will do and to develop that strategy to get there. And the job description of the board is to hire the CEO and evaluate the CEO on the outcomes of the organization. Now Bob unpacks some more functions of the board a little bit later on in the conversation, but understanding the fundamental job descriptions of both the CEO or executive director or founder and the job description of the board is crucial. So let's jump back into this conversation with Bob Nik. So. CEO or the executive director, the leader of the organization comes up with the vision, comes up with the strategy. Right now, they don't have to come up with by myself suddenly, if they have a few other people that they trust and Sure. Yeah. But they present it to the board. The board doesn't come up with it. Okay. And then the board, uh, is there just to hold the CEO accountable to what he's presented to them to begin with. Yes. And the spirit of this, of course, has to be taught too, because they're usually both pretty much rookies. Yeah. That's why I say it's good to have a consultant, which is what I do. Right, right, right. So here, here's my list. Okay. I have actual, I've been working on putting this together, writing. Right, of course. So the board of director, principles of operation. Mm-hmm. What do board of directors really do? Every member shall make every reasonable effort to attend every meeting. Simple. Right. Simple enough, right? Oh yeah. Some people say, well, I'll give me an EI, you know, I'm busy. I can't come, I missed it. Yeah. I had to go do this. I had to do that. Well, especially early on, if you have three or five board P member, I think maybe four or seven or 10 is the, is the ideal when you get going. Mm-hmm. Um, so, okay, come to the meetings, they shall, uh, demonstrate that. One of the top three priorities for each member adds to their volunteer service and financial support is this. If you're on the board now, you can give 'em money, you can do a lot of things to help, but don't be on the board if it's like your fourth or fifth or sixth priority. Priority, understood. Board meeting shall be scheduled on a yearly basis, and reminders shall go out a month prior to the meeting. See, this is all simple stuff. Yeah, it's not very complicated. An agenda shall be distributed one week prior to the meeting. Resolutions presented by management shall be included with the agenda. See, board can't come up with, Hey, I think we ought to do this. The board approved resolutions from the staff. New resolutions may be submitted in writing during the board meeting. In writing. Mm-hmm. During the board meeting stuff comes up, but that way I can't tell you how many PE times in organizations I've had somebody say, well we passed that organ re Well, did you write it up? Do you have a written of the organization? Yeah. We all seem like very simple, fundamental things, but they mess you up big time. If somebody says, yeah, we passed that. Board responsibility oversees long-term success of the ministry, long-term success of the ministry. See, people think this is a little hard on the CEO, but the point is the board spirit is they want the CEO to to, to, uh, succeed. You're not there to criticize. You're there to, right. Hey, I know something about that. I could help you do that. Nothing wrong with a board meeting. Say I board person, say, I know how to write strategy. Mm-hmm. See, 'cause the board has three hats. Board person helper to the CEO. Okay. And the third. And the third is resource development. And resource development is donor support. And above and beyond then? Yeah. Like, hey, I know somebody that might fill that job or, gotcha. You know, it takes basically people in money to run the run things. Yep. Committee of the board shall con conduct in writing an evaluation of the CEO every year and set the compensation in according to that, and review the financial health of the ministry. So that's really the board's responsibility is keep it financially healthy. Yep. And keep a great functioning CEO. I have to assume that you run into a lot of situations where what you've just described is anything but what's in place in a nonprofit organization. Yes. And there's a lot of sort of mingling and melding between the two roles. And there's a lot of board members who are actively involved in the day-to-day operation mm-hmm. Of the organization and. For the executive director that finds themself himself in that place, whether it is by ignorance and it, you know, just sort of happened. Mm-hmm. Mm-hmm. Or they took over an organization that was kind of set up that way or has those issues going on, how do you start to unwind that? Yeah. This is not easy doing, um, but I think this essentially comes down to the spirit and maturity mm-hmm. Of the people you choose. All discussions. And decisions regarding the ministry shall be discussed in session with a spirit of openness and transparency. Don't get decisions done in the men's restroom or the women's restroom or anything. If you've got a problem, say it. Mm-hmm. Because you want, that's what you want. You want a quality truthful interchange. Mm-hmm. Here's another one. The board speaks with one voice here. This is a classic one I've done. I ran into this a little while ago. Mm-hmm. The CEO, the founder who had a administrative assistant and was hiring somebody else, the founder said, oh, the board told me I should do this. Well, who, who, when did that happen? Mm-hmm. Well, you know, this person called me and said, that's what I should do. And they're on the board. No. The board speaks with one voice through a resolution. So you actually want differences on the board. You want 'em to argue about stuff among themselves and then have a resolution that's so they get clarity to the CEO. So it sounds to me like when these two relationships are, are, are sort of working in symbiosis with each other, if that's a good way to put it. There's a funnel by which information travels back and forth. Sometimes nonprofits start with people on their board who are family members. Of course, which is, this is not really a family relationship we're creating. No. Between the CEO and the board as a nonprofit starts to grow, like talk about how the board might need to evolve or change over time. I think they just have to get better. Like this list right here mm-hmm. Is they kind of refine the list. For instance, most boards I've seen don't have term limits, so not good. Um, for a lot of different reasons, it's not v very easy for any board people to say this person is not doing a good job. Hmm. So the easy way around that is you have to say they're elected for three or four years. That's usually a good point. And at the end of that time, we can ask them to reelect for another three or four times, and after that you have to go off the board. Hmm. And you can come back on the board after a year, here's the one thing that you gotta have, you gotta like change or you gotta at least say, I can accept change. Hmm. Okay. It's sort of a sophistication, like how do you evaluate the, the CEO? You should see my evaluation at Krista. Uh, uh, the board guy who was very, um, knowledgeable, had a written evaluation. Mm-hmm. And the first thing he did sit me down and go. Okay, you're not gonna like some of this, you know, it's like, Hey, you know what, you, you gotta get better at this. And you know what? You gotta get better at that. You're great at this, you're great at that one to five. And he always had a spirit and a feeling that like he really wanted me to succeed, succeed. And I took it that way, and then I'd come back. One of 'em, I'll give you an example. This is the, this is what's really hard with boards and staff. The second year as a Krista, the first year my evaluation said, Bob, you're, you don't really, haven't gotten out in the committee, out in the community very much, which is a distinctive of the CEO. You need to also, you know, sell the organization outside. Right. You know, you don't, you haven't gotten to know very many people and you know, that's, that's something you gotta really change. Well, I thought I had, but I didn't have a record of it or anything. Right? So I told Kate, okay, every time I go visit somebody outside the organization just to ask me who would they do, what'd we talk about the next year, I presented as my ovation. What I did, I got an a plus. The point is they didn't know and I didn't know they wanted me to do more of it. It worked to my advantage. You know, it's kind of amazing when you listen to criticism and those evaluations should come to the CEO from the board at least once a year. You actually have a tool. Oh, I say only once a year. Okay. Only once a year. Gotcha. If you could sort of just think back to that guy we were talking about or that girl at the beginning of our conversation, and you could offer just from your years of knowledge and experience, you could offer just one or two. High level pieces of advice about developing a great long-term relationship with the board, putting the right people on the board. Here's what your step one in step two really need to be in order to set yourself up for success in five years, 10 years, 15 years. Yeah. Yeah. What would that look like? Don't ever attempt to do it by yourself. It's the reason the Bible talks about spiritual gifts. Everybody has different gifts, talents, but two is if you're gonna succeed at this, you better be ready to give your soul time, energy to it. That's true in business or anything else. So if it really is resonating with you for whatever purpose, it's gonna cost you something. Mm. Mm-hmm. One of the things that profoundly moved me early on in my career was the Harvard Business Review, which you wouldn't think of, you know, a ministry guy reads too much, but they did a research on what, what takes great leadership from a business standpoint. Mm-hmm. What's the one quality of a, of a business leader? And they decided to measure it by the growth of the business and uh, astoundingly. The, the five they rated at the top that they found mm-hmm. Nobody had ever heard of before. Two, they never heard of the CEO before, really? Because the key to success in business or nonprofit. Is to find people that are better than you are and ask them to call you, call follow you. And that's called humility. So it isn't, that's the thing in, see, it's not about you. What a great conversation with Bob Lonca, nonprofit consultant and advisor with some really practical and common sense advice about the role the board plays in a startup or a small nonprofit. I think there's plenty of practical nuggets in this for you. If you're a leader of a small nonprofit, as you develop and you grow a relationship with your board. I am super grateful for Bob's Insight. Hope that you are too. Now, if you want to know more about the work that Bob is doing right now, or you want to check out his book, which is called Live Large Seven Lasting Lessons for Navigating Life's Twists and Turns, you can check out his website. It's bob loick.com. Bob, B-O-B-L-O-N-A-C. Dot com. That's all for today's episode of the Nonprofit Launch Plan podcast. Thank you so much for listening. Thank you so much for investing the time and the energy and the effort to chasing after that thing that you have been called to. Now remember, if you've got a special question. Or an issue that you're facing and you'd like to talk about it. It is super easy to book some free time on my calendar when you do, just so you're not surprised here's exactly what's gonna happen. No pressure, no obligation, no pitching. It's just some get to know you time on a Zoom call for both of us where we talk about whatever it is you're dealing with, the challenges you're facing, the things that are really kind of keeping you up at night, where you're at in your nonprofit journey. We chat and if I can answer and help in some way during that. Time I will. Otherwise, after we get together, I'll follow up with you within about 24 hours guaranteed with a couple of recommendations for next steps if I think there's a way that somehow I can help, that whole initial discovery meeting is absolutely free. And again, there's no obligation. Just go to nonprofit launch plan.com and click on book a call. Also remember the other freebie that's on the website. If you wanna binge all the my material related to the five steps of the fearless fundraising framework, I've got this easy to use workbook with the videos that go along with it, that take you all through the five steps and will build your confidence in knowing how to invite other people to partner with your nonprofit financially. That is the toughest thing, especially at the beginning of a nonprofit journey. It's free. You can get the five videos in the workbook on the website@nonprofitlaunchplan.com. Again, thanks for listening to this episode of the Nonprofit Launch Plan podcast for startups, small and growing nonprofits. Thanks for listening. Thanks for being here. Don't forget to subscribe so you don't miss out on the next episode. And if in any way at all you found this episode helpful, please share it with another nonprofit leader, maybe somebody on your board who you think might benefit. Until next time, keep making a difference and thanks for listening.