OK, how did we do it? What are the tactics behind the strategic bullets outlined in our last post on this topic? After all, strategy goes for naught if it isn’t supported by tactics, operational goals, and ACTION. Here are the actions that produced the startling transition you have read about over the past 4 weeks.
Enhanced governance best practices:
- An early step was the launch of a governance committee that developed a broad ranging governance policy manual outlining requirements for board nomination, participation, performance, and even removal, in addition to a host of other operating procedures. The lead inspector at a recent CARF (Commission on Accreditation of Rehabilitation Facilities) recertification audit labeled the manual the best policy guidance manual he’d ever seen.
- An important next step was the formation of a strong nominating committee with access to solid address books, which began reaching out to business and community leaders with the agency’s new image and reputation. Community leaders who would not have considered giving time to the agency before served on the committee and agreed to apply for seats on the board itself.
Transition in board membership:
- Among the many new policies in the governance manual and bylaws was the implementation of strong term limits. That included phasing out over three years virtually all board members who had served more than 6 consecutive years.
- Past board chairs who still were valued for their continuing contribution got an extra couple of years if desired, and the last of them will likely leave the board this year.
Removal of legal/operational roadblocks:
- We guided the finance staff in implementing good quality accounting software, transitioning their accounting data to a stable system, and replacing the agency finance director who had tolerated dangerously substandard accounting procedures to the detriment of the agency.
- The Board mandated the formation of an audit committee. Then the audit committee was directed to issue an RFP for their annual audit, and they subsequently engaged a new CPA firm with strong credentials in nonprofit audit requirements.
- A major effort was the removal of the 51% rule for board membership, and the dissolution of the association, so that the board took back the authority to make all key decisions regarding legal and strategic policy matters. This was probably the cornerstone of the Governance Committee’s transition campaign, for without this change the board transition might not have been possible.
- As a final phase in the evolution, the Board revised the bylaws and Articles of Incorporation to remove all the old thinking language that had tied the hands of past boards with details that were properly the realm of the board.
All these programs and policies are continuing and being enhanced every year, and the organization now has the strongest governing board in its history. In terms of financial success, as noted previously, the agency has grown revenues by over 70% since the transition began, and they’ve just won the largest grant in their history. Certainly not just the result of an effective board, but also the strong performance of the agency’s management and staff. But these things don’t happen without strong leadership.
Foundations don’t give to the weak or ill governed, because they don’t want their money wasted. Private donors give where they feel their money will be appreciated for its bringing value beyond survival. Government social service agencies don’t give contracts to agencies that can’t perform. And strong performance comes from strong leadership at all levels, starting at the top.
I am pleased to say that I was the principal catalyst in virtually all of these changes, first as a management consultant and later as Board Chair, although substantial credit goes to the previous board chair, who fully supported everything I proposed.
The overriding message here: this kind of transition is not impossible. It’s not easy, to be sure. The leadership has to be won over to the idea that they can do better, that the organization can do better, but for that to happen they must adopt change even when change is uncomfortable. If the organization’s mission is truly in their hearts, great things are possible. I speak from personal experience.