Daring to Lead 2011

CompassPoint and the Meyer Foundation have come out with a new "Daring to Lead" study. I blogged a bit about their 2006 study, so thought I would give the 2011 update a read as well. It's a survey of more than 3,000 executive directors of non-profit organizations and, although it seems weighted towards charitable and social service organizations, there are a few interesting parallels and tidbits for associations.

First, the good news.

...the distribution of executive tenure across the 3,000 respondents reflects a healthy continuum of new and veteran leaders in the sector. Nearly a third of current executive (31%) have been on the job for fewer than three years; this is more than the 27% who have been on the job for ten or more years. Alarm at the potential widespread sector disruption executive turnover might cause has given way to concern about how best to prepare new leaders and their organizations to weather, and even leverage, inevitable transition.

It's good to hear the generational transition in leadership is actually taking place, and that people are starting to mellow out about it. In the 2006 study, there was a lot more angst about the crushing inevitability of time, and concerns that the new group of younger leaders were not prepared for their positions and (shockingly!) had higher expectations for pay and for work/life balance than the sector traditionally provided. Boomers, it seemed, would have to stay in their positions longer, or the critical missions of their organizations would not continue.

Daring to Lead 2011 seems to indicate that this is no longer the worry. It reflects, I believe, the leadership trend we're also seeing in the association world. More and more GenX and even Millennial leaders are coming into positions of prominence (something obvious to anyone who attended the recent ASAE conference in St. Louis) and, although old and new challenges still linger, the world is not crashing down and the work is somehow getting done.

Now, the bad news.

Executive time invested in working with boards of directors was notably low. Sixteen percent (16%) of executives reported spending fewer than five hours per month on board-related activity, yet nearly half of these executives described themselves as spending the right amount of time. The largest group of executives (39%) spend between five and ten hours per month--just 6% of their time overall--and half of these executives said this was the right amount of time. Other studies have found that executives who spend 20% of their time on board-related activity have high rates of satisfaction with board performance. Similarly, among these respondents, executives at the low-end of the time investment spectrum were the least happy with their board's performance.

This is disturbing and a trend, I hope, that is NOT reflected in the association sector. Speaking for myself, the predictive indicators defined above work. I definitely spend more than 20% of my time on board and board-related activities, and I am satisfied (to say the least) with the performance of the board in my organization. For executives who are not satisfied, I would ask them to reflect on how much time they are spending on the board and on board development activities. Investment of time and levels of satisfaction naturally go hand-in-hand from my perspective. To think that there are organizations whose executives are unsatisfied, but who are unwilling (or unable?) to spend more time on the problem, says something fundamentally deficient about the organization and its capabilities.

Daring to Lead 2006 - Recommendations

This is going to be my last post of the Daring to Lead 2006 study. It concludes with a list of recommendations for nonprofit executives based on their results. I think the list is worth reading and strikes me as fairly practical advice—reminders about things all nonprofit execs should do but not all find time for. They include:

1. Take responsibility for developing a strategic board.
2. Build leaders at all levels of your organization as a succession planning strategy for the day you'll no longer be in the exec position.
3. Ask for adequate salary and benefits.
4. Build a network of supportive peers and mentors to help you over difficult patches.

The report provides some more details in each of those areas. But the one I really want to zoom in on is:

5. Live in the question: Am I still the right person for this job?

How many execs ask themselves this question on a regular basis? Am I the person to manage the challenges emerging for this organization and to take it to the next level of mission achievement? The study authors argue that the number of forced resignations they encountered in the backgrounds of the study participatnts could have been successfully avoided if more execs would approach their work with this mindset—that they won't always be the solution, and that when the merry-go-round stops it's better to get off gracefully than to be asked to leave. It also reflects a level of stewardship that is still not entirely in vogue.

From a generational perspective, I think this question is more important than ever. It'd be interesting to hear the takes of Boomers, Xers and Millenials on the question. Would one group be more willing than others to ask themselves the question? Would one more easily move on if the honest answer indicated that they should?

Daring to Lead 2006 - Finding 5

The authors of Daring to Lead 2006 saved the best for last—at least as far as The Hourglass Blog is concerned. Their fifth and final finding—that bench strength, diversity, and competitive compensation are critical factors in finding future leaders—cuts right to the heart of the generational shift coming to the leadership of nonprofit organizations. Here's a quick excerpt:

Because the majority of current nonprofit executives are baby boomers, anticipation of wide scale retirement has intensified the anxiety around leadership transition across the sector. This research suggests that many older executives are not on a traditional retirement trajectory; nearly half of executives older than 60 say that something other than retirement is what they will do next. Still, the nonprofit sector—like the other sectors—will most certainly have a market response to the talent supply available as the generational handoff unfolds. Our data suggest several points of concern. First, only half of executives at mid-sized organizations (5-20 staff) are actively developing future executives. Second, the sector does not appear to be achieving greater diversity in its newer and younger executives. And third, executives believe that the next cohort of leaders will require higher salaries and more work-life balance, things that small and min-sized nonprofits may struggle to provide.

What I really want to focus on is their third point of concern, that executives believe that the next cohort of leaders will require higher salaries and more work-life balance. The study cites that 61% of executives surveyed believe that if they left, their organizations would have to pay the next executive more than they are currently making. The amount of increased compensation perceived to be needed varies by organization size, but the majority in all size catergories seemed to think it would require 11-20% more.

The study authors conducted focus groups in additional to the survey, and some of the quotes from those focus groups are priceless.

Some participants believe that younger executives will expect to be paid more than baby boomers have accepted and that further, they will want work life balance to an extent the founders never expected from the nonprofit executive role. One executive commented, "The young people who come in want balance tomorrow." Another said, "Young people have a lot of high expectations about salary and benefits and they actually read the employee handbook and want everything they are entitled to."

To me, this is more than just reflective of a changing priorities of one generation versus another. I think it also reflects the growing establishment of nonprofit management as a profession—now with business literature, certification programs, degree programs, and a growing cohort of professionally-trained practitioners all its own. Yes, GenX wants more work-life balance than Baby Boomers, and is more concerned with being compensated for its talents, but some of that perceived demand for higher salaries goes with the development of that professional cohort.

Please don't misinterpret. I am not suggesting that Baby Boomer executives are not professional. But it would also not surprise me if a greater number of them are not in nonprofit management for the money or for the career development opportunities it can present. One focus group participant said:

People that do nonprofit work, that came out of the activism of the '60s, have a really different view: that somehow money is bad, or it's a shameful thing to expect to be paid well.

The survey also cites that 21% of its reponders are the founders of their organizations. I thought that was a surprisingly high number, but it seems to support this point. It would be interesting to see how that statistic changes over the next couple of decades.

Daring to Lead 2006 - Finding 4

Finding 4 of the Daring to Lead 2006 study states that, concerned with organizational sustainability, executives are seeking new skills and strategies. And the new skills and strategies they are seeking are, overwhelmingly, those related to fundraising and finance. The study cites the following percentages when executives were asked to identify the two skills they most need to build:

Fundraising = 49%
Finance = 30%
Networking/Partnerships = 26%
Strategy/Vision = 23%
Managing Staff = 18%
Working with Board = 17%
Advocacy = 14%
Public Speaking = 8%
Writing = 5%

I question how much of this, however, is due to their interest in organizational sustainability. If so many of them are planning to leave their jobs in the next five years (see Finding 1), couldn't this also mean that they are focused on their own professional development, and are simply trying to improve themselves in the areas they perceive themselves to be weak?

Indeed, this section of the survey also tracks the executives use of professional development. Depending on the size of the organization 87-89% of them attend workshops and conferences, 51-66% of them belong to professional associations, 19-33% use professional coaching, and 16-19% of them have some kind of nonprofit management certification or degree.

In my experience, association management is a sector that heavily invests in professional development, and these statistics may just be reflective of that trend.

Daring to Lead 2006 - Finding 3

Still working my way through the Daring to Lead 2006 study. Finding 1 was about how 75% non-profit executives of all ages plan to leave their jobs in the next five years. Finding 2 began to explore why, with Boards of Directors contributing significantly to executive burnout. Finding 3 continues that exploration of reasons—non-profit executives believe they make significant financial sacrifices to lead nonprofits.

This was another finding that did not vary much with the age of the executive. On a 6-point scale, 39% of executives under 40 years old rated their sacrifice as a 6, as did 37% of executives in their 40s, and 32% of executives in their 50s and 60s. What did seem to make a difference was the size of the nonprofit organization the executive was running—with the degree of perceived financial sacrifice much lower among executives of larger organizations where the salaries are higher. The data show as many as 70% of executives who work for small staff size organizations believing they have made a significant financial sacrifice, compared to only 44% of executives who work for large staff size organizations.

The study report doesn't address this point, but I'd be curious to see a comparison between those who believe they have made a financial sacrifice to lead a nonprofit with the various career paths that lead to nonprofit leadership. Is it only those who come from the for-profit sector who feel they've made a financial sacrifice? Or do those who have come up through the nonprofit ranks also feel that way?

Daring to Lead 2006 - Finding 2

I continue to work my way through the Daring to Lead 2006 study. I blogged last time about the study's first finding—that 75% of surveyed nonprofit executives plan to leave their jobs in the next five years. Their second finding—that Boards of Directors and funders contribute to executive burnout—begins to get into the reasons why so many executives are apparently dissatisfied.

Look at these data sets from the study, comparing the responses of executives who were planning on leaving with those who were planning on staying:

Board is not personally supportive
46% of executives who plan to leave agree vs.
19% of executives who plan to stay

Board doesn't understand ED's job
49% of executives who plan to leave agree vs.
27% of executives who plan to stay

Board doesn't value ED's contributions
32% of executives who plan to leave agree vs.
8% of executives who plan to stay

Staff don't view the Board as leaders
66% of executives who plan to leave agree vs.
48% of executives who plan to stay

The point here is obviously the higher agreement rates among executives who are planning to leave. But look again at that last data set. Two-thirds of executives who plan to leave say their staff don't view their Board as an engaged leadership body—but nearly half of the executives who plan to stay say the same thing.

The study is careful to point out that it is simply reporting on executive perception of a relationship that requires strategic effort on both sides. In other words, just because an executive thinks her staff don't view her Board as leaders, that doesn't mean her staff really think that, or that her Board isn't really comprised of leaders.

I'm curious what you think about the potential behind this statistic—that between half and two-thirds of nonprofit staffs don't view their Boards as engaged leaders. Don't worry, I'm not asking you to comment on your staff and your Board. I'm asking whether you think such a disconnect really exists in such a high percentage of our nonprofit organizations. I'm skeptical.

Daring to Lead 2006 - Finding 1

I wanted to get back to the Daring to Lead 2006 study. When Jamie and I first blogged about it, we got a thoughtful comment from one of the study's co-authors, who made the point that one of things that prompted the study, and its predecessor in 2001, was the observation that talented and committed non-profit executives were burning out early in their tenure because of the overwhelming demands of the job. In reviewing the study's more detailed findings, the case for that conclusion really bares itself out.

For starters, let's take a look at their first major finding: Executives plan to leave their jobs—but not the sector—within five years. Fully three-quarters of the nearly 2,000 study responders agreed with this statement. And, more directly for our purposes, those results did not vary according to the age of the responder. Eighteen percent were under 40, twenty-five percent were between 40 and 49, forty-one percent were between 50 and 59, fifteen percent were between 60 and 69, and one percent were 70 or older—and across the board seventy-five percent of them said they were planning to leave their current jobs within the next five years.

When asked what to classify their ideal next job, seventeen percent of the executives cited retirement. Although the report is not specific on this point, it would seem logical to assume that this reply was skewed towards to older responders—perhaps that entire group over 60 and a few in the 50 to 59 range.

What assumptions would the different generations attach to these findings? Speaking as an Xer, they don't seem all that out of whack with my own expectations and experiences in the non-profit association world. Most younger executives I know view movement to a new association after several years of success as a valid career development move. And Jamie has already described how the Millennials expect to have four or five different CAREERS over the length of their working lives.

The report does not position it as anything else, but taken in and of itself, this first finding seems to validate the natural dynamics of the nonprofit marketplace. The reasons behind this anticipated turnover will be explored through some of the other findings.

Generations and Job Loyalty

Okay, I, too want to read this "Daring to Lead" report after the teaser Eric just gave us. If I understand correctly the first paragraph that Eric quotes, the report is concerned because:

a. They feel nonprofits need committed and talented leaders, and

b. 75% of nonprofit execs don't think they'll be in the same job in 5 years.

What's the problem with that? Why is the second sentence contrary to the concept of committed and talented leaders? I think there may be some generationally-based assumptions going on there.

I understand the value, generally speaking, of employee loyalty. I think Fred Reichheld's work on loyalty (of employees, customers, and investors) is compelling. I certainly raise my eyebrows if someone comes to me and says they've had 125% turnover in the last year. But the leader at the top of the organization chart must intend to stay there more than 5 years? Even if you are arguing that companies need a certain consistency in their direction and culture, why do you assume that the transition of a single leader is necessarily going to lead to that?

Why can't nonprofit organizations grow and thrive by having committed and talented leaders in their top positions for three or four years at a time? If I am a committed and talented leader, I should know myself well enough to match my specific leadership competencies with the specific needs of the organization. It's quite possible that I will realize that they only need me for three or four years in that position. None of this rules out a leader staying with an organization for ten or twenty years. There's nothing to say the match can't last that long. Organizations and individuals can grow and change together. But I don't assume that staying ten or twenty years is synonymous with effectiveness, and I wonder if that is part of me being Gen X.

I don't remember where I first heard it, so I should probably do some research on this statistic, but I did hear that the Millennials are coming into the workforce expected to have four or five CAREERS during their working life. That's four or five different careers--not just four or five different jobs. Contrast this to just a few generations earlier where employees expected to get a job, work there for their career, and retire with a gold watch. This relates to the societal trend around the speed of change, so I am not surprised that each new generation has an even more "radical" expectation that the generation before about job or career tenures.

So pay attention to assumptions you make about how long people "should" or should not stay in particular jobs or careers. Sometimes it may be your generationally-specific assumptions talking, rather than a real understanding of the leadership needs of the situation.

Daring to Lead 2006

The Daring to Lead 2006 study recently caught my eye. It's a national study of nonprofit executive leadership completed as a joint project of CompassPoint Nonprofit Services and The Meyer Foundation. It's opening paragraph says:

"For anyone who believes that committed and talented executive directors are critical to the success of nonprofit organizations, this report offers sobering news. Nearly 2,000 nonprofit executive directors in eight cities completed the survey for Daring to Lead 2006. Three quarters don't plan on being in their current jobs five years from now, and nine percent are currently in the process of leaving. Frustrations with boards of directors and institutional funders, lack of management and administrative support, and below-market compensation add stress to a role that can be challenging even in the best circumstances."

I plan to read the whole report and post some additional thoughts here, especially as I see them relating to the question of generational change in leadership in the nonprofit sector. If someone has already read the report, please let me know what you think of it.