The NonProfit Times - March 1, 2008 - (Page 20)

STREETSMART NONPROFIT MANAGER THOMAS A. MCLAUGHLIN The Power Of The Founder Fear and loathing in the executive suite T he term “Founder's Syndrome” rolls off the tongue for many people, a casual phrase used to describe all kinds of negative situations involving the person who started a nonprofit. The term is a pejorative. No one ever talks about Founder’s Syndrome in a complimentary way. Even the term itself makes the circumstances surrounding the creation and early management of a nonprofit organization sound like a clinical disorder.Yet the selfless act of creating a nonprofit shouldn't be disparaged. One of the reasons for this sometime ambivalence about founders is an unstated aversion to the unique power of a nonprofit founder. To be blunt, a nonprofit founder is the most powerful position in the voluntary sector. WHO DOES THE FOUNDER TRUST? build social capital. Soon it’s clear that this is your show. You have quickly earned your staff's trust and personal faith. Most important of all, you've been right a good deal of the time, and so you've earned the benefit of the doubt, perhaps indefinitely. Your supply of goodwill and intense connection could last for a long, long time. Now suppose it turns out that you were on to something after all. That terrific idea proved to be exactly that, Pretend you are a founder. Before you do almost anything else you have to appoint a board of directors. If you were undertaking an enterprise filled with risk and uncertainty, who would you want to have around you? You'd have your friends and former colleagues, of course. They are people you know and trust and who will support you.This makes perfect sense, so you reach out to a handful of these like-minded people and convince them to be on your board. Maybe they are wary of joining a board of directors, so you assure them it won’t be very demanding. You sell them on your idea and on your ability to achieve it -- not hard, considering your prior relationship -- and they sign on for a small-gauge gig. We trust you, they say implicitly.Make this easy on us. You have just done two things.First, you have built a fair amount of political and social capital with these important people. Second, you have subtly undercut one of the fundamental tenets of nonprofit board membership -- the duty of loyalty. At the moment, those rookie board members’primary loyalty is to you, not to the organization. Next, you must hire a staff.Who are you most likely to attract to your new venture? Will it be seasoned veterans of the field looking to take a chance or energetic young people sold on your vision and eager to try their hand at this new mission? Even if you wanted seasoned types, the odds are that you would have to hire and train young people.You have now added to your already large stock of social capital because not only have you hired people too young to be set in their ways, you're training them to see the world the way you do. It’s also probably a small organization, so you’re all working very closely -- perhaps literally. It's more chances to 20 It is in the interests of the organization for the founder’s board to take on ITS OWN IDENTITY and your tiny organization starts growing at a steady pace. Now that the organizational wheels are rolling, the cascade of planned and unplanned events, rapid-fire decisions, bursts of self-discovery and sheer stimulation make it a period of high adrenaline.And, you are undeniably at the center of everything. This is an exhilarating time, when you are marketing a heady mix of the original idea, the fledgling organization,and yourself.The result is that you are so fully identified with the organization that sometimes it is hard for outsiders to discern the difference. SECURE ROLE OR FLOUNDERING FOUNDER This combination of a secure role in a promising organization can go in one of two directions. If the happy match between founder and entity continues, the situation could go on indefinitely. The nonprofit will grow MARCH 1, 2008 as large and as effective as circumstances demand. Consumers will be well-served. There will be plaudits all around, and the founder will at some point enjoy the biggest and most welldeserved retirement party anyone can remember. Or, maybe it goes the opposite way. It could also happen that the needs of the organization and the desires or capacities of the founder diverge. Something in the environment or some aspect of operations or governance push the entity in one direction while the founder goes the opposite way. Questions of who is “right” fade in importance as the tension between the founder and the organization (or some part of it) evolves in an ugly direction. This is the essence of what many refer to as Founder’s Syndrome. That social capital turns into a liability for the organization when individual and institutional desires diverge, because the founder can still draw almost indefinitely on that accumulated good will to move in her chosen direction. Most founders run into trouble only when they make a prolonged strategic mistake and cause the organization to deviate from what might otherwise have been a successful path. Even then, they can usually survive on the strength of their political capital alone. In the worst cases, they survive because of the weakness of their board. In effect, the founder's achievement at the beginning often short-circuits the normal process of accountability later on. Right or wrong, the founder can draw on that huge excess inventory of good will to win the argument. The essence of this founder’s continuing survival is the initial imbalance of power that never quite gets rectified. In the absence of a big mistake, most founders’ dominance would likely go unchallenged. After all, the world of nonprofit executives is filled with founding CEOs whose dominance, defensiveness, intractability, shortsightedness and other flaws are routinely overlooked because most of the time they’re right. That doesn’t make their style and choices justifiable. It just makes it easier for everyone else to overlook them. In the beginning, founders have to operate from the gut. Beginning with the simplest decision such as who should be on the board or who should be hired for the first jobs, the founder usually doesn’t have a team of trusted advisors to rely on. Decisions have to be made quickly and there is little time to ponder short-term implications, let alone long-term impact.The founder is in ready-fire-aim mode all the time. The problem is that this behavior can become habit-forming and hinder www.nptimes.com the founder’s ability to transition their vision into a strategy that the rest of the organization can understand.Alternatively, they might try to exert leadership through vision or passion alone, rather than well-defined plans and the systems to implement them. A small organization tends to mask this problem, but as the organization grows larger and it becomes logistically impossible to touch everyone in the organization personally, the founder's influence wanes. Most nonprofits -- indeed, most individuals working in any entity -- appreciate the regularity of a defined task, an established approach, and predictable outcomes. When the predominant source of leadership is a personal vision rather than a true strategy, none of these things is possible. Management consists of getting things done through other people,and the founder who cannot get outside her passion will have a hard time managing. If the founder does choose to lead solely from personal vision, the result could be that everyone else sees an increasingly arbitrary, unpredictable leader. Hunches and impulses -- but only the founder’s -will scramble the topography of leadership. The damage comes not from whether the founder is right or wrong but from the maddeningly inscrutable style of leadership.And once again, it’s the founder’s unique advantages that keep her in place even though she may feel increasingly at odds with the nonprofit she herself created. That’s not just a problem, it’s a syndrome. It’s a set of symptoms that characterize an underlying dysfunction.The board often is fearful of losing the founder and at the same time the founder fears being estranged from the organization. Either fear can become self-fulfilling. The founder’s role is not inherently problematic, but it amplifies that individual’s natural strengths and weaknesses. There is only one real reliable source of counterbalancing power -the board of directors.This is true for any nonprofit CEO, but doubly so for founders. It is in the interests of the organization for the founder’s board to take on its own identity and build its own strength. Given the likely shared experiences of the board and the founder this is not easy. But it is the only way to avoid a syndrome. NPT Thomas A. McLaughlin is a national nonprofit management consultant with Grant Thornton in Boston. He is the author of the book Nonprofit Strategic Positioning (John Wiley and Sons, 2006).This column is adapted from his forthcoming book on founders from BoardSource (February 2006). His e-mail address is thomas.mclaughlin@gt.com THE NONPROFIT TIMES http://www.nptimes.com

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The NonProfit Times - March 1, 2008 Fuel Costs Eating Up Food Banks California Legislation Pushing Foundation Funding Diversity Estate Tax Won't Die Contents Who...When...Where...How...What? Red Cross Cuts Jobs, Regional Support In $200 Million Deficit General Ramblings: What the....? Briefs Taxing Issues: New for 2008 Foundations: Rebooting At Gates Mail Drove Donors to Give Online Streetsmart Nonprofit Manager: The Power of the Founder Software: Technology Innovation Calendar Fundraising Guide NPT Jobs Resource Directory AFP International Conference Insert

The NonProfit Times - March 1, 2008

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