Exploring the Dimensions of the Nonprofit Leader

Human Services
Typography

Summary

Despite increasing strategic crossover between the for-profit and nonprofit sectors, public sector nonprofit governance requires a unique approach. This article delves into the factors that distinguish an effective nonprofit leader, drawing on literature about entrepreneurship and emotional intelligence to uncover both the personal, internal composition of a strong nonprofit leader and the public sector’s inherent challenges and opportunities. Interviews with four nonprofit executives in Philadelphia reveal a “common language” when they discuss specific elements of their work, including management standards and staff development, models of partnership and engagement with peer organizations, and environmental challenges. The three primary themes that emerged — accountability, resilience and optimism — are presented here within the context of interdisciplinary research in the areas of business and psychology. The significance of these conclusions is portrayed in the successes of the executives featured, who have brought sustainability to their organizations through a capacity to embody the practice methods and standards identified.

Key Features of Nonprofit Leadership: Challenges and Opportunities

In late 2006, the Urban Institute’s National Center for Charitable Statistics reported that in the previous ten years, “while the nation’s gross domestic product grew by an inflation-adjusted 36.6 percent from 1994 to 2004, the nonprofit sector’s revenues increased 61.5 percent…. [T]he sector’s expenses and assets grew at an even faster pace: 62.6 and 90.7 percent, respectively” (Urban Institute 2009). The trajectory of these rates will likely continue, thanks in part to our country’s distinct social culture (Tierney 2006, 10), which has emerged with particular vitality since the Clinton presidency. Concrete indicators of this social shift include a marked increase in charitable giving as the baby boomer population is aging, and, between 1992 and 2002, an average annual influx into the market of 2,900 new foundations. More anecdotally, young people are displaying a growing interest in social entrepreneurship, corporations are making social responsibility a greater priority, and the government is steadily turning to nonprofits to deliver public services (Tierney 2006, 10). Our new federal administration is expected to prompt even further growth and development through social programming in the areas of education and health care. All told, the nonprofit sector has enormous influence over our country’s economic, social and political playing fields.

A primary challenge posed by the explosive growth in this sector of late is that many organizations report an insufficient workforce, particularly in leadership roles, to meet demand. According to the Bridgespan Group, a leading national consulting group in nonprofit systems, strategies and trends, nonprofit organizations with revenues higher than $250,000 “will need to attract and develop some 640,000 new senior managers” (Tierney 2006, 2) by the year 2016. “To put this challenge in context,” the Bridgespan report continues, “attracting the required number of managers will be equivalent to recruiting over 50% of every MBA graduating class, at every college and university across the country, every year for the next ten years” (Tierney 2006, 6). This “leadership deficit,” as defined by Bridgespan, is attributable to many factors, including the impending retirement of an entire generation of workers — the baby boomers. What is more, the competition for new talent is fierce and extends across all sectors, placing additional pressure on the nonprofit industry to generate a supply of new leadership.

An additional factor to consider is the surge in nonprofit business in a relatively short period of time, which may have effectively caught the nonprofit workforce off guard. Having to respond quickly to a shifting market, the sector was unable to provide job opportunities with the right mix of stability, excitement and salary to secure the best candidates. Consequently, those with the most talent, passion and high-achievement potential often preferred either to pursue other sectors with higher compensation standards or to work for themselves, rather than inherit an existing organization. This trend created flat organizational structures in many nonprofits and restricted organizations of every size from growing their talent pool. The social sector’s lack of sufficient resources for recruitment and retention certainly exacerbates the growing shortage of potential executives. As the author of the Bridgespan report concludes, “The leadership deficit is further aggravated by the sector’s lack of intermediaries to help in recruiting and developing managers. Nonprofits have neither the size nor the resources to develop large numbers of managers internally, as their for-profit counterparts do” (Tierney 2006, 3).

But this explanation isn’t entirely satisfactory either; some nonprofits are large and well-funded, with healthy budgets and business models for staff recruitment and development. In a 2008 article featuring research done by Bridgespan affiliate Bridgestar, the Alliance for Children and Families — a membership organization that helps nonprofit agencies around the country meet leadership challenges — claimed, “Profit-making companies are far more likely to seek new leaders from within their own structures, while nonprofit organizations seldom have the administrative depth to make this a viable approach” (Alliance for Children and Families 2008, 8). This raises the question of whether the real issue is a leadership deficit as opposed to succession planning. Bridgestar highlights both perspectives as legitimate and certainly related. Organizations are responsible for growing their own leaders, but there simply may not be enough external talent to go around; therefore, “If we don’t make it a priority to recognize, reward, and develop the next generation of leaders, providing them with appropriate career development opportunities…, other organizations will reach down into our pool and take away the best and the brightest. [R]emaining viable as an organization means much more than continuing to provide solid services for your community” (Alliance for Children and Families 2008, 9).

Organizational stability also requires more than having a deep bench of potential leaders. To build greater internal strength, many successful nonprofits have adopted principles of business and strategy from the corporate sector, turning to mergers and acquisitions to enable better sustainability. While two organizations may merge for a variety of reasons, such as to gain enhanced financial stability, two organizations are often greater than the sum of their parts. Each partner can enjoy new access to the other’s consumers, funders, and networks, and, more importantly, together both partners become part of a single emerging brand. With a new brand often comes a new vision and, thus, new opportunity. Bridgespan cites the following strategic benefits that can result from mergers: “quality improvements in existing services; improved efficiency in existing services; development of new skills; and entry into new geographies” (Cortez, Foster, and Smith Milway 2009, 5). Additionally, a financially stronger organization is, simply put, more attractive to funders and stakeholders than its former, perhaps more limited, self. This creative and strategic business approach is traditionally thought of as exclusive to for-profit companies. Successful nonprofit leaders, however — particularly those featured in this article — know what corporate leaders have always known: taking risks and reinventing strategy are critical to survival and success. In this sense, the line between the corporate and social sectors is more blurred than ever.

Despite the increasing uptake of corporate sector tactics by social services organizations, important differences remain between for-profit and nonprofit fields, and these differences reveal a unique dimension to the successful nonprofit leader who can foresee and pursue the benefits of mergers and acquisitions and similarly innovative initiatives while navigating the vagaries of nonprofit management. One study characterized the nonprofit industry as “highly turbulent, which implies an increasingly dynamic, hostile, and complex set of environmental conditions” (Morris and Jones 1999, 71). The same study looked back across the decades to understand the origins of the modern nonprofit sector, concluding: “[T]he relatively stable and predictable business environments of the 1950s and 1960s led to the development in the private sector of many large mechanistic organizations. Alternatively… the smaller, more organic structures appear to be more appropriate when faced with high levels of environmental change” (Morris and Jones 1999, 71). It seems, then, that almost by definition, nonprofit executives are accustomed to varying degrees of instability, and the successful ones are able lead their organizations toward high-risk, high-potential initiatives while maintaining sustainability. In the context of nonprofit mergers and acquisitions, the leader demonstrates not only an innovative vision but also the willingness and confidence to break the mold and pursue that vision. These qualities are then rewarded, as, “Foundations, government, private funders, and intermediaries are willing to provide funding to support due diligence and post-merger integration, both encouraging and enabling more organizations… to make upfront investments with long-term paybacks to the organizations’ efficiency and effectiveness” (Cortez et al. 2009, 10).

Recently, a growing number of private sector leaders have transitioned into nonprofit leadership positions. This trend is due not only to the public sector’s relative vigor and economic pull, but also to the merits and mission of the work. Nonprofit work is often regarded as a form of “giving back,” an almost sacrificial community effort where salaries are typically substantially less than in the corporate world, but where the social benefit is understood to outweigh any monetary discrepancies in compensation. In this way, those who have spent their careers in the private sector may regard nonprofit work as attractive, with its reputation for ethical dealings, and may have a sense that nonprofit work is noble, perhaps even sweet. Looking in from the outside, “[s]ocial sector leaders appear less decisive than business leaders to those who fail to grasp the complex governance and diffuse power structures common to social sectors” (Collins 2005, 10). But the transition from the business sector to the social sector is rarely simple. It is the complicated and multi-layered system of accountability inherent in the nonprofit systems of control that ultimately distinguishes the two sectors.

Accountability within a nonprofit organization begins with its complex funding scheme. Foundations, government (local, state and federal) and private donors are among the main sources of funding for many nonprofits today, and each typically comes with a specific set of guidelines for spending, measuring and reporting on activities. In this way, nonprofit leaders develop a perspective that is necessarily broad and flexible. The nonprofit leader knows that long-term success and solvency are dependent upon meeting funders’ expectations, but, despite financial complexities, is able still to create innovation and growth. An executive’s desire to see a program serve a particular population, for example, may have to be adjusted to serve a different population — one preferred or designated by the funder — in order for the program to exist at all: “The outstanding fact that differentiates public entrepreneurs from ordinary managers and politicians is their ability to alter the existing allocation of scarce public resources in fundamental ways” (Morris and Jones 1999, 72). Effective nonprofit leaders are uniquely able to channel a volatile funding stream, with myriad individual constraints, into meaningful and measurable programmatic success.

Funders, policymakers, boards of directors, staff — these stakeholders are not unique to the social sector, and one might suppose that the Wall Street variety tend to be more rigid and less forgiving. However, a closer examination of social sector organizations reveals just how complicated the dynamics between and among nonprofit stakeholders can be:

[Nonprofits] receive funds indirectly from an involuntary taxpayer rather than directly from a satisfied and voluntary customer; have difficulties in identifying the organization’s “customer,” as there are typically a number of different publics being served by a given agency; are subject to public scrutiny, such that major decisions have to be made with transparency… and must involve consensus among and consultation with a variety of interest groups and constituencies. (Morris and Jones 1999, 78).

Additionally, multiple funders directly supporting the same organization or project sometimes are unfamiliar with one another or may reflect unaligned values. In other cases, especially within large institutions, colleagues may be in competition with one another for support from the same funder. These realities call for a politically savvy leader with a strong ability to approach multiple directives at once while empowering staff to understand their priorities and responsibilities. The successful nonprofit leader must be able to develop and maintain strong relationships with all stakeholders, especially funders. Often, leaders of the more successful organizations can point to consistent diplomacy and communication in sustaining long-standing, secure funding streams. However, the conundrum of nonprofit governance exposes even the sharpest leaders to some degree of failure, and from this comes knowledge and resilience that serves these leaders throughout future financial and organizational endeavors.

The leaders of these almost exclusively grant-driven nonprofit entities must also be sensitive to how complete reliance on outside funders for sustainability greatly impacts the types of outcomes sought, as well as methods for evaluating those outcomes. Traditional numeric measurements to demonstrate, for example, number of people served by a particular program or an increase in consumer satisfaction can and often do discourage nonprofit leaders from a more creative approach to planning programs and services. Recruitment and retention rates, bottom-line growth and profit margins are other standards that prohibit some public organizations from pursuing entrepreneurial goals. Because these organizations “do not have a profit motive and instead are guided by social and political objectives, [they] typically seek to achieve a multiplicity and diversity of objectives; these objectives, and performance towards them, are harder to measure” (Morris and Jones 1999, 77). The nonprofit executive does not have the luxury of following a singular ambitious pursuit and this, too, contributes to the leadership deficit; it is not terribly surprising to watch talented leaders choose paths that lead away from the public sector and towards something more tangible. But the innovative nonprofit leader who can understand and master these difficulties is able to bring success and progressive value to the organization, facilitating continued growth.

Summary

Despite increasing strategic crossover between the for-profit and nonprofit sectors, public sector nonprofit governance requires a unique approach. This article delves into the factors that distinguish an effective nonprofit leader, drawing on literature about entrepreneurship and emotional intelligence to uncover both the personal, internal composition of a strong nonprofit leader and the public sector’s inherent challenges and opportunities. Interviews with four nonprofit executives in Philadelphia reveal a “common language” when they discuss specific elements of their work, including management standards and staff development, models of partnership and engagement with peer organizations, and environmental challenges. The three primary themes that emerged — accountability, resilience and optimism — are presented here within the context of interdisciplinary research in the areas of business and psychology. The significance of these conclusions is portrayed in the successes of the executives featured, who have brought sustainability to their organizations through a capacity to embody the practice methods and standards identified.

Key Features of Nonprofit Leadership: Challenges and Opportunities

In late 2006, the Urban Institute’s National Center for Charitable Statistics reported that in the previous ten years, “while the nation’s gross domestic product grew by an inflation-adjusted 36.6 percent from 1994 to 2004, the nonprofit sector’s revenues increased 61.5 percent…. [T]he sector’s expenses and assets grew at an even faster pace: 62.6 and 90.7 percent, respectively” (Urban Institute 2009). The trajectory of these rates will likely continue, thanks in part to our country’s distinct social culture (Tierney 2006, 10), which has emerged with particular vitality since the Clinton presidency. Concrete indicators of this social shift include a marked increase in charitable giving as the baby boomer population is aging, and, between 1992 and 2002, an average annual influx into the market of 2,900 new foundations. More anecdotally, young people are displaying a growing interest in social entrepreneurship, corporations are making social responsibility a greater priority, and the government is steadily turning to nonprofits to deliver public services (Tierney 2006, 10). Our new federal administration is expected to prompt even further growth and development through social programming in the areas of education and health care. All told, the nonprofit sector has enormous influence over our country’s economic, social and political playing fields.

A primary challenge posed by the explosive growth in this sector of late is that many organizations report an insufficient workforce, particularly in leadership roles, to meet demand. According to the Bridgespan Group, a leading national consulting group in nonprofit systems, strategies and trends, nonprofit organizations with revenues higher than $250,000 “will need to attract and develop some 640,000 new senior managers” (Tierney 2006, 2) by the year 2016. “To put this challenge in context,” the Bridgespan report continues, “attracting the required number of managers will be equivalent to recruiting over 50% of every MBA graduating class, at every college and university across the country, every year for the next ten years” (Tierney 2006, 6). This “leadership deficit,” as defined by Bridgespan, is attributable to many factors, including the impending retirement of an entire generation of workers — the baby boomers. What is more, the competition for new talent is fierce and extends across all sectors, placing additional pressure on the nonprofit industry to generate a supply of new leadership.

An additional factor to consider is the surge in nonprofit business in a relatively short period of time, which may have effectively caught the nonprofit workforce off guard. Having to respond quickly to a shifting market, the sector was unable to provide job opportunities with the right mix of stability, excitement and salary to secure the best candidates. Consequently, those with the most talent, passion and high-achievement potential often preferred either to pursue other sectors with higher compensation standards or to work for themselves, rather than inherit an existing organization. This trend created flat organizational structures in many nonprofits and restricted organizations of every size from growing their talent pool. The social sector’s lack of sufficient resources for recruitment and retention certainly exacerbates the growing shortage of potential executives. As the author of the Bridgespan report concludes, “The leadership deficit is further aggravated by the sector’s lack of intermediaries to help in recruiting and developing managers. Nonprofits have neither the size nor the resources to develop large numbers of managers internally, as their for-profit counterparts do” (Tierney 2006, 3).

But this explanation isn’t entirely satisfactory either; some nonprofits are large and well-funded, with healthy budgets and business models for staff recruitment and development. In a 2008 article featuring research done by Bridgespan affiliate Bridgestar, the Alliance for Children and Families — a membership organization that helps nonprofit agencies around the country meet leadership challenges — claimed, “Profit-making companies are far more likely to seek new leaders from within their own structures, while nonprofit organizations seldom have the administrative depth to make this a viable approach” (Alliance for Children and Families 2008, 8). This raises the question of whether the real issue is a leadership deficit as opposed to succession planning. Bridgestar highlights both perspectives as legitimate and certainly related. Organizations are responsible for growing their own leaders, but there simply may not be enough external talent to go around; therefore, “If we don’t make it a priority to recognize, reward, and develop the next generation of leaders, providing them with appropriate career development opportunities…, other organizations will reach down into our pool and take away the best and the brightest. [R]emaining viable as an organization means much more than continuing to provide solid services for your community” (Alliance for Children and Families 2008, 9).

Organizational stability also requires more than having a deep bench of potential leaders. To build greater internal strength, many successful nonprofits have adopted principles of business and strategy from the corporate sector, turning to mergers and acquisitions to enable better sustainability. While two organizations may merge for a variety of reasons, such as to gain enhanced financial stability, two organizations are often greater than the sum of their parts. Each partner can enjoy new access to the other’s consumers, funders, and networks, and, more importantly, together both partners become part of a single emerging brand. With a new brand often comes a new vision and, thus, new opportunity. Bridgespan cites the following strategic benefits that can result from mergers: “quality improvements in existing services; improved efficiency in existing services; development of new skills; and entry into new geographies” (Cortez, Foster, and Smith Milway 2009, 5). Additionally, a financially stronger organization is, simply put, more attractive to funders and stakeholders than its former, perhaps more limited, self. This creative and strategic business approach is traditionally thought of as exclusive to for-profit companies. Successful nonprofit leaders, however — particularly those featured in this article — know what corporate leaders have always known: taking risks and reinventing strategy are critical to survival and success. In this sense, the line between the corporate and social sectors is more blurred than ever.

Despite the increasing uptake of corporate sector tactics by social services organizations, important differences remain between for-profit and nonprofit fields, and these differences reveal a unique dimension to the successful nonprofit leader who can foresee and pursue the benefits of mergers and acquisitions and similarly innovative initiatives while navigating the vagaries of nonprofit management. One study characterized the nonprofit industry as “highly turbulent, which implies an increasingly dynamic, hostile, and complex set of environmental conditions” (Morris and Jones 1999, 71). The same study looked back across the decades to understand the origins of the modern nonprofit sector, concluding: “[T]he relatively stable and predictable business environments of the 1950s and 1960s led to the development in the private sector of many large mechanistic organizations. Alternatively… the smaller, more organic structures appear to be more appropriate when faced with high levels of environmental change” (Morris and Jones 1999, 71). It seems, then, that almost by definition, nonprofit executives are accustomed to varying degrees of instability, and the successful ones are able lead their organizations toward high-risk, high-potential initiatives while maintaining sustainability. In the context of nonprofit mergers and acquisitions, the leader demonstrates not only an innovative vision but also the willingness and confidence to break the mold and pursue that vision. These qualities are then rewarded, as, “Foundations, government, private funders, and intermediaries are willing to provide funding to support due diligence and post-merger integration, both encouraging and enabling more organizations… to make upfront investments with long-term paybacks to the organizations’ efficiency and effectiveness” (Cortez et al. 2009, 10).

Recently, a growing number of private sector leaders have transitioned into nonprofit leadership positions. This trend is due not only to the public sector’s relative vigor and economic pull, but also to the merits and mission of the work. Nonprofit work is often regarded as a form of “giving back,” an almost sacrificial community effort where salaries are typically substantially less than in the corporate world, but where the social benefit is understood to outweigh any monetary discrepancies in compensation. In this way, those who have spent their careers in the private sector may regard nonprofit work as attractive, with its reputation for ethical dealings, and may have a sense that nonprofit work is noble, perhaps even sweet. Looking in from the outside, “[s]ocial sector leaders appear less decisive than business leaders to those who fail to grasp the complex governance and diffuse power structures common to social sectors” (Collins 2005, 10). But the transition from the business sector to the social sector is rarely simple. It is the complicated and multi-layered system of accountability inherent in the nonprofit systems of control that ultimately distinguishes the two sectors.

Accountability within a nonprofit organization begins with its complex funding scheme. Foundations, government (local, state and federal) and private donors are among the main sources of funding for many nonprofits today, and each typically comes with a specific set of guidelines for spending, measuring and reporting on activities. In this way, nonprofit leaders develop a perspective that is necessarily broad and flexible. The nonprofit leader knows that long-term success and solvency are dependent upon meeting funders’ expectations, but, despite financial complexities, is able still to create innovation and growth. An executive’s desire to see a program serve a particular population, for example, may have to be adjusted to serve a different population — one preferred or designated by the funder — in order for the program to exist at all: “The outstanding fact that differentiates public entrepreneurs from ordinary managers and politicians is their ability to alter the existing allocation of scarce public resources in fundamental ways” (Morris and Jones 1999, 72). Effective nonprofit leaders are uniquely able to channel a volatile funding stream, with myriad individual constraints, into meaningful and measurable programmatic success.

Funders, policymakers, boards of directors, staff — these stakeholders are not unique to the social sector, and one might suppose that the Wall Street variety tend to be more rigid and less forgiving. However, a closer examination of social sector organizations reveals just how complicated the dynamics between and among nonprofit stakeholders can be:

[Nonprofits] receive funds indirectly from an involuntary taxpayer rather than directly from a satisfied and voluntary customer; have difficulties in identifying the organization’s “customer,” as there are typically a number of different publics being served by a given agency; are subject to public scrutiny, such that major decisions have to be made with transparency… and must involve consensus among and consultation with a variety of interest groups and constituencies. (Morris and Jones 1999, 78).

Additionally, multiple funders directly supporting the same organization or project sometimes are unfamiliar with one another or may reflect unaligned values. In other cases, especially within large institutions, colleagues may be in competition with one another for support from the same funder. These realities call for a politically savvy leader with a strong ability to approach multiple directives at once while empowering staff to understand their priorities and responsibilities. The successful nonprofit leader must be able to develop and maintain strong relationships with all stakeholders, especially funders. Often, leaders of the more successful organizations can point to consistent diplomacy and communication in sustaining long-standing, secure funding streams. However, the conundrum of nonprofit governance exposes even the sharpest leaders to some degree of failure, and from this comes knowledge and resilience that serves these leaders throughout future financial and organizational endeavors.

The leaders of these almost exclusively grant-driven nonprofit entities must also be sensitive to how complete reliance on outside funders for sustainability greatly impacts the types of outcomes sought, as well as methods for evaluating those outcomes. Traditional numeric measurements to demonstrate, for example, number of people served by a particular program or an increase in consumer satisfaction can and often do discourage nonprofit leaders from a more creative approach to planning programs and services. Recruitment and retention rates, bottom-line growth and profit margins are other standards that prohibit some public organizations from pursuing entrepreneurial goals. Because these organizations “do not have a profit motive and instead are guided by social and political objectives, [they] typically seek to achieve a multiplicity and diversity of objectives; these objectives, and performance towards them, are harder to measure” (Morris and Jones 1999, 77). The nonprofit executive does not have the luxury of following a singular ambitious pursuit and this, too, contributes to the leadership deficit; it is not terribly surprising to watch talented leaders choose paths that lead away from the public sector and towards something more tangible. But the innovative nonprofit leader who can understand and master these difficulties is able to bring success and progressive value to the organization, facilitating continued growth.

Emotional Intelligence as a Component of Leadership

Emotional Intelligence as a Component of Leadership

One field of study that has gained increasing attention in the last decade is emotional intelligence. Emotional intelligence refers to a person’s capacity to use emotion proactively, both his or her own emotions and those of others around them, and on both a conscious and sub-conscious level, as a tool to enhance reasoning and decision-making. Daniel Goleman, the “godfather” of emotional intelligence, has published extensively about the importance of non-technical skills in the workplace. He connects qualities of emotional intelligence directly to leadership and argues that success in leadership does not depend exclusively on the more traditional qualities of intellect and practical proficiencies. Goleman writes:

It’s not that IQ and technical skills are irrelevant. They do matter, but mainly as “threshold capabilities”; that is, they are the entry-level requirements for executive positions. But my research, along with other recent studies, clearly shows that emotional intelligence is the “sine qua non” of leadership. Without it, a person can have the best training in the world, an incisive, analytical mind, and an endless supply of smart ideas, but he still won’t make a great leader (Goleman 1998b, 1).

Goleman identifies five major aspects of emotional intelligence: self-awareness, self-regulation, motivation, empathy, and social skill (Goleman 1998b). Self-awareness is the capacity to identify one’s own strengths and weakness, and to behave at the workplace in ways that capitalize on the former and minimize the latter. Goleman cites a person with high self-awareness who was resistant to a new corporate initiative: “She offered an explanation: ‘It’s hard for me to get behind the rollout of this service,’ she admitted, ‘because I really wanted to run the project, but I wasn’t selected. Bear with me while I deal with that’” (Goleman 1998b, 2). Candor about areas of weakness, comfort with oneself and “a strong and positive sense of self-worth” (Goleman 1998a, 80) characterize people who are self-aware. Part of self-worth is the willingness to listen to oneself before anybody else. Goleman suggests, “Our gut feelings — our deepest sense of what feels right and what is ‘off’ — provide critical information that we must not ignore” (Goleman 1998a, 50). The importance of instinct as the principal operating factor in reaching conclusions has been echoed by other scholars, as well, such as Malcolm Gladwell, whose bestseller Blink reinforces this very theme (Gladwell 2005). Based on Goleman’s and Gladwell’s observations, self-awareness goes beyond an individual’s conscious self-assessment and more deeply involves a person’s innate capacity for decision-making, thus influencing every aspect of performance.

Self-regulation is related to self-awareness, but describes more specifically the ability to control emotions, whether negative or positive, in order to maintain a demeanor best suited for professional practice and activity. Goleman writes about self-regulation not only as a reactionary approach to scenarios that can jostle, excite and distract, but also as an executive’s steady and deliberate impact on organizational culture:

Why does self-regulation matter so much for leaders? People who are in control of their feelings and impulses — that is, people who are reasonable — are able to create an environment of trust and fairness. In such an environment, politics and infighting are sharply reduced… . Talented people flock to the organization… Fewer bad moods at the top mean fewer throughout the organization (Goleman 1998b, 3).

The idea that executives shape the tone and attitude of interpersonal behaviors — and, consequently, productivity — in an organization is not a new one (and I explore the concept further later in this article). Goleman also emphasizes the direct correlation between self-regulation and ethics, indicating that “people with low impulse control” (Goleman 1998b, 4) sometimes succumb to threats to integrity. “A propensity for reflection and thoughtfulness” (Goleman 1998b, 4) exhibited by the leader of an organization, then, offers security to every area affected by leadership decision-making, particularly staff and finances.

The principle of motivation represents the will to achieve — eagerness, drive, ambition — regardless of obstacles, and is another theme consistently reinforced by the profiled leaders. Two particular qualities of motivated leaders are that “they are forever raising the performance bar, and they like to keep score” (Goleman 1998b, 4). They are competitive — with themselves and with peers alike. They set goals and employ methods of measurement to quantify how well they have met those goals, if at all. It is not difficult to imagine how easily this trait, if unchecked or insufficiently balanced with other characteristics such as self-awareness and self-regulation, could undermine one’s leadership profile. But Goleman contends that a potential leader will not materialize into an actual one without ample motivation: “If there is one trait that virtually all leaders have, it is motivation” (Goleman 1998b, 5). Leaders work their way into leadership roles through a relentless sense of pursuit, a need to constantly produce results. Problem-solving is a critical hallmark of motivation, and Goleman uses a term that I discuss in depth later in this article: optimism. The strongest leader sees opportunities where others may not and assumes that all issues are resolvable, and, importantly, is motivated to seize those opportunities and find the resolution.

Empathy is Goleman’s fourth pillar of emotional intelligence and is perhaps the most prone to misconstrual or dismissal from corporate sector diehards. But empathy has a clear and concrete professional purpose, and “doesn’t mean adopting other people’s emotions as one’s own and trying to please everybody” (Goleman 1998b, 5). It describes the leader’s intuitive understanding of staff’s non-technical needs and the ability to communicate that understanding effectively. As I discuss later, the importance of staff satisfaction, by way of feeling respected and heard, cannot be underestimated. Staff morale and job satisfaction have enormous impact on how others in the organization feel about their jobs and how the entirety of the organization performs. Demonstrating the value of empathy in an increasingly cross-cultural global market, Goleman observes, “Empathy is an antidote. People who have it are attuned to subtleties in body language; they can hear the message beneath the words being spoken. Beyond that, they have a deep understanding of the existence and importance of cultural and ethnic differences” (Goleman 1998b, 6). Empathy also enhances the leader’s ability to make staff feel respected so they can, in turn, respect one another, strengthening the constant efforts toward retention. This type of leader can thus develop strong teams who work together effectively to affirm one another and successfully carry out the mission of the organization (Goleman 1998b).

Social skill, the fifth component of emotional intelligence, is, like empathy, reflective of a leader’s interactions with the world, in contrast to the first three factors, which highlight more internal characteristics (Goleman 1998b). It is the ability to leverage relationships toward the ideas and ideals a leader wants to promote, through likeability, trust and respect. But just as the line blurs between self-awareness, self-regulation, motivation and empathy, social skill also represents shades of the other four. Without social skill, the other four components of emotional intelligence may fall flat. For example:

[C]onsider the case of an executive in the strategy department of a global computer manufacturer. By 1993, he was convinced that the future lay with the internet. Over the course of the next year, he found kindred spirits and used his social skill to stitch together a virtual community that cut across levels, divisions, and nations. He then used this de facto team to put up a corporate website, among the first by a major company (Goleman 1998b, 7).

Without the strength of his interpersonal connections, the person in this example might not have accomplished this important and viable goal. Goleman notes also that because social skill is based in positive relationships, the more successful leaders may “appear not to be working while at work” (Goleman 1998b, 7) and, thus, social skill may be the most difficult area to quantify.

Goleman acknowledges, in fact, that emotional intelligence in general is not always conducive to measurement. Referring to a hypothetical hotel receptionist who is particularly adept at her job, he quotes Tom Pritzker, President and CEO of Global Hyatt Corporation, which operates Hyatt Hotels, saying, “The lady at the front desk who wins over the customer with her smile can’t be quantified, but you can sense the advantage” (Goleman 1998a, 167). Goleman’s findings did not distinguish between public and private sector, but they do speak to business nuances specific to nonprofit industry. For example, the complicated power structure inherent in most successful social service organizations necessitates a leader with particular acuity in self-awareness, personally and organizationally, in order to engage funders strategically and pursue support from appropriate partners. Likewise, social skill and empathy are inherent in any effective approach to relationship-building, a particularly essential element of the personal business standards described by the four leaders featured in this study.

Some of the most important qualities described by the leaders profiled in this study, indeed, are rooted in principles outlined by Goleman. Taking smart risks, making good decisions and showing initiative (Morris and Jones 1999) are behaviors exemplified by the most successful and entrepreneurial leaders. The principles of self-awareness, self-regulation, motivation, empathy and social skill enable the clarity and capacity to carry out these behaviors, especially in vulnerable nonprofit industries where they are increasingly critical to organizational strategy. Some suggest, in fact, that this vulnerability actually fosters creative leadership: “[E]ntrepreneurship [may represent] an effective strategic response to environmental turbulence. Discontinuities in the environment threaten existing modes of operation, while also creating numerous opportunities for innovative behavior” (Morris and Jones 1999, 72).

 

Exploration of Theory through Individual Nonprofit Leaders

Exploration of Theory through Individual Nonprofit Leaders

To explore how these principles identified by the researchers at Bridgespan, Goleman and others play out in practice, I interviewed four nonprofit leaders in Philadelphia for their insight into important qualities and ideas that have contributed to their successful careers. The interviews all touched on various areas in nonprofit leadership, including vision, mentorship, institutional memory and emotional intelligence. Despite a range of opinions on the importance and nature of these areas and very different educational, professional and cultural backgrounds, the ideas expressed by each leader echoed themes similarly discussed by the others. In particular, three main ideas consistently resurfaced throughout the interviews: accountability, resilience and optimism.

Accountability

In different ways, each of the leaders articulated the importance of assuming personal accountability in everyday operations and decision-making. One leader used the term “internal locus of control,” to mean a perspective where he presumes himself to be in control of his own environment and where he recognizes his own influence over every accomplishment and misstep in the organization, as well as the implications of these among staff. Another leader suggested something similar when asked about the importance of building a team, saying that leaders are ultimately responsible for hiring mistakes and hiring successes, whether at the senior level or further down in the organization, because the leader sets the standards. In the same way, he pointed to the executive’s impact on interpersonal dynamics in the office when discussing the importance of social skills. The leader continued on to say that staff react, consciously or not, to everything he does in the workplace on both personal and professional levels, and that the strong leaders are the ones who recognize and understand this control that they have.

The question of mentorship presented a particularly interesting finding around the idea of accountability, yielding responses about the value of guidance and counsel from a trusted and more experienced professional resource or colleague. Each executive expressed the importance of mentors in nurturing talent and, naturally, the importance of the manner in which the mentor gives time and imparts knowledge to best serve the mentee. Additionally, a less obvious idea emerged from their insights. In describing the significance of being mentored in their own careers, three of the four leaders highlighted the time they put in and the work they contributed to make it a valuable and substantive relationship. One leader explained how one of her most valued mentors would be surprised to learn that he has been cast in that role, noting that she has created this mentorship opportunity for herself where one doesn’t formally exist. Her ability to cultivate this mentoring opportunity where one may not obviously arise, and to interpret his actions and words in a way that directly enriches her own professional skills, is a testament to her sense of accountability. Another leader mentioned that, at the beginning of his career, he was responsible for “90% of the work” in his relationship with his first mentor, and that he actively reached out to learn skills and to gain exposure to people in positions above him, for the opportunity to evaluate, emulate and evolve. A third leader said that, to this day, she reaches out to her longstanding mentor when she needs guidance, instead of waiting to be helped.

This point — being able to recognize your own limits and know when to ask for help — is critically aligned with the “internal locus of control” principle identified by one of the leaders. Indeed, an important secondary theme within accountability is self-knowledge. To be fully accountable, an effective leader should leverage his or her own strengths and weaknesses to assume appropriate responsibility and, likewise, delegate tasks to staff and colleagues based on their areas of expertise and individual abilities. The same value applies to the organization as a whole, where the strong leader has a clear and objective picture of the organization’s identity and capacity and assumes a level of work that is consistent with that picture, while looking to other institutions for any necessary partnership support. The idea is not to “check out” of a task or initiative that reveals personal or organizational weakness, but rather to recognize the weakness and foster the appropriate team or partner to meet the need.

Along these lines, one executive discussed the importance of “building your team,” or what another referred to as “designing a human dynamic where people can and want to work together effectively.” The team assembled should have the right mix of skills to collectively support their leader’s vision. Reflecting the principle that “people bring different things to the table,” a third leader expressed her commitment to hiring in order to create cohesive teams where individual skills — including the leader’s own skill-set — are complementary. In addition to maximizing their own individual strengths, the executives interviewed emphasized the importance of taking a generalist approach where needed, and being able to speak and act proficiently across a spectrum of topics. One leader said simply that, if he can’t appreciate, understand and be able to contribute to, as appropriate, the work of his entire staff, he can’t effectively lead. He also noted, in a point relevant to themes carried throughout this article, that the generalist sensibilities that led him to a role in hotel management earlier in his career eventually drew him to the public sector where diversity is paramount not only to a community mission but also to the means for achieving that mission.

Goleman’s theory of emotional intelligence is particularly salient in a discussion about accountability. Goleman’s concept of self-awareness and the value of self-knowledge discussed earlier in this section both contribute to better accountability by facilitating more effective and informed decision-making. The principle of motivation provides an applied context for an executive’s sense of accountability, demonstrating a relative propensity for competition and problem-solving, traits that ultimately reveal self-reliance (Goleman 1998b). In a field that is particularly turbulent and complex (Morris and Jones 1999), an executive’s strong sense of self, unwavering confidence and ability to reach out for support enable the ongoing personal and organizational viability essential for institutional sustainability. Finally, the idea of self-regulation is relevant to accountability because it suggests the level to which a leader feels personal responsibility (Goleman 1998b), and a particularly adept self-regulator will often assume the onus that others may cast off, resulting in greater success in organizational growth, empowerment of staff or sustained relationships with key stakeholders.

Resilience

One of the featured executives said it best: “Leaders are responsible for making the hard decisions.” The importance of toughness and diligence was a consistent theme throughout the interviews, and all four leaders described how a strong work ethic — from their youth, to the start of their careers, to the present day — enabled professional success. Two of the leaders interviewed moved from Europe to pursue degrees in higher education in the United States, relying on their own gumption and resourcefulness to move forward in the directions they chose. Another leader recalls her first position as one that required her to constantly put out fires, an aspect of the job she came to love. Another describes his years in graduate school as predominantly uphill and lacking in social and financial resources; but he built a record of success through a commitment to produce consistent and effective results in his work, to network and follow up on every potential resource, and to engage in projects that did not necessarily come easily to him. His early years indeed foretold the resilience that has aided him throughout his career. By developing the trust and friendship of a community in which he was very much an outsider, he learned that, in order to have his needs met, including his own professional development and growth, he needed to engage, ask questions and nurture these relationships. Similarly, to this day, he makes weekly “check-in” calls to contacts at foundations, many of which sustain the viability of his organization.

If accountability is rooted in “what you’re made of,” then resilience might be reduced to “how hard you work.” But for the successful nonprofit leader, hard work involves more than long hours at the office, immersed in files and documents. Rather, nonprofit leaders spend as much time deliberately cultivating interpersonal relationships and staff buy-in as they do crafting emails and memoranda. In this light, the importance of social skill emerged as a secondary theme aligned with diligence, in the sense that it is the leader’s job to proactively build these relationships with staff and others. One executive noted that friendliness in a leader allows staff to feel good about themselves and the work they do, and research has documented a correlation between strong employee satisfaction and performance on the job (Pronovost et al. 2006). A second executive pointed out that social skills “don’t always equal likeability,” but they do influence whether or not staff feel connected to, and ultimately confident in, their leader. This confidence is in turn likely to engender support for more than the leader as a person, but also for that leader’s institutional vision, and will ultimately be reflected in the culture of the organization. Recall how one leader characterized his commitment to interpersonal interaction in the office as a mechanism to control organizational culture. This is an enormously important component of his responsibility to promote job satisfaction among staff, and one that takes diligence and time to achieve with sincerity.

In the same way that hard work takes discipline and deeply affects how one is viewed by staff, peers and partners, one’s character and reputation demand equal personal attention with equal public payoff. When asked about one of the main pieces of advice she passes on to direct reports, one leader says that she emphasizes the importance of integrity. Another maintains that the predominant thread throughout his career is service, illustrating a similar sense of ethics as a personal standard by which to measure the value of his own pursuits. Still another points to a relentless dedication to social justice as both the compass for many of her decisions and the impetus to follow through on initiatives until she has effected change in the community.

Pulling from a deep well of commitment to the work has helped these leaders effectively navigate various challenges, including the unstable landscape of public funding and the complicated power structure inherent in nonprofit governance (Collins 2005). A clear sense of priority and the will to make firm decisions are paramount in an executive’s ability to lead an organization successfully. Because relationship-building is so important to organizational sustainability, most notably with funders and partners (Cortez et al. 2009), a leader’s social skill and the diligence with which close engagement with stakeholders is cultivated is a deliberate and strategic component of the executive’s professional profile (Goleman 1998a). Applying that same diligence to staff engagement, as well, will pay dividends in the consistent development of future leaders. A competitive approach to recruiting and retaining talent through a sensitivity to staff needs is essential in nonprofit sustainability (Alliance for Children and Families 2008). The resilient leader is able to keep the personal performance bar high in order to fully address this issue.

Optimism

Optimism is reactive. For a nonprofit leader, optimism presupposes a willingness to learn new ideas and suspicion of the status quo, and may trigger specific actions or responses depending on the context and environment. In these uniquely trying economic and social times, nonprofit organizations face increased obstacles and uncertain futures, but the optimistic leader can see through challenges to the opportunities among them. One of the nonprofit leaders I interviewed has adopted as a motto, “Believe you can fix anything.” A second executive says, “Nothing is irreversible.” One executive characterized status quo as a problem to be fixed. This willingness to approach a problem from various angles until a solution emerges speaks to a sense of risk-taking, rule-breaking and creativity. Optimism is a decision the leader makes, and it evokes principles of both accountability and resilience. An effective, optimistic leader will have confidence, not only in the strength of the organization, but also in his or her own capacity to generate better outcomes.

An underlying theme that relates directly to optimism and was expressed clearly by all four leaders is flexibility. When queried about the importance of institutional memory, each agreed that it is important to know the organization’s history and the whys and hows of its identity today, but, resoundingly, they emphasized that institutional memory can be dangerous if it inhibits the organization’s ability to be innovative and current. One leader warned that it can impede vision and adaptability for the future. Another agreed that people and environments change, and that you can only drive looking forward. A third cautioned against allowing institutional memory to become an anchor, and made an additional, unique observation about the potential for discrepancies between external institutional memory — meaning how those outside the organization perceive it based on past dealings — and the culture or brand that internal staff identify with. He noted that, especially for organizations with a long history in the public sector, current relationships with community, government and other partners often reflect how those stakeholders have characterized the organization over time.

The leader who understands the importance of these relationships, in fact, likely appreciates the full strategic value of partnerships, in which optimism and flexibility are imperative. As noted earlier in this article, cultivating relationships with possible partners, and sustaining partnerships that have come to fruition, is an innovative approach to nonprofit sustainability. One of the executives described a unique partnership model, where her organization and its staff have benefited through an informal partnership with another organization. The partnership is based in a strong and trusted peer-to-peer relationship between the two executive directors. The leader I interviewed highlights the many ways the organizations together are greater than the sum of their parts and, individually, can offer staff new opportunities and networks through the creativity of their leaders. A leader’s willingness to explore potential partnerships, even informal ones, with organizations with seemingly disparate missions illustrates both optimism and trust, and is also an increasingly relied-upon strategic business approach in the public sector today.

Literature that describes nonprofit funding streams reveals just how flexible leaders in the field must be. The responsibility to juggle multiple relationships and requests from various types of funders while maintaining organizational buy-in to each (Collins 2005) is a significant one, and an inflexible or pessimistic leader would likely be unable to meet this challenge for any extended period of time. The successful nonprofit leader knows that because organizational governance is sometimes beyond individual control, the ability to adjust to new and competing directives at all times is extremely important. Overall, “the public sector work environment may represent a level of ambiguity, flex, and contradiction in values such that there is room for the entrepreneur to develop and act on such characteristics” (Morris and Jones 1999, 72). In other words, nonprofit work favors the optimist. Recall the significance of innovation, motivation and creativity as described earlier in this article; the flexible and optimistic leader thrives when pursuing solutions that may be non-traditional or unprecedented.

Conclusions and Areas for Future Study

Conclusions and Areas for Future Study

Without discounting the value of traditional aspects of leadership such as baseline skill and intelligence, the purpose of this article is to emphasize non-traditional markers, particularly in the context of nonprofit leadership, such as creativity, emotional intelligence, ethics, self-confidence and entrepreneurship. These concepts have all been identified in the literature as vital to public sector success, and were further refined through a sort of “common language” derived from interviews with four successful nonprofit leaders in the Philadelphia region. Three guiding principles — accountability, resilience and optimism — emerged across these interviews in various research and practice contexts, including management standards and staff development, models of partnership and engagement with peer organizations, environmental challenges unique to the public sector, and self-understanding. Certain ideas were examined in greater depth to uncover the personal, internal composition of a strong nonprofit leader, while others revealed more about the nonprofit field generally and about how some leaders have successfully navigated the sector’s inherent challenges and opportunities.

The implications of this study reach beyond the importance of how accountability, resilience and optimism affect current leaders. Particularly given a growing leadership deficit, the importance of practical, action-oriented objectives for recruiting and retaining future leaders cannot be underestimated. It is not uncommon to hear of a well-funded nonprofit organization with an innovative leadership development program, but many of these programs focus on technical leadership proficiencies (e.g., grantwriting, program development). Perhaps a model designed with a wider lens, to include basic leadership competencies in the areas of accountability, resilience and optimism, could be of practical use to managers at every level of an organization, from the board of directors down. These are the decision-makers responsible for developing the future leaders of their organizations, and the capacity of the public sector demands strong leadership now more than ever.

Goleman’s theory of emotional intelligence, as presented here, offers a professional standard based in psychology but applied in business. Examining that profile against the backdrop of nonprofit leadership concepts, through research on current trends and discussions with leaders in the field, yields a compelling portrayal of success. The personal practice paradigms described by the leaders interviewed are closely aligned with those qualities that make the nonprofit leader unique:

Findings on the public sector entrepreneur… include a mix of power and achievement motivation; an ability to work strategically, beginning with small steps; strong political and external networking skills; calculated risk-taking; self-confidence; and an ability to tolerate and use ambiguity as a source of discretion (Morris and Jones 1999, 79).

Each leader’s personal values directly and indirectly reflect a willingness and capacity to embody these qualities, through success and failure, in order to bring about organizational success. In all cases, an executive’s success is neither formulaic nor precise; rather, his or her personal impact is difficult to measure and illustrated in different ways by different leaders.

Measurement is, in fact, an area of this report that is not fully resolved, and more research remains to be done for a comprehensive perspective. It is difficult to measure aptitude for subjective personal qualities such as emotional intelligence and entrepreneurship, and perhaps even more difficult to quantify successes attained as a result of those traits. However, that information would provide a more scientific basis for the conclusions presented here and would likely prompt greater attention from consultants, leaders and other stakeholders in the public sector. Similarly, the ability to implement criteria related to accountability, resilience and optimism as predetermining factors in strategic hiring decisions, performance evaluations and leadership development curricula within organizations is unclear. The advent of evidence-based tools to identify such sensitive and nuanced personal qualities would be enormously useful, though likely not infallible.

Successful nonprofit leaders’ personal backgrounds also warrant further exploration to inform the structured development of future leaders. The concrete behaviors of the four leaders profiled in this study were featured much more prominently than was the potential influence of their educational, cultural and socioeconomic backgrounds or gender. The significant psychological implications of leadership style could be best presented in a full individual profile. Studying similarities between the personal backgrounds of executives, particularly when controlling for distinctions in size and mission of their organizations, could present compelling theories on leader archetypes. Furthermore, in an increasingly intercultural world, finding shared professional standards and relationships among diverse conventions would help foster a strengthened social code in all industries, so that culture is not an obstacle to partnership or general success.

A final suggestion for future study would be to explore a wider set of practice implications from the key themes presented in this article. For example, effective communications to staff, partners, funders and governance bodies contribute enormously to a leader’s productivity. Examining the influence of accountability, resilience and optimism on successful communication styles, such as for clarifying vision, describing priorities and boosting morale, could foster further understanding of leadership qualities and standards. Mentorship, discussed by all four featured leaders as essential, is another area that would benefit from this type of review. An analysis of why certain mentoring practices are more successful than others could offer schemas on both how to effectively mentor future leaders and how to identify those leaders who are especially strong mentors. The pursuit of recognizing not only the successes of current leaders but also indicators for and of future leaders is, perhaps, this article’s most important area of focus. As the public sector continues to grow, so will the need for capable leadership, and attention to developing those leaders now is paramount to the sustainability of the field.

References

References

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