New Executive Series: Assessing Your Organization’s Sustainability

Rachael Gibson & Melody Thomas April 21, 2015

ABOUT RAFFA, P.C.

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Focuses on making the world a better place

Contributes to client’s abilities to achieve their missions and deliver their promises to the world.

Keeps organizations compliant, effective, and efficient with practical back office support and deeper strategies that create sustainability

Provides expertise in consulting, accounting, nonprofit search, and technology services that help advance client’s organizational missions.

RAFFA, P.C. 1899 L Street, NW, Suite 900 Washington, DC 20036 (202) 995-7245

LEARNING OBJECTIVES

•Discuss Raffa’s sustainability model and the four core elements of sustainability planning

•Explore strategies for working with the Board of Directors and Senior Leadership team to advance your organization’s sustainability

•Discover strategies (specifically bench strength review) to implement a leader development culture at all levels in the organization

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WHAT IS SUSTAINABILITY?

Sustainability involves having strong organization or “business” fundamentals in place that enable the agency to become or continue to be a high-value community asset over the long-term. REMEMBER…. “Sustainability is an orientation, NOT a destination.” Zimmerman, Bell, Masaoka

Excerpt from Essential Guides to Sustainability, Succession, and Transition Planning: Part 1 – Organizational Sustainability Planning Guide.

Business Model & Strategy

Leadership Resources

SUSTAINABILITY PLANNING

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Culture

THE

FOUR ELEMENTS

FOUR CORE ELEMENTS OF SUSTAINABILITY: BUSINESS MODEL/STRATEGY

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Business Model: How the organization creates and delivers value, and finances the value-creation process.

• Has at least 5-7 years of life in front of it.

• Built on quality services. Needed by clients. Valued by donors/funders.

Business Strategy: A coordinated set of actions aimed at creating and sustaining a market position in order to carry out your nonprofit’s mission. (Competitive advantage.)

• Is there a written strategy in place?

• Does it position the organization to meet future needs and demands?

• Are the board and staff aligned around it?

FOUR CORE ELEMENTS OF SUSTAINABILITY: LEADERSHIP

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Leadership in place to meet current and future needs

Succession plans for top leadership

The Board is a high-value asset to the organization

The Board’s work adequately covers its three core roles: • Shaping mission and direction

• Ensuring leadership and resources

• Monitoring and improving performance, including its own

Strong, positive relationship between Board and executive

Diversity plus cultural and intergenerational competence

FOUR CORE ELEMENTS OF SUSTAINABILITY: RESOURCES

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Financial resources: sufficient, diverse, well-managed

Physical assets (facilities, campus, etc.) are maintained

Human resources (staff, volunteers) are sufficient, stable, engaged

Technology aligns with the business model

Reputation/brand: understands its reputation in the community

Proactive resource development strategy in place

Good stewardship of hard assets AND building soft assets

FOUR CORE ELEMENTS OF SUSTAINABILITY: CULTURE

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“Sacred values” clear to board and staff

Decision-making authority defined

Agile and resilient

Agreement on commitment to diversity and inclusion

Culture and future direction aligned

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The Sustainability

Mini Assessment

RISK MANAGEMENT: SUSTAINABILITY PLANNING

Management of Sustainability Planning Risk

Proactive assessment of the organization’s ability to accomplish its mission with present and future leadership with longevity, strength, and success in meeting the needs of those within the organization and with those served.

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Planning Does Planning Does NOT • Builds capacity for mission impact • Prepares proactively for executive

transition 1-5 years in advance • Reviews organizational business

model/strategy, leadership, culture, and resources to increase effectiveness and longevity.

• Aligned with the strategic plans of the organization

• Only focus on financial stability

APPLICATION FOR BOARDS & CEOS

Social Contracting is an ongoing dialog or agreement-building process for continuous clarity about:

• Goals and priorities

• Roles, responsibilities, and expectations

• How to manage overlap between executive and governance roles

• How and when performance is monitored

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BOARD AND EXECUTIVE RELATIONSHIP

1.Establish clear priorities 2. Clarify roles & expectations

• Executive’s expectations for the board • Board’s expectations for the executive • Touch points & overlaps (can be sources of tension)

3. Have a plan for ongoing monitoring & periodic evaluation of performance

• Executive’s performance • Board’s performance

3 Success Factors

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1. Connect to overall organization strategy 2. Enlist CEO and board support 3. Design as a process, not an event 4. Organize organizationally, not just top level 5. Align with HR practices to support it 6. Approach with discipline and implement 7. Measure and evaluate 8. Give it the time it needs 9. Communicate often

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LEADER DEVELOPMENT BEST PRACTICES:

WHAT IS RAFFA’S BENCH STRENGTH REVIEW?

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• Helps leverage the management team for overall sustainability, leadership continuity, and retention

• Advances attention to leadership and management development

• Provides contingency planning for planned and unplanned absences

• Ensures continuity of mission impact through the development of critical competencies and functions.

• Realigns position duties and/or the management structure.

WHY REVIEW YOUR MANAGEMENT TEAM’S BENCH?

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• Refreshes and updates management position descriptions

• Identifies internal potential and backup designees for key personnel

• Identifies perceived gaps in support of key functions

• Identifies professional development (cross-training) needs to expand core competencies and prepare designated backups

• Identifies key relationships held by individuals to mitigate risks to the organization.

• Identifies leader development opportunities for key personnel

For new CEOs Provides a review of the management team structure and options for achieving organizational goals

LEADER DEVELOPMENT

BENEFIT:

Broadens and

Sustains Leadership

Capacity &

Builds Bench

Strength

Builds Bench

strength

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Strategic Talent Management Component

Investing / Positioning

Strategizing / Planning

Aligning / Assessing

Developing / Retaining

Reviewing / Recruiting

Timing / Implementing

WHERE TO START?

• What from this discussion would add value to your organization?

• Who would need to be convinced of the value and importance given other competing priorities?

• Who might you see as an advocate or champion?

• What would help make the case clear and compelling to act now or at a later date?

• What is the biggest barrier to action?

• What is your next action?

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Organizational Sustainability Mini-Assessment Please read the following questions and note your response. As it applies to your organization, is this statement completely true (yes), partially true (part), not at all true (no), or you don't know (DK)?

Busi

ness

Mod

el/S

trat

egy Our organization has a solid business model (what we do and how we pay for it) that

has at least 5-7 years of life in front of it and is built on quality services/products that are needed by clients and valued by donors/funders.

Yes Part No DK

Our strategic or long-range plan (or business/organization strategy) is current and relevant to today's and tomorrow's market conditions. Progress toward the plan is frequently reviewed and is the subject of priority-setting discussions.

Yes Part No DK

Among the board, executive and management team there’s a high degree of alignment about the direction and strategy. Yes Part No DK

Lead

ersh

ip

We have the staff and board leadership in place who meet our present and near-term future leadership needs. Yes Part No DK

We have written succession plans in place for all key employees that include cross training plans. We have a strategy in place to recruit, develop and deploy new leaders, both staff and board.

Yes Part No DK

Our chief executive could go on a six-month sabbatical tomorrow and the organization would not miss a beat. Yes Part No DK

Our board is a high-value asset to the organization. Processes are in place and followed for orientation of new board members and we have a pipeline of leaders and a process for board officer succession.

Yes Part No DK

Reso

urce

s

Our organization has sufficient financial resources to meet its commitments in the short to mid-term. Yes Part No DK

Our organization’s funding or revenue streams have longevity – the majority are likely to continue beyond the current year's budget or current grant cycle. We have an appropriate degree of diversification of revenue streams.

Yes Part No DK

A proactive resource development strategy is in place that is tuned to our organization’s particular market – the present market as well as future market. There is a clear logical link between our revenue development strategy and our overall business/organization strategy.

Yes Part No DK

We are good stewards of ALL of the organization’s assets, financial assets as well as “soft and social capital,” the strengths that underpin the organization’s work, such as community reputation, human capital, team capital, systems and processes, intellectual property, etc.

Yes Part No DK

Cultu

re

Our organization’s culture could be described as resilient, forward-focused, results-oriented and action-based. Yes Part No DK

The value and worth of the organization is widely understood throughout the board, staff and volunteers. Virtually anyone on the team could make a compelling case for supporting the organization.

Yes Part No DK

©Raffa, 2014. | www.raffa.com

Organization Leadership Agenda

Goals Assumptions

Executive’s/Staff’s Role Board’s Role

Success Measures

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Melody Thomas Senior Coordinator

mthomas@raffa.com 202.955.7242

Rachael Gibson Senior Consultant rgibson@raffa.com

202.955.7221