Jeffrey Sonnenfeld, Senior Associate Dean of the Yale School of Management, did a great piece in the Washington Post this weekend on Facebook’s challenges with a Founder/CEO.  He points out that good governance practices often go out the window, and directors kow-tow to the mystical leader, when a founder is at the helm of a company. Public and private companies are not alone in having leadership challenges—or what I call “founder’s syndrome.”

Many nonprofits have also been created by visionary leaders, and have the same challenges Facebook may–like boards of directors who aren’t willing to stand up to the founder, or even at some point look for new leadership.

There are ways to avoid this dynamic.

A Diverse Board.  Facebook’s board is all-male.  Don’t make the same mistake. A diverse board, though, is not just gender or race diverse. It should be age-diverse and made up not only of donors, but of people from the communities the organization serves. It should also include several individuals from related institutions (perhaps in other states), who can lend relevant expertise.

Free-Thinking Leadership. Board leaders are often hand-picked by the Executive, so that they get along well together. This is great. But more important is leaders who can speak their mind to the Executive and be sure all ideas and options are on the table.

Financial Compliance. It’s not uncommon for nonprofits still being led by their founders to have some squishy numbers in the books. An Audit Committee—separate from the Finance Committee—should oversee an annual audit process that follows current accounting standards.  Independent Sector offers a checklist for accountability that includes these standards.

Mission-Driven Decisionmaking. At the end of the day, every board and leadership decision should meet this simple litmus test “Does this further our mission?”  It sounds easy, but sometimes Founder-led organizations can get sidetracked with pet projects of the founder, or conversely, projects the founder doesn’t find particularly interesting but need to be done to move the mission forward.

Succession Planning. Every business owner needs to do it. So do nonprofit organization founders. It’s a conversation that needs to be had with the board, with real plans and timelines drawn up on paper so everyone knows what role the founder will play and how the organization will continue to succeed after he or she retires.  Consider planning for an Interim Executive for 18 months after the founder leaves. No one can match the zeal and history of the founder, and a leader who is experienced in helping organizations make transitions can be just the right person to bridge to your next visionary.

 

Red Gerbera Daisy IMG_0149 s.cAmazon is known for efficiency. Zappos has built a customer-centered company. The marriage announced last week merges a $1 billion-a-year shoe-selling enterprise with a $20 billion behemoth online seller. Many industry watchers have been boo-hooing the deal, assuming that Amazon’s culture will subsume Zappos and, frankly, ruin it.

But I have another take. When one enterprise knows how to deliver What the Customer Wants, When She Wants it while the other one Builds Community and Brand Loyalty with customers, then it can be a match made in heaven.  That’s because we are in a world moving away from “hard brands”—i.e. what the PR and marketing people traditionally pushed towards the customer/media and towards “brands-in-conversation”—entities that evolve in a dialogue with their customers. The same goes for nonprofits struggling in this downturn.  Many of them are facing going out of business because they are just not making ends meet, even though they do great work.

Where do nonprofits stand?

At last count, we had more than 1.5 million nonprofits in the United States (that’s according to The Urban Institute, National Center for Charitable Statistics, based on organizations that filed form 990’s with the IRS within the last 24 months). Thats a lot of brands competing for dollars and volunteers.  And unfortunately, many of these organizations have mission overlap.  In addition, some are better at delivering results, some are better at outreach and organizing, and some are better at promoting a great donor or volunteer or member experience. But few are good at all of these tasks.

So what can a nonprofit do? Consider a partnership or merger.

Considering a merger with another entity can be scary, as nonprofits are fiercely independent. But a merger/partnership can really strengthen your brand. That’s because your brand is all about delivering on mission.  When you share responsibilities with another entity, you can increase your “ROI” with the people you serve, while decreasing costs, overhead and inefficiencies.

A joint effort doesn’t have to happen overnight.  Here are some baby steps to creating a productive brand merger.

  • Introduce your boards to each other at a social, not business-oriented, “mixer.”
  • Engage staff of each organization in a brainstorming session—the goal is better meeting the mission.
  • Try a joint venture—a project with a measurable outcome consistent with both organizations’ goals.
  • Host an event together so you can share ideas, showcase strengths, and get feedback from attendees on how your two organizations worked together.
  • Share each other’s content—through your web and social media venues; Tweet about each other’s successes and events, for example.
  • Consider the donor’s point of view. What additional services or geographic reach would enable each organization to give a lead donor more bang for their buck?

These are just some of the ways you can increase brand impact and build trust between two enterprises. Remember that the goal is always delivering on the mission. If you can keep your staff and board mission-focused, then the ROI of a partnership or merger can bring great benefits to the people who need them most: those you serve.

Join Amy this Wednesday on a free teleconference about Engaging Boards for a More Successful Fundraising Auction. To register, click here.

Nonprofits often resist marketing. Marketing and sales smack of for-profit activities. In the best of cases, marketing dollars are viewed as an expenditure that reduces money for core mission projects. Worst case, branding, marketing and brand management are considered downright inappropriate.

But whether you know it or not, you are already selling your mission. The question is to whom, how, and how effectively?

In today’s highly competitive marketplace of ideas, your non-profit organization has very little emotional space in which to differentiate itself from the pack. When a nonprofit calls or sends us mail, or when a friend discusses volunteering, we look at this request not just against a backdrop of all our nonprofit investments but also against the other competing interests in our lives—our son’s Little League team, our work picnic, the birthday party we are hosting next weekend.

Here’s where a strong brand comes into play.

When a household already contributes to a church and a Little League Team and a PTA, they may feel that their nonprofit “basket” is full. To make an impression on this family, a nonprofit has to make a bold and memorable case for support. Having a strong brand already in place can help open the door or close the sale. For example, when my local volunteer fire department comes knocking at the door for their annual donation drive, I already understand their brand. They volunteer at our schools to explain fire safety to the children. The firehouse hosts kids’ parties and we’ve all taken the tour and tried to lift the 100-plus pounds of gear each firefighter wears in a fire. And a few years ago, they put out a fire on my street. They have a strong brand and they don’t need to tell me what they do. So the conversation is focused on what level of donation I am able and willing to give for the cause.

Not everyone can have as compelling and easy a case to understand as the local volunteer fire department. But if they don’t, they need to work hard to make it easy for people both inside and outside the organization to “get” what change they make in the world. Then, the trick is that once you’ve invested time and dollars making your brand known, you need to manage your brand so that there’s no slippage. Your “brand promise” has to be delivered as expected every time your organization or its name/logo is used. And that means Every Time, or you may have done lasting damage to your mission by reducing your ability to raise funds and attract talented staff and volunteers. (More on how good governance connects to your brand promise in a future posting).

Do you have a brand success story or brand crisis? Please share (names can be changed to protect organizational anonymity)!