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Peak Performance -- Q&A with Jean Lobell, Managing Director, Community Resource Exchange

July 22, 2008

Late last year, Community Resource Exchange (CRE), one of New York's most respected nonprofit management consulting organizations, released a study that compared the leadership practices of executives in the nonprofit and corporate sectors. Recently, PhilanTopic contributor Michael Seltzer sat down with Jean Lobell, a CRE managing director, to discuss the report's findings.

Michael Seltzer: Over the years, some have argued that nonprofit organizations are poorly managed, poorly led, and that all they need is an infusion of business discipline. The logic is that if nonprofit organizations operated more like for-profit businesses, they would be in a much stronger position to tackle the problems and challenges they were established to address in the first place. Your research reveals a different picture. What are the key findings of the report?

Jlobell_imgJean Lobell: The conventional wisdom is what makes the findings of the study so eye-opening. The report showed that nonprofit leaders scored higher than for-profit leaders on leadership effectiveness. Using a 360-feedback survey that measures seventeen leadership best practices, we compared the scores of hundreds of corporate and nonprofit leaders and found that the nonprofit leaders scored substantially higher than their business counterparts in fourteen of the seventeen areas. The six practices where nonprofit leaders had the greatest edge are encouraging participation, persuasiveness, openness to feedback, sharing credit, demonstration of effectiveness (i.e., getting the desired outcomes), and use of lasting power. The differences between the scores are statistically significant, so the results are not a fluke.

MS: Three areas where nonprofit leaders had comparatively lower ratings were in what you called push/pressure, energy, and coping with stress. The findings also indicated that nonprofit executive directors may suffer from a fair degree of self doubt.

JL: It's quite impressive, actually, that nonprofit leaders scored lower than their for-profit counterparts in only three areas of practice. The first, push/pressure, is defined as pushing for results and applying pressure on others until a task is successful. Nonprofit leaders also ranked lower on energy level, which is defined as a desire to achieve results quickly with high consciousness of time. The third area where nonprofit leaders scored lower is their ability to cope with stress, which we defined as maintaining command control, managing difficult situations calmly, and handling unforeseen trouble with confidence. So it appears that nonprofit leaders may not exert enough pressure and energy to get the desired results, and they tend to have difficulty coping with stressful situations.

The self-doubt observation is a hypothesis based on the finding that nonprofit leaders consistently rated themselves lower than those providing them feedback. Explanations for that finding are many. Are they harder on themselves? Might stress and burnout lower their perception of what they can accomplish? Given the complexity of their roles, might they find it hard to imagine that they could do well? We're not entirely sure.

MS: So they basically hold themselves up to a higher standard than their direct reports or peers do?

JL: Exactly. And when you look at the indicators they scored comparatively low in, they are very much interrelated. They have to do with really holding people accountable, not excusing people when they don’t deliver, and demanding results.

MS: That requires quite a bit of toughness.

JL: Toughness and also some sense of security about yourself as a leader in terms of what you can or can't ask of a direct report. If you look at the calendar of a nonprofit executive director, it's no wonder they experience a lot of stress. It's also no wonder they have really good leadership and influence practices. Each day, they engage with an incredible array of stakeholders -- funders, staff, board members, community leaders, reporters, and government officials.

MS: Your report really does paint a picture of what we've known all along -- nonprofit managers and leaders are incredible multi-taskers, juggling both short- and long-term pressures. And yet at the end of the day, they don't see enough of the results of their work to give them confidence they are in fact doing a superb job under difficult circumstances.

JL: You're making a good point. Too many nonprofit leaders don't have enough clear indicators of success to help them really assess how well their organization is doing, or how great they are in what they do. At the same time, there's much more demand, particularly from funders, for demonstrating outcomes.

It's not the same as in the for-profit sector where success indicators such as generated revenue are clear and tangible. Increasingly, however, nonprofits are setting very clear, quantifiable targets, which can be reinforcing and empowering.

MS: What would you recommend, to nonprofit EDs and to funders, in light of your findings?

JL: Nonprofit leaders need to give themselves permission to attend to their own leadership development needs. In our consulting work and in our Leadership Caucus, one of the major outcomes is the recognition of the value of having the time and space to do just that. If nonprofit leaders are to continue to successfully influence their communities, have a voice in the public forum of ideas and policy, and work on behalf of the common good, they need to sustain their leadership capacity. And their boards of directors need to understand more deeply the leadership strengths as well as challenges facing their executive directors.

The need for just that has led CRE to develop a Board Leadership Caucus for trustees. We're are hoping that it will provide an opportunity for a better understanding of some of the things we talk about in the report as well as stronger partnerships between executive directors and their boards. For funders, acknowledgement of the significant leadership assets that are already within the sector coupled with a commitment to develop, support, and sustain them would be a tremendous boon to the sector.

(Copies of the report, which was written by Jean and Paul Connolly, are available for downloading from the Community Resource Exchange Web site.)

-- Michael Seltzer (with research assistance from Declan Guilfoyle)

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