On-Point

In this double-header installment of the On-Point column, Council on Foundations senior advisors recommend regularly communicating with all board members—and not just the chair—can help CEOs steer clear of moving in wrong directions and becoming imbalanced with outside commitments.

The Silent Treatment

"He seemed like such a dynamo." Bob was selected as the new CEO of the Omega Foundation after the board chair led an extensive search to identify and recruit a leader to revamp the foundation's entire grantmaking strategy and program. Bob had been a foundation program officer early in his career, then he became the CEO of a widely respected environmental nonprofit doing advocacy and policy work. Since Omega's grantmaking focused on environmental and economic development issues, and Bob had both the field knowledge and the leadership characteristics the board was looking for, he was a great candidate.

Bob came in full-steam-ahead, quickly launching analyses of past grantmaking patterns, commissioning grantee and community satisfaction studies, and convening meetings of industry experts and community leaders. People were impressed with his vigor and enthusiasm.

Before his third board meeting, Bob met with his chair to discuss dramatic changes he was ready to introduce in the meeting—addressing new grantmaking priorities and guidelines and streamlining the intake and grantee management processes. The subsequent meeting seemed to go well, although only eight of the 12 board members attended.

Meetings four and five came and went—by which time Bob had been on the job for more than a year, and the chair was nearly through his term as well—with numerous elements of Bob's vision of change moving from ideas to implementation. Bob felt good about the changes he had effected, although he wished more of the board members would pay greater attention to what was happening.

Two weeks before meeting six, just as the board book was being finalized, the chair called Bob and asked to have lunch. He told Bob to prepare for some tough news: The board was not happy with the foundation's new direction or his leadership.

The Cost of Freedom

"This one's a classic," says one of the On-Point advisors. "Juicy," says another. And juicy it is, as Omega's board turns to a high energy CEO—with a proven track record, deep technical expertise, current knowledge of the policy advocacy field and acknowledged leadership skills—to take them where they want to go.

The advisors say they're seeing this pattern of events occur frequently. Foundations seeking change and greater impact are more likely to choose different types of leaders than they might have chosen in years past. They often hand these new leaders an amazing amount of latitude to reorient the enterprise, sometimes without carefully considering the implications of that freedom.

Leaders like Bob are selected for the way their ideas and talents line up with what the board thinks is the right direction for the foundation. In his case, the advisors point out, he formed a bond with the chair, who also chaired the search committee, and he's felt affirmed in his thinking from the outset. As far as Bob can see, all the signals indicate that he and the board see eye-to-eye on where the foundation can go, and how to get there. After all, everyone's been impressed with his ideas, from the meetings early in the search through multiple board meetings.

But the unstated part of Bob's position, the advisors make clear, is bringing the board along with him. New foundation CEOs charged with creating change are often unprepared for this essential task. Instead of being the leader who leads and listens, sometimes the new CEO leads and expects that the board is listening. After a time, if the board members do not feel like they are heard by the CEO, they are no longer listening or being led.

At some point, a precipitous incident occurs (in this case, probably the impending change in the board chair). The board dynamic shifts and the actionoriented CEO loses his allure and his support. The advisors say these situations often are career-ending for the CEO. In our case here, a chastened Bob survives.

The advisors' thoughts about where Bob went wrong and what he needs to do now follow.

The Turning Point

In a nutshell, says one advisor, Bob got out ahead of his blockers.

First of all, he didn't stop to read the culture. Omega presented Bob with a very different situation than his advocacy organization. There, if Bob had a well-thought-out idea, and could fund it, moving forward on a fast track didn't require him to do much to work it through the board. But at Omega, Bob needed to study the board dynamic, learn how the chair played his role and figure out the roles and power bases of other key players. He needed to learn how, and on what timetable, big ideas moved through the board. Often boards consider concepts first, for example, and then deal with programmatic changes related to the concepts in a subsequent meeting, once board members have had time to consider those changes carefully. Even if Bob were brought in to change the culture, say the advisors, he needed to understand it first.

He was much too independent of his board. Even when he did connect, he focused on only one player—the chair. Bob connected with several of Omega's key stakeholder groups in his early months—grantees and key leaders in the community and in the foundation's funding areas. But he hardly interacted with the board during that crucial time. Bob and the chair hit it off at the time of the search, and Bob became far too dependent on that relationship, say the advisors. (One chair doth not the board make.) He didn't take the time to find out where individual board members stood on changing the strategy and grant program. Without knowing who had good creative ideas or strong reservations, he had no way of knowing how to frame his ideas and pick his allies.

And more generally, he didn't know his people: "When I came in," says one advisor, "I spent enough time with the board members so that I knew who each of them was, as a person. And each of them had a good sense of who I was, as their manager." This advisor knows where he stands with his board, but Bob is dependent on the chair for almost all his feedback on how he's doing. And, although he seems not to realize it, he is also dependent on the chair to engineer the board's engagement with and approval of "Bob's plan."

He made it all about Bob. As our advisors see it, it is Bob's plan. Whatever mandate the board gave their new, hardcharging CEO, the board still needs to own the emerging strategy and plan for Omega. Bob hasn't given them a chance to make that happen. Bob shaped his own vision, and then fed it back to the board. He could, suggest the advisors, have brought various pieces of the plan through committees, and given those committees options to debate. Without that empowerment, Bob lacked allies on the board who would passionately fight for the changes he proposed.

He ignored all the signals. Bob mistook silence for approval, and acquiescence for engagement, says the advisor group. Four out of 12 board members not present should have been a real signal to Bob that they weren't engaged and he needed to draw them in. Where Bob described the board members as "not paying enough attention," the advisors saw clear danger signs in low attendance, limited participation in meetings, board members who never lingered to chat after meetings, and almost no evidence of conversations of a "what-do-you-think-about-this" sort with board members. As one advisor neatly put it, "One of the things that I found measured people's involvement was their involvement."

So, Bob the dynamo pretty nearly flunked governance 101 for CEOs. But he's still on the job. The On-Point team has recommendations for what he should do now.

The number one priority, say the advisors, is meeting with every member of the board individually before the next board meeting. With each board member, Bob needs to acknowledge that he hears what he is being told and ask for some candid input. How would they critique his performance? What has excited them about the directions he is suggesting? What has raised concerns? How can he communicate better with each of them—during and between board meetings?

Second, Bob needs to go to the current chair and ask for a "full, candid and frank" assessment. He needs to learn from the chair where he went wrong, and why the chair did not provide an earlier heads up about the eroding support among board members. He should ask for the chair's help and guidance in putting together a plan for going forward that captures Bob's ideas and has all the board members' support and encouragement. If the new chair is known by this time, Bob and "his chair" also need to include him or her in their discussion.

Third, Bob needs to keep the new pattern of connection going—meeting regularly with members of the board, testing ideas, and moving options through committees. When a board book is compiled, it should reflect significant work and thinking by the foundation's staff and board members.

Bob was fully confident of his vision and his ability to make things happen. But he had to learn that boards allow CEOs to make things happen. The give and take required to make boards comfortable enough to allow, encourage and support CEO-driven change is a subtle, but huge, part of the CEO's job, say the advisors. Boards may hold all the traditional powers—hiring, firing and setting policy—but the burden of making the board/CEO relationship work nevertheless falls most heavily on the CEO's shoulders.

For the Board

Bob's not the only one who made some mistakes, say the advisors. What could the board have done differently? Four big things:

• Role definition: Made it clear to Bob at the outset what part they wanted to play in Omega's transformation. Bob seems to have thought they were along for the ride. They saw it differently—but didn't say so.    
• A match for Bob: Asked themselves, ahead of time, what it would take to be a good board to Bob, an activist CEO. Bob was a big change from their previous CEO, a program officer par excellence. Yet the board members didn't consciously change gears when Bob came on board, and perhaps they didn't know how to do so.    
• Early warning: The signals Bob ignored should have been apparent to—and pointed out by—the chair after the first few board meetings.    
• Help on process: Bob didn't know how to move ideas through the board in a way that involved and engaged them, so he turned his ideas into everyone's ideas. The chair and the committee chairs could have helped prevent that misunderstanding by engaging with Bob early in his tenure.

The Point of Diminishing Returns

"I just don't see what we're getting." Rick has been CEO of the Upper Valley Community Foundation (UVCF) for approximately five years. His annual performance review is coming up soon. One of the items on his mind—and he imagines it's on some board members' minds as well—is his involvement outside the foundation. When he was relatively new to the foundation and devoting all his attention to strengthening the grants program and staff capacity, the board thought he was too invisible in the larger community, and told him so.

Since then, the staff has gotten bigger and Rick has felt that the internal issues are under control. So he's taken on quite a few external responsibilities. He's in the Leadership 2020 cohort for his state, along with other civic, business, nonprofit and government leaders. He's joined the symphony board and the board of his regional association of grantmakers. He chairs the local economic development action task force, and coaches his son's soccer team. He's on the board of a national healthcare association based in New York. He also gives speeches to Kiwanis, the Rotary, the Chamber of Commerce, etc.

Some, but not all, of the board members are really happy with Rick's transformation. However, a significant few aren't sure the foundation is getting enough return on all his outside time. Rick also is struggling, with too much on his plate and no clear sense of his own compass.

He knows that outside commitments will be a major focus of his review. He thinks he's where he is in large part due to the earlier board feedback. What's the right balance? And how does Rick prepare for the conversation?

The On-Point advisors don't see any real question about whether Rick needs to be visible and active in his community and beyond. Of course he should, a foundation CEO is expected to "manage up" as well as "manage down." In just the same way, our advisors say, the foundation's chief executive must "lead out" as well as "lead in."

They note that foundations, and especially community foundations, function in a rich, heavily populated ecosystem of philanthropic giving and public problem-solving. The CEO usually bears the brunt of keeping the foundation's connections with the rest of the system vibrant, through serving on local boards and commissions, speaking at conferences, convening meetings, and taking leadership positions with policy, issuebased and philanthropy infrastructure organizations.

In doing this work, the CEO "projects out"—establishing the foundation's identity, building relationships with key partners and contributing to public understanding of what foundations do. He or she also must "gather in." One advisor called his gleanings from community relationships "the crown jewels" of what he needs to know in the community. Another suggests that outside activities were, for her, "my key tool for getting the information to keep the program from stagnating."

Finding Balance

If external leadership is a crucial aspect of Rick's job, say the advisors, that doesn't mean it's easy to find his "right balance" (i.e., determine what he should be doing outside the foundation, for how much time, and with what benefits). For any CEO, those answers come from considering many variables: the mission, values and current priorities of the foundation; the type of foundation and the field in which it operates; where the foundation is in its life cycle; and the CEO's strengths and interests. Of course, board members' views of those variables often have tremendous influence.

One advisor, who was charged with leading a small, program-focused foundation in a big city, says, "I was essentially a grant—a gift given by my board to the community. My whole job was to be out in the community, creating partnerships that made the grantmaking more effective. They didn't want me in the office." Another, from a corporate foundation, comments, "The company basically saw the whole foundation function as a demonstration of its interest in the community. So, my work outside was about the image of the company… tangible evidence that company X cared." And a third, who is leading a new healthcare conversion foundation, adds, "I have to be out there, especially with public officials, because the identity and credibility of the foundation are being established right now."

To help examine Rick's particular situation, our advisors have to ask him some questions:

What are his current assignments and how did he collect them? The advisors expect that Rick's list of commitments "just grew." Some of them appear to be holdovers from his previous job with a national association. Some are probably things he said yes to because he was energetically recruited. He may have taken on others because they were important to board members. Some, like the soccer team, are personal. The advisors urge Rick to "add it up by the numbers"—the numbers of meetings, the time spent attending those meetings, the time spent preparing for those meetings and the days spent away from the office attending those meetings. The result may be surprising and sobering—even to Rick himself.

How does the time spent line up with current priorities? Guessing a bit about what's going on with Rick and at UVCF, the advisors suggest he think about "leading out" in relation to some broad foundation objectives, like building the identity of UVCF among new populations and new donors, contributing to his professional development, strengthening public understanding of philanthropy, building the foundation's endowment and strengthening relationships with potential new partners on both the city and state levels. Those categories will help him calibrate what he does—and also help the board see his outside work in context.

What's Rick's process for transferring the value from himself to others? Rick is learning information and skills that could help the foundation strengthen its programs internally. He's also getting exposure that could help UCVF reach out more effectively, and expand the board dialogue, too. But, say the advisors, it's quite likely that the knowledge gained stops with Rick. There need to be "transfer mechanisms." If Rick is talking to and working with "new kinds of folks" who aren't usually part of the UVCF loop, how is that knowledge reaching the program officers and the development staff? If his regional association of grantmakers and Leadership 2020 work are suggesting significant changes in the way external partners in the state view foundations, are those changes garnering time on the board's agenda? The advisors stress that this transfer must not be expected to occur by happenstance.

What are Rick's rules? If he doesn't already know it, Rick needs to realize that foundation CEOs look like great grabs—to be on boards, give speeches, lead commissions or convene meetings—if they give the slightest indication that they are approachable and interested. Rick needs to establish some rules for himself. One advisor notes that he chose "only those things that involved either leadership in the field of philanthropy or leadership to the city."

Another, who observed that she learned very quickly that her board members didn't want to see her on television for things that had to do with her life story and not the foundation's story, came up with a very simple rule: "On their time, about the foundation…on my time, about the things that make me who I am." Another good rule is that commitments to organizations with regular out of town meetings must be directly and clearly related to the top three things on UVCF's "learn-and-do-this-year" list.

Turning to Rick's second plea—help with handling the review—the advisors urge Rick to stay calm and avoid being defensive. He certainly shouldn't push back with "first you told me that…now you're telling me this." If possible, he should talk to the chair of the review committee and the board chair ahead of time to learn more about what is on board members' minds. Why and how has the equation changed during the past couple of years?

The advisors counsel Rick to listen intently. ("Too far from his board on this one. Why's he waited for his review?") He needs to ask for the board's advice overtly. What kind of affiliations do they think are most important for him? Do they value the time spent on philanthropy organizations and conferences? (On that score, one advisor recalls this blunt statement: "Look, I'll give you six appearances or speeches a year. And that's it!") What sort of tolerance do they have for things that are essentially "about Rick?" How do they tie the returns and potential returns from the Leadership 2020 and economic development work to UVCF's strategy and aspirations?

The advisors also caution him to remember that the review conversation is not all about the external. If a board member thinks he's not minding the store, he needs to ask which internal functions he or she thinks are not getting the necessary attention and what the resulting problems are.

Finally, the advisors strongly suggest that Rick use the review to launch a discussion to create a new plan for leading out with the board's help. The key aspects of Rick's new plan are: It's anchored in UVCF's mission, which is to serve the people and communities of the Upper Valley. There's broad comfort with the areas where he's going to spend the most time, and how those areas relate to the work of UCVF. A regular process will share Rick's knowledge with the staff members who need it. In every board meeting, Rick has time to bring the board up to date on key external activities and indicators. He and the chair agree to raise the issue of external involvements at least twice a year. And the measures for accomplishment are jointly developed by Rick and the board.

Good working comfort on the CEO's external role, say the advisors, relies on transparency and clarity of expectations. If Rick and his board can develop a comfortable way to continue exploring leading out, they will be able to resolve two mission-critical challenges every foundation faces: What connection do we want to have with our community, and how do we want to spend the precious resource of our leader's time?

Five key elements of Rick's new plan

Both Rick and his board may breathe easier about his "leading out" if they can see how his external activities are:

• Anchored in the mission of UVCF    
• Focused on a few top priorities for UVCF in the next two to three years    
• Connected to UVCF through defined processes for sharing Rick's knowledge and contacts with the foundation's staff and board    
• Measured in ways that Rick and the board understand and agree on    
• Fine-tuned through continuous conversation between the board chair and Rick.

Conceptualized by Council on Foundations Senior Vice President for Professional Development Joanne Scanlan and Management Consultant Marcia Sharp, On-Point is part of the Council's Senior Advisor Program, supported through funding by Council members. The program makes seasoned foundation leaders available as pro bono consultants to Council member foundations. Current advisors include Phillip Hallen, Reatha Clark King, Handy Lindsey, Skip Rhodes, Robin Tryloff, Cole Wilbur and Eugene Wilson. The On-Point series is written by Marcia Sharp.

To learn more about the program and see the online biographies of the advisors, visit the Council's website (www.cof.org/senioradvisors).

To explore having an advisor come to work with your foundation on executive transitions, CEO job development or to discuss other Council resources for executive hiring, contact Scanlan at scanj@cof.org or 202/467-0475.