Bert Armstrong, Principal 919.390.1925 ArmstrongMcGuire

1. Challenge and Compromise Navigating the roles of Executives and Boards in Decision Making Bert Armstrong, Principal 919.390.1925 www.ArmstrongMcGuire.com

2. October 5, 2017

3. www.ArmstrongMcGuire.com/habitat

4. About Armstrong McGuire • Founded 2003 • Clients across North Carolina • Fledgling start ups to major statewide and national organizations • Habitat affiliates in Raleigh, Durham, Chatham, Greensboro, Winston-Salem • Millions of dollars raised through annual, capital and endowment campaigns • Executive and professional leaders recruited on behalf of our clients • Strategic, succession, resource development, and board development plans developed and implemented with our support • Core Values: • Integrity. • Experience. • Relationships. • Results.

5. 1 3 2 90 minutes (OR LESS) focused on… • Challenges facing the Executive Director and Board • Guides to Managing the Joint Responsibilities • Social Contract – the Evaluation Process for Setting Expectations of each other

6. Keys to the Game • Dialogue makes for a better 90 minutes • Learn from each other • Appreciate the different lens each affiliate comes from

7. Getting Started ?’s What is the tenure of your current chief executive? Board members? If you could choose an ideal descriptor for what your Habitat Board should be, what would it be and why?

8. Challenges 1

9. Executive’s Challenges • Understanding organization / acquiring knowledge—quickly • Establishing solid working relationships • Setting good priorities • Meeting pent-up demand for change and decisions • Managing expectations • Building a coalition for change • Dealing with organizational and personal transitions • Maintaining personal equilibrium and well-being

10. Board's challenges • Shifting gears after a search or major planning process. Finding energy to: • Address the important relationship-building work • Launch and support new initiatives or a new executive • Adjusting to executive’s leadership style • Attending to the trust-building phase • Avoiding polarities of micromanagement and excessive confidence • Avoiding “savior thinking” in their view of chief executive’s role • Ensuring that legacy issues and “thinking ruts” don’t derail the work

11. Waves of Change Reshaping Immersion Consolidation Entry Changes – Number / Intensity Refinement 36 18 24 30 6 12 0 Months Source: Gabarro, J. “When a New Manager Takes Charge.”

12. Be Patient FULL ENGAGEMENT TYPICALLY TAKES ONE COMPLETE BUDGET PREPARATION & MANAGEMENT CYCLE AFTER A NEW PLAN IS DEVELOPED OR A NEW LEADER COMES ON BOARD

13. Joint Responsibilities (Governance, Board Development, Leadership Effectiveness) 2 • Do you already have agreements regarding shared expectations and responsibilities between staff and Board? • Start by reviewing your by-laws • Is the chief executive evaluated annually? • Is the board evaluated annually?

14. Building the RIGHT Board for the time • Who is on the board and why (board profile)? • How are board members recruited? • What does each member bring to the table? • What are board meetings like? • Well attended? Interesting? Productive? • Who leads the meeting? Who talks more: board or staff? • Strategic goals front and center or do your focus on operations? • Effective, clear picture of budget and operating plans? • Active standing or ad hoc board committees? • Are assignments made? Followed up on?

15. Building the Culture? “That complex whole which includes knowledge, belief, art, morals, law, custom and any other capabilities and habits acquired by men and women as a member of society.“ --E.B. Tylor, Anthropologist

16. 10 basics to a healthyorganizational culture • A clearly defined and relevant mission • A compelling vision for the future • A clear strategic path for achieving your vision • Leaders who seek opportunities to lead and inspire others • A well-qualified team with a collective “we can/must/will do this” attitude

17. 10 basics to a healthyorganizational culture • Program credibility, good management and stewardship of resources, and demonstrable results • A commitment to, and investment in, marketing of the organization • Adequate capacity (i.e. technology, personnel, and infrastructure) to get the job done • Board members and staff leadership prepared to govern, lead, give, and champion the cause – TOGETHER! • 100% participation by board members in every campaign.

18. PLANNING THE FUTURE (Mission/Vision/Strategic Plan) Questions every board member should be asking: • Do you share a common understanding of the mission and does it capture the scope of your work? • Do you take time as a board to set, review, and refine your vision? • Does your service to Habitat reflect its core values? • Do you have a strategic plan? Who was involved in creating it? Is it up to date? Followed?

19. A shared Mission, Vision, and Core Values Mission: Seeking to put God's love into action, Habitat for Humanity brings people together to build homes, communities, and hope. Vision: A world where everyone has a decent place to live.

20. FUNDING THE FUTURE (Awareness, Community Engagement, Resource Development) • Are you an ambassador for Habitat? Can you tell the story? • Are you a regular, significant donor to Habitat? • Can you describe to others how more resources make a difference for those we serve? • Are you asking and/or thanking your donors for their investments?

21. Donors are saying… • “I want to make a difference with my money.” • “I want to help change the world, or my corner of it.” • “I want my community to be a place where every child has a safe place to live and grow up.” • “I love what Habitat stands for but I’m not sure how I can help them do more.” • “I want safer neighborhoods.” • “I’m not sure who is on their board.” • “I wish I better understood how money is being spent there.”

22. Staff and board saying… • “I hate asking for money.” • “I’m embarrassed to ask my friends for money.” • “Fundraising feels like begging to me.” • “Our biggest gifts come from grants. We don’t need to raise money from the community.” • “Fundraising is the development director’s job, not mine.” • “I’d love to join your board. And I’ll do anything but ask for money.” • “I have other giving priorities.” (new board chair of a respected nonprofit)

23. Do we have a problem? • Practical result: We leave money on the table. • Where fundraising is seen as distasteful or simply as a means to an end, organizations struggle. • When leaders avoid meaningful and necessary engagement with donors, missions and donor investment opportunities go unfulfilled. Everyone looses – including those you serve.

24. Make philanthropy’s role in promoting your mission and values clear • Leaders in today’s nonprofits MUST embrace some role(s) in fundraising • Fundraising leadership starts at the top! • For where your treasure is, there will your heart be also. (Matthew 6:1) • Boards and chief executives can’t leave it to their development officers alone to champion fundraising. • It’s up to you to set the bar high or low.

25. Five “I’s” of Great Fundraising Programs • Who are Habitat’s donors? What are you doing to move them towards a gift? Towards a bigger gift? • Identify. • Investigate. • Inform. • Involve. • Invite. • Steward.

26. Lead from the top! Absolutely no substitute for the E.D. and board being zealous in how they speak about philanthropy and the example they set in giving, showing appreciation, and engaging with donors. Make it clear to everyone that donors are valued participants in achieving your mission. There are many ways for staff and board, to participate using the 5 I’s. What are some things you can do?

27. 3 The Social Contract You are in this together!

28. Social Contract - Assumptions • Organizations exist in a sea of relationships/agreements that frame its transactions • The board/executive director relationship is one of the most (if not the most) crucial • Two factors are at work in all relationships: • Expectations and • Perceptions of performance • Aligning expectations is as critical as good performance

29. Board/Executive Social Contract • Agreement-building process for clarity about: • Goals & priorities • Roles, responsibilities & expectations • Managing overlap between executive & governance roles (sources of tension) • How & when performance is monitored • It’s an ongoing process • This relationship is the key in shaping today’s actions and the future of the organization

30. Covenant Discussion • What are the leadership roles/responsibilities in the pursuit of priorities over the next 12 – 18 months – both the board and the ED? • At what point do these roles/responsibilities overlap? • How do we manage that? • What does the board need/expect from their new ED in order for the board to effectively govern? • To do his or her job effectively, what does the new ED need/expect from the board?

31. What’s left? • What other expectations of each other do we need to clarify, or perceptions about each other or our organization to we need to address to keep them from tripping us up? • Values, sacred cows, rumors/third person scuttlebutt, etc. • What principles/standards are required for dealing with conflict / disagreements in order to ensure highly effective operations in your organization? • Are we willing to pursue them? • What’s needed to do that? • What are the things that we haven’t said that are likely to sandbag your leadership relationship?

32. Bert Armstrong, Principal 919-390-1925 www.ArmstrongMcGuire.com