Organizational lifecycles analysis provides an effective diagnostic tool for examining how an organization has evolved as well as what opportunities and challenges lie ahead. Understanding what has been and what is to come is the foundation for predicting, analyzing and addressing effective organizational development. This lifecycle knowledge is especially effective when used in conjunction with a strategic framework that articulates the three or four goals an organization must achieve over the next three to five years.
Considerations when hiring
Whether hiring a new CEO or filling other senior leadership positions, the odds of making the correct hire are dramatically increased by applying lifecycle analysis while developing key performance indicators. The success of the hiring process is dependent on understanding the outcomes the individual is expected to accomplish and the range of experience, skill sets and attributes required to achieve these results. Often there is a bias toward identifying and hiring the skills required to successfully produce the position outcomes. However, it is the personal attributes that determine how effectively an individual works within the organization’s culture. Individuals with outstanding skill sets are often hired and then are unable to perform because they lack the characteristics to function effectively within the organization’s established culture. The current and anticipated next stage of the nonprofit’s lifecycle shapes culture and therefore must be fully analyzed to define the most important characteristics for a new leader.
Resources on lifecycles
Many resources are available to provide help in discerning the current and ideal future state of your organization. Susan Kenny Stevens’ book Nonprofit Lifecycles: Stage-Based Wisdom for Nonprofit Capacity is a frequently mentioned resource for the nonprofit sector. Nonprofit board members may be more familiar with Ichak Adizes’ groundbreaking work on corporate lifecycles from the 1980s. His book, Corporate Lifecycles: How and Why Corporations Grow and Die and What to Do About It, provides comprehensive insights into the unique facets of each stage of the lifecycle and also delineates how culture changes as organizations develop from an idea to a start-up to growth and maturity.
Below are examples of how three different stages in the lifecycle might be applied to assessments of organizational leadership:
Idea, Start-Up, Infant or Young Organizations
Nonprofit organizations are created because of new or innovative programing or content delivery ideas. Culturally, these organizations are characterized by high energy with the staff and board playing many different roles in fluid and often unpredictable ways. The leader is often the founder and is a charismatic cheerleader for the organization’s mission. This is the most fragile stage in an organization’s lifecycle, and there are libraries filled with books on the challenges of founder’s syndrome and how perilous leadership transitions are at this stage of the nonprofit’s life.
The driving question is, should this organization continue to exist? Has it been proven that the programs or services render the anticipated impact and that the market demand will sustain this organization long-term? If the answer is yes, then what steps must be taken to transfer ownership of the organization’s strategic direction and operations from the founder (or perhaps the founding board) to the board and staff and who can take this organization to the next stage of its development? The tendency is to hire another charismatic cheerleader with deep programming knowledge and experience. What the organization needs is a leader who will create the systems necessary to foster replicable results year after year. This individual will understand and has experience in balancing a range of organizational development needs, rather than focusing exclusively on program development and delivery. This is also the stage when the fundraising program must diversify beyond start-up capital and sweat equity to a sustainable fundraising model. The leader selected must have the attributes required to respect the start-up culture while guiding the evolution of that culture toward a sustainable future.
Adolescent or Growth Organizations
If an organization successfully navigates the start-up stage, it will begin experiencing the opportunities and challenges of what is commonly called the growth stage. This phase is characterized by the board and staff always feeling stretched, like there is never enough. Program opportunities exceed delivery capacity. Potential new partners, collaborators and funders clamor for new services or ask for the organization to embark on new programs to serve new audiences. To navigate this stage, the board and staff must recognize the linkage between quality programming and organizational excellence and must also have clarity regarding mission, or what results does this organization seek to achieve. This is the phase when the board must sometimes say “no” to good ideas. During this phase the board and staff members may exit because “we aren’t having as much fun as we used to” or “there are too many rules.” The goal of this phase is not to become a stifling bureaucracy, but rather to align resources (human and capital) in ways that will be most effective in accelerating progress on the mission. The temptation is to hire leaders who will “bring back the fun.” This often translates into seeking an entrepreneur who is interested in fostering new program or service development and is not a systemic thinker. Those characteristics may cause an organization to return to the start-up phase or fail to negotiate the organizational development necessary to become a sustainable growth or prime organization. The ideal leader for this phase brings consistency and discipline to the organization without driving it into a risk-averse culture. This leader understands how to deliver the promised results and exceed the expectations of funders and stakeholders.
Ageing, Dying and Turnaround Organizations
At this stage, an organization has lost its connection to the external environment. Decisions are made by the board and staff in support of internal drivers or agendas, rather than responding to the changing external landscape and serving their clients, as delineated in the mission. At this stage there is either a decision for renewal and reinvention or an acceptance by the board and staff to cease operations.
Obviously, the leader who would be selected to close a nonprofit and liquidate assets in a manner that is respectful to its legacy is different than the profile for an individual who will reinvent a nonprofit organization. Reinvention may require significant changes in the board and staff composition and the transformation of the organization’s culture. Moving the organization from internal preoccupation to external relevancy requires an experienced leader who understands the key values that must be instilled to drive transformational cultural change. The experience and capacity for engaging disenfranchised funders and stakeholders may be paramount to success of this reinvention phase.
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