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10 steps to success as a non-profit CEO

Atul Tandon, chief executive of the Tandon Institute, is spot-on in his assessment of the do's and don'ts of being a non-profit CEO. Enjoy!

By Atul Tandon

Congratulations! You’ve just been named CEO of a nonprofit organization.

Those years of toiling in the gritty neighborhoods of office cubicles — through interminable budget meetings, unending conference calls, and high-stakes strategy sessions — have paid off. You’ve arrived at the corner office. If you are lucky, you even have a private conference room and that greatest of office luxuries, a private bathroom.

You feel honored and maybe a bit humbled by the responsibility the nonprofit’s board has bestowed on you. After your colleagues finish toasting your success, but before you assume your new role, consider a few of the challenges you’re likely to face in the early days of navigating these new waters. Here are some lessons learned, drawn from my experience in various c-suites and from watching hundreds of CEOs of local nonprofits, from Adelaide to Zamboanga.

1. You’re a leader, not a manager.

It’s likely you were selected as CEO because you’ve demonstrated excellence in managing organizations, nonprofit or (maybe and) for-profit. Revenue skyrocketed when you were at the helm of fundraising. Costs plummeted when you served as chief financial officer. You recruited, hired, and retained brilliant people as the head of human resources. You did all the right things to get to where you are today.

Now forget all those things.

As the pioneering management consultant Peter Drucker once said, "Management is doing things right; leadership is doing the right things." CEOs are leaders who create a vision for an organization and then educate, enlighten, and inspire others to embrace that vision and make it their own in all they do. You are now a visionary.

2. Making demands is costly.

My career started in the early 1980s in India and my boss was a patriarch. Patriarchs gave orders and we humble servants followed directions. Today, thankfully, patriarchy is all but extinct. Your ability to build consensus, especially in the multi-stakeholder world in which you now live, is what will define your success.

Embrace the classical virtues used to lead and inspire people. The apostle Paul’s admonition is still relevant nearly 2,000 years later: "So, as those who have been chosen ... put on a heart of compassion, kindness, humility, gentleness, and patience."

Often, new CEOs face mandates from their boards to "shake things up," but making big changes, especially within your first 100 days, can be costly and erode trust you need to build.

Imagine you decide to summarily dismiss some or all the members of your senior team. Think through the unintended consequences of alienating other important leaders, as well as the confusion that will reign, the rumors that will run rampant, and the staff’s resentment you suddenly will be facing.

3. You’ll never know it all and please don’t try.

As CEO, you must spend your time in ways that enable you to see the big picture, the important issues your organization is facing. Getting bogged down in details not only wastes precious time, but it sends a message to those responsible for such details: I question your competence.

Do all you can to avoid the tyranny of the urgent. And please, don’t micromanage. You have staff to handle the details and those "urgent" issues. Devote your energy and passion to the cause your organization is advancing, be it eradicating poverty, serving the homeless, or abolishing nuclear weapons.

4. You’re being watched — always.

As the man or woman in the corner office, everything you do — from the way you dress to the type of car you drive to what you eat for lunch — speaks of who you are. Those around you, including your senior leaders, your line staff, and even external stakeholders, will take notice.

The effective CEO understands that actions speaker much louder than words. This tenet was essential to leadership long before YouTube, Twitter, and Facebook started to dominate our lives. As Mr. Drucker noted, "The most important thing in communication is to hear what isn’t being said."

5. You may think you’re in charge, but ...

Any CEO who believes he or she is "in charge" will soon learn that nothing could be further from the truth. Whether facing angry stakeholders or disappointed board members, every CEO has a multitude of bosses, some of whom may be demanding and unafraid to threaten a sooner-than-expected plan of succession.

As all of us in the nonprofit world recognize, a well-functioning and engaged board of directors is an integral element of any successful nonprofit organization. And, of course, the opposite is also true.

Sages and apostles admonish us to "speak the truth in love." This is wise counsel for effective communication between a CEO and his or her board in discussing relevant issues facing the organization. Discerning board members will offer you advice, not edicts or demands; encouragement, not unreasonable expectations. Board members who extend grace often gain in stature and influence as well as earn your trust and respect.

6. Pleasing donors is not your only priority.

CEOs who boast they have one and only one priority — their donors — likely will soon be departing, or imparting self-inflicted wounds on their organization. You have multiple stakeholders with conflicting priorities and you are always in a balancing act.

Your organization must deliver real impact. Are you meeting the ends of "public good" (i.e. achieving your mission)? Do you have a sustainable and scalable resource engine? Are your volunteers excited and engaged? Do those volunteers know what to do? Is your staff motivated? Do you have the right people on the proverbial "bus"? Is your operational model sound?

You need to work hard to simplify these complexities, or they will consume you. You will be well-served to remind yourself often of Occam’s razor. The medieval English theologian and philosopher William of Ockham devised a simple yet profound problem-solving principle: choose the strategy with the fewest assumptions.

We live in a world more complicated than anyone could have predicted even 10 years ago. Great organizations are those that understand their times and their mission, develop straightforward solutions to the issues they seek to address, and execute them flawlessly and relentlessly. Consider Charity: Water and World Vision.

7. Donors are essential.

Of course they are. But those CEOs who look at donors as ATMs fail to understand one of their most profound obligations: transforming those donors into advocates through education and personal enlightenment. In jobs I held at World Vision United States and United Way Worldwide, I’ve witnessed firsthand such inspiration and passion in donors who see an organization’s programs at work. They return home more engaged and inspired, and in many cases become powerful advocates for the organizational cause.

8. Say "thank you" often.

Those two words go a long way, in the short run and in the long run. One of your biggest challenges as CEO will be to ensure that your organization recruits employees with outstanding skills as well as a commitment to excellence and teamwork. I know a lot of individuals with the former, but not all of them possess the latter. By acknowledging work well-performed, you are sending an important message that compensation and perks cannot buy, fostering self-esteem, confidence, and motivation.

I’ve known CEOs who fail to do this, and I can assure you that turnover rates in their organizations keep their recruiters way too busy.

9. Your budget is not a blank check.

Even though I moved from the world’s largest banking firm to one of the largest nonprofits, I had a steep learning curve. First-class seats on flights? No way. Five-star hotels? Things of the past!

You are not Croesus, the ancient ruler known for his wealth and who is credited with introducing gold and silver coins in Lydia, his kingdom that encompassed parts of what is now Turkey. I can assure you that budgets at your organization will be tight; your ability to spend money, especially on fostering innovation, will be limited, if not nonexistent. Looking for a return on investment of 10 to 1 on your fundraising? Look again. You’ll be nicknamed "Midas" if you get 5 to 1.

Get used to it. Pick your budget battles wisely, spend sparingly, and always strive to expand your resource engine, not diminish it.

10. You do not walk on water.

Give yourself, and other around you, grace. You will make mistakes. Those who admit their mistakes and learn from them grow professionally and gain respect. Trust me. I’ve made many mistakes since I worked for that first Indian patriarch. And I have sought to learn for each one.

Atul Tandon is chief executive of the Tandon Institute, which works with nonprofits to accelerate their impact, revenue, and performance. He has served in leadership roles at Citibank, World Vision, and United Way Worldwide.

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