Nonprofit organizations are tax-exempt under Internal Revenue Code because they provide “public benefit”. Nonprofits serve communities and individuals in distress, serve industry trade organizations, supply growth and learning opportunities for industry and business membership associations, and serve many other public interests. There are over 600 subgroup classifications of nonprofits.
While there are obvious advantages to a nonprofit, an elusive weakness can wipe out any financial gain of nonprofit status. The weakness is self-deception in leadership. If not addressed, this organizational ‘self-deception tax’ wipes out gains from exempt status and can ultimately lead to the demise of the organization.
As a trainer and speaker, I’ve presented hundreds of programs to membership nonprofits over the years. As a consultant, I’ve worked with many others including community and individual support groups. Much of my focus during the past two decades has been organizational and business development (OD) for nonprofits (as well as for-profit organizations). In short, I’m in the knowledge and skill transfer business – and have been since 1980. My work with nonprofits gives me a front row seat to the detrimental and ‘taxing’ OD cycle to which nonprofits are susceptible.
In OD, the purpose of knowledge and skill transfer is cultural change. It is a pleasure and honor to work with nonprofits to assist them in accomplishing their mission, and it is painful to see good organizations struggle when solutions are readily available.
The digital age, specifically Google, applies tremendous pressure on organizations. Historically strong nonprofit organizations now experience declining support, revenue, and membership. As a result, OD work is thriving as these organizations work to rebuild support, sponsorship, revenues, and membership. In some cases, nonprofits completely redesign ‘how’ they do business. Leadership at Goodwill masterfully implemented positive change.
Despite these challenges, the strong attraction of tax benefits contributes to an increasing number of nonprofits growing. There are currently over 1.5 million nonprofits adding nearly a trillion dollars to the US economy.
These organizations need leaders to assist change and innovation.
Self-deception is a natural part of the human condition. In small doses, it provides positive results. Unchecked self-deception creates problems for individuals and organizations: Self-deception kills change and innovation.
And while kill is a severe word, it is use intentionally because changing organizational culture is emotionally ‘violent’: Extreme behaviors are often observed, and character assassination attempts have serious and sometimes life changing consequences. Organizational change is not for the faint of heart.
The major consequence of leaders stuck in self-deception is groupthink – a shared condition of self-deception. Groupthink is defined as the practice of thinking or making decisions as a group in ways which discourage creativity and individual responsibility: the focus is group harmony and conformity. This psychological phenomenon generates irrational and dysfunctional decision-making outcomes which become part of the organizational culture.
Organizational culture is formed by the underlying beliefs, assumptions, values and ways of interacting in the unique social and psychological environment of an organization. In short, ‘HOW’ the organization functions.
Culture affects everyone in contact with the organization. Cultures are contagious: laughter can be contagious and so can a virus. Cultures which serve employees well are healthy organizations. These cultures thrive with innovation. Cultures which create stress and pain for employees are unhealthy.
Individuals in unhealthy organizations employ protective measures for survival. This feeds the self-deception cycle which becomes a cesspool breeding further self-deception in leaders.
Organizational cultures are powerful and resistant to change. Good people who become involved with unhealthy cultures can become quickly infected with self-deception.
The Self-Deception Cycle:
And the cycle continues until individuals take a stand against self-deception and change the culture -though it is amazing how long unhealthy organizations survive. In the for-profit world, Sears Corporation is a recent example of an unhealthy organization dying over decades.
Why are nonprofits susceptible to this devastating cycle?
1) They lack the constant watchful eye of investors insisting on returns
2) Board are often built with ‘friends’ or popular individuals within the industry and community
3) Board members often lack the necessary business acumen to challenge bad plans, actions, and decisions.
Without checks and balances, self-deception engrains deeply into the culture. This is exacerbated by the power politics created by board members from within the community. As a result, unhealthy cultures survive and contribute to long stretches of ineffective leadership.
The good news: There are solutions!
To fully appreciate and understand the solutions, it is prudent to understand the complex role self-deception, groupthink, and culture play in the demise of organizations.
The Role of Self-Deception
Self-deception is one form of deceit.
Deceit (lying) is hardwired into human brains. Scientists who study animal behavior (Ethologists) have mountains of research connecting human behaviors to the instinctual patterns evolved from lower species.
In the animal kingdom – insects, birds, reptiles, marine life, and mammals – use both passive deceit and behavioral deceit. An example of passive deceit is coloring: The Viceroy Butterfly (not so toxic) mimics the color pattern of the Monarch Butterfly (more toxic) to avoid predators. An example of behavioral deceit is a submissive chimpanzee ignoring threats from a dominant chimpanzee to save ‘face’. Both passive and behavioral deceit are seen frequently in the wild and in captivity. As Dr. Lloyd Morgan states, “where there are eggs to be fertilized and nurtured, deception is sure to make an appearance.”
Humans have taken deceit to a new level. Verbal examples include praising people you greatly dislike (benign); telling tall tales to impress others (compensatory); telling partial truths by taking exchanges out of context (implied); misrepresenting facts to deceive for personal gain (malicious); and exaggerating emotions or events to attract attention (hysterical).
Deceit can also be non-verbal. Four strategies in nonverbal deception are 1) minimization by dampening external expressions, 2) exaggeration to influence others, 3) neutralization with a ‘poker face’, and 4) substitution by showing a false and often opposite expression.
We learn to deceive early in life and are encouraged through media, reality TV, and advertising: consider the accepted role of cosmetics, wardrobe design, and plastic surgery.
The benefits to deceit are obvious: avoiding punishment, increasing power, increasing position, increasing resources, protecting others, and protecting personal egos.
Protecting personal egos is self-deception.
Dr. Anthony Greenwald (1980), a psychologist at the University of Washington, suggests individuals have a cognitive bias of egocentricity: People tend to see themselves responsible for desired outcomes while not being responsible for undesired outcomes.
Self-deception improves our ability to handle stress, anxiety, avoid depression, and contribute to our confidence and determination. Self-management through self-deception is critical to survival and success. As we all know, it takes a good amount of self-deception to get through many days at work.
Self-deception allows us to function in times of stress. Self-deception is an unconscious act. Which is why, people living in self-deception can’t see it themselves.
Samuel Clemons, name deceitfully changed with the best intentions to Mark Twain, sums it up nicely,
“None of us could live with a habitual truth teller; but, thank goodness, none of us has to.”
Like many aspects of life, self-deception serves a good purpose until it gets out of hand. The real problem is the level of self-deception and its effect on the culture of the organization.
In the world of psychology, there are generally four category levels of self-deception:
- Level 1: Narcissistic which includes delusional projection, denial, and distortion
- Level 2: Immature which includes acting out, hypochondriasis, passive-aggressive behavior, projection, and schizoid fantasy
- Level 3: Neurotic which includes displacement, dissociation, intellectualization, isolation, rationalization, reaction formation, and repression
- Level 4: Mature which includes altruism, anticipation, humor, sublimation, and suppression
Self-deception in Level 4 might include laughing at a mistake to hide embarrassment. Individuals experiencing frightening or dangerous events might engage elements in all levels.
The unconscious nature of self-deception blinds us to small deceptions and to severe consequences. Leaders with good intentions unfortunately harm those around them and the organizations; They often leave a wake of destruction in long-standing relationships.
Add in the addictive nature of people, and it’s easy to see how self-deception becomes serious problem for individuals. Combine individual vulnerability to self-deception with the powerful force of organizational culture, and it is not surprising to discover healthy mature adults operating with Level 4 behaviors.
Leaders make countless difficult decisions each day having a wide impact on individuals and the organization. Remaining self-reflective and maintaining awareness to negative consequences is difficult and exhausting work.
In a rapidly changing world, decisions often yield unintended results. It is difficult for many leaders to accept responsibility for bad decisions. Admitting a lack of experience and skills creates enormous levels of anxiety. It’s easier to self-deceive than accept responsibility for limitations and face scrutiny.
It’s the hardwiring of the brain that takes us down the wrong path. We have a driven need to feel safe, and self-deception guarantees the ‘perception’ of safety – which serves the hardwiring of the brain. Remember, these choices happen in the subconscious.
In my work, I’ve rarely met a leader wishing harm to others or the organizations for which they work. The majority spent countless hours striving for their organizations to succeed. They often sacrificed time with their family and loved ones to support their people and the organizations. Their intentions were noble and sincere. They were doing the best job they could with the skills and resources at their disposal.
Unfortunately, in an environment which feels unsafe, self-deception thrives. Common behaviors demonstrated by self-deceptive individuals include:
- Dismissing council
- Decision-making without research
- Decision-making in silos
- Jumping to conclusions
- Ignoring complaints of employees, suppliers, stakeholders, and board members
- Ignoring departures of talented individuals from the organization
- Ignoring advice from within the organization and from hired experts
- Attacking and removing challengers
- Ignoring ‘proofs’ of their lack of skills
A board member of a nonprofit association – long plagued with an unhealthy culture of self-deception – was assigned the task to search for a new CEO for one of its wholly owned for-profits. The search was conducted without much communication to the membership of the organization. Though several worthy candidates were identified, the board member recommended himself as the best candidate despite having multiple past business failures. The chairman of the board, good friends with this individual, vocally supported his acceptance as the CEO. With the endorsement of the chairman, the board accepted the recommendation.
Within 5 years, this individual drove away the best and brightest of the organization and his decisions put the organization in financial jeopardy with the help of an incompetent CFO – one of the first hires of the CEO. The CFO was also operating with a hefty amount of self-deception – like attracts like.
Leaders establish the standard for ‘HOW’ individuals should act. If the example a leader sets is one of self-deception, then self-deception becomes the organizational norm.
This leads directly to the condition of groupthink.
The Role of Groupthink
The major consequence in organizations from leadership stuck in self-deception is groupthink – a shared condition of self-deception.
When groupthink overtakes an organization, healthy conflict becomes the enemy of leadership. Without healthy conflict, the process of decision-making becomes dysfunctional. Not only do individuals avoid responsibilities to the organization in order to maintain harmony and conformity, decisions are justified and promoted even in the face of dismal failure.
Innovation is discouraged in these organization, and the champions of new ideas become targets for removal. Those who wish to stay, learn quickly to remain silent which fuels further stagnation.
For those who won’t be silenced, the tool often used to remove these ‘troublemakers’ is character assassination. These assassinations are carried out openly and with the silence or support of those avoiding the same fate themselves. To outsiders viewing the charade, it is difficult to comprehend otherwise intelligent and insightful people making destructive decisions.
The consequences of groupthink for an organization are severe:
- Unquestioned belief in the group’s inherent morality
- Unquestioned belief in the business skills of individuals of the group
- Collective efforts to rationalize decisions
- Dismissal of individuals and recommended changes
- Dissenters viewed as enemies to be removed
- Individual self-censorship for personal survival
- Direct and intense pressure against anyone expressing opposing arguments
- Fortified roadblocks to information sharing
- Early declaration of leaderships preference for the ‘right’ decision
- The illusion of invulnerability for individuals and the organization
- Failures attributed to influences outside control of the group
In today’s world, where healthy leadership strives for innovation, transparency, and inclusion, organizations entrenched in groupthink have little chance of succeeding.
The following case story exemplifies the consequences of groupthink:
The interim CEO lead the motion discussion before the board: a motion to file censure charges against the previous CEO. During the discussion, the interim CEO stated law enforcement was involved in the issue.
This raised a red flag for one board member, who pressed with questions regarding law enforcement’s involvement. A few questions and answers revealed law enforcement had no interest in the case at any level. The questioning board member was visibly chastised with non-verbal communications from the other board members.
Not surprisingly, the board voted 100% in favor of censure and subsequently offered the interim CEO a fulltime position and a healthy raise.
Organizational culture is formed by the underlying beliefs, assumptions, values and ways of interacting that contribute to the unique social and psychological environment of an organization.
When the underlying beliefs, assumptions, and values support self-deception of leadership, it leads to groupthink. Groupthink becomes intrenched in the culture of the organization with every decision made and every day that goes by.
The Role of Culture
Organizational culture affects everyone connected with the organization.
Organizations function through an endless series of decisions. These decisions are based on the beliefs, assumptions, and values established in the organization. Most of these decisions occur without conscious thought by those making them: It’s just the way we do things here.
While it is damaging when self-deception affects an individual, problems compound when self-deception affects a group of individuals. The ‘taxes’ to organizations become catastrophic for an organization steeped in self-deception.
Healthy conflict is critical to good decisions in a complex world.
Without healthy conflict, decisions go unquestioned, and those responsible for decisions blame others and outside influences for the failures. Leaders engaged in self-deception in an unhealthy culture respond with defensiveness and combativeness. Territorial games thrive and threats to their self-deception are eliminated by any means possible. While reasons for removal are sometimes fabricated, many times accusations are formed by taking events out of context.
All the slogans in the world cannot change an organization with leadership defining suggestions as personal attacks questioning their ability.
Culture trumps everything regarding the success or failure of an organization. Changing culture requires dedicated commitment from leadership. Michael Hammer and James Chompy’s published the results of their OD research in 1993: Organizational change initiatives fail 70% of the time! And continuing research shows this 70% failure rate is still the norm.
The 70% failure rate is a direct result of leadership self-deception.
Leaders create and maintain self-deceptive mindsets, groupthink swells, and an unhealthy culture is built to support the self-deception of leadership. The cycle takes on a life of its own, and individuals striving for change are neutralized or removed from the organization.
Instead of rallying around change, self-preservation creates silence, followed by justification for their silence or the condemnation of individuals threatening change. The group instead focuses on achieving harmony and cohesion regarding their decisions and ignores negative results of their decisions. As results decay further, they shift blame to outspoken individuals or other scapegoats.
If by chance a self-aware individual is placed within the organization, unless they are emotionally courageous and able to marshal the resources to combat the culture, they are likely soon to fall prey to the culture or depart.
The consequences of an unhealthy culture include:
- Thwarted Initiatives
- Resistance to new leadership
- Leadership turnover
- Wasted resources
- Outdated procedures
- Failure to implement strategic plans
Focus on irrelevant issues
- Outside threats ignored
- Employees ignored
- Cannibalization of assets
- High volumes of HR issues and lawsuits
- Declining market share
- Decreases in support, revenue, funds, members, and supporters
- Inability to analyze and change procedures and systems
- Failure to communicate with stakeholders
- Unresolved conflicts and territorial games
- Avoidance of healthy conflict and dialogue
- Overconfidence in skills and abilities by senior executives
The nonprofit’s growth in fundraising and sponsorship had stalled. At the recommendation of the board, the CEO brought in multiple trainers and consultants to improve their fundraising efforts. Many of the projects required several years to fully implement. The investment in the project was well into the hundreds of thousands of dollars.
The fundraising team was led by Brad – promoted to the position because he had been the number one fundraiser for years. In his position, responsibilities included supporting the team of fundraisers as well as his own fundraising efforts.
Within six months, several individuals on the team scored big wins in fundraising and sponsorship. Brad began to feel uncomfortable in meetings where he was no longer in the spotlight. Within three months, the CEO canceled the project because rumors began circulating that Brad considered jumping to another organization.
Three years later, the organization experienced its lowest fundraising and sponsorship level in the last 10 years. Brad was terminated. The CEO incorporated Brad’s role into her role. One board member contacted the trainers and consultants contracted and suggested they approach the CEO again to see if the projects could be resurrected.
The CEO received the calls, clearly related the events involving Brad to them while still deciding their services were not necessary. A few board meetings later, the board member who had reached out was voted off the board.
While the organization continues to operate, fundraising and sponsorship efforts continue to fall short.
All the consequences of groupthink are part of organizational self-deception. Self-deception at the organizational level takes far more effort to eradicate than within small groups or individuals.
The good news: There is hope.
Organizations have successfully changed. Groupthink has been replaced with healthy dialogue and conflict. Individuals have successfully faced their self-deception and altered the course of their lives, the lives of those they are in contact with, and their organizations.
While solutions are listed in the next section, it is important to acknowledge change is a process which takes continued effort and dedication. Change does not come easy or quick. Many simple and fast solutions are frequently attempted and without exception, they fail. Change is a complex process requiring the courage of conviction and dedication to details.
The Solution for Leadership
The ultimate solution is awareness of self-deception within individuals, groups, and organizations.
Once self-deception is identified and accepted, awareness opens the possibility of different and better choices.
To become aware, an individual must have the courage and desire to ‘look in the mirror’ and become self-reflective. One of the best actions is to stop resisting other people. Reflective listening to others opens the mind to new perspectives. The view from the balcony is much different than the cheap seats. It’s much easier to see through the illusion of self-deception and its consequences.
If they can actively listen and reflect, great changes are possible in their life, the lives of others, and the organization. When resistance stops, the self-deception cycle can be eliminated, and this fuels further self-awareness.
Self-awareness is like a vaccine against the virus of self-deception. Once inoculated, self-awareness spreads among individuals, groups, and finally the organizational culture has a chance to heal.
Self-awareness begins and ends with leadership. It is possible for a single self-aware leader to transform an organization. In the for-profit world, Richard Anderson accomplished this for Delta Airlines as CEO from 2007-2016.
While it is common to have a CEO lead a successful organizational change program, with the right resources and some luck, cultures can be changed from almost any level within the organization.
Change only succeeds with continued support and resources.
The first critical step to success is creation of a safe environment. Humans are hardwired to seek safety. Without a safe environment, failure is guaranteed because the need for safety drives decisions within an organization. Without a safe environment, self-deception takes over again.
A safe environment serves the purpose of maintaining and nurturing awareness in as many people within the organization as possible. In a safe environment encouragement of awareness of self and others, discussion, dialogue, and healthy conflict is supported.
OD change is about creating safe environments and nurturing awareness in individuals, groups, and organizations. OD initiatives succeed when a safe environment can be maintained for those on the road to self-awareness.
Awareness can be achieved and enhanced with increased knowledge. Skill development through coaching, mentoring, and training are effect tools. Critical subjects include:
- Emotional Intelligence
- Healthy conflict and conflict resolution
- Verbal and written communication skills
- Influence and persuasive
- Finance and financial analytical skills
- Strategic planning
Knowledge in these subjects provides security and mastery provides the ability to protect others.
If resources are available, learning opportunities benefit leadership and staff alike. While individuals don’t need to be experts in these skills to start down the road to change, it is important to build a team with these skills.
Emotional Intelligence (EI) is all about awareness: self-awareness, awareness of others, and awareness of culture.
Wise council cannot be over emphasized in achieving and supporting awareness and safe environments.
The following case story exemplifies transformation to self-awareness in a leader:
Heading of one of the largest state divisions of the nonprofit organization, David had accomplished much during his career. Unfortunately, the entire organization was losing market share and membership. As part of a major OD initiative, David jumped in with enthusiasm, partly because he loved the mission of the organization, though mostly because of his respect for the individual who orchestrated getting the project approved.
Opening his division to the consultants on the project, it was soon observed that he depicted the culture of the entire organization – good and bad. The organization had a culture of ‘running down’ individual’s whose actions were unsuccessful. This had been part of the culture for over a century.
After one such incident, the consultant, who’d created a safe environment for healthy conflict with David, created awareness through questions asked of David, the impact of the exchange on the employee. David didn’t say much at the time.
The next day, David produced a list he’d made of similar incidents he’d been part of in the past – even going back as far as ‘how’ he’d been ‘run down’ in his early career. He was truly embarrassed he had been unaware of the problem.
From that day on, David worked hard to develop new communication habits. While he sometimes started in on an employee, he almost immediately able to halt the behavior and restate his concerns in a manner conducive to stronger relationships.
An organization changes as safe environments are expanded. As self-awareness grows within the organization, it becomes easier to create safe environments and the social force persuades holdouts to climb aboard the awareness train. This can be done internally if there are enough self-aware individuals. If not, outside consultants and coaches can be utilized.
The focus remains on ‘how’ things are done versus ‘what’ is done. The ‘how’ promotes safe the safe environment and the value of self-awareness.
As self-awareness increases in individuals, the next step is addressing groupthink.
The Solution to Groupthink
A ‘love’ for the organization does not provide leadership enough skills for success. Guiding nonprofits to success requires extensive business knowledge and communication skills for staff, leadership, and board members.
Combine self-deception and a lack of business skills in leadership and you tee up a perfect storm for Groupthink – the shared condition of self-deception.
Individuals within the organization are given every opportunity to become self-aware. If repeated efforts fail, replacement may become necessary. Individuals who consciously and actively choose to destroy change efforts, bring risk to environment. The greatest risk is high ranking individuals within the organization. They have means and self-deception interests to protect. They are also the most difficult to remove.
Change must be monitored carefully even if executives embrace change. Continued confirmation of a healthy safe environment through discussion and survey is key to ongoing improvement. The safe environment needs to thrive.
Make no mistake, this is not an easy or quick process. Completion takes years, though breakthroughs can happen almost immediately and all along the journey. Some organization can only withstand small amounts of change – surprisingly small change.
If safe environments are kept in tack and measurable targets guide actions, then positive change will continue unless self-deceived leaders intervene.
Remaining self-reflective and aware is difficult work. Leaders continually make difficult decisions. Combined with a lack of skills and the responsibility for the consequences of bad decisions, it’s understandable to engage in self-deception and encourage others to join you in self-deception. Without a safe environment, group think becomes the enemy of change and the organization.
I’ve learned a dedicated group can be accomplish dramatic change no matter the pace of the change. It’s great to see the creation of an improved experience for employees and mission delivery.
Tracking, through internal or external analysis, results is important for success. Not all projects will succeed, and failed projects will test the dedication of the organization to change. The groups analyzing or reviewing the analysis of an outside group are best served by the most self-aware individuals in the organization. It helps if they have strong facilitation skills.
Expect conflicts to arise and employ healthy conflict and conflict resolution skills. These are the strongest skills preventing groupthink.
Examples demonstrating the demise of groupthink include:
- Cessation of actions against challengers
- Openly accepting responsibility for failed initiatives
- Creating succession plans and providing education for board positions and leadership
- Providing forums for feedback and criticism
- Opening communication to stakeholders
- Sharing financial data
- Providing opportunities for input prior to final decisions
- Researching subjects prior to decisions
- Analyzing underlying assumptions and beliefs
- Identifying measurable targets
- Clarifying roles and responsibilities
- Openly discussing project progress
- Sharing lessons from failed projects
- Providing accurate information to others
- Actively listening and issuing thanks to dissenters
- Supporting change champions
- Acknowledging risks openly
- Staying on real issues
While it is always best if leadership is committed to self-awareness and change, positive experiences during the process of coaching, counseling, and project management can spark major changes in individuals and within groups.
Although the process is far from linear and can take years, dramatic changes can occur in a relatively short amount of time as a result of a group’s dedication to the mission.
The following is a case story example of the self-awareness growth within a key executive:
The COO, Raj, had a line out of his office door. Those in line would often step out of line to handle various tasks and then back into line. This had been occurring for several years. A friend of his, who happened to be an OD consultant visited him one day and observed the scene before her. She talked to a few people waiting in line to find out the reason for the line before checking in with his assistant. She learned his schedule was tight and despite the best of efforts, the schedule was frequently interrupted by emergencies. She further learned they stayed in line because the last few staff members who’d left the line wound up being transferred. At that point, she saw the person she knew to be the CEO pass by and glare at Raj’s door. She checked in with the assistant to say she would meet with Raj another time.
When Raj and she did connect, she mentioned the CEO’s glare. Raj was shocked because the CEO had never mentioned this to him. At first, Raj justified the line. They talked about other possible solutions since the line was having an unintended negative effect.
Based on the conversation, Raj enrolled in several executive development programs. He also unofficially surveyed staff and direct reports. His fears were confirmed.
After a little soul searching, and a few months, he scheduled a meeting with the CEO. He later reported to his friend it was one of the most difficult conversations of his life.
Raj’s changes transformed the behaviors of those reporting to him. Initiatives which had been stalled suddenly came to life. In turn the changes his reports made, positively affected those who reported to them. Throughout this transformation, all employees were encouraged to make time for skill development programs.
Results within the organization reached new heights.
Two years later, Raj was promoted to CEO by the board of directors with the full endorsement of the retiring CEO.
Recognizing areas for skill development, supporting others in self-awareness, and encouraging healthy conflict greatly improves the environment and results of organizations. By not resisting challenges to individual and group abilities, and organization prepares for major organizational change and innovation.
Solutions for Positive Culture Change
Organizational change initiative cannot be started unless at least one self-aware individual with the necessary resources supports the project. Most of the time, this individual comes from within the organization, although it also comes from increasing pressures on the organization and the introduction of outside individuals. The focus is always to create a safe environment for self-awareness.
Sometimes leaders are so vested in their own illusions, they are unable to look at their responsibility in creating or continuing an unhealthy organizational culture. This happens when facing past decisions is too painful. Organizations, especially organizations in crisis, don’t have the luxury of waiting for leadership to change behaviors.
The most important realizations for organizations are:
- firing leadership won’t solve the problem
- Nor will forcing skill development for leadership
Culture trumps everything! Bring a new leader into an unaware and unhealthy culture, and they will become infected by the culture.
It’s not surprising to see even the best replacements making the same mistakes as their predecessor. This explains why struggling organizations who refuse to address an unhealthy culture go through multiple leadership changes without performance improvement.
The key to culture change is bringing to light the beliefs, assumptions, and values of ‘how’ the organization does business.
Even though changing culture is surprisingly difficult and lengthy process, immediate wins can be achieved though governance, bylaw, and standard operating procedures (SOP) changes. The focus of the changes is the encouragement of innovation and change through leadership change.
Here are a few suggested check and balance changes which can be incorporated into the bylaws of the organization:
- Quarterly reviews in strategic planning and business growth – specific objectives must be defined: non-specific goals are too vague
- Transparency of finances and strategic results
- In situations with elected board members, the
election process should be well documented so:
- A lottery elected committee (elected a year prior for learning purposes) has complete authority over the process
- Gag orders for sitting board members
- Strong business acumen requirements for board members
- Transparency and established regular communication with stakeholders are key
- Firm time limits for leadership and board member service versus a year gap
- Challenge committees chosen to review plans and decisions by board members
- Full financial access provided to revolving committees of the organization
- Experts picked by stakeholders versus leadership
- Review boards comprised of outside industry experts established on a regular basis
- Stakeholder reviews of any contracted service provides such as auditing firms, consultants, leadership, staff, and boards
- Regular engagement of consultants and consulting organizations to analyze the organization, finances, and leadership. Reports are for stakeholders as well as leadership.
The task of an OD consultant is to guide individuals and organizations through change. The process is unique for every situation and every organization.
The price paid for being a consultant is complete dependence on clients to implement advice. Even still, it’s rewarding and challenging work, and hope springs eternal that clients implement the knowledge and actions for which they’ve paid.
The following is a case story example of positive change within an organization:
Three years after working with an OD consultant, at the repeated recommendations of the consultant, the leadership of a for-profit company, wholly owned by a nonprofit, finally agreed to share their financial information with the nonprofit board. The financial state of the for-profit was serious. Not only was the for-profit enterprise heavily leveraged with loans and extended credit, their financial status jeopardized the nonprofit which had been loaning the organization money without formal contracts. The day after the board review of the financials, the consultant was released, and false charges were brought against the board members who supported the disclosure. Without the resources to serve membership, members left and during the next three years the organization struggled.
During that time though, changes recommended by the OD consultant were implemented into the Bylaws and SOP of the organization. With the departure of several board members and the introduction of new board members, the board majority finally replaced the CEO and key officers of the organization. The OD consultant was hired back and within two years, the organization was growing financially and on track for further growth.
As you consider the consequences of self-deception in individuals and throughout organizations, you can clearly understand why OD initiatives fail – specifically in the nonprofit sector.
Fortunately, the solutions to save leaders and organizations trapped in self-deception have proven effective.
- Begin building self-awareness in leaders
- Create safe environments for self-awareness to spread
- Support healthy conflict between individuals and within groups during the normal course of business
- Leverage self-awareness skills to uncover and shift underlying beliefs, assumptions, and value of the organization
The Self-Awareness Cycle:
Nonprofits make an enormous difference in people’s lives. In the hands of self-aware leadership with the necessary skills, nonprofits thrive and contribute to the people working in the organization, those they serve directly, and the world at large. They benefit from tax exempt status and exemplarily leaders. In such a world, everyone can feel safe.
NOTE: While the case stories in this article are true in concept, names, dates and other facts have been altered to protect individual and group self-deception – not that this is likely with those operating in a world of self-deception.
And as for self-deception, who am I to think those who’d benefit most from this article will take the time to read it. It’s more likely the only group who will read it are those self-aware individuals looking for insights into organizational change of an unhealthy organization – and those leaders are rare.
© 2019 Jeffrey Hansler All rights reserved
Jeffrey Hansler, CSP is an expert at organizational development, leadership, and persuasive communication which includes skills of influence, negotiation, sales, body language, micro-expressions, and authority. He may be reached at email@example.com or 714-225-7461 when’s he not checking the mirror for self-deception.