The COVID-19 pandemic may have surprised the nonprofit sector. The new health and safety protocols, shelter-at-home directives, household, and corporate financial stress, brought to the forefront the challenges of organizational design and complexity in many nonprofit organizations.
As we begin to exit the pandemic, nonprofit leaders should consider how to use the challenges borne from the pandemic as the impetus to plan for change that will enable the relevancy and sustainability of their organizations. This will require a planned change approach designed to maximize cooperation and minimize the tensions between the various constituencies within the organization. Here are a few things to consider at the forefront of such a program:
Plan for perpetual new realities
The COVID-19 pandemic may be the necessary accelerator for rethinking the structure and operations of nonprofit organizations. Society is changing, and although nonprofit organizations are essential for civil society, how they operate in service may need re-evaluation. Nonprofits typically have systems and structures designed to serve the social context and needs of the eras in which they are formed. As society and generational leadership change, these new realities create value tensions between what might need to be for relevancy and sustainability¹. Acknowledging and responding to these new realities with a structured and planned approach should improve acceptance of change within the organization and greater relevance to society.
Rethink mental models
Nonprofit leaders often rely too much on their experiences and hindsight when considering their options. This over-reliance on hindsight may result in the inability to see how the current situation differs from past decisions. Using Contextual Intelligence and applying a 3-D Thinking approach (hindsight, foresight, and insight) is essential to increase the probability of better decision outcomes². Remember: past experiences may not always be good predictors of future results. Recognizing and applying situational context is key.
Recognize how culture affects decision-making and agility
An organization’s culture can enable or constrain necessary change. As organizations grow, the culture often forms to sustain the status quo. As a result, slow and conservative decision-making is often the norm in established organizations. With risk mitigation at its center, this approach to decision-making typically leads to operational agility or the ability to identify cost reductions or related revenue enhancement quickly³. Conversely, portfolio agility allows leaders to quickly shift resources from declining areas to those areas more likely to grow³. Many nonprofit leaders are adept at operational agility, yet portfolio agility requires more foresight, insight, and effort.
Acknowledge complexity and the value of Systemic Leadership
Nonprofit organizations often have a highly complex organization design. There are multiple levels of systems, all functioning within a single organization, each having its own goals and objectives. At one level of the organization, there are volunteers, members, and employees. On another, there are donors, sponsors, and partners. Some also have affiliates (local organizations). While any of these levels would have unique challenges, the interconnectivity between the various systems creates breadth and depth of tension and competition that can be difficult to navigate. Moving all these systems toward the same outcome requires a Systemic Leadership approach.
The COVID-19 pandemic provided a window into the future. It is a disruptive force that affected all levels of a nonprofit organization’s system. It highlighted the necessity for rethinking operations and leadership approaches. The vast interconnectivity of actors required to fulfill the mission of many public sector nonprofit organizations creates a significant leadership challenge for the future. Transformational change seems necessary if many nonprofit organizations hope to remain relevant and sustainable in the future.
¹ Annabel Beerel, Leadership and Change Management, 1st edition (SAGE Publications Ltd).
² Matthew R. Kutz and Anita Bamford-Wade, “Contextual Intelligence: A Critical Competency for Leading in Complex Environments,” in Approaches to Managing Organizational Diversity and Innovation, ed. Nancy D. Erbe (IGI Global, 2014).
³ Gregory Kesler and Amy Kates, Leading Organization Design: How to Make Organization Design Decisions to Drive the Results You Want, 1st edition (Jossey-Bass).