Why Nonprofit Boards Must Be Masters of Change Management

The world is in a state of rapid transformation.

Organizations are facing an extraordinary level of change, at an accelerating pace. Research shows that since the year 2000, 52 percent of companies in the Fortune 500 have gone bankrupt, been acquired, or ceased to exist as a result of digital disruption. Ranstad US predicted that by the year 2025, a majority of the workforce would be agile workers on 1099s, and according to a recent article in Forbes, that prediction has already been proven true this year as the freelancer economy continues to rise.

All sectors face unprecedented disruption; as a whole we are experiencing pervasive public health disruption, economic disruption, and environmental disruption with no clear end in sight.

In the face of uncertainty and complexity, organizations must learn how to systematically and effectively manage change.

Nonprofits must prepare for this change imperative

The data tells us that nonprofit organizations are especially at risk. In fact, over half of all chartered nonprofits are destined to fail or stall within a few years of inception due to leadership issues and the lack of a strategic plan, among other things.

Frequently nonprofits miss opportunities to adapt, and unfortunately legacy strategies do not suffice in this age of disruption. The social sector must embrace comprehensive change in strategy, operating models, organizational structure, people, and processes. We must become masters of change management.

Prepare to lead

Adapting to rapid change requires steadfast leadership. Innosight reports that 58% of executives who have launched transformative change and innovation in their companies cite committed leadership as the single biggest factor determining success in the marketplace.

CEOs, board chairs, and executive teams must work in lock step to ensure a crystal clear vision and buy-in from the top down.

Managing through a long period of change can be exhausting. To mitigate the risk of lost momentum, consider benchmarking progress and celebrating forward movement with your team. Checking in regularly, seeking feedback often, creating support networks, and modeling self-care will positively impact the transition.

Support change through diversity

Surviving and thriving in a rapidly changing environment demands new ideas that address complex, systemic problems. We need creative and innovative ideas that can only come from a diverse group of individuals who are committed to organizations’ missions and prepared to lead.

Diverse life experiences and viewpoints among board members positively impact organizational performance and the ability to adapt, with problem-solving, innovation, creativity, recruitment potential, and financial strength all elevating as a result. In fact, many studies have proven diversity positively impacts financial performance. According to McKinsey & Company, organizations that rank at the top for ethnic diversity in board composition and management are 35 percent more likely to outperform companies that do not.

Build social sector unity

Boards of directors need to evaluate the shifting ground beneath their organization and develop new, long-term solutions. By thinking of ourselves as a sector rather than focusing on individual organizations, leaders can allocate resources more effectively and efficiently.

What collaborations, alliances, and partnerships can boards of directors develop to secure resilience and adaptability? As a sector, how can we spread resources to meet the most needs? As leaders of nonprofit organizations and mission stewards, it’s time to start asking ourselves tough questions and seeking solutions.

Remain focused on core values

A steeled focus on organizational core values can reduce stakeholder anxiety and renew a sense of balance for your organization. When decision making during a period of change, use your core values as a lens and guide. When creating or revising core values, develop specific equity-centered values that can be translated into policies and procedures.

To create authentic conversations, share best practices, and challenge previously established values, consider appointing clients to your board of directors. When possible, intentionally craft conversations and agenda items that spotlight your values, and strategically recognize team members who showcase your values in action.

Maintain strong communication

Solid communication between CEOs and boards of directors will ensure a shared vision necessary to embrace transformation. Board members who stay connected with the organization’s client base will no doubt gain heightened awareness of fears and personal biases that may be impediments to implementing change processes. Through data collection and mission impact measurements, board members will be given the tools to determine programmatic effectiveness.

When executed well, adapting to change and implementing organizational transformation can be a catalyst. Nonprofit organizations can use this period of rapid change to develop strategies that address systemic inequities with the paradoxical long-term goal to put ourselves, as a sector, out of business. Now is the time to build resilience into our systems, allow for adaptation along the way, and master change management. The strength and survival of our organizations and our communities depends on it.

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Authored by BoardBuild CEO Pamela Cannell and originally published September 2020 by NonprofitPRO: