TPF was initially interested in exploring how La Piana might provide training and education focused on strategic restructuring to both Foundation staff and the nonprofit and funder communities in the area. That work began in April of 2010. Almost immediately, TPF fielded several requests for financial support for assessment and exploration, including requests from two local community foundations and two disability service organizations – both were interested in assessing the potential for partnership. Thanks to support from TPF’s Collaborative Restructuring Initiative (or CRI, officially launched in the spring of 2010) La Piana worked closely with both groups as they did so. As a result of their explorations, the organizations learned a lot about themselves and the two community foundations have identified a way they can support and strengthen community-wide philanthropy.

The Patterson Foundation’s interest was not limited to providing educational opportunities and financial support, however. Upon learning about our consultant training programs, Jacobs and CRI Initiative Manager Pam Truitt attended a one-day introductory training in Fort Wayne, Indiana. That session, sponsored by the Foellinger Foundation, covered the fundamentals of consulting to organizations exploring or negotiating collaborative restructuring arrangements. Several months later, Truitt participated in the second phase of our program – a three-day intensive combining and extended role-play with case studies and in-depth discussions around contracting, the negotiations process, human resources, external communications, and implementation and integration. TPF realized that building local capacity among consultants was critical to its long-term success, and decided to sponsor a series of trainings in its own region – and then make available ongoing education and support, including mentoring, for consultants who choose to make the facilitation of collaborative restructuring efforts part of their practice. As Truitt said in her blog after the three-day intensive:

As Initiative Manager, I have gone through the training and emphatically state that, at least in the beginning, I could not do this work alone. In addition to learning and being skillful in the technical aspects…consultants must be effective facilitators, understand how to deal with difficult personalities, handle icebergs that invariably surface, guide discussions when appropriate and keep the process moving without favoring one organization over the other. If Wonder Woman were facilitating a nonprofit merger, she would need help!

TPF is also connecting with national funders in the collaboration space, such as the Lodestar Foundation, The Forbes Funds, and The Community Foundation for Greater Atlanta, to learn and share information.

Over the past two years our relationship with TPF has evolved into a true partnership – one that is collaborative, productive, and extremely rewarding. We continue to work with TPF staff to understand and address the specific needs of their community, providing workshops, training, consulting, facilitation, and mentoring to nonprofits and local consultants alike. As a result of TPF’s commitment and our work together, more Florida nonprofits are aware of and actively exploring options for collaborative restructuring – and able to draw on local resources, both financial and technical, as they do so.

But many nonprofits are so accustomed to working in adverse conditions – doing more with less, making compromises, and inhabiting a reality in which the stretch goal is to be “sustainable” rather than to truly thrive – that they may be desensitized to what urgency really feels like. Like the proverbial frog in the pan of boiling water, these organizations have adapted so well to an increasingly hostile environment that perhaps the impetus to do something about it comes too late.

Take strategic restructuring. It is encouraging that partnerships are now viewed as a positive strategic choice rather than an option of last resort, but the flip side is that we now see more nonprofits coming to the table with the view that collaboration is “nice, but not necessary.” Many of these are on solid enough footing to continue working on their own, but fail to recognize that this also makes them better positioned to engage in restructuring and more attractive to potential partner organizations. Lacking a sense of urgency, they may hesitate to own the process or really invest in moving it along. The risk here is that the window of opportunity to proactively choose a collaborative strategy rather than being compelled to it may not be open for long. Should they find themselves facing a real crisis, they may wish they had acted sooner.

Succession planning is another good example. Five or six years ago, reports like “The Leadership Deficit” touched off a sense of real urgency across the sector. The Boomers are retiring! Who will be left to lead our organizations? The mass exodus didn’t exactly manifest as predicted, as we all now know, but how many nonprofits have taken advantage of the reprieve as an an opportunity to engage in recruiting talent and developing leadership for when the day does come – as it surely will – when new leaders must take the helm?

Nonprofits face an increasingly complex set of challenges and opportunities, from major demographic shifts to competition from for-profit providers to political pressures and global economic uncertainty. The water’s getting warmer.

Do you feel the heat? Is it time to make a leap?

As the facilitator of this merger (and a former executive director with experience in behavioral health), the most compelling outcome was the creation of a seamless service delivery system to address the needs of clients in a more holistic way. By unifying services to address substance abuse addictions, mental illness, homelessness, and to provide job training and primary health services, this merger will help to ensure that client needs do not slip through the cracks of a fragmented delivery system.

In the mainstream dialogue about nonprofit mergers, the focus is often on efficiency and cost-savings, but ultimately these alliances must make sense from a mission perspective: How can services be integrated and provided in a more effective manner? What will payers – in this case the City and County Department of Public Health – find attractive for contracting?

The landscape of services in San Francisco is fragmented, with many separate organizations providing numerous different services addressing specific client needs.  However, in most cases, they are not comprehensive, integrated services. The merger of Haight Ashbury Free Clinics and Walden House creates a more seamless approach, such that clients do not have to go in search of services from multiple entities to get the care they need.

Like so many nonprofits, operating on thin margins is nothing new to our community health centers, and they have consistently proven just how resourceful they can be – but demanding that they expand their capacity while withholding the means to do so is nothing short of a “set-up.”

One of the more exciting opportunities of health care reform was to have been the development and testing of new collaborative models, such as Community-based Collaborative Care Networks and Accountable Care Organizations. And while we would prefer to see this strength-based approach to collaboration win the day, the diversion of community health center expansion funds reminds us that collaboration is also a strategy for dealing with adversity.

The California HeathCare Foundation views collaboration as an essential strategy for community health centers to be able to draw upon – in both good times and bad. We have partnered with them over the past three years to develop resources to help clinic leaders assess their collaborative options. We are also in the midst of working with four clinic groups in California, providing technical assistance as they explore and develop partnerships.  We look forward to sharing what we learn from this continuing work in future posts and publications.

AbilityFirst is a Southern California nonprofit serving people with developmental disabilities.   They came to La Piana Consulting at the height of the Great Recession in 2009 in order to think about strategies for responding to economic change.  Our Real-Time Strategic Planning (RTSP) process was a perfect fit for their needs because they wanted to know how to make good decisions in the face of change, and RTSP focuses on creating a Strategy Screen—or list of criteria—to guide decision making.

The challenge: the state of California provided approximately 50% of AbilityFirst’s funding either directly or indirectly—and the state was in the throes of a major budget crisis.  The last state budget process had resulted in significant cuts to state funded services, and the prospect for additional major cuts in coming years was certain.  AbilityFirst knew they had to be prepared to survive these cuts.

Over a period of two months we used the RTSP process with a committee of board members and senior managers to develop critical elements of the Strategy Screen and to analyze information about other providers in the field.

For AbilityFirst, the process focused extensively on identifying the organization’s competitive advantages and using that as primary criteria to guide decision making.  These competitive advantages included specialized facilities for both camping and after school programs that no one else could match, as well as a significant financial reserve.

On a sunny winter day in a meeting room overlooking the Santa Monica beach, the full board of directors gathered for a planning retreat.  The specific agenda was to confirm the Strategy Screen that had been developed by the RTSP committee, then apply that screen to the Big Question facing AbilityFirst: which programs would receive priority protection as funding diminished?

The board quickly approved the Strategy Screen and systematically applied the tool to consider the organization’s ten programs.  The discussion was focused, but rich in details that staff would later use in executing on the board’s decisions.  By the end of the day, the board had identified two programs as not core to fulfilling the organization’s mission.  The staff had its marching orders: consider how to shed these programs over time in a responsible way.

Over the next six months, one of the two programs was easily transferred to another agency, ensuring that clients received ongoing services.  The second involves complex and long-term financial and legal agreements and could not be eliminated in the short term.  That said, the organization continues to negotiate a possible transfer of the program to another nonprofit specializing in the field.

The State of California continued to face major budget challenges in the 2010-11 and 2011-12 fiscal years, resulting in further cuts in funding for the developmentally disabled.  AbilityFirst was ready and continues to thrive.

The result: AbilityFirst continues to be a highly focused nonprofit providing the most effective, high quality services possible to meet the needs of its clients and to fulfill its mission.  In the face of financial pressures, it is operating in a manner that is sustainable over the long run and now has decision making tools at its disposal to continue to develop and refine future strategies.

PHOTOS: Courtesy AbilityFirst and Jim Douglass

Ownership is very different in the nonprofit sector than it is in the for-profit sector. The reality in the nonprofit sector is that no one individual or group such as a management team or board can own a nonprofit organization.  There are no stock shares to be owned or traded. Any assets owned by the nonprofit must remain with the nonprofit.  If a merger of a nonprofit takes place, the assets of the nonprofit must remain within the surviving corporation.   (Similarly, if a nonprofit dissolves independent of a strategic restructuring process any assets remaining after resolving all liabilities must be transferred to another nonprofit serving a similar mission.)

Nonprofits hold special tax status in order to accomplish their mission with the resources developed under that tax status. Therefore, in a sense, through this special tax status, the nonprofit is owned by the public – this is why nonprofit corporations are sometimes referred to as “public benefit corporations.”

Board members, staff, clients, and the public have a profound interest in the organization’s future success and its ability to provide needed programs/services.  The board and staff have the responsibility to manage and make decisions for the organization that are in the best interest of the community and the mission served.

When an organization considers a potential strategic restructuring partnership, the leadership must consider this decision from the perspective of what is in the best interest of the mission and the people or issue it serves – first and foremost.  Clearly, the roles of employees and board representation are important factors in the process of considering the most appropriate organizational design.  But ultimately, the nonprofit’s mission and ownership by the public must be the priority in decision making.

I will be leading the keynote at the Ohio Grantmakers Forum Annual Conference in October on the topic of Nonprofit Strategy in the New Abnormal and check out my recent guest blog at the Stanford Social Innovation Review.

Tell me what you think. Is any of this new or normal?

Leadership requires more than the confidence to stand up and offer to lead. In fact, there are three skill areas that must be built or honed for someone to truly claim the mantle of leadership.

1. Self-Awareness.

You must have an understanding and appreciation of who you are as a person, and how you manage yourself. This includes:
•   Knowing skills, limits, strengths, and competencies through realistic self-appraisal
•   Developing control, self-regulation, and an ability to “live in the response, not the stimulus,”
•   Understanding time vs. energy management
•   Maintaining a deep commitment to personal and professional growth
•   Having the ability to monitor and regulate self-efficacy

2. Understanding of Others.

Another key element of leadership requires your ability to connect and influence others.  These skills include your:
•    Capacity for deep listening
•    Development of personal voice and an ability to influence others
•    Aptitude to affirm, connect with, and correct others
•    Ability to have difficult conversations
•    High level of cultural competency
•    Ability to forge and deepen interpersonal relationships
•    Improvisational skills

3. Organizational Impact.

Leaders need to understand how to create and direct an organization beyond standard operations.  These skills include:
•    Understanding how organizations work
•    Creating organizational engagement and alignment
•    Building and directing teams
•    Thinking strategically

Given these key elements above, leadership development programs require a combination of:

Self-reflection: participants must be given an opportunity to see themselves as others see them in order to build their strengths and minimize any weaknesses in their self-presentation, communication style, or other behaviors.

Peer learning and networking:  sessions must include time for participants to connect as peers through both structured activities and exercises and through open discussion.

Hard skill development: participants must learn something new and useful during each session, such as how to manage a troublesome staff member, develop a personal performance plan, or more effectively run a board meeting.

Through research and practice, we have found that there are 5 essential program elements to build multi-dimensional leaders in a setting that builds hard skills, creates a strong peer network, and allows for self-reflection and personal growth.

The 5 essential elements of a leadership development program are:

1. Community. Both seasoned organizational leaders and emerging leaders achieve transformative learning when part of a community of peers.  The shared experience of self-examination and skill development creates a sense of shared identity for moving forward together and a mutually supportive community to draw on once the formal program ends.

2. Context. The individuals in the program must be able to leave behind for the moment their organizational context in order to explore issues, solutions, and new skills that will help them to address their work challenges. In this way they will return to their organizational home ready to practice what they have learned.  The workplace then becomes a real-life learning laboratory where new skills and confidence can be applied.

3. Clinic. Each time the learning community gathers “the clinic” provides a vital connection between practice and learning.  Based upon case study methodology borrowed from the social science/educational/  disciplines, individuals have the opportunity to present a current issue or problem they find challenging.  The community becomes a problem solving resource that sheds light on the underlying issues and provides an opportunity for problem-solving engagement for all participants.

4.  Coaching. Strong leadership programs include assessment tools as well as qualitative feedback to build self-knowledge.  Incorporating individual executive coaching allows each participant to translate data and feedback into actions to address weaknesses and reinforce strengths.

5. Curriculum. The curriculum must choose from among the wide array of topics and sub-topics related to leadership and management.  Topics must inform and build upon each other while integrating solid, proven nonprofit management and leadership practices.  The curriculum must also be applicable and understandable from a range of diverse perspectives and delivered in a manner that connects with adult learners.

We have used this holistic approach towards leadership development programs and learning communities from Honolulu Hawai’i to Fargo North Dakota. What elements do you think are most critical to a leadership development program?