Whereas the strength of most for-profit enterprises is their management practice, a Bridgespan survey showed that non-profits are best in visionary leadership, but often significantly under-managed. This paper aims to describe how a few charismatic leaders recognize the crucial importance of improving their management capabilities so the organization will deliver great results over time. Examples of five leading non-profits are presented to show how management strengths can be added. Key points learned by successful non-profits are: understand the tension between leadership and management; get strategic clarity to make it easier to see how to achieve the desired impact by setting priorities, establishing performance measures, and making tradeoffs; anchor strategic clarity in a few key metrics, to keep everyone focused; build and align the team; and actively manage the change process. Implementing this agenda in the context of nonprofit leadership is difficult. A framework is offered that illustrates the shift that many non-profits need to work through in order to become a high performing organization. When asked, non-profit leaders profess that visionary leadership (with a compelling case for a cause) drives fundraising and recruitment of volunteers. But their management to deliver long-term results is not as strong. Organizations must find a balance, with the goal of becoming both strongly led and strongly managed.

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Sound management practices are essential if nonprofits with ambitious goals hope to increase their impact over time. And yet, when Bridgespan consulting teams surveyed senior staff members at 30 nonprofits, the respondents consistently rated their organizations much higher on leadership skills, such as developing an overall vision, than on management capabilities, such as making trade offs and setting priorities in order to realize that vision. Based on this survey and in our work with more than 100 nonprofits, we conclude that quite a few are strongly led, but under-managed. The problem is especially noticeable at founder-led nonprofits, where one person makes all the important decisions but has limited management experience Such nonprofits often exhibit the stresses of operating as if they were in constant start-up mode, too often relying on the charisma of their leader to resolve an operating crisis that an experienced manager might have helped the organization avoid (Exhibit 1 [Figure omitted. See Article Image.]).

But why do so many nonprofits evidence some of the symptoms of being strongly led, but under-managed? Given that most nonprofits are chronically short of resources, both funding and leadership talent, they tend to focus their energy where it will produce immediate results. For most nonprofit leaders this means that success depends upon providing visionary leadership and making a compelling case for a cause, which in turn drives fundraising and helps them attract and motivate staff and volunteers. In contrast, nonprofit leaders are seldom recognized or rewarded for their managerial skills.

In organizations suffering from management strains the trouble signs are easy to spot. Staff members are confused about their roles and responsibilities. Out-of-control finances, arising from an inability to set and operate within a sustainable budget or inadequate financial systems, constantly threaten the organization's ability to achieve and sustain results.

What can be done? We recently discussed this topic in depth with a select group of leaders whose nonprofits are purposefully navigating the path towards stronger management. Our goal was to better understand why so many organizations with strong leaders were under-managed and how these leaders have been working to overcome this problem. As the conversations progressed, it became clear that these leaders had adopted a similar agenda to ensure that their organizations appreciate, build and sustain strong management practices. They each worked hard to clarify their organization's strategy; they established meaningful metrics with which to assess progress; and they made it a priority to assemble a balanced team at the top. They also made a point of engaging the organization to adopt these changes in ways that were consistent with - and propelled by - the overall vision.

However, implementing this agenda in the context of nonprofit leadership is difficult. Here's how the leaders of a few well-respected nonprofits - Teach for America (TFA), Communities in Schools (CIS), the Partnership for Public Service, the Corporation for Supportive Housing, and Jumpstart - have focused on adding management capabilities to strengthen their organizations.

Understanding the tension between leadership and management

In nonprofits there often is an inherent tension between rallying resources to support the mission and managing the business efficiently. (See box [Figure omitted. See Article Image.] "Leadership and management: what's the difference?" for a brief explanation of the distinctions between the two). Rob Waldron's early experiences as CEO of the youth-serving Jumpstart organization illuminate the tension.

Upon joining Jumpstart, a national network focused on mobilizing college students to provide tutoring to young children in Head Start programs, Waldron quickly realized that the fast-growing organization was losing too many talented, committed people through turnover. Waldron knew that Jumpstart needed to bolster its management practices. "[I told funders,] 'I want to be the best manager of a nonprofit in Boston, and I want us to be the best managed nonprofit in America,'" he said. "Based on my for-profit experience, I thought that strong management was what people would seek and want to invest in. But no one gives a &$#@. They don't make the decision that way. It's not the thing that drives the emotion to give."

As Waldron came to realize, the qualities that make for strong leadership are critical to an organization's ability to attract money and talent. The capacity to promote the mission in compelling ways is absolutely vital to success on these dimensions. The challenge, then, is to not only develop effective management capabilities, but to do so without diminishing the mission-based leadership strengths of the organization.

Getting to strategic clarity

In the experience of the leading nonprofit executives we interviewed, the critical first step is achieving strategic clarity. Achieving strategic clarity means answering, in very concrete terms, two questions that are core to a nonprofit's mission: "What impact are we prepared to be held accountable for?" and "What do we need to do - and not do - in order to achieve this impact?"

Developing this clarity enables the organization to align its systems and structures around a common objective. It also enables the distribution of decision-making authority beyond the executive director, as decisions that once required judgment calls by the leader can be made by a broader group aiming towards an agreed upon set of outcomes.

Getting to strategic clarity is not synonymous with developing yet another strategic plan. As Wendy Kopp, founder and CEO of Teach for America, remembers concluding at one point in a strategic planning exercise, "I am not going to read another overly detailed plan that tries to lay out what every part of the organization is going to do for several years. This makes no sense. We are going to forget all this planning, and we are going to come up with a few priorities and very clear goals."

At Teach For America, the question about accountability came down to:

Attracting new teachers who will have a meaningful impact on their students' achievement to underserved public schools. One measure of their effectiveness: having children make one and a half years of progress in one year of school.

Providing an ever-expanding force of leaders who continue working - inside and outside the education system - to ensure educational opportunity for all. The key measure here: the numbers of alumni assuming leadership roles in schools, government, and other nonprofits.

The fact that everyone at TFA aligned around these answers not only provides stability for the organization's strategy but also makes it easier to answer the question of how to achieve the desired impact by setting priorities, establishing performance measures, and making tradeoffs.

TFA, like many successful nonprofits, has often been urged to expand its scope and take on new tasks, such as opening and running charter schools. But the organization increasingly has focused on what it considers "core," thereby holding to the theory of change that has helped it achieve its impact thus far. "I'm so clear about it," Wendy Kopp notes, "and part of my role is to make sure everyone else is clear about it. It's hard to describe how many times, even in a day, I end up saying, 'But that wouldn't make sense given our theory of change.'"

Articulate the strategy with precision

The Corporation for Supportive Housing (CSH) has helped transform how funders and providers think about serving chronically homeless people. To do so, CSH operates on three distinct levels: working at the state and federal levels to bring about policy change; building capacity among organizations in the field, so that they become more effective developers and operators of supportive housing; and providing financing and technical assistance on a project-by-project basis. As Carla Javits, the former CEO recounts, at one point in CSH's development, "Several members of the board really pushed us on the question of which one of the three lines of business ... is the most critical, the most central to our work? And we went back and really talked that through." Eventually, they concluded that they really couldn't prioritize one above the other. "The beauty of CSH, was the interaction among the three," Javits recalls. "But that forced us to think about it ... [and] to better articulate our theory of change." The point is to get to the simplicity that reflects deep and sustained thinking about the focus of the organization's work.

Anchoring strategic clarity in a few key metrics

Once a nonprofit has achieved strategic clarity, homing in on a small number of key metrics can be a powerful way to keep everyone in the organization focused on both the fidelity of the implementation and the ultimate outcomes.

At Jumpstart, Rob Waldron zeroed in on three metrics: the number of kids served; the gain per child; and the cost per tutor hour. Once those three measures were identified, the organization was able to flag unproductive variations across sites, drive increased growth and effectiveness, and lower unit costs. As a result, when it became apparent that one site was consuming twice as many resources as another to serve the same number of children with the same results, few people questioned the need for change - or the desirability of spreading best demonstrated practices throughout the network.

As the Jumpstart example illustrates, the key to establishing effective performance measures is to focus on ones that will be highly motivating because they are so clearly aligned with the organization's mission.

At Teach For America, for example, accountability and measures were central to instilling a results-oriented culture. As Wendy Kopp observes, "Our people are so focused on what it is that we're trying to accomplish from a social impact perspective, that it leads them to be really open to the idea that this is not about us - it's about getting to the goals more quickly."

Building and aligning the team

Augmenting the experience and capabilities of the senior leadership team is often the most visible sign of change in organizations that are becoming more strongly managed. While there are a variety of ways of going about this, one of the most common is naming someone with managerial experience and a mindset oriented around systems and processes as the organization's second-in-command. At CIS, for example, Bill Milliken, the visionary founder, long-time CEO, and current vice chair, elevated a protégé with an aptitude for management concerns - Dan Cardinali - to become president of the organization. The two now work in tandem, with each exercising both leadership and management.

At Teach For America, Wendy Kopp initially took a different tack. After TFA's tumultuous but successful start up phase, she initially considered handing things off to a new leader, "because what did I know about how to manage this, really?" But then she decided that TFA would be best served by her staying on - and shoring up her own weak points as a manager. "I just thought I'd better learn how to do this stuff." However, she is also quick to acknowledge that she has hastened her education by bringing in colleagues with private-sector experience who have established and help drive best practices on multiple management fronts. "Everyone's always asking me 'Who are your mentors?' and 'What is the board's role?' The honest truth is I've learned so much from the people who've worked here and pushed us in various ways ... And that's really what's driven our evolution."

More recently, Kopp has brought in a chief operating officer to whom she has turned over much of the operational responsibility for TFA. She observed that, "The reality is that while I became decent at management and got things headed in the right direction, the new COO is better. Beyond his natural abilities, he also brings an experience base that I simply don't have. At this point in our development - given our size and complexity - that has made a huge difference."

The flip side of augmenting the team with individuals who possess needed skills is letting go of employees who may be passionately dedicated to the organization, but who are not able to contribute at the level needed. Here the dynamics of the nonprofit sector can make decisive and often necessary action especially difficult.[1] As one leader told us, "There is a woman on the staff right now whom I am struggling with. She will say, 'I just want to dedicate my life to this organization.' And when she throws that at you, she's basically saying, 'You are going to jeopardize my happiness and my sense of meaning if you change my employment status.'" That said, this leader, like many others with whom we have spoken, went on to say that if he were to do things over again, he would move much sooner to complete both the hiring and the firing for his senior team.

While creating new roles and/or elevating certain positions can reinforce a new emphasis on management, many leaders point to a necessary complement: explicitly connecting these individuals with the mission-related work of the firm. After Carla Javits became CEO at the Corporation for Supportive Housing, for example, she created a chief financial and administrative officer position to oversee augmented finance, IT, HR, and business-support functions. "Each of those departments got a little more beefed up under the leadership of one person who then brought all four functions together and really raised their profile." At the same time, Javits also made a point of having her CFAO operate at the same level as the COO who oversaw all the programmatic work, thereby ensuring that "the business leadership became part of the senior leadership team of the organization."

Similarly, Max Stier established a trusted colleague in a COO-like position shortly after founding the Partnership for Public Service, and relies on him to manage the administration, finance and HR functions - freeing Stier up to focus on the board, the press, funders, and other external stakeholders. Importantly, however, over the years, Stier and his colleague have made a point of not making a clean "Mr Outside/Mr Inside" split. "It's a bad idea to have a full distinction," Stier believes, in part because the person in the operations role has relevant programmatic expertise, and in part because he feels it's important for him to stay in touch with some of the key internal issues.

Helping the organization see the benefits of better management

Actively managing the change process - reinforcing not only why change is necessary, but also how it will strengthen the organization's ability to sustain its impact and live into its mission over time - is an ongoing leadership challenge. Helping people see the upside of more rigorous management practices is critical piece of the process, not only because the pain and disruption of new ways of working always precede the benefits, but also because personal commitment to the organization's mission is what tends to keep the best people on board.

Carla Javits found this especially important when the Corporation for Supportive Housing moved to establish more effective and detailed accounting and data-reporting systems in its local offices. While the initiative was essential for the overall health of the organization, it placed a greater administrative burden on the local office leaders. Javits observes: "The questions then become, 'Is this going to be worth it? ... What are we going to get out of it?' [You need to] really drill down on what the payoff is, why it needs to be done - especially in a mission-driven organization."

Initially, she emphasized the fact that better financial information would not only give the local leaders a better view into what was going on, but also help them "make [the state of play] more transparent to the people in the organization who need to know." It wasn't long, however, before she was in a position to share information from the new systems that could help CHS have greater impact, because "we thought X, but actually it's Y."

Javits also created a powerful institutional bridge between the programmatic and management sides of the organization by having the CFAO and head of finance join the regional program leaders for their recurring leadership team meetings. "In some ways it annoyed people," Javits said of the change in process, "because the program leaders didn't necessarily want to be spending that much time on business issues, and the business leadership wasn't necessarily prone to spend so much time listening to program issues. But doing that made an immense difference in the organization [by fostering] mutual respect and understanding."

Wendy Kopp noted the value of continually communicating the idea that effective management practices aren't distractions from the work - they are the work. But, at the same time, she said, recognizing and encouraging the passion that drives nonprofit work is crucial: "You need all of the systems, but you just can't afford to lose the spirit. We have to sell our people on the idea of using data ... [by] getting them to realize that focusing on their kids' academic achievement is the greatest form of social activism, and that measuring their progress is critical if they are going to do that. [Along the way], you also need to make sure you're not inadvertently doing things that meet the measures but don't maximize your ultimate impact ... Getting all of that right is very hard."

Even as new practices take hold, the tension between leadership and management considerations will persist. And so it is important to be continually on the alert for symptoms that might indicate a need to adjust or renew efforts to strengthen management. As we have observed - and as our conversations with nonprofit leaders have confirmed - unforeseen challenges always accompany growth. Long-term success lies not in anticipating and pre-empting every single challenge, but in being receptive and prepared to take action when a new one arises.

Exhibit 1:

Box 1:

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