The firing came right out of the blue for one Canadian executive director: “I was fired without warning last January after 15 years here because of financial stress freaking out our employees,” she said.
And the reason is all too familiar: “My employees went behind my back to the board, and I believe that I ended up taking the blame for the long recession,” she said.
For any experienced nonprofit executive, the “without warning” piece of this dismissal should raise red flags. “It points to an almost total failure by the CEO to pick up on the human dynamics of his or her organization or to the CEO choosing not to—or not knowing how to—appropriately address those issues,” said nonprofit executive and consultant Sonia Handforth-Kome (Seattle, Wash., firstname.lastname@example.org).
“What happened to the trust and communication between the CEO and the staff? Was the CEO aware of the staff members’ concerns? What did the CEO do to hear and address the concerns? If he or she was not aware, why not?” Handforth-Kome asked.
Point: The administrator must be able to take the temperature of his staff on a regular basis to maintain trust.
At all times, but especially in times of hardship or organizational or environmental stress, the CEO must remain alert and empathic to the concerns of staff members, she said.
One suggestion: Hold “fishbowl” sessions with staff members, asking employees to voice their concerns, opinions and solutions, Handforth-Kome said.
“This is a strategy my current organization uses. We literally invite employees to put their questions on a slip of paper and drop those slips into a fishbowl,” she said. The CEO pulls questions out randomly and starts conversations around the questions, she said.
The point is that employees need a way to safely ask “impertinent” questions—questions that matter to them—and then use this to get a conversation started and receive an explanation around their area of concern, Handforth-Kome said.
To build trust, the executive should also involve his staff regularly in planning and problem solving, she said. “This creates a robust and innovative environment, where staff members feel heard and valued,” Handforth-Kome said.
An example: “In my previous organization, we experienced poor financial performance for a variety of reasons, most of which were not in the organization’s control—funding cuts, policy shifts, insurance premium increases,” she said.
Facing unacceptable losses for the coming year, during the budgeting period, every staff member was shown the financial picture of the organization, she said. “We asked each employee if they would prefer to freeze raises, decrease benefits or reduce the number of budgeted positions for the coming fiscal year,” Handforth-Kome said.
The staff chose to freeze raises, and that was the strategy used in the budget to hold the line on losses, she said. “Managers worked with staff to control expenses and increase revenues,” Handforth-Kome said. “Staff members understood what was at stake. By the end of the fiscal year, finances had recovered sufficiently that all staff received a bonus, and the organization was able to budget raises for the next fiscal year.”
Involving employees in its problem solving has paid off well for that organization. “Since that time (about four years ago), the organization has grown by over 25% and is in excellent financial shape,” she said.
The second part of any issue where the board springs a surprise is: What happened to the board’s trust and communication with the CEO?
In a trusting relationship, Handforth-Kome said this is how the board handles back channels of communication with employees: If the CEO is maintaining appropriate communication with the board, then when a staff member or staff members go around the CEO to the board for reasons that do not have to do with suspected fraud or abuse, the board member(s) who received the contact(s) should immediately let the CEO know what has happened, who has contacted them and why.
“They should be able to trust that the CEO will respond fairly, will be able to hear the staff member’s concerns and should be able to address those concerns appropriately,” she said. “The board members should not guarantee confidentiality to the employee(s), but should let the employee(s) know that their concerns will be addressed by the CEO, as is appropriate.”
The board’s role then becomes ensuring that the CEO is attending to the staff issue, and to support the CEO in his or her efforts to address the staff member’s concerns, Handforth-Kome said. “If there is a grievance policy—and there should be a grievance policy—then board members who have been approached by staff members can direct those staff members to that policy,” she said.
Preventing board/CEO relationship breakdowns that involve employees rests on the executive director’s abilities as a communicator, Handforth-Kome said.
“The CEO needs to be skilled at open communication with both board members and staff members,” she said. “If the CEO is defensive, demonstrating stress or jumping too quickly to solutions, staff members will feel shut down and unheard.”
If the CEO is not openly discussing issues and concerns with the board, along with proposed strategies, the board will lose confidence in the CEO, Handforth-Kome said.
Then, the board starts making assumptions about what is “really” going on, she said. “This is particularly difficult for the CEO in times of stress, since the CEO must manage his or her own issues while maintaining a higher level of openness and communication with all stakeholders. It can be very exhausting for the CEO,” Handforth-Kome said.