Open space: coping with your office's gray boxes.

There are gray boxes in many nonprofit organizations today; gray boxes that evidence a quiet acceptance of a larger structural reality that neither individual managers nor their organizations can fully overcome.

These boxes are now appearing at the high end of organizational charts reserved for managers and executives. The telltale sign of these holes is always the same: a box, possibly shaded gray, containing the name of the position underneath which is not the name of the holder of that position but the simple yet enormously expressive notation OPEN.

For about a decade, nonprofit managers of virtually all kinds have felt the effects of a growing labor shortage. The symbolic beginning of the shortage could be seen as the first time a McDonald's restaurant put up a sign saying "help wanted," because that one act signaled the beginning of a permanent competition for the same workforce. Since then, most nonprofit employers have joined their for profit peers in a more or less permanent campaign to find enough people to do the job.

Shortages in the lower levels of an organization eventually produce shortages in the higher levels, so for that reason alone the gray holes are hardly a surprise. But there are many other factors at work, among them Baby Boomer demographic shifts, a workforce with more options, and changing attitudes toward employment. None of them promise to improve much in the near term. The analogy to a meteorological perfect storm is tired but apt.

So if gray boxes at the highest level of your organization chart are inevitable, what will be the implications, and how will you deal with them?

NOT ALL BAD NEWS

Despite what it may seem, not all the implications are negative. To be sure, most of their positive value is of a lower order than the negatives, but there are still positives nonetheless. For one thing, gray boxes mean less spending on salaries and benefits. This phenomenon is already well accepted among executives when it comes to their workforces, because it has been what helped many a nonprofit balance the budget in the past 10 years of rising unfilled openings. Now this emptiness creep is just reaching the higher levels.

Gray boxes on the high end of the organization chart also reinforce a now well-established recognition that those who labor for a nonprofit are a source of outright value, not just a way to plug holes in the production engine. Scarcity in the executive ranks will increase the board of directors' sense of their staff leaders' value. It's not beyond the realm of possibility that it will increase their compensation a bit too. In turn, this could help ease future shortages.

For organizations that are savvy and well-resourced enough, high-level gray boxes will motivate them to increase their in-house training programs for lower level staff. One of the most common reasons for gray boxes is because box occupants beneath them are seen as not having had adequate preparation. What better way to head off high level vacancies than to train those behind them in the pipeline?

Finally, in a boost for overhead-haters, gray boxes that stay that way could be a sign that a position was poorly designed or extraneous in the first place. When the demand for executives rises, those available to fill the positions can afford to be picky.

THERE IS BAD NEWS

Of course, gray boxes at the leadership level of an organization are a drag on operations. The primary disadvantage is that they lead either to less service or lower quality service, or both. But unlike direct mission workers, unfilled executive positions have an insidious long-term effect on an organization.

A standing joke in most organizations is that if the boss is out for a day nobody misses him or her. When the boss is a high-level executive that's usually very true--for good reason. Executives have to operate within a longer time frame than direct mission workers because they must deal with opportunities and problems that evolve over a long period of time. A gray executive box that lasts for a week is not a problem. But one that stays gray for months or even years--if the position was properly designed in the first place--will almost certainly have a long-term negative effect on the entity that may not even be felt until much later.

Another negative of gray box executive positions is that they will lead inevitably to workarounds and compromises. People reporting to a gray box will eventually feel forced to freelance, making ad hoc decisions and commitments on their own without any connection to the larger organization and its strategy. Taken to an extreme, this undermines the very concept of an organization chart since everyone begins to understand that nothing works the way the chart suggests. Once the position is filled, these instincts are hard to tame and can lead to lasting organizational ineffectiveness.

In a related way, staff will grow more comfortable with blurred reporting lines. The freelancing, improvising and workarounds that have to occur weaken the authority of the organization's structure when it becomes well-known that the thing doesn't work. This is difficult enough for day-to-day operations, but the really damaging affect is that it diminishes accountability. Especially for larger organizations, the result is less credibility with funders, regulators, and the general public.

And the obvious personnel impact of gray boxes is that everybody else has to work harder. Few may sympathize with the highest-paid individuals in any organization, but the impact on job satisfaction and personal well being is often painfully evident.

WHAT'S AHEAD

Short of unprecedented economic or other profound and abrupt changes, it is hard to envision a future without gray executive boxes. The number of nonprofits continues to grow each year, the Boomer generation of executives is beginning to contemplate a future without full-time work, and many organizations have not consciously developed the next internal generation of leadership.

Many national organizations, which have the best communications networks about these matters, envision growing numbers of executive retirements in the coming half decade or more. For a while, demographic trends won't be forcing a large enough share of executive candidates into the pipeline.

The conclusion is simple, manageable and thoroughly logical. There will be a growing number of executive gray boxes in the future. Train your managers today to be leaders tomorrow. Devolve more authority to lower levels and teams. Look to an even younger generation for leadership than you may have in the past. And be flexible in the way you structure the organization to accommodate the vacancies. Gray boxes may be inevitable, but they need not color your thinking.

Thomas A. McLaughlin is a national nonprofit management consultant with Grant Thornton in Boston. He is the author of the book Nonprofit Strategic Positioning (John Wiley and Sons, 2006). His email address is [e-mail]