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The extraordinary leader.

Insights into developing capacities critical to your success as CEO.

No matter how capable you are as a chief executive officer or CEO-aspirant, or how well everything appears to be going for your association, you cannot assume that your association's future is secure. The world just plain will not allow it, and the price of complacency can be expensive for organizations - perhaps even precipitous decline, if not extinction.

In this article I discuss how you, as an association CEO or member of the executive team, can go about developing two of the most critical association capacities that are at the heart of extraordinary CEO leadership: the capacity to innovate and the ability to forge a strong board-CEO partnership. Our world is anything but stable, and even though change is nothing new in human affairs, seldom if ever in history has change been of such magnitude, so fast paced, or so unpredictable. This is an incredibly tough world to lead in.

Take for example two powerful trends sorely challenging associations. The inexorable decline in volunteer time as a result of the dramatic growth in two-career families and the relatively busier schedules of the survivors of corporate downsizing have left many associations with very elaborate - often quite baroque - volunteer involvement structures that are too time-intensive and cumbersome for the available cadre of harried volunteers. It is increasingly common to find outmoded structures breaking down, as the wheels of volunteer bodies (e.g., committees, task forces) spin and volunteer involvement becomes ritualistic, the appearance of participation outweighing actual accomplishment.

Even more dramatically, sweeping transformation of entire business sectors - health care and financial services, for example - can call into question an association's core membership, mission, and strategies. If you head an association in the insurance industry, for example, how do you respond to the inevitable growth of gargantuan financial services firms offering banking, insurance, and investment management? Do you develop a new mission based on new products and services for an expanded, more diverse membership?

What extraordinary CEOs do

In this rambunctious world, doing a virtuoso job of leading and managing what is just will not cut it. If you want to become an extraordinary CEO, then you must focus on helping your association acquire certain critical attributes and capacities that are essential for surviving and growing in a rapidly changing world. To succeed in the future, your association must be

* united around clear values, vision, and mission;

* fast moving and flexible;

* focused and disciplined;

* able to stay on top of events in the wider world and to learn quickly;

* adept at attracting, retaining, developing, and empowering capable people;

* capable of innovating - regularly and systematically; and

* led by a strong board-CEO partnership.

Two particularly high-stakes attributes that are notoriously difficult to produce and notable for their widespread absence are the focus of this article: the capacity to innovate and the ability to forge a strong board-CEO partnership.

Outcome 1: Developing an innovative association

Innovation is the process of developing and implementing a strategic change portfolio consisting of innovation initiatives or "change chunks" to deal with selected strategic issues. Innovation basically involves an association CEO's taking the lead in developing and connecting three capacities:

* Creativity, which is the capacity to generate possibilities for change, resides in the people - the board and staff members and volunteers - who work in an association. People are creative - not associations in the abstract, and no association can be more creative than the people in it.

* Innovation planning, which takes creative ideas and translates them into concrete initiatives or change chunks, is a contemporary variation on the strategic planning theme widely known as strategic management.

* Implementation, which takes planned innovation initiatives from paper to action, involves employing a special implementation structure and process separate from day-to-day operations to manage the strategic change portfolio, building a culture that is innovation friendly, and overcoming the normal human resistance to change.

Association CEOs around the country who are seriously committed to innovation have fostered creativity in their organizations through a variety of means, such as providing opportunities for off-site creativity education and training, ensuring opportunities for free-flowing brainstorming in staff meetings, building a library of materials on the rapidly changing field of creativity, and leading discussions on the creativity process. By far the most powerful approach to building creative capacity is to make sure that creativity feeds into a strategic management process that will use the creative fuel in generating change initiatives.

Having said that, it is probably fair to estimate that upwards of 90 percent of all of the planning associations and other nonprofits do is basically control focused. Even so-called strategic planning has tended in the past merely to project the present into the future. Not only has such planning generally failed to produce innovation, thereby making its practitioners vulnerable in a challenging environment. It has also left in its wake countless board and staff members who have lost faith in planning as a change tool.

The innovation engine

Well, if the bad news is that traditional strategic planning has failed to serve as a powerful innovation tool, the good news is that in recent years many associations and other nonprofits have experimented with a variation on the strategic planning theme that has proved to be a very effective innovation engine: strategic management.

The strategic management process produces two key outcomes:

* an updated strategic framework, consisting of an association's core values, its vision for the future, and its current mission; and

* a strategic change portfolio consisting of a small number of innovation initiatives or change chunks intended to address the strategic issues that the association's board, CEO, and executive team have selected for attention.

In addition to these two preeminent outcomes, certain key attributes of the strategic management process distinguish it from traditional strategic planning:

* front-end, intensive involvement of the association's board, CEO, and executive team - usually in a retreat setting - in updating values, vision, and mission and in identifying the strategic issues facing the association;

* the selection of only a small number of strategic issues that truly deserve attention (meaning the development of detailed change chunks to address them) during the current year;

* the use of task forces to develop the change chunks; and

* the management of implementation of change chunks through a structure and process kept entirely separate from day-to-day association operations.

The magic of the strategic management process lies not in detailed planning but in the selection of the right issues to address through task-force planning during the current year. Issues - or change challenges - can come in several forms. They can be opportunities (a federal grant or a new demand for which you can develop a product) or problems and threats (membership decline, falling attendance at the annual trade show, a dysfunctional board). And they can be related to classic business questions (new revenue generation, new customers, new products or services); to human resource capacity (staffing, board leadership, volunteer involvement); to systems (planning process, financial management, MIS); and to external relations (image, stakeholder relationships, legislative relations).

Associations that have employed strategic management as an innovation tool (such as those noted at the beginning of this article) have used the following logic to select issues:

* First, they ask the question, "What costs or penalties will the association face if the issue is not dealt with now, but is left to next year or beyond?" For example, not dealing with a dysfunctional board might seriously erode the board-staff partnership and impede initiatives to build membership. The point is to make sure that the highest-stakes issues are addressed this year.

* Second, they ask, "What do we think it will cost to address each issue, and can we realistically expect to come up with the required resources?" For example, pursuing a merger with another association in the same general business might require considerable board, CEO, and executive time as well as expensive legal assistance, and might also possibly entail substantial political risk.

The final selection of issues is based on the most favorable balance of avoided penalties and required resources and risks.

The 1998-1999 strategic change portfolio of the Association for Investment Management and Research (AIMR), for example, consisted of the following change chunks:

* Three in the capacity-building area: major governance restructuring, strengthening the board-CEO partnership, and implementing a more innovation-focused strategic management process.

* Three in the area of business strategy: updating AIMR's values, vision, and mission statements; fashioning a comprehensive strategy for international growth; and supporting implementation of AIMR's established ethical and performance standards.

Implementing change chunks

Sad to say, planned change is the exception to the rule in human affairs; witness the shelves filled with dust-covered planning tomes that exercise no influence over the organizations that produced them. Resistance is a more powerful foe of creative change and growth when it is largely unconscious and, thus, not even recognized by the resister, who may see only the most rational reasons for opposing change. A common manifestation of this phenomenon is what I call "killing change with a million sensible questions." An often well-meaning devil's advocate asks question after question about the possible results of recommended changes, wearing down enthusiasm and commitment in the process.

In addition to the very natural and understandable resistance of human beings to change, the pressures of day-to-day operations can endanger planned change. Indeed, experience has taught that full in-baskets, jangling phones, and nonstop crises frequently overwhelm planned change. In his brilliant Seven Habits of Highly Effective People, Stephen Covey describes the seductiveness of those seemingly urgent, but relatively minor, activities that comprise a typical business day. The fact is, accomplishing them - and checking them off the list - tends to provide considerable satisfaction to high-achieving people. Consequently, associations are all too often so busy that they do not take command of their own change and development, instead allowing themselves to be changed by the forces around them.

Fortunately, over the past decade practical techniques for effectively managing the implementation of planned change have been successfully tested. We now know that planned, managed innovation can occur if it is channeled through a special structure and process that are kept separate from day-to-day management. And we also know that the CEO must pay close attention to creating an internal culture that is receptive to change.

For example, the five associations cited earlier all created a formal change program to oversee and manage implementation of the change chunks making up the strategic change portfolio separate from daily operations. A member of the executive team serves (in addition to his or her regular responsibilities) as the "change coordinator," guiding, monitoring, and supporting task forces as they fashion change initiatives and move through the implementation process. The executive team serves as the "coordinating committee" of the change program, reviewing the work of planning and implementation task forces and signing off on resource allocation. And the CEO regularly reports progress to the board's executive committee as "steering committee" for the change program.

Outcome 2: Building a strong board-CEO partnership

Boards can be a precious resource for and close, valuable partner of the CEO in providing strategic and policy leadership for an association. Board members bring knowledge, experience, expertise, networks, and diverse perspectives to the leadership process, and if these resources are fully tapped in doing the work of the board, associations can only benefit.

Despite this tremendous promise, however, association boards are often not creatively involved in governing, operating instead as a kind of high-level technical advisory committee and audience for finished staff work. Naturally, when high-achieving people are engaged in work that does not capitalize fully on the resources they bring to the job, they grow frustrated. One obvious, inevitable victim of such frustration is the board-CEO working relationship, which can easily fray to the breaking point. Another less obvious victim is association strategy, which is far weaker for the absence of creative board participation in fashioning it. In these changing, challenging times, no association can afford an underperforming board. So what is the association CEO to do?

The extraordinary CEOs of the five associations cited earlier - along with hundreds of other nonprofit leaders around the country - worked closely with their boards, in retreat settings, to redesign the board leadership process and structure. In every instance, the starting point was a new way of viewing the board.

The old way was to see the board as basically the pinnacle of the association pyramid, typically receiving paper from below and responding to it; I call this the review-and-react board. Largely a passive, reactive role, it tremendously limits the board contribution to the association and the satisfaction and ownership of board members. Audiences can never be partners, no matter how well-crafted the staff work. The new view or new model, if you will, treats the board as an organization within the wider association which, like any other organizational unit, is expected to produce value for the association. The challenge of board redesign is to determine how the board needs to focus its precious time in generating value - actual product - for the association, not alone but in partnership with the CEO.

The board redesign process starts with the board's fashioning its own leadership vision, identifying the products in key governance areas that it wants to spend time on, and then reaching agreement with the CEO on the structure and process that will enable the board to generate these products in active partnership with the CEO. The board leadership vision of the American Health Information Management Association, for example, has the following elements:

* Serving as the steward and guardian of AHIMA's values, vision, and mission;

* Providing strong strategic and policy direction for AHIMA;

* Taking a leading, proactive role in planning and decision making;

* Serving as the preeminent driver,of AHIMA's growth and development;

* Monitoring AHIMA's overall performance against strategies and goals;

* Ensuring that all board members are fully engaged in the governance process and that the resources they bring to the board are fully utilized;

* Making sure that the board's composition is diverse enough to support a truly powerful strategic decision-making process and to facilitate external partnership building; and

* Taking accountability for its own performance as governing body.

Within the framework of its board leadership vision, the board of the Agency-Company Organization for Research and Development (ACORD) identified products in key governance areas (in active partnership with the CEO and staff) it wanted to focus on, including these:

* In the planning area: annually updating association values, vision, and mission; identifying and selecting strategic issues to address; reaching agreement on annual performance targets and resource allocation.

* In the operational oversight area: designing financial and program and business performance reporting formats; regularly reviewing financial and program and business performance.

* In the area of external relations and volunteer involvement: regularly reviewing volunteer involvement to determine needed improvements in structure and process; overseeing development of stakeholder management strategies; ensuring that ACORD's image is promoted in all external publications.

The Health Industry Distributors Association (HIDA), having developed and adopted a board leadership vision and having defined the products requiring serious board attention, has taken a number of steps to strengthen board structure and process, including:

* Adoption of a new standing committee structure that matches the work that the board is committed to doing: an executive committee to focus on the management of board operations and to coordinate standing committee work; a planning and business development committee; an operational oversight committee; and an external relations committee.

* The development of board performance standards, which are monitored by the executive committee.

* The diversification of the board's composition beyond the industry as a means of bringing in fresh knowledge and perspectives.

* The addition to the planning cycle of an annual board-CEO-executive team, two-day strategic work session for the purpose of updating values, vision, and mission, and identifying the change chunks to be in the HIDA strategic change portfolio.

* The institution of an annual CEO evaluation by the executive committee, based on annual negotiated performance targets, above and beyond the normal organizational targets set through the operational planning process.

Every one of the five associations cited previously reorganized its board into a small number of standing committees, every one of which cuts across the whole association, providing the "horizontal discipline" that is at the heart of effective governance. By contrast, traditional boards are generally organized into committees that are merely the tip of the administrative iceberg: by businesses and programs (such as education and training; the annual conference; home health care) and by narrow administrative functions (such as finance and personnel). This traditional silo organization makes it virtually impossible for a board to be more than a collection of expert advisers reacting to staff work in the various silos.

CEO skills and character dimension

In this article I have explored practical ways that the extraordinary CEO can help his or her association develop two capacities that are critical for survival and growth in the coming century: building and implementing a strategic change portfolio consisting of innovation initiatives or change chunks and creating a strong, positive board-CEO partnership. Space prevents me from dealing in-depth with the CEO skills and characteristics that undergird extraordinary CEO leadership, but a word is in order. Three skills have, in my experience, proved essential to extraordinary leadership: visioning, designing, and facilitating.

Visioning is the art of seeing what might be but does not now exist - of painting a picture of the desired future in terms of association impacts, role, and culture. If you cannot envision, you are most likely ill-equipped to motivate the people around you, or to lead the innovation process, which depends heavily on visioning.

Designing involves being a kind of association architect, making sure that the various organizational components - such as the board, management team, and strategic management process - are properly developed and connected so that they produce the desired outcomes.

In a world of highly skilled knowledge workers doing very complex work in a turbulent world, commanding and controlling will not get you far. The modern association has nothing in common with a traditional, paramilitary structure. Therefore, facilitating process will be one of your most important CEO skills.

Experience has probably taught you, like me, that skills not grounded in character cannot, no matter how well honed and rigorously applied, command the respect and commitment of the people you lead. In my work with extraordinary CEOs, I have identified three character traits that appear uniquely important: true humility, realistic self-understanding, and commitment to core values.

* A truly humble CEO is a fundamentally confident CEO who is spiritually grown up. In not seeing yourself as the center of the universe and in being free of the need to demonstrate dominance or to save face, you can attract strong people and celebrate diversity. Abraham Lincoln and Harry Truman are stellar examples from political history.

* If you possess realistic understanding, you are psychologically grown up in the sense that your view of the world - especially of the people you work with directly - is objective. This realism requires that you deeply understand what makes you tick, and that you are alert to deep-seated, often hidden emotions that might filter and distort reality. For example, a CEO's deep-seated need for control might turn critical but sensible questioning by board members into a perceived threat to authority. If you do not spot the emotions at work, you may respond defensively and contribute to the erosion of your most important partnership.

* Three core values are at the heart of extraordinary CEO leadership: honesty, openness, and regard for the welfare of the people around you. If you do not practice them every day, you are unlikely to inspire the trust or motivate the commitment essential for effective board and staff participation in change leadership.

Some people believe that character is immutable; there is not much to be done about it once it has been shaped, they say. Experience has taught me the polar opposite, and I encourage you to concentrate in your development not only on how you can produce the essential association capacities or develop the critical skills but also on growing your character. Doing so will help ensure your ascension to the rank of extraordinary CEO.

Note: Five association CEOs with far-reaching organizational development initiatives provided case examples for this article: Tom Bowman of the Association for Investment Management and Research, Charlottesville, Virginia; Ken Crerar of the Council of Insurance Agents and Brokers, Washington, D.C.; Greg Maciag of the Agency-Company Organization for Research and Development, Pearl River, New York; Wayne Kay of the Health INdustry Distributors Association, Alexandria, Virginia; and Linda Kloss of the American Health Information Management Association, Chicago. This article also draws on Doug Eadie's work with ASAE's Executive Management Section Council, which has been investigating association CEO leadership requirements for the past 18 months.

Resources

Doug Eadie, president of Doug Eadie Presents!, Cleveland, Ohio, is writing a new book, with the working title The Extraordinary CEO, that will be published in the near future by ASAE. Eadie has also written several other books, available from the ASAE Bookstore.

* Boards That Work: A Practical Guide to Building Effective Association Boards (product AMR216724) $28 member, $33 nonmember, plus shipping. This constructive approach to board relations is based on flexibility, openness, and commitment to innovation. Eadie applies practical experience - lessons learned as a consultant to more than 300 nonprofit boards - to help leadership teams work together more effectively.

* Changing by Design (product AMR250074), $27.95, plus shipping. This book presents a balanced, comprehensive model for successfully managing change in today's nonprofit organization. Illustrated by case studies, it shows how to design and manage a change plan, partner effectively with the board in leading change, encourage and unleash creativity and innovation in developing change initiatives, effectively involve staff in designing and implementing change, protect change initiatives from becoming sidetracked by day-to-day pressures, and recognize and deal with barriers to change.

* Meeting the Change Challenge: The Executive's Guide to Leading Change in the Nonprofit World (AMR216726), $19.95 member, $24.95 nonmember, plus shipping (audiocassettes are available at the same prices - product AMR216725). This guide to leading and managing change shows chief executive officers how to embrace the role of change leader, which will enhance their associations' health and vitality as well as their own professional growth and advancement. The book discusses the three key capacities critical to successful change leadership and management: lead, innovate, and implement.

These books are available from the ASAE Bookstore. Add 5.75 percent sales tax for books shipped to Washington, D.C., addresses. To order, call (202) 371-0940; fax to (202) 371-8315; or send an e-mail to mbrsvccen@asaenet.org.

Douglas C. Eadie, a member of ASAE's Executive Management Section, is president of Doug Eadie Presents!, Cleveland, Ohio, and a strategic consultant. E-mail: DEadiePres@aol.com. Web site: www.dougeadie.com.
COPYRIGHT 1998 American Society of Association Executives
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1998, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:association CEOs
Author:Eadie, Douglas C.
Publication:Association Management
Date:Aug 1, 1998
Words:3792
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