THE MOST COMMON PITFALLS WHEN AN EXECUTIVE DIRECTOR LEAVES AND AN INTERIM POSITION IS CREATED

“Anyone can be an Executive Director, especially when it’s a short-term fill-in position - how hard can it be, right?"

I have had that conversation more often than is good for my blood  pressure. As soon as a Board member of a not-for-profit says “how hard can it be, right?” I know they are headed for trouble. “We have a Board member (or colleague, or donor) who is retired and has time and won’t charge us anything, so he can fill in and we’ll save some cost. I mean, how hard…etc”.

Canadian author Margaret Lawrence once told of being at a cocktail party and talking with a neurosurgeon who said “you know Ms. Lawrence, when I retire I’m going to write a novel”. “What a coincidence” said Margaret Lawrence “when I retire I’m going to be a neurosurgeon”.

Well, it is hard to be an Executive Director and in some ways even harder to be an Interim Executive Director. The learning curve is very steep and an Interim Executive Director has to keep the organization strong, on track with its programs and strategies, manage all stakeholder relations, plus keep staff and systems  functioning positively while not making decisions that will have adverse consequences when a permanent  Executive Director is recruited. An Interim Executive Director is supposed to come fully conversant with and experienced in grant application processes and regulations, HR best practices for NFP’s, knowledge of fundraising and campaign methodologies, internal and external communications strategies, basic financial management, and the ability to deal with Board/Governance policies and procedures. Someone who has “a bit of time on their hands” and can volunteer for the position but has no direct experience in managing the complexities of a not-for-profit  (serving on a Board does not constitute operational experience) will at the very best be less than effective, and at worst leave a time bomb of financial, staffing (usually including plummeting staff morale) and other problems for the permanent person coming in. Like any rule there are of course exceptions, and I am aware of cases where a person with senior and somewhat related experience has been a successful Interim Executive Director, but it is rare.

In addition to the amateur Interim Executive Director issue, here are some of the other most common mistakes made in looking for either an interim, or even a permanent Executive Director:

Job Description – it’s the same but shorter, isn’t it?:  

Just taking the full time Executive Director’s job description and tacking “Interim” on to it is not a good idea. The interim position will have different performance measurements from the permanent position and it will have very different operational requirements. For example, an Interim Executive Director will not normally be required to create long-term strategies or program development and should not tinker with those already in place unless funding is in jeopardy or projected outcomes are not being achieved. Also, the emphasis on some aspects of the role will be different and may require, for example, paying closer attention to staff morale and retention  in order to maintain stability and continuity, while paying less attention to such aspects as, for example,  new capital or brand redefinition and new marketing programs.

We don’t need their advice on anything else, do we?:   

One mistake I have seen is the missed opportunity of failing to capitalize on the range of knowledge plus variety of experience that an Interim Executive Director usually brings to the position, or actively discouraging any consulting or advice outside the job description. Assuming this person does not want or is not considered for the permanent position, they can be objective and truthful in providing a point of view about the organization’s operations. Having an experienced and objective consultant as well as an operational leader can be a real bonus and the job description should include providing an assessment of the organization’s strengths, challenges and opportunities for improvement as an exit requirement.

Pay peanuts and you get monkeys:  

This, plus “you get what you pay for”, are two clichés that Boards still sometimes forget when hiring for an  interim position. Just like the “how hard can it be?” argument, Boards sometimes see hiring an Interim Executive Director as an opportunity to save money. The flawed reasoning is that the interim person will not have the same level of responsibility or skill requirements as a permanent position so they don’t need to be paid as much. Not true and can lead to bad hiring. Granted, the responsibilities are different in an interim role, but no less difficult or demanding and require the same level of expertise and ability as any permanent role. Don’t expect to pay less (or nothing!) and expect the same level of competence. Remember, the interim person is responsible for maintaining your brand, reputation and carefully built donor and other stakeholder relationships. No matter how much money you think you’re saving by hiring someone at a lower rate than the permanent position, a less experienced and low performing Interim Executive Director can cost an organization dearly if those areas are neglected or poorly handled.

Why hire anyone? We can just give a staff member the job for the interim: 

Sure, add a whole new job to an existing and presumably important one for someone who probably doesn’t want it and isn’t sure how to do it. Plus, when it’s over, that person drops back in status and presumably loses the few extra bucks you were paying temporarily. The job will not be done well, the staff will find it hard to   relate to a colleague who is now their boss for a while and the person will resent the whole situation. I have seen it done and it’s a lose/lose proposition. It’s in the same category as “we need someone to handle HR.  Susan, who does admin and bookkeeping, can’t be that busy – let’s put  her in charge of HR”. As the saying goes, it’s not a problem until it’s a problem. Suddenly the organization has a legal, ethical or performance failure or dismissal issue and Susan is totally out of her depth and the organization is in trouble.

Let’s just ask the outgoing Executive Director to find someone:

Even if the outgoing Executive Director is leaving on positive terms, they will either try to find someone just like them (which may or may not be good) or a friend they know who may not be suitable, or will often go for upgrading a staff member, particularly a close colleague who may have lobbied for the job. Hiring an Executive Director, either interim or permanent, is a Board responsibility. In almost all not-for-profits, the Executive Director is the only employee of the Board and reports directly to the Board, often via the Chair. It is wrong and usually against the by-laws to delegate this responsibility.

How does an organization avoid all those pitfalls and keep things running smoothly? The Board needs to:

• Take on the responsibility for creating a job description and appropriate compensation level designed specifically for an interim position, ideally with professional help.

• A committee of the Board needs to manage the search process.

• The Board needs to review then approve the committee’s recommendation.

• Staff need to be informed fully and positively once the decision is made and before rumours start.

How hard can it be, right? It needn’t be hard at all. Osborne Interim Management can provide a senior, experienced Interim Executive Director and can guide Boards through the whole process of job description, on-boarding and eventual transition to a permanent Executive Director.

Blane Hogue (click to see Blane’s profile)

Principal

Other Articles Written by Blane

Fundraising and Philanthropy in a Tightening Economy

Social Enterprise: Profit Meets Not-for-Profit - Can They Live Together?

  

HOW TO SET UP AN EFFECTIVE MENTORING PROGRAM

Early in my career, I learned about the value of having a mentor. Back “in the day” there were no formal mentoring programs at the financial institution that I worked at, but I found myself looking forward to spending time with two particular senior executives. I watched their interactions with employees and customers and listened to their messages and how they delivered them. I took note of how they dressed and how they carried themselves. I didn’t know the word for it then, but I was being mentored and my mentors didn’t even know it! 

Today, mentoring has come a long way in becoming a more formal program in most progressive companies. It also has become a critical function as a great deal of corporate knowledge needs to be transferred to the next generation. 

This article is a follow up to Osborne’s article in January about the merits of mentoring. It will help your company set up a mentoring program that is easy and sustainable. 

There are four parts to setting up a mentoring program. 

First, the company needs to articulate the purpose of the mentoring program. The purpose can be anything from sharing the knowledge of a senior employee approaching retirement to development of junior staff, preparing them for a future in your company or industry. Articulating the purpose of your program will allow you to be focused and avoid becoming too broad and diluted. For the purpose of an example, “our mentoring program is to develop young accountants in an organization, preparing them for future roles.” 

The second step is to define the areas of the company that will be part of the program. In our example, we are going to involve all departments of accounting in an effort to give our young grads exposure to all the area’s different disciplines. For each discipline, a check list of mentoring topics should be documented. This will assist the mentor in structuring their part of the program, making the learning consistent between mentors. 

The third step is to identify mentors. Previously, we discussed what would make a good mentor. In sum, a good mentor is a good listener, empathetic, very knowledgeable in their area of expertise and has time to dedicate to his or her mentee. A good mentor need not be a leader of people. In fact, being a mentor can assist an employee in becoming a good leader by developing coaching skills. Always identify mentors first before committing to a program. You will need to know you have the support and resources to make it happen. 

Once the mentors have been identified, the obvious next step is to identify the mentees. An ideal mentee is one that has already shown initiative, loves to learn and is obviously looking forward to moving up in the company. Never choose an employee who has performance or attitude problems. A mentoring program is a reward for those employees who want a challenge and have proven themselves in their current role. It is not the time to hand problems off to someone else to try and fix! 

The matching process is the next step. When considering whom to match with whom you should take into consideration the following: 

• Personality – having the same is not always better. But be aware of total opposite personalities. 
• Learning style, versus coaching style – exposing employees to different types of mentors will lead to a more rounded individual.
• A mentor should never be an employee’s leader. 
• An obvious factor is location. While proximity is best, current technology (i.e. Skype) allows you to expose employees to others in your organization from around the world. 

So here you are: You have defined the program, identified and matched your mentors and mentees. Now what? 

I recommend having a kick off meeting that has both a formal agenda and a networking component and includes all participants. The formal agenda should be led by an HR facilitator and every attempt should be made to have the most senior executive address the group at the beginning. The formal part of the program can outline expectations of both the mentor and the mentee and provide recommendations on meeting frequency and length. Every relationship will fall into its own rhythm over time, but initially, structure is important for sustainability. In order to get the mentors and mentees talking, I recommend, planting some questions with both parties. This may or may not be required. If there is initial awkwardness, having some prepared questions will really help the conversation flow. The goal of this initial session is to make sure that both the mentee and mentor have similar expectations and feel comfortable moving forward. 

The formal agenda should be followed by a less formal networking session, even over a lunch or dinner. The mentor should demonstrate their networking skills and introduce their mentee to others in the group. The meeting should not end without a commitment for a follow up conversation or meeting. 

The final piece of the mentoring program puzzle is the most important and the most difficult – sustainability. While it is inevitably up to the participants to keep the program going, you can assist by offering the following assistance: 

• Regular check in’s with participant (monthly or quarterly). Are there any challenges? What are some successes? 
• Give topics for discussion. 
• Bring the group together six months into the program. Focus on results and if any improvements can be made. 
• Follow up with the mentees leader to see if there has been any progress. 
• Ensure there is a goal related to mentorship on the mentors performance reviews (what gets measured gets done). 
• Provide a expense fund for mentors and mentees to go for coffee or lunch. 
• Develop a year-end assessment scorecard that will assess the program from all perspectives. 
• Start the cycle every year with a kick off. Consider changing up the mentors and the matches currently in place. If the current matches feel that want to continue, let that happen too. 

Suzanne Wilson (click to see Suzanne’s profile) 
Principal 

Other Related Articles 
Mentoring - Successful People Never Achieve Their Goals Alone 
Leadership - The Holy Grail of Business 

IAIN DRUMMOND JOINS OIM

Osborne Interim Management is pleased to welcome IainDrummond to the organization as a Principal.

Iain is a highly experienced IT executive with an extensive background as CEO of both public and private companies. He is well-versed in all aspects of management, including running international operations for a large multinational computer manufacturer. As a result of his extensive earlier experience as a systems analyst and troubleshooter, Iain is used to creating high-value solutions to challenging business problems. He has a strong focus on sales, marketing, product development, budgeting and financial controls, and is a top-level presenter with strong verbal and written communication skills. He is a skilled motivator and people person, and is used to dealing at C-level with both government and private sector organizations.

RISK MANAGEMENT - BLOG POST BY IVAN McCLELLAND

3 Types of Insurance you should consider for your small business.

 Insurance is essential component of your risk management toolkit, particularly in respect of mitigating the financial consequences of certain loss exposures. Business owners must continually balance their need to manage risks with the cost of obtaining peace of mind through insurance. In the past few years some types of policies have increased in popularity and consequently these policies may be more affordable that they were before. Here are three policies that every Small business owner should consider;

1.     Cyber Insurance. We all use technology to some degree and many business are highly reliant upon IT to sustain their operations. The financial impact and associated liability can be mitigated through cyber risk insurance. Although this type of insurance has been available in Canada since the mid 1990’s, its popularity has increased considerably in recent years. There are numerous insurers in Canada who offer cyber risk insurance and policies can be customised in respect of retention amounts and potential losses covered. 

2.     Key – Person Insurance. Does your business include someone whose contribution is vital to the survival of your company? If yes, then key person insurance should be a part of your business continuity and succession plan - especially if you're a small business owner. Numerous insurers offer this type of coverage and many group benefits providers will include this coverage if requested. 

3.     Overland Flood. Traditionally this type of insurance has not been readily available in Canada, and the few insurers who offered it charged excessive premiums. But that is changing!  A number of large insurance companies have started to offer overland flood insurance, and as these policies become more popular the premiums should start to come down to levels were it may be a viable risk management option. 

You should talk with your insurance broker or consider reviewing your enterprise approach to risk management, to assess if your insurance is aligned with your risk management objectives. The risk management team at Osborne are available to help with all your risk management needs.

Ivan McClelland (click to read Ivan's profile)

Principal

CYBER SECURITY RISKS - ARE YOU PROTECTED?

Cyber security risks are present in almost all organizations, irrespective of size, as we all become increasing dependant on information technology to manage operations, HR, financial and customer information. These operational risks should be considered by all organizations as part of their risk management program.

While Small to Midsized Enterprises (SME) don't have the luxury of dedicated information security teams and resources that large enterprises can afford, they still face many of the same threats. According to the Government of Canada, over 31% of cyber-attacks intentionally targeted small to medium sized businesses in 2012 and that number has increased in the past two years. They also report that the average financial impact to such businesses is in excess of $15,000 per attack, although this number is conservative when compared to other studies.

Customers and employees naturally expect personal and financial data to be kept secure, and a data breach can be a painful and expensive ordeal. But it can be daunting for a small business that may have a small IT department, to think about how to tackle IT security.

The response of many SME’s is the “security through obscurity” approach. In other words, we’re too small to be on anyone’s radar and the cyber-criminals are only going after the big guys. It is true that many of the well-publicized stories of data breaches have involved very large enterprises like Home Depot, TJ Maxx and JP Morgan. But these cases only represent a very small faction of the actual number of cyber security incidents that happen every day, which are increasingly focused on SMEs.

The reason why SME’s are increasingly becoming the victims of cyber criminals is the same reason why criminals target the vulnerable members of a society. Smaller companies are simply easy pickings and they don’t fight back like bigger companies. They represent a low risk of apprehension as SME’s would typically lack the monitoring, forensics, logs, audits, reviews, penetration testing, and other security defenses and warning systems that would alert them to a breach.

That being said, the most pressing IT security problem facing Canadian entrepreneurs is not computer hackers. The majority of security breaches actually come from a company’s own employees. They’re usually not doing it on purpose as most breaches are accidents, such as; an employee mistakenly emailing confidential client information outside the company, a cashier leaving a customer’s credit card information on a publicly viewable computer, or a manager inadvertently deleting important files. So where do you start?

IT Security has grown in complexity as IT systems and the methods used to compromise them have grown. There are however some first steps that can be taken to mitigate the risk. The following 6 steps are a starting point that a small business can use to evaluate its current cyber security risk and how to manage it:

1. Strategy and Human Resources Policies

• Does your company have a clear IT security policy that’s known to staff?
• Do you provide security awareness training to your staff, or promote a culture of security and protection within your organization?
• Do you have a policy on acceptable IT use, password guidelines and security practices?
• Do you have confidentiality agreements for contractors and vendors?
• Does your company have a privacy policy? Remember privacy law applies equally to how you protect employee information as well as customer information.

2. Data Backup

• For critical data (this is anything needed in day-to-day operations, including customer information), do you centralize it on a server and back it up nightly to a remote location?
• For important data (anything important to the business but that doesn’t get updated frequently), do you centralize it on a server and back it up semi-regularly off-site?

3. Desktop Security

• Do all computers have working anti-virus software?
• Do you have a security policy for downloading and installing new software?
• Do you have passwords with a minimum of eight alphanumeric characters that are changed every 90 days?
• Are all computers updated with the latest system updates and security patches?

4. Internet and Network Security

• Do you have a firewall and intrusion detection on all web connections?
• Do you use a virtual private network for remote access?
• Are all modem and wireless access connections known and secured?

5. Privacy and Sensitive Information

• Have you restricted access to applications and information to those who need it? Do you periodically review access levels?
• Is customer financial information encrypted and accessible only to those who need it?
• Are paper files kept in locked filing cabinets with controlled access?

6. Audit

• Do you do a periodic audit (every six months at least) of your IT security checklist?

These steps do not represent a comprehensive approach to IT security, but they will start you on the road to having a more secure and reliable network. Remember, technology is evolving very quickly and the methods used to compromise networks are evolving just as quickly, so managing your cyber risk must be a dynamic and iterative process.

The Government of Canada has published a useful guide for small businesses which can provide more information on how to protect your operations, systems and information. It is a very useful resource and it is available here.

Ivan McClelland (click to see Ivan’s profile)
Principal

Other Article Written by Ivan McClelland:
"No Risk, No Reward" - Identifying and Managing Risk Tolerance for Your Business