Friday March 31, 2017

Part II: Two Illustrative Narratives Taken from Actual Experiences

By Bob Regan (reposted with permission)

The first exemplary story is a recent conversation I had with the Board of Trustees at a struggling Catholic secondary school in the Northeast. This story will begin to establish a clearer distinction between fundraising and institution building as desired leadership qualities. For purposes of this narrative, I will refer to this school as Catholic Academy.

CS&A was invited to meet with the full Board to discuss our services and to explore whether we might be a good fit to support their search for new leadership. The school itself is located in a hardscrabble, industrial town whose better days are clearly in the past. Perhaps not surprisingly, enrollments at the school reflect the declining fortunes of the local economy. The facility was old but well maintained and welcoming. (Like all Catholic schools, the floors were polished to a bright sheen!) The financial condition of the school was deteriorating, but the Board remained committed to the mission and confident that the situation could be turned around quickly with the right leadership.

The meeting began with the usual introductions and pleasantries around the table and then the Board Chair quickly launched into his commentary.

“Bob, we cannot afford to make a mistake here. For years, we were led by the good Sisters who sponsor our school, and then we converted to lay leadership a few years ago and selected an educator with tons of experience in the classroom and as principal at another Catholic school. He was a nice guy and had excellent recommendations, but his tenure was a bust. He focused on all the wrong things, despite our urgings. Our financial hole got deeper. After several attempts at a cure, we decided to part ways, and have done so amicably. We have also learned from our mistake and now seek a Head of School with proven fundraising experience. We need someone who can make things happen fast. Can your firm deliver such a person?”

This was clearly a no-nonsense kind of guy – reasonably cordial but right to the point. From the rapid nods of approval around the table, I could see that this was also a top priority for the entire Board, not just the Board Chair. An eager silence awaited my response.

“I understand,” I responded. “We hear this theme all the time, and I am confident we can deliver an outstanding pool of candidates. But before going into other details, could you tell me what you mean by ‘proven fundraising experience?’ What kind of experience are you talking about?”

The pleasing nods of approval quickly changed to looks of amazed incredulity. Is he REALLY asking us that question? Of all people, doesn’t he know what we mean by “fundraiser?”

“I’m not sure I understand your question, Bob. Is there another kind of fundraiser that we don’t know about?”

“Perhaps,” I said. “Let me clarify. Hypothetically, what if we could present candidates with a remarkable history of growing enrollments in every leadership role they have played? Would that matter to you? Enrollments are a source of revenue, of course, and they are annuities, not one-time gifts. Would such a robust revenue-generating scenario meet your definition of fundraising experience?”

With that, the reactions around the table were varied. Some rolled their eyes in continued disbelief at my impertinence, while others squinted and nodded in unison as if to suggest that this could be an interesting line of thinking. The Board Chair was the first to speak, however, and his opinion prevailed.

“No, it would probably not meet our definition of fundraising. And for good reason. Enrollments take too long to happen, and the community is already discouraged and losing confidence. We need someone to come in here with a sense of urgency and hit the ground running. Our next leader needs to be a proven rainmaker and needs to raise money from day one.

“I understand,” I said. “And please know, I am not trying to be rude or disrespectful, and I have great admiration for the important work you do as trustees. But I need to ask you a difficult question, if I may. To raise money – at least in meaningful amounts – you need two things: you need a willing donor with capacity, and you need a compelling story to tell, a reason to give. What will the next Head of School at Catholic Academy be selling from day one? What’s the compelling story here?”

You can imagine where our conversation went from there. This well-intentioned board was convinced that the school’s Catholic mission, alone, was the compelling story and reason for others to give. Its worthy mission, along with years of faithful service to its community, were sufficient grounds for an entitled future. Past is prologue. The fundraiser they hire will figure out how to tell the story. If, by chance, the fundraiser is also an experienced school leader who possesses those other leadership intangibles, that would be all to the good. But the core requirement, the sine qua non, was proven fundraising experience. This is the resolute choice they made.

An hour or so later, I was thanked for taking the time to meet, and graciously shown the door. It is my understanding that the search for a fundraiser as Head of School is now underway.

Jeremy’s Failed Leadership

This second story is an unfortunate “after the fact” narrative that demonstrates how hiring mistakes emanate from faulty assumptions and search priorities. It also demonstrates insidious misalignment between board expectations and CEO performance. But it has a hopeful ending.

Two years ago, I received an email from the Board Chair of an independent, Catholic secondary school in California asking if we could schedule time to talk privately. We did not know each other at the time, so I thanked her for reaching out and asked if she could share with me in advance what she wished to discuss. She responded (confidentially) that the current president of her school was in the final year of a three-year commitment, and the board was considering not extending his contract. They wanted to seek our professional counsel before making a final decision. We spoke within minutes. It turns out that the school had been experiencing declining enrollments for a number of years – long before the current president was hired – and the situation was becoming increasingly discouraging and threatening. The prior, long-time Head of School was a Brother who was retiring, and the board saw an opportunity for transformational change in the impending leadership transition – a potential inflection point, if you will. Timing was fortuitous. They decided to go big and package a total solution in two parts: convert to the President/Principal Leadership Model and seek a lay leader with proven fundraising skills. This artful combination of a new leadership structure and dynamic new skill set in the corner office was compelling and potentially synergistic and created a buzz on campus and in the boardroom.

After months of sourcing on their own, they found Jeremy, their current president & CEO.

Jeremy seemed like the perfect candidate to the board. A practicing Catholic and family man, Jeremy was a development officer in a local health care organization. He had zero educational leadership experience, but he seemed genuinely passionate about Catholic mission and identity and brought a successful portfolio of fundraising results. In the President/Principal Model, his lack of educational leadership experience would be sanguinely offset by the principal who serves as chief academic officer overseeing day to day academic operations. There seemed to be no downside to the decision, and only upside promise. Or so they thought.

“Problem is,” said the Board Chair, “here we are, nearly three years later, and nothing has changed. Our enrollments are still declining, we are losing some of our best families, and all Jeremy wants to do is raise money – and not big money, mind you, but small amounts, nickels and dimes, really — hardly enough to compensate for the growing number of empty seats in our classrooms and loss of confidence in the community. Don’t get me wrong”, she countered. “Jeremy is a nice guy and has done some good things – like raising money to refurbish our library. But our enrollment and revenue problems persist and are getting worse, and we are running out of time.”

The Board Chair went on to explain that Jeremy had a narrow view of his role as president and believed that responsibility for strategic planning and vision setting belonged exclusively to the board. Without a determined CEO driving the change agenda, the board was incapable of achieving consensus or traction around a new vision or plan for the school. Jeremy’s insouciance created a leadership vacuum at every operating level. As the institution’s “outward facing” leader – his view of his role — he was disinterested in the messy business of running a school and delegated all operational responsibility to the principal who felt increasingly overwhelmed and powerless. Faculty and staff morale were deteriorating, and the school’s ninety-year brand was in reputational freefall. Some feared a certain death spiral was under way.

Not surprisingly, the Board Chair reported that the relationship between Jeremy and the board had become increasingly contentious if not toxic. The board accused Jeremy of failing to deliver on his promises and for his dereliction in refusing to exercise the fullness of his responsibilities as CEO. For his part, Jeremy accused the board of failing to lead by example when it comes to giving, and for failing to take the lead in creating a culture of philanthropy at the school. “This is not a one-man show,” he argued. Ruefully, the Board Chair could not disagree entirely with Jeremy’s claims.

Within days of our conversation, Jeremy was informed that his contract would not be renewed at the end of the academic year. The Board Chair reported that Jeremy seemed relieved and accepted the decision without rancor or bitterness. I will not discuss the details of the successful national search we conducted for Jeremy’s successor or how we dealt with the evident board dysfunction that revealed itself during Jeremy’s disappointing tenure. Those may be appropriate topics for a later post. Suffice to say, we are hopeful and believe the school may now be positioned for the long-anticipated transformation.

What Conclusions Might We Draw From these Two Narratives?

They say hard cases make bad law. The two stories discussed above are admittedly hard cases and somewhat oversimplified, but they are factually true and not uncommon and speak to the kind of governance pathologies that can lead to bad policy and misguided hiring practices. There is much we can learn from them. With genuine respect for the good individuals and institutions involved in these stories, I would like to suggest that there are at least four (4) important conclusions we can draw:

First and foremost: Avoid the temptation to seek the quick fix. There is none. Instead, boards would be well advised to begin every Head of School search in honest reflection and frank discussion before launching the search or leaping to conclusions. In Joseph Heller’s humorously dark novel, “Catch-22,” one of the characters says of his clueless adversary that he can’t see things as they really are because he has flies in his eyes. “And how can he see he has flies in his eyes if he has flies in his eyes?” To ensure clear thinking, and wash any flies from their eyes, boards should engage in a collective exercise to achieve clarity of purpose and understanding. Boards should go offsite and ask themselves three gating questions:

I can assure you, if you are thoughtful and honest with yourself and your board colleagues, you will come to see things as they really are and not rush to a facile conclusion and select the fundraiser profile, narrowly defined. The profile you construct may include fundraising as a desired executive trait or set of experiences, but it will be more robust and nuanced and will encourage you to keep an open mind and allow the search process to inform your judgment. To some extent, the search process works best when it becomes a journey in discovery and discernment. Allow yourself the opportunity to be surprised. Very often, the most prodigious fundraisers in Catholic schools turn out to be people who never had any formal fundraising training and who never raised money until they assumed the formidable responsibilities of Head of School. And then their talents and passions kicked in serendipitously, and with awesome, game-changing results. It happens.

A second conclusion I would suggest is this: Regardless of what is stipulated in the CEO job description, incumbents tend to do what they know how to do and enjoy doing. As Jeremy’s self-destructive behavior clearly shows, his passion was fundraising, not leading. He thrives on the challenge of aligning donor interests with the needs of the school, and closing the deal. Justice Felix Frankfurter once wrote, “A power conscious of itself seeks expression.” From a search consultant’s perspective, truer words were never spoken. This is why runners run, singers sing, and leaders lead. Jeremy was simply expressing his passion, which is meeting people and asking for money. Lesson: If you require leadership, seek a leader not a fundraiser. Jeremy’s passion and board expectations were radically misaligned from the outset. Success never had a chance.

As Jeremy’s experience also attests, fundraising is not an effective intervention strategy. You cannot fundraise your way out of systemic decline. Whatever incremental gains can be achieved through personal solicitations and grant writing, they will never be sufficient to compensate for the massive outflows of cash caused by declining enrollments and eroding reputation and brand. There is not enough flour in the universe to support the number of cake sales needed to fund an adequate recovery through fundraising and events alone. The turnaround must begin by restoring enrollments and rebuilding the confidence and trust of the community. This is the important work of Institution Building.

In a related manner, and as suggested in both the Catholic Academy and Jeremy scenarios, successful fundraising can never be based on mission alone but must be powered by vision. It’s what you do with your mission, what you inspire from its core values and traditions that resonates with donors. Jeremy’s fundraising could never be truly transformational because it lacked a bold purpose. The small amounts he raised were dispositive of his failed notion of leadership and the proper role of chief executive officer of a Catholic school. To his credit, Jeremy’s modest fundraising results generated additional cash for the school, which enabled much-needed, though relatively minor facility improvements. For schools at risk, however, such marginal results are inconsequential and illusory. They may help get your school through another day, but not to a different place. The transformation so viscerally needed and urgently anticipated never occurred. This is also the central fallacy in the Catholic Academy board’s thinking, and why their Head of School search is likely to produce a fundraiser positioned for frustration and ultimate failure — another Jeremy story in the making. Without a compelling reason to give, and give big, donors of allied goodwill and affection for the school will be pleased to support your mission, but only in modest, perfunctory amounts. As I have written elsewhere, “Mission enables but vision inspires.” Big gifts chase big ideas, while small gifts reward small thinking. 

We are grateful for our friend Bob Regan for allowing us to share this post from his blog. Bob is the leader of the CS&A Search Group's Catholic Schools Practice. 

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