Dec 10, 2018

Two at the Top: The Emergence of Nonprofit Co-leadership

“Two heads are better than one” is a popular saying, but is it true when it comes to running a nonprofit? Some nonprofits are testing the theory by adopting the nonprofit co-leadership model, which takes decision-making power out of the hands of one person and allows multiple individuals to have a say before a final call is made. This episode of CPA Conversations looks inside the approach with Michael Cade, a strategy consultant and executive coach for MFCCoach LLC in Morrisville, Pa.

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By: Bill Hayes, Pennsylvania CPA Journal Managing Editor 

Podcast Transcript

Two heads are better than one. It's a popular saying that we accept without giving it much thought, but when it comes to leadership of a nonprofit, is it better to have one individual make the final decision or a structure that encourages multiple people to have their opinions heard before a final call is established? To get the answer to this question, today we are with Michael Cade, a strategy consultant and executive coach for MFCCoach LLC, in Morrisville.

Can you tell us a bit about the concept of nonprofit coleadership, and what it entails?

[Cade] Actually, it's not a really new concept, and this is something that was unusual when I found out about it. I was like, “I've never heard about this before,” but it's something that's been pretty common in the performing arts arena for many, many years. If you look at an orchestra or an opera, they have an executive director and an artistic director, and they have sort of equal power.

Originally, in the not-for-profit world or the for-profit world, there's one boss. This whole concept of coleadership is saying let's break that apart, if it makes sense, and have two leaders at sort of the same level guiding the organization forward, and it's been, like I said, around for a while, but that artistic model has now crossed over into some of the different segments within the not-for-profit world, so other organizations are picking it up and trying it out.

What would you say would be the main benefits of this style of leadership?

[Cade] Typically, what the boards are looking for is focus. They're basically looking at that situation where there's part of the organization that is so complex or so different than just normal running of business that it needs somebody to watch it. The rest of the business, its operation, it's your typical back office and sales and generating donors, those things can be handled in one organization, but then the rest of the organization is focused on something so technically advanced or so complicated that they need someone to focus on it exclusively.

What would you say are the drawbacks?

Typically, when you have two people running an organization, that's hard to maintain and, as this concept moves from these organizations that seem pure, that you can break a performing arts organization down to the artistic and operations, people are trying to use it in organizations where it doesn't split out that neatly. They're saying, “Well, there's certain things we want a COO to do, and there's certain things we want somebody else to do,” but those aren't separate. And they're interrelated. The drawbacks become can you keep that focus consistent, and can you now keep two people focused in the same direction as opposed to one. That's the old CEO is the top, they're the one that comes up with a vision, but what happens when you have two people coming up with a vision? Usually it starts out nice, but it can be a challenge to maintain it over time.

I think you may have discussed this a little bit with the performing arts, but we'll see if we can go into any other areas. Are there certain types of nonprofits that would benefit more from this approach than others?

[Cade] I think where you're going to see it pop up typically would be those areas where there's a very technical orientation, like a science-style organization, where a typical business leader wouldn't know enough about the scientific development of something to be able to really add value there. I've seen it popping up in lots of different places. And, like I said, I think it's going to be a challenge going forward where there isn't a very, very specific need for it. Where there isn't some high-level of technical competence required. It then becomes we're gonna break down the leadership into a couple different bits, and, like I said, if there's nothing that's a very, very specific need, I think it can't be maintained over time.

A leader of an organization is used to having that final call. And that's something that they probably want to maintain, but what qualities do you think an individual needs to possess in order to be an effective coleader? Because it's a whole different thing.

[Cade] Absolutely. It comes down to flexibility and incredible collaboration skills because it's a two-headed monster at this point. If it wants to go left, both have to say “we're going to go left.” And that requires a lot of interaction and negotiation skills and interpersonal skills to make that happen. I think it comes down to being able to focus exclusively on the mission and say we all agree, or we both agree, where we want to get to. We may have some disagreements over the how, but we agree to where we're going and we'll work through the differences. It becomes a challenge over time because as these things develop, sooner or later somebody's going to come up with a new idea that they want ... you know, we want to go in this way and that one doesn't want to. So it's really just that challenge of staying collaborative, really focusing on the mission, and having great communication skills, because it's not just communicating with the other person, the other leader, it's finding your voice to communicate with the board, and finding your voice to communicate with your organization and your clients about why this is a good thing and how this coleadership model will continue to be a good thing going forward.

Would you see this brand of leadership as being on the rise, or are people's perceptions of the negative keeping it to a bit of a niche approach right now?

[Cade] It's currently growing, but it's very small. This is sort of an experimental phase. Like I said, there's the performing arts folks that have been doing this for eons. It's just their way of doing it. This move into what we'll call the other rest of the segment, that's relatively new. It has some press behind it. The Non-Profit Quarterly is an organization that has coleadership, so they're basically putting information out there from their own experiences and they've shared that they feel it's very positive. And they're willing to admit that it has its challenges as well. It solves an interesting problem in that the CEO of an organization has to be a very, very broad individual, has to think very broadly about lots and lots of different things. So splitting it apart and saying, well, we want to, kind of, compartmentalize it a bit, people believe that will make hiring those folks easier. So I think we're going to see some experimentation for a while. I don't know if it'll take off or not. I think, long term, like I said, there's some challenges that will be difficult to overcome, but I think for the foreseeable future, we're going to see it popping up more as folks try it out.

If you're a board member, or if you're an employee that serves under coleadership, what can you expect? Does it sort of take a different mind-set to serve under that more than one leader approach?

[Cade] Thankfully, matrix management has been around for a little while. So from an employee perspective, it’s probably not always going to look a lot different. You’ll probably have someone that you report to and it’ll be pretty clear. The odd thing will be if it’s not quite working. If they’re not really quite aligned, you’re going to find yourself in an awkward situation of, well, does this person have authority to do this? Should I listen to them if they say “X” or “Y?” Do I have to ask somebody else first? It’s really important in this coleadership model for that communication to be clear. This is when you do your documentation of authority and things like that so that people are protected at work.

The board side is a great question. I was so glad you brought that up because there’s a new requirement in this coleadership model that says we as a board have to watch and monitor how the relationship between these two people is developing, and that’s not something that boards do. I’m on a couple boards now, so you’re there once a month, once a quarter, and maybe the committee meeting or whatnot. Now you’re going to have to really be paying attention to how those two folks are interacting when you only get to see them once in a while. So I think it’s going to be a big challenge for boards to step up, to think about performance and appraisal processes, and think about how we make sure we’re motivating these two folks to stay in sync. And what happens when it starts to go wrong? This is a whole new thing. It’s one thing to have one CEO that you say, well, you’re on the hook for everything. Now if something goes wrong, you have to start, well, is it this one, is it that one, is it both of them. It’s going to be interesting to watch that develop.

For CPAs, how does the nonprofit coleadership model affect their opportunities for development and growth within an organization?

[Cade] There's a new facet to the coleadership model and that's where a CEO has decided that he or she wants to make the COO almost an equal partner, and let the COO go off and work with donors or work with development or focus on bigger, broader issues. The COO becomes sort of an operations lead. And it has a good and a bad side.

For the CFO, or the CPA within the organization that's looking to move up, it may be a role that they may be able to fulfill in the future, but it's very broad. It's much broader than a normal financial role. I look at it and say, well, there's an opportunity there, but there's also this ... you're creating kind of a super COO, which may be almost impossible to get into from inside an organization. And I always get nervous about that. When we create a role that's so big that you basically have to hire somebody from outside, or have to hire someone from the operations side. It's something to look at if you're walking into an organization that has that type of model. That has a very operation-centric coleader. Is there really a step to get up to that next level? Because the finance folks, if you haven't had program work in your past, it's very difficult once you get to a certain level to then get into a program management opportunity role to build that other side on the operations side. So it's something to think about when they're walking in there and just to make sure that there is still a path for them to develop.

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Podcast transcripts are provided as a summary of the conversation and have been lightly edited for the written medium. The transcript is not a verbatim representation of the interview.
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