Leadership Development: A Crisis of Confidence in Nonprofit Leadership

Humility is a virtue, but this may be a bit much.

Last month, McKinsey & Company released a report on its 2013 survey of CEOs and other execs at social-sector nonprofits to gauge their confidence in the leadership structure they have and what they think they’d need to improve. The report, titled “What Social-Sector Leaders Need to Succeed  (opens in a new tab),” delivers some striking statistics on how executives perceive themselves:

• Fewer than a third of the respondents (32 percent) rated themselves as strong in their ability to innovate and implement.
• A fifth (20 percent) rated themselves strong at surrounding themselves with a talented team.
• Collaboration? Twenty-four percent.
• Ability to manage to outcomes? Eighteen percent.

Those are paltry numbers, especially when you consider that (a) these are the kind of leadership capabilities that those surveyed listed as a top priority (that is, things they’re presumably paying attention to) and (b) McKinsey asked them the kinds of questions that lend themselves to response bias, where people give answers that are closer to what they’re supposed to say than what they actually feel.

Which is to say that the reality may actually be worse.

I don’t think you can strictly equate a social-sector leadership crisis with an association one. The social sector—charities, service organizations, foundations, and the like—isn’t strictly analogous to the association world, which often has different revenue streams and leadership structures. But as the McKinsey report’s authors point out, there’s been a broad expansion in nonprofits overall—25 percent in the past decade—which means that the demand for expert leadership across the mission-oriented spectrum is more pronounced.

And meanwhile, the investment in leadership development has remained stagnant. According to the McKinsey report, foundations allocate less than 1 percent of their annual funding to the matter. And that’s created a kind of vicious cycle: The pool of talented leadership in nonprofits thins, which puts more pressure on the top executives in place to get things done, the eroding their confidence when (inevitably) they can’t execute the way they’d hoped. As the McKinsey report puts it: “A gap in talent at the top, where too much of the leadership burden rests with one or two professionals, may limit what a social-sector organization can accomplish.”

So what’s the fix? In October, I wrote about some of the ways that organizations are building more coaching and collaboration into their work, to give opportunities to improve their leadership skills. This can work well in large organizations, which have the size and capacity (and, frankly, the finances) to give younger employees more experience and build a leadership ladder of sorts. But that may not work for smaller organizations where the pool of in-house talent to train on leadership issues may be small—or even one person. McKinsey cautions that the people experiencing the “training” may interpret it as something more sinister. “[W]e were told by leadership experts that younger professionals do not experience ‘stretch goals’ as development opportunities but see them as a sort of exploitation: in other words, increased work for which they do not receive additional compensation or promotion.”

That doesn’t mean that leadership development is by definition a bad idea for a small-association leader. But it does mean that it can’t resemble make-work. The small-association executive who pursues it—and that person should pursue it—needs to be clearer than usual with participants about what the tasks and outcomes are. And how seriously the leader takes the investment.

McKinsey recommends that some of that work be done with the private sector. It may be sensible for some associations to pursue that approach with their member organizations. Regardless of how it’s done, though, the next generation entering the nonprofit workforce is expecting it to happen. “The next generation of mission-driven professionals is considering social-sector careers,” the McKinsey authors write. “They expect mentoring, professional-development opportunities, and increasing responsibility.”

If you’re on a tight training budget, how do you give younger or newer employees leadership experience? Share your stories in the comments.

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