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Governance as leadership Reframing the work of noprofit boards - Ñhait R.

Chait R. , Teylor B.E. Governance as leadership Reframing the work of noprofit boards - Wiley publishing , 2005. - 226 p.
ISBN 0-471-68420-1
Download (direct link): governanceasleadership2005.pdf
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6. Unforeseen outcomes. The formal approach to strategy also assumes that skillful managers can predict the future outcomes
TYPE II GOVERNING: STRATEGIC 6 1
of present actions. Boards traditionally prize (and believe) a chief executive confident enough to assure that planned initiatives will produce intended results.While an assembly line can be programmed to manufacture a uniform product, the processes of nonprofit organizations are more mysterious and less control-lable.An organization may, for example, develop a new program, based on the best available research to prevent teenage pregnancy. However, certain characteristics of the organization’s target population may confound the premises of the program, changes in government funding may undermine success, or staff may execute ineffectively.
Meanwhile, something else, not even mentioned in the plan, succeeds beyond anyone’s expectations. In fact, the trustees may be unaware of the program until after a level of conspicuous success has been attained. If the success occurs at a low enough level of a relatively large organization, even the chief executive may be surprised. Trustees eager to know what is really going on in the organization, what is working and what is not, realize (usually sooner than later) that the strategic plan is not always the best place to look.
Despite these six obstacles, formal plans have important positive effects. As we stated earlier, strategic plans are badges of legitimacy. No nonprofit wants to be “illegitimate” and no chief executive wants to appear unprofessional. Formal, written plans safeguard against both risks. The standard cycle—plan, implement, assess, adjust, and plan anew—ensures that CEOs play a prominent role ascribed to leaders, and the well-choreographed sequence of events offers trustees a measure of comfort and confidence. In addition, and by no means inconsequential, the planning process creates “excuses” for organizations to converse
6 2 GOVERNANCE AS LEADERSHIP
internally and externally, and plans provide plausible rationales for managers to make decisions and allocate resources. As we highlight the frustrations that trustees and staff experience with formal strategic planning, we do not discount the benefits.
The central drawback of strategic planning, however, has become a near fatal flaw in the minds of many. For instance, Gary Hamel (1996), a professor of strategy and consultant to Fortune 500 companies, decried formal strategy as “ritualistic... reductionist ... and elitist... harnessing only a small proportion of an organization’s creative potential.” For-profits and nonprofits alike were in search of a better idea and, lo and behold, ideas were the answer.
strategic thinking: beyond a type i minDsET
Rather than rely only on a formal, analytical, and technical process detailing the sequence of steps that will move an organization to a preferred future, leaders can arrive at strategy another way: through insight, intuition, and improvisation. In a word, leaders can think, and strategy-as-thinking can produce “Strategy as Revolution” (Hamel 1996). Breakthrough strategies, impelled by new ideas, enable organizations to exploit new opportunities and capture new markets. According to this view, the gods are no longer in the details; the gods (and leaders) are in the clouds. Details are delegated to mere managers. Leaders are strategic thinkers, not strategic planners. The byword is “BHAGs,” an acronym for big, hairy, audacious goals. (As Exhibit 4.1 illustrates, some nonprofits have, in fact, been revolutionary and, in the case of higher education, a for-profit has
TYPE II GOVERNING: STRATEGIC 63
EXHIBIT 4.1 "big HAIRY (bhags) IN AUDACIOUS NONPROFIT goals” REALMS

In health care, “focused factories” were the BHAG. Institutions like the Mayo Clinic in Rochester, Minnesota, the Cleveland Clinic, and the Shouldice Hospital in Toronto achieved excellence, efficiency, and profitability through standardization and specialization. Shouldice, in fact, does “only abdominal hernia operations” (Herzlinger 1997). All rejected the dominant model of a comprehensive health care center that was all cures for all people.
In religion, Willow Creek Community Church (Mellado, 1991) outside Chicago, Prestonwood Baptist Church in Plano, Texas, Southeast Christian Church in Grapevine, Texas, and several other mega-churches (Brown, 2002), merged traditional religion with market segmentation, customer orientation, and contemporary entertainment. This was done to attract thousands upon thousands of new worshipers, even as attendance dwindled at mainline congregations. So-called “full-service” churches became “one-stop shops” for prayer, recreation, food, and fellowship.
In higher education, the BHAG was the “invasion” of the University of Phoenix. In some twenty years, this for-profit university became the largest university in the United States, with some 250,000 students enrolled in on-site and online degree programs worldwide. Despite contemptuous criticism and bitter resistance from traditionalists, the university rewrote the rulebook, or better, invented a new rulebook, on how to deliver a quality university education to a mass audience. Many nonprofit universities, however reluctantly or desperately, adopted “best practices” that not only made Phoenix a phenomenon, but also made the stock, traded on NASDAQ as the Apollo Group, the second best performer on that exchange for the most current five-year period.
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