Classic NPO mistakes in hiring a CEO
Updated: Sep 20, 2021
I recently got this question from one of my professors in I-O Psychology:
“Have you noticed that non-profit organizations tend to write vague job descriptions, even when looking for an executive director? Perhaps it is due to the fact that most non-profits operate with limited funds.
Recently I found out about an executive director position for a local non-profit. When I read the description, it was lacking detailed information especially important interpersonal characteristics. Although these characteristics are important to the executive director role, the job description lacked these characteristics and it was vague. As a result of this, the organization generated over twenty-five candidates. Before they started interviewing candidates, the search committee ended up sifting through all of the applications to narrow down the list. However, what would have happened if the interim director had decided to write a more detailed job description, including interpersonal characteristics. Do you think they would have generated fewer and more qualified applicants?”
NPOs are my area of expertise and I have several answers to this question. Let’s begin by understanding the context. Often board members’ tenure is shorter than the CEO (e.g., they don’t have the institutional history or understanding that the CEO does). The long-term CEO often could not begin to describe in detail what he/she does (e.g., growth and development over time led to professional or personal changes that she/he has not devoted conscious thought to). Priorities can shift with the economic conditions. Depending on the type of organization (e.g., charitable, trade association, foundation), culture often dictates desired characteristics. Also depending on the type of organization, board member volunteers vary in expertise, background, and skills. Even the most gifted human resources person or bank manager will not have the depth of understanding to write the job description that will lead to hiring an effective NPO CEO. Volunteer board members tend to want to adapt what they know about hiring and employment to hiring a NPO CEO. It is not the same situation.
One board I worked with was faced with the retirement of a long-term CEO. When I asked what attributes or characteristics they were looking for, the chairman said (in all seriousness), “We don’t know, but we’ll know what we’re looking for when we see it.” Good thing I kept listening. I had to suppress my astonishment because I almost laughed and asked if that was a joke. The next comments left no doubt that the board intended to go on a fishing expedition. That’s likely why the NPO my professor asked about got what they got. Classic mistakes by NPO boards in hiring a CEO:
1) Hiring on the rebound. Like a recent breakup, losing a long-term CEO is a gut-wrenching affair. Boards inevitably will try to hire someone as quickly as possible to avoid the pain of loss. Rather than think through strategically what type of leader is needed for the future, the board seeks to replace what was lost. Bad idea. I’ve seen these rebound hires time and again. They never last (usually not past six months). Just like dating on the rebound, the board can never replicate what they once had. Besides, organizations change. What the organization needed in a leader 20 years ago is likely not the same as what the organization needs today.
2) Hiring someone from the board ranks. Familiarity and cameraderie with a person is never a good reason to hire that person for the top job. Boards think it a great/smart idea because they don’t need to wrestle with messy stuff like job descriptions and interviews and background checks. Yuck! However, the relationship changes the minute the person goes from “peer leader” to “employee”. Intimacy and trust turn to fear (and sometimes loathing) when expectations are not made clear. Another problem is when new members come on the board, they may not be so enamored with the other board members’ good buddy…I’ve seen this happen at least a dozen times. None but one worked out.
3) Going on a fishing expedition. This is what the board client I already mentioned did. Boards end up writing a job description that in no way resembles what the board needs and/or only vaguely describes what it wants. This one is classic because it’s similar to writing an RFP for services without thinking through what outcomes one expects and articulating those into specific skills or experience needed. One small staff (3) organization board thought they wanted a great financial manager because of increasing revenues and organizational complexity (investments and such). They got one. Only one teensy problem: this is a community entity that also needs a charismatic leader who will interact with the public and members. The new CEO is an introvert. Not gonna happen. But the books and investments are in great shape! Which set of skills/characteristics would have been easier to outsource — charismatic leader or introverted financial guru?
What do I think about writing a detailed job description? Do it. But hire someone who can be objective and ask critical questions to help. My favorite saying is, “What will end up biting you in the butt are the things you don’t know you don’t know.” No one knows everything and not even the smartest collection of board members will know everything. A healthy dose of outside perspective can cause light bulbs to light all over the boardroom.