Next comes people. The CEO must focus on the organization’s culture, particularly in building an inclusive and impact-focused culture. The starting point is to model the behaviors that help create that culture. As CEO, you need to be conscious that everyone closely observes what you say and do. You should use this to reinforce the behaviors you want to see. For example, if you admit mistakes, it makes it much easier for others to do so; if you repeatedly articulate the importance of focusing on the needs of those you serve, others will internalize this; and so on. It’s particularly important for nonprofit CEOs to facilitate a culture of psychological safety across the organization and within internal teams. “Psychological safety” here means a culture that encourages candor and openness. You also need to ensure that the individuals and communities you serve are centered in your work. This can be best done by building these behaviors (i.e., psychological safety and centering those you serve) into your culture. Given its importance to the effectiveness of a nonprofit, I’ll explore culture in greater depth in the next chapter.

Focus on the Team

You can’t do it all alone, and you shouldn’t try. This can be a difficult lesson for new CEOs to internalize. They often think that they need to know everything (or give an impression of doing so) and show invulnerability by making decisions alone—as I did in the situation recounted at the start of this chapter. Nothing could be further from the truth. The most effective leaders work closely with their teams. Doing this well is a superpower. The team can be your senior leadership team (SLT) or, if you are a small nonprofit, the team of all your staff—or some other formulation. Other members of the team will know more about many things than you do. Given the space and encouragement, they will challenge your views and assumptions, and the end result will be better decisions. But this requires a culture of psychological safety and a leader who actively encourages others to share their views, as we’ll see in the next chapter.

Recruit and Retain the Right People

Another key leadership responsibility is ensuring you have the right people in the organization. This requires you and your team to recruit well and, perhaps more importantly, let go of staff who do not perform or work effectively with colleagues despite support. New CEOs, and even experienced ones, spend inordinate amounts of time trying to decide whether to fire problematic staff and, almost invariably, when they finally do let go of those staff (having tried various other solutions), they will wonder why they didn’t act earlier, not least because of the burden placed by problematic staff on their colleagues and the culture. We’ll discuss this further in the Team chapter.

Work Effectively with Your Board

Boards have the responsibility to hire and fire the CEO and, more broadly, to govern the organization, so, by definition, the board should be a priority for the CEO. A good board will provide high-level support for the CEO while holding them accountable for the organization’s performance. A dysfunctional board will meddle in issues of management, perhaps fight within itself, and demand an undue amount of the CEO’s time. The CEO’s objective is to make sure, as best they can, to have an effective and not dysfunctional board. While the board itself will ensure whether it operates effectively, all CEOs should prioritize investing in relationships with individual board members. The potential consequences of board dysfunction cannot be overstated. We’ll look at the board in greater detail in the last chapter of this section.

Commit to Fundraising

CEOs need to lean into fundraising. Many CEOs, and particularly new ones, struggle with this. Sometimes they lack familiarity with fundraising, particularly if they come from a programmatic background. At other times they have a disdain for fundraising. But funding won’t flow if the CEO doesn’t prioritize mobilizing it. To my mind, fundraising is one of the most important priorities of the CEO because, without the requisite funding, your organization won’t be nearly as impactful as it should be, regardless of the power of its cause and people. We’ll explore this in greater depth in the Funders chapter in the next section.

In summary, the key priorities for the CEO are to hold and articulate the vision of the organization, lead on strategy, build an impactful and impact-focused culture, recruit well and let go of problematic staff, ensure a productive relationship with your board, keep those you serve at the center of your work, and relentlessly fundraise. Do those well and you’ll set the organization up for success. How you do all of this depends in significant part on your leadership style, which is what we’ll now turn to.

INTERVIEW

Priorities of a Nonprofit CEO at the Five-Year Mark

Observations of Mathieu Lefevre, founding CEO of More in Common, as the organization marked its fifth anniversary. More in Common’s mission is to understand the forces driving people apart, to find common ground, and to help bring people together to tackle shared challenges. It draws from groundbreaking research to test and find solutions, working with partners that have the capacity to make a real difference at scale.

The three biggest priorities for me are culture, strategy, and funding. Much of why those are my three biggest priorities will be obvious: I imagine those three will feature in any CEO’s list. So let me perhaps elaborate a little on the less obvious aspects:

Culture: Maintaining a positive work culture in the 2020s in the social sector is a real challenge. The last few years have seen our sector (and the world beyond) deal with a welcome and long overdue reckoning on important issues that affect the workplace: race and diversity, LGBTQ rights and discrimination, and many more. Those have prompted some internal conversations in the workplace which have led to much-needed positive changes. But too often in our sector that has led to an excessive focus on internal dynamics which have come at the cost of our work and our mission. Too many organizations in our sector have become entirely paralyzed by non-stop internal discussions on DEI and culture and identity. I consider it one of our greatest successes as a team to have avoided such paralysis. The main reason we have managed to do this is by recruiting a diverse team, and specifically one with different worldviews and life experiences.

Strategy: Expressing a strategy that works as an inspirational sketch and not a blueprint, enabling teams at the national level to function with great autonomy is a priority and not a job easily done. What level of detail should a strategy take in a nonprofit operating in different scales and geographies? How do you accommodate for different people needing different levels of clarity in the strategy? How do you draw up a strategy that empowers leaders to make decisions and gives them strategic clarity?

Funding: The greatest challenge here has been convincing funders to fund us beyond the start-up phase. Lots of funders want to fund a new venture but finding funding when you are growing and five years old is harder.²

YOUR LEADERSHIP STYLE

Your leadership style refers to the methods and behaviors you use to motivate, manage, and direct your team. Those stepping into a new role as CEO of a nonprofit often wonder what their leadership style should be. Should they be more unilateral in their decision-making, more inclusive, or something in between? They may be concerned that whatever style they have developed over the years in lower-level positions may not be best suited to their new role and responsibilities. They may feel that now that they are in charge of the whole organization, they need to stamp their authority more clearly. Or they may struggle with the responsibility of being the final decision-maker.

As you reflect on the style of leadership you want to bring to the role, you need to consider how power operates in a nonprofit, and what style best suits the objectives you want to achieve.

1. Power Is More Diffuse

Nonprofit CEOs also need to come to grips with the reality that power is often quite diffuse at their organizations—certainly more so than in many private-sector organizations. Businesses generally have a more hierarchical structure, with the CEO exercising executive authority.^* In contrast, nonprofit leaders have to be able to exercise “soft power.” This is because nonprofit staff generally expect leadership to be more consultative than would be the case at most businesses, in part reflecting the fact that they are usually more intrinsically, and less financially, motivated. They also tend to be more engaged with important social causes than their private-sector colleagues and will often bring their activism to work.

It is also because nonprofits have more stakeholders with significant influence on their work than most businesses do. For nonprofits, key external stakeholders include the individuals and communities served, funders, and peer organizations, while internal stakeholders include staff and the board. The CEO needs to keep donors and board members actively engaged, not having direct authority over them.

The individuals and communities you serve will have their own priorities to which you need to be attuned. Some larger nonprofits, such as the Girl Scouts or Habitat for Humanity, have a federated structure, with many organizations operating under a common brand and in which the CEO’s power over affiliated organizations is more persuasive than directive.

But even when power is more diffuse, good nonprofit leaders know how to exercise it in pursuit of their organization’s purpose. As Frances Hesselbein, the former CEO of the Girl Scouts of the USA, observed: “You always have power, if you know where to find it. There is the power of inclusion, and the power of language, and the power of shared interests, and the power of coalition. Power is all around you to draw upon, but it is rarely raw, rarely visible.”³

All of this is relevant to your leadership style. Where power is more diffuse, leaders need to lean into coaching and persuasion over top-down diktat.

INTERVIEW

Building Self-Confidence as a New, Young, Female CEO

Observations of Françoise Moudouthe, CEO of the African Women’s Development Fund. AWDF is a Pan-African grant-making organization that supports the realization and fulfillment of African women’s rights through funding of autonomous women’s organizations on the continent. It is headquartered in Accra, Ghana.

I have been the CEO of the African Women’s Development Fund for nearly two years. I started this job while the COVID-19 pandemic made in-person connection virtually impossible—and yet I had a short window to create connections and build trust with the team, the Board, and our partners and donors. I responded by making Zoom my home. I spent hours in one-on-one meetings with folks, video on, which was not ideal for the introvert in me. I had to find ways to re-create the warm, informal, unscripted interactions with colleagues and partners that I would have made in person. It worked out, but it was exhausting!

As a first-time, younger CEO, it took me a while to build my own self-confidence. Having spent my first couple of months in learning and listening mode (thanks to a two-month handover period with my predecessor—highly recommended for leadership transitions), I had come to a sense of clarity about some of the key priorities and the changes that I wanted to make. Yet I had a hard time translating them into swift action: it took me months to make some of the changes I had identified in the early days. I think it’s because I wanted to take the time to demonstrate to my team that the changes were not just what I thought, but what was strategically needed, and get their buy-in. That is critical, of course, but I overdid it. Sometimes, a leader just has to lead. I learned that the hard way. As a young leader joining a well-established organization that I had been admiring, I have had to learn the difference between respect and deference, and that it was okay to challenge the way things had been done for years and years. It takes courage and it takes confidence, but some hard conversations cannot be avoided, and some of them we must have with ourselves.⁴

2. Common Leadership Styles

The business and academic literature have a wealth of material on leadership style. The classic formulations are laid out by the doyen of leadership and emotional intelligence, Daniel Goleman.⁵

His research identifies six common leadership styles:

Coercive leaders demand immediate compliance: “Do what I tell you.”

Authoritative leaders mobilize people toward a vision: “Come with me.”

Affiliative leaders create emotional bonds and harmony: “People come first.”

Democratic leaders build consensus through participation: “What do you think?”

Pacesetting leaders expect excellence and self-direction: “Do as I do, now.”

Coaching leaders develop people for the future: “Try this.”

Research shows that the most effective leaders use a number of these styles—particularly the authoritative, democratic, affiliative, and coaching styles—switching between them as circumstances require. I won’t review all the styles in detail, as they are largely self-explanatory, but I do want to talk briefly about three of particular relevance to nonprofit leadership: authoritative, coercive, and coaching.

The authoritative style is well adapted to purpose-driven leadership. According to Goleman:

The authoritative leader is a visionary; [s/]he motivates people by making clear to them how their work fits into a larger vision for the organization. People who work for such leaders understand that what they do matters and why. Authoritative leadership also maximizes commitment to the organization’s goals and strategy. By framing the individual tasks within a grand vision, the authoritative leader defines standards that revolve around that vision.⁶

The relevance of an authoritative style of leadership to an organization focused on purpose is clear. I’ve certainly found in my own leadership experience that the ability to motivate staff around our purpose is a powerful mobilizing force: for my team, it’s empowering to know that our work, done well, contributes to people exiting situations of extreme exploitation.

Of course, the risk, particularly for an inexperienced leader, is that an authoritative style too readily veers into a coercive one, often manifesting as a desire to control subordinates. I’ve seen that often in new CEOs (myself included). More often than not, this inclination reflects a lack of confidence rather than excessive self-belief and needs to be kept in check. Even in times of crisis, coercion is of limited use. It is not geared toward achieving sustained results or encouraging commitment.

3. The “Heroic” Leader

A version of coercive leadership too often found at nonprofits is the “hero” or “charismatic” style of leadership. If you have worked for nonprofits long enough, you’ll have encountered this. These leaders bring huge passion and charisma to their roles. They are often founders who have created organizations in their image. But the problem with this style of leadership is that its important strengths—the ability to inspire others and sell a powerful vision—are often undermined by an overwhelming focus on the leader, to the detriment of the organization and its mission. There is nothing wrong with being charismatic about your mission and organization, as long as it doesn’t morph into an undue focus on the self rather than the organization. But often the hero leader thinks that their interests and the organization’s are one and the same, or even that their interests take priority. Such leaders often verge on being narcissistic, and frequently bully subordinates. They demand loyalty and compliance and oppose any questioning of their leadership—all justified by their belief that they know better than anyone else what is in the best interests of the organization.

This style of leadership carries huge risks, because it allows for little or no accountability for the CEO, even when he (and it’s more commonly men) commits abuses—for example, by sexually harassing colleagues, or using organizational funds for his own purposes, or bullying junior staff. Given he is a “hero,” and completely identified with the organization, any questioning of his behavior is regarded as an undermining of the organization.

CASE STUDY