Another is to have regular discussions between the CEO and the board chair on your term and succession. The decision for a CEO to leave should never be a surprise—to the board or to the CEO! Far better to have an open discussion and, when the time is right, an agreed-upon succession process. An important part of that process should involve the outgoing CEO handing over key relationships to their successor.

Another consideration is whether, as part of a transition process or otherwise, the organization might benefit from co-CEOs. I’ve never been a fan of these, as there is a risk of discordant leadership, but some evidence suggests that organizations can benefit from such an arrangement, especially as many are looking at alternative leadership and power-sharing structures.²¹ When done well, such an arrangement may well reduce some of the risks of transition, if one goes while the other remains.

Leading a nonprofit is challenging and rewarding in equal measure, though for a new CEO, the scale will likely tip more toward challenge than reward. Key to getting a better balance is determining which things are most important for you to focus on, and which should be left to others. This requires a hardheaded examination of what serves the organization and its mission best, not what you are most comfortable with or interested in. At the same time as determining your priorities, you need to work out your leadership style, as this will help translate those priorities into progress. And you need to do all of this while finding ways to look after your own well-being so that you are best placed to lead your organization effectively.

Your leadership efforts will be greatly assisted if you have a strong team around you, starting with your leadership team (if you have one) and then the organization as a whole. A priority for every CEO should be investing in their teams. That requires you to build an inclusive and impact-focused culture, and to recruit and retain the right staff, which is what we will turn to next.

CEO ACTION POINTS

Determine Your Priorities and Style

1.Identify your priorities, which should include:

•holding the vision,

•leading on strategy,

•building an impactful and impact-focused culture,

•investing in your team,

•recruiting well and letting go of problematic staff,

•ensuring a productive relationship with your board,

•keeping those you serve at the center of your work, and

•a relentless focus on fundraising.

2.Understand how your leadership style will impact your team and implementation of the mission, and consciously choose the leadership style that works best for you and the organization, understanding it should be adapted as circumstances change.

3.Invest in your own well-being.

4.Have a plan for the succession process, whenever it might occur.

^* A striking example of an overly hierarchical corporate culture was that at the Australian operations of the global accountancy firm PwC. An investigation into those operations following the misuse of confidential government information found: “Culturally, the generally accepted view is that the CEO ‘runs the show.’ During a long period of commercial success, this has translated to a reluctance of partners to challenge the CEO, even at senior leadership levels… In practice there is not a lot of constructive dissent, with relationships and loyalty being key to career progression.” Edmund Tadros and Neil Chenoweth, “Profit-first ‘shadow’ culture blamed for PwC scandal,” Australian Financial Review, September 27, 2023.

^* Nancy Kline gives a powerful exposition on this in her book Time to Think (London: Cassell, 2015).

^* “Traditional mentoring (or training or advising or consulting) puts in advice, content, information. Coaching, by contrast, pulls out the capacity people have within.” Anne Scoular, FT Guide to Business Coaching (London: Pearson Education Limited, 2020), Kindle Edition, 16.

^* Leslie R. Crutchfield and Heather McLeod Grant, Forces for Good: The Six Practices of High-Impact Nonprofit (San Francisco: Jossey-Bass, 2012), 190 and Table 7.1. When it comes to private-sector organizations, there is research showing that for the most successful CEOs, years eleven through fifteen of their tenure are “their best value-creating years”: James M. Citrin, Claudius A. Hildebrand, and Robert J. Stark, “The CEO Lifecyle,” Harvard Business Review, November–December 2019.

CHAPTER 5

The Team

Prioritize Culture and Recruit and Retain the Right Staff

Good leadership requires you to surround yourself with people of diverse perspectives who can disagree with you without fear of retaliation.

—Doris Kearns Goodwin¹

Despite my occasionally bruising experiences, the International Crisis Group was one of the most remarkable organizations I’ve had the opportunity to work for. And it was during my years there that I first had cause to reflect more deeply on the role of the leader in shaping a nonprofit’s culture.

I joined the conflict prevention organization as its research director in my mid-thirties, straight out of US graduate school. I stayed there for nine rewarding years, ending up as deputy president and chief operating officer.

Key to its success throughout that time was the leadership of its then-president and CEO, Gareth Evans. Gareth was a former long-serving foreign minister of Australia and a preeminent global thinker and advocate on how the world could better respond to and prevent mass atrocities. He was a force of nature, and his personality strongly shaped the culture of the organization.

Gareth’s leadership had many strengths and a few weaknesses. These were all reflected in the organization’s culture. On the positive side, Gareth was an outstanding policy thinker and writer, and brought great intellectual rigor to all of our work. He had exacting standards and insisted that everything we produced be of the highest quality. Our high-caliber outputs generated respect from our interlocutors, such as government ministers and officials, and ensured Crisis Group got ready access to the corridors of power. He had an utterly relentless focus on our mission and drilled it into everyone. As noted earlier, we never had a written strategic plan during his tenure, yet every staff member at Crisis Group could tell you, without hesitation, that the purpose of Crisis Group was to prevent and resolve deadly conflict, and that our mission was to carry out field-based research, produce nuanced analysis and reports, and engage in high-level advocacy to policymakers and those who influenced them.

But, perhaps inevitably with such a larger-than-life figure, there were significant flaws. Gareth was notoriously impatient. This impatience often turned into irritation (and occasionally rage) with staff who didn’t promptly agree with him or implement his directives exactly as he envisaged. As a result, few staff members dared openly disagree with him, somewhat restricting the flow and exchange of ideas. Also, despite Crisis Group having more than one hundred staff in the latter years of his leadership, Gareth never set up a leadership team. His leadership depended heavily on one-to-one engagement with senior staff on their issue areas. This was a continuation of the leadership model he was used to as foreign minister and isn’t uncommon with think tanks. But it limited opportunities for him to test his ideas and decisions with senior colleagues collectively, and to get their buy-in and commitment.

Finally, Gareth created a highly demanding work environment, again in his image. He put in longer hours and traveled more than anyone I’ve worked with, before or since. He expected similar dedication from his staff. To excel, you had to largely abandon any pretense of a work-life balance.

What were the consequences of all of this? Without a doubt Crisis Group was highly successful under Gareth’s leadership—it had an outsized impact in pursuit of its conflict-prevention purpose. He made it globally relevant and ensured it punched above its weight with policymakers worldwide. But all this came at a cost and stored up problems for his successors (with long-suppressed demands for more inclusive decision-making and a better working environment flaring up after his departure). Those who thrived at the organization held a similar worldview to that of the CEO. That meant that almost all the senior staff at Crisis Group during this time were white, native English–speaking men with graduate degrees from prestigious US and European universities. The culture was neither diverse nor inclusive, despite this being an organization that worked on conflicts in Africa, Asia, Latin America, and the former Soviet republics. This largely reflected the world of US and European foreign policy think tanks at that time. But, as an organization that prided itself as a trailblazer in these circles, it missed the opportunity to demonstrate how it could be even more impactful, particularly with policymakers outside Washington, DC; London; and Brussels, by bringing more diverse perspectives to the table.

Having said that, I should be clear that I was one of those who thrived under Gareth’s leadership. I could put in the punishing hours, as I was ambitious and had no family for most of those years. I had a similar worldview and, of course, was a white, native English speaker with strong analytical skills and the requisite education. I moved quickly up the ranks and spent most of these years as Gareth’s de facto and then actual deputy. In that role, I brought much the same approach to my own leadership, including the unilateral approach to decision-making that I highlighted in the previous chapter. And, for all the challenges, I remain deeply grateful for the wonderful opportunities Gareth and Crisis Group provided me with.

In the years since, I’ve reflected a lot on the lessons I should take from my time there. Those experiences and subsequent reflections have strongly influenced my leadership today and have certainly made me a better leader. I’ve sought to ensure that all staff members at the Freedom Fund internalize our purpose and desire to achieve the greatest possible impact. We endeavor to turn out consistently high-quality work, but in a way that is sustainable for our employees, regularly seeking feedback from them on how well we are doing on that and other fronts. We have a diverse and representative staff, while constantly striving to go further. I have an outstanding leadership team, where my opinions are regularly and thoughtfully challenged. And, most importantly of all, to my mind, we encourage a culture where all staff members feel included and free to openly raise issues and share their views, leading to more robust decisions across the organization. I’ll discuss my efforts to create an inclusive culture in greater detail below and in the next chapter.

As for Crisis Group, its makeup and culture has changed significantly in the decade and a half since Gareth’s departure. The current CEO, Dr. Comfort Ero, is a British-Nigerian woman, with deep and internationally recognized expertise on conflict. At the time of her appointment, the ten most prominent foreign policy and international affairs think tanks in North America and Europe were led by white men (eight of them) or white women (two).² Dr. Ero’s appointment was celebrated by then Nigerian president Muhammadu Buhari (among others), who stated, “over the course of her career, Dr. Ero has worked as a strong voice in bringing the challenges of conflict-affected countries to the front burner and her new role presents yet another opportunity for her to do more for humanity.”³

In this chapter, I’ll explore what organizational culture is and why it is so important in building impactful organizations. We’ll look at how culture shapes the performance of teams within the organization, and what a culture of “psychological safety” is, and how to enable it and the risk-taking and innovation it supports. We’ll finish up by examining the importance of recruiting the right people for your organization and letting go those who are not right for your nonprofit.

WHY IS CULTURE IMPORTANT?

Culture is a strange beast. Most leaders understand that culture is important to the performance of their organization as a whole and individual teams within it. But few understand exactly why, or if they do, they are not sure how to go about actually shaping and maintaining it.

Culture is central to the way a nonprofit works and its ability to achieve significant change. A good culture will amplify everything your organization does. A toxic one will derail it.

Given this, building a good culture should be a priority for every CEO. But that’s easier said than done because culture is amorphous. “Culture is like the wind. It is invisible; yet its effect can be seen and felt.”⁴ You can’t command and control culture. Rather, you need to influence and shape it. And to do that you need to understand what a good culture looks like.

Culture is “how organizations do things.”⁵ It reflects how staff act and relate to each other and how the organization represents itself to stakeholders, particularly those it serves.⁶ Culture is endlessly varied, existing on a spectrum from empowering to toxic. A good culture ensures staff are aligned with the organization’s purpose and feel supported in pursuing it. This is why legendary management consultant Peter Drucker regarded culture as more important than strategy, as reflected by the aphorism commonly attributed to him: “Culture eats strategy for breakfast.” Culture can unleash tremendous amounts of energy toward a shared purpose and maximize an organization’s impact.⁷ According to one survey of 1,900 corporate CEOs and chief financial officers, over 90 percent believed that improving culture would improve the impact of their organizations.⁸

A good culture contributes to the organization’s effectiveness in two main ways, one internal and the other external. First, it promotes cohesion within the organization. It encourages staff to have a shared understanding of how to relate to each other, i.e., “this is how we do things here.” It reduces the need for direct managerial control and bureaucratic processes. A good culture improves retention of staff, increases engagement, produces more robust decisions, reduces unnecessary conflict, and helps break down silos (given alignment around a shared purpose). When problems do arise, staff are able to address them by building on a shared understanding of mutual respect and a willingness to find a solution together.

Second, the culture differentiates your organization from its peers. The right kind of culture helps attract talented staff, as well as donors and partners, and contributes to improved performance and impact.⁹

On the other hand, a bad or dysfunctional culture will be a drag on the organization’s performance and may well lead to its failure. A toxic culture can be an existential threat to an organization. Another survey of corporate leaders found that a toxic corporate culture is by far the strongest predictor of industry-adjusted attrition and is ten times more important than compensation in predicting turnover.¹⁰

Dysfunctional cultures are all too common; we’ve all encountered them or have friends who have. They may not always be visible from the outside (in part because staff may be intimidated from speaking out), but they are all too visible for those who have to endure them. The organization may have a culture of bullying or discrimination or may tolerate sexual harassment of more junior staff. It may be mindlessly bureaucratic. Some organizations may have environments with limited trust, where staff aren’t comfortable sharing their opinions for fear of being shot down. Others may be so inclusive of everyone’s views that there are endless discussions and meetings, but important decisions rarely get made.

Nonprofits are not protected from having toxic cultures by reason of their purpose-driven nature. They are just as prone to dysfunctional culture as their corporate counterparts, not least when being led by coercive leaders convinced that the righteousness of their cause gives them the right to behave however they wish. Such organizations can be high performing for a time, for example, by setting unreasonable demands on staff, but they are not sustainable over the longer term, particularly in an era of greatly increased scrutiny of culture and leadership behavior.