INVEST IN YOUR LEADERSHIP TEAM

A CEO who builds and works effectively with a powerful team will always outperform one acting on their own. In larger nonprofits that team will be your senior leadership team. Of course, not all nonprofits are large enough to merit a formal leadership team. But, even if you don’t have a formal team, you’ll likely have one or more direct reports, who can make up an informal leadership team.

All the evidence from organizational theory and practice is that high performing teams produce better outcomes than high-performing leaders acting alone.^* And the reason for that is obvious—effective teams give a leader more options and better information and allow them to test ideas and options and identify the most robust outcomes. Such teams have other benefits too. They make a CEO’s role a little less lonely, as team members can share some of the burden of decision-making and allow a leader to work through their concerns with others invested in the outcome. Team members also help get buy-in across the organization, bringing their own teams along with them on contentious decisions.

Yet new CEOs often shy away from building empowered teams. Too often they are reluctant to share the burden of leadership, worrying that it will be seen as a sign of weakness and insecurity. New to the leadership role, these CEOs frequently seek to establish their authority by making it clear that they are the sole decision-maker. Or, if they have teams in place, they don’t lean into them but treat their colleagues as implementers of their decisions, not fellow decision-makers. I understand the tendency, having been guilty of it in the past myself. But I can only reiterate that the most successful leaders are those who understand that tapping the strengths of an effective team is a demonstration of confidence and security, not the opposite. And one that will lead to better decisions and hence greater impact over time. I know that one of the joys of my role at the Freedom Fund is to have an outstanding leadership team with whom I can openly discuss challenges and fears, and thereby arrive at better decisions, with greater confidence.

HIRING THE RIGHT PEOPLE AND LETTING GO THE WRONG PEOPLE

To build really effective teams, you need to get the right people in place. There are three aspects to this: you need to recruit the best staff, keep them, and let go those who are not right for the organization. As the leadership expert Jim Collins frames it: “You start by focusing on the First Who principle—do whatever you can to get the right people on the bus, the wrong people off the bus, and the right people into the right seats.”²⁶ Nonprofit leaders can struggle with this, especially when it comes to the firing of staff. But your organization exists to make a difference to those it serves, and that requires a laser-like focus on employing the right staff.

What do I mean by the “right” staff? Too often at nonprofits, hires are made simply by looking for someone with the strongest technical expertise or experience. But other characteristics matter, too, especially for roles that require leadership or representation. Would the person represent your organization well? Do they embody your organizational values? Do they have personal experience of the issues you work on? Are they thoughtful about what effective management looks like, and will they help to contribute to your culture and the success of your staff? Management abilities, in particular, are often overlooked in favor of impressive credentials or degrees, or a deep commitment to mission. But poor management can do a great deal of damage to morale and reputation and bring down an entire team.

Recruitment is hard even at the best of times. Many CEOs say it is their biggest concern.²⁷ Nonprofits have the added challenge that they usually can’t or won’t compete with the private sector on salary. But they have the advantage of having an inspiring cause with which to motivate applicants.

It’s very difficult to know if a hire will be a good fit based on a round or two of interviews, a written test, their resume, and reference checks. Research shows that structured interview questions (where candidates are asked a consistent set of questions with clear criteria to assess the quality of responses)^* are more effective than unstructured interviews (a series of interview questions that vary in nature and order from candidate to candidate) and reference checks and years of work experience.²⁸

The reality, though, is, however robust your recruitment processes are, you usually won’t know if you made the right hire until a few months into the job. And, if your new hire is not right for the role, your responsibility—once you have engaged in good-faith efforts to address performance issues or find a better-suited role—is to let that staff member go, in the interests of your organization and that staff member—i.e., to “get the wrong person off the bus.” I often think this is the primary CEO recruitment responsibility. Given you can’t conclusively judge performance in advance, you can’t really be held accountable for flaws in hiring (assuming you have a thoughtful, structured process). There is little point in beating yourself up when you hire the wrong person. But you can certainly be held accountable for not taking action once it becomes clear that your staff member is not fit for the job.

Many of us struggle with this, particularly in the nonprofit sector, which often likes to think of itself as less ruthless than the business sector. But I don’t think there’s anything gentle about keeping on someone who is struggling, impacting your organization’s ability to carry out its mission and undermining its ability to deliver for those you serve. Keeping them on is a disservice to them and your team. And while a thoughtful performance review process is essential, to see if the staff member in question can be supported into performing more effectively or transferred into a role they are better suited for, we often engage in endless processes to avoid making the hard decision to fire someone.

Moreover, inaction can have an opportunity cost. Retaining failing staff can demoralize other staff members and require them to spend more time than they should be compensating for others’ non-performance. Inaction also stops you from getting someone better in the role. Some of the leadership decisions I have most regretted are not moving quickly enough to take action when I had decided someone should get off the organizational bus. I have felt chastened on those occasions when staff opened up about the toll of working with the departed colleague (usually their supervisor) and how they didn’t feel in a position to raise concerns against their direct boss.

MOTIVATING AND RETAINING STAFF

Once you have the staff you want, the challenge is to keep them engaged and committed. A good culture is key, which is why I’ve spent so much time exploring what that means. So is intrinsic motivation, and this is where well-run nonprofits have an inherent advantage over their private-sector counterparts. Intrinsic motivation is the drive to engage in an activity for its own sake—driven by internal factors such as personal interest, enjoyment, or satisfaction—rather than for the sake of an external reward, such as a generous salary. So, working to address hunger and homelessness will be intrinsically more motivating for most people than trying to sell more widgets, for example. While it has long been understood that rewards, particularly financial ones, are a key motivation for staff, more recent psychological research posits that intrinsic motivation is of equal or greater importance. This is important, as most nonprofits struggle to offer the kind of salaries on offer at their for-profit counterparts but are very well placed to offer meaningful work. One recent US study of corporate employees found that 90 percent were willing to trade a percentage of their lifetime earnings for greater meaning at work. And on average they would be willing to forgo 23 percent of their entire future lifetime earnings in order to have a job that was always meaningful.²⁹

Key drivers of intrinsic motivation are autonomy, competence, and relatedness. This is known as self-determination theory.³⁰ Autonomy is people’s need to feel that they have choices and are in control of their behaviors and goals. Competence is the need for people to feel effective at meeting everyday challenges, demonstrating skill over time, and feeling a sense of growth and flourishing. Relatedness is people’s need to care about and be cared about by others, and to feel that they are contributing to something greater than themselves.³¹

The importance of autonomy, competence, and relatedness can readily be understood when debating post-pandemic hybrid work. Many organizations have struggled over whether to mandate a return to the office full-time, provide complete flexibility to work from home, or something in between. The challenge has been exacerbated by the fact that, during lockdowns, working from home was the only option, so for staff who prefer that option, a direction to return to the office for any day feels like a reduction in a benefit already enjoyed. On the other hand, being fully remote can make it more difficult to build connectivity and a sense of belonging.

As we were working out the best approach for the Freedom Fund’s offices in London and New York, we gave thought to not just autonomy, but also competence and relatedness. Many staff commented on the loss of connection they experienced when working entirely remotely. Many noted that their work benefited when they could come together in person as teams. But, of course, many also valued the flexibility that working from home provided, and the time they gained from not commuting. We polled all staff on preferences for a return to the office (encouraging a sense of autonomy) and most preferred the option of two days in the office. We settled on this, with a choice for all managers (in consultation with their teams) over which two days, and highly flexible hours on those days they are in the office. We’ve also sought out other ways to promote a sense of connection, through social events, off-sites, and learning opportunities to encourage a sense of flourishing over time. The arrangement is not perfect, but the outcome appears to have been welcomed and supported by most staff and contributed to ongoing high performance.

Having the right staff and a good culture also means having a diverse team and a culture that welcomes all staff. There is a lot to unpack with all of this, so we will devote the whole of the next chapter to this topic.

TEAM ACTION POINTS

Prioritize Culture and Recruit and Retain the Right Staff

Prioritize building a good culture for your organization as a whole, and for teams within it.

Understand that a good culture is one of psychological safety, and that is inclusive and impact-focused, and supports thoughtful risk-taking.

Recognize the importance of the CEO modeling the desired behaviors as part of building culture.

When it comes to recruiting and retaining staff, “get the right people on the bus, the wrong people off the bus, and the right people into the right seats.”

Lean into the power of purpose to motivate staff. Recognize that autonomy, competence, and relatedness are key drivers of intrinsic motivation for staff.

^* Amy Edmondson, “How Fearless Organizations Succeed,” Strategy + Business, November 14, 2018, https://www.strategy-business.com/article/How-Fearless-Organizations-Succeed. Some conservative critics see psychological safety as a form of “coddling” of employees, leading to a lack of discipline and rigor. But this fundamentally misunderstands the concept. At its heart, it is about encouraging risk-taking, not closing it down, by ensuring that staff are encouraged to air views openly and contribute to better decisions and outcomes.

^* See a short but excellent book on the behaviors of dysfunctional teams, and how to respond; I recommend Patrick Lencioni, Five Dysfunctions of a Team: A Leadership Fable (San Francisco: Jossey-Bass, 2002).

^* To give an example, two leadership books I’ve been reading while writing this chapter have the power of teams as the central thesis of their accounts on leadership. See Henry Engelhardt, Be a Better Boss (London: Whitefox Publishing, 2023); and Daniel Coyle, The Culture Code: The Secret of Highly Successful Groups (New York: Ballantine Books, 2019).

^* Work sample tests are also good predictors if the job lends itself to giving the candidate a piece of work similar to what they would do in the job. Some jobs (such as communications roles) lend themselves more to this than others. Well-designed cognitive tests are sometimes regarded as an effective tool, but some tend to discriminate against women and non-white male candidates, rendering them largely ineffective.

CHAPTER 6

Diversity, Equity, and Inclusion

Embrace Humility and Learning

It is not our differences that divide us. It is our inability to recognize, accept, and celebrate those differences.

—Audre Lorde¹

By the end of its first year, the Freedom Fund had scaled from one staff member to seven. All our staff were white, and most had graduate degrees. Our board comprised one woman and five men, all white. Our staff, based in London and New York, oversaw our existing programs in India and Nepal and planned expansion in Thailand and Ethiopia. While we had a number of Indian and Nepali consultants based in those countries, it’s safe to say that our staff and board were not representative of our society as a whole, let alone the communities in the low- and middle-income countries we served.

Only in 2018 did I belatedly begin paying more attention to diversity. Prompted in part by unfolding #MeToo scandals, my priority was to work with the board to ensure it had a better gender balance. I was not thinking more broadly than that. Efforts to improve the board’s diversity were constrained by the fact it was explicitly a donor board,^* significantly limiting the pool of potential candidates that could fit its financial requirements. Our efforts to make the board more representative of the communities we served started a year later when one of our founder organizations encouraged us to appoint someone who had personal experience of labor exploitation to the board and offered to make one of its seats available for this purpose.

By early 2023, the picture had changed. We had eighty-two staff members—thirty-five identified as white, and the remaining forty-seven identified as Arab (French), Asian, Asian (South), Asian/White, Black, Black (African), Indigenous (Newar Janajati), Mediterranean, or Parda. Nearly three-quarters of our staff were women. Over half our staff lived in our program countries. On the senior leadership team, we had three women and two men. One was South Asian, and the rest were white and from the US, Canada, UK, and Australia, respectively. In the organization as a whole, four staff members identified as survivors of trafficking, including one member of our senior leadership team. Our board of eight had four women and four men; two were from low- and middle-income countries, and one had personally experienced labor exploitation. The organization was far more diverse than when it began but was still working at becoming more representative and inclusive.

I’m recounting these figures to give you a snapshot of the Freedom Fund’s progress, or lack of it, during its early years. Diversity is not just about numbers, but if you don’t start to become more representative of your society and those you serve, then you can’t take the next steps to become more inclusive. I share these details somewhat warily, as I’m fully conscious that talking about our halting progress on DEI opens us, and particularly me as leader, to criticism. But I think many leaders struggle with how best to approach DEI, especially when they didn’t think about DEI from the outset. I hope by sharing my own experiences, missteps, and learnings, I can help others better understand its importance and identify ways to help their organizations evolve.

Why did we take so long to become more diverse? Largely because this was the path of least resistance. We were growing in a hurry. In those first few years, we recruited staff who met our technical and educational requirements, without looking beyond those requirements to identify what other attributes were of critical importance, such as firsthand experience of the issues we were working on. Nor did we think to change our recruitment criteria and processes to expand the pool of potential candidates. We did not feel under any pressure to do so, because we were in good company with our peer organizations, most of which were similarly unrepresentative. When I started as CEO of the Freedom Fund, the four largest anti-slavery organizations in the UK and US were led by white men and had largely homogenous leadership teams. We also took comfort that our work, partnering with frontline organizations in countries with a high burden of slavery, was very much about supporting and shifting power to vulnerable communities. Progress externally allowed us to overlook our lack of progress internally.

Our efforts became all the more urgent following the murder of George Floyd and the rise of the Black Lives Matter movement. Our staff in the US and UK started asking what more we planned to do to ensure that our operations and culture were more inclusive, representative, and actively addressing racism and other systemic injustices. Our staff in low- and middle-income countries raised concerns about the need for staffing across the organization to be more representative of the countries we worked in, and to ensure that staff working in those countries received the same treatment and opportunities as staff in London and New York.

For my part, I initially felt somewhat uncomfortable with the pressure to do more. Like so many others, we publicly acknowledged the importance of Black Lives Matter and produced a statement about our commitment to DEI. I hesitated to go further, out of nervousness and uncertainty about what such actions would require and how they might change our focus on external impact. I took comfort that our staff surveys regularly reported high levels of satisfaction, and I thought that was more important than embarking on an uncertain process of internal reflection on DEI. I was also conscious that the board reflected a range of views on what action was required, and that we might struggle to reach agreement with the board on the best way forward, creating unnecessary friction in the process.

But staff continued to push for more, and I started doing more reading and reflecting on power and privilege. I came to the overdue understanding that we couldn’t credibly tackle entrenched power dynamics in the regions where we worked if we didn’t first look inward. I realized that we wouldn’t be as impactful as we hoped to be if we didn’t better represent the communities we served within our own staffing. Such representation—if done well—would enhance our legitimacy and credibility in the eyes of these communities and would also ensure that we had a deeper understanding of the challenges they faced and the outcomes they desired. All of that would contribute to greater impact over time. I also understood it was important to take action to maintain the staff’s longtime support of the culture we were so proud of.

So, three years ago we began a concerted process and, since then, we have come together around a shared understanding of how to move forward on DEI and have significantly stepped up our efforts. I’ll detail those efforts at the end of this chapter, with the hope that you will find them informative as you consider your own organization’s DEI efforts. That said, we are still very much a work in progress. In fact, one of the things I’ve come to understand is that DEI is invariably an ongoing process, not a one-off exercise.

When you are a leader, DEI deserves your close attention. While you may believe your nonprofit is diverse, your staff and other stakeholders may not agree. You may think all staff members are treated similarly and have equal opportunities to progress, but what is their experience? You may be a very small organization and think that DEI is not a priority, but it will be to those you serve, and once your organization is bigger, undoing entrenched patterns of behavior becomes much harder. You may think that because your mission is about tackling power imbalances in the outside world you don’t need to look internally, but you do. DEI should be a priority for any nonprofit leader. Done well, it ensures your organization is a better place to work for all staff and has greater legitimacy and credibility and, hence, impact.

I don’t intend this chapter to be a full primer on DEI, and I highly encourage you to seek out the many excellent resources on this topic written by activists, experts, and nonprofit leaders. It is not written for those who already have a deep understanding of DEI, as I am still learning myself. Rather, it’s intended as an introduction to the topic, for those leaders who are starting to grapple seriously with DEI. It will focus particularly on the role of the CEO.

WHAT IS DEI?

Diversity, equity, and inclusion is a catchall phrase for three distinct but related ideas. Diversity is about the presence of difference. Diverse here means people with different identities, experiences, perspectives, and qualities. Equity is about the process of fairness, a step toward full inclusion. Inclusion is about ensuring people with diverse backgrounds feel and are welcome in the organization. A diverse staff, in and of itself, is not sufficient; full inclusion requires that all staff voices, especially those from systematically marginalized backgrounds, are heard in important decisions and aspects of the organization.² Done properly, it should result in a workplace where all staff feel welcomed and experience a sense of belonging.

COMMON DEI TERMS^*