Insider advantage vs. association management expertise: With nonprofit CEO recruitment the choice is not always obvious

With the economy beginning to surge (slightly), nonprofit CEO recruitment has become the subject of questions I have received.

Selection committees are seeing attractive job applicants well-experienced in managing nonprofit associations, but who have little or no professional credentials in the association’s specialty.  Nonprofit CEO recruitment committee members wonder, “should we hire someone from within our own group and hope they can learn to manage the association, or should we hire someone who has demonstrated skills in managing nonprofit organizations, but who isn’t now one of us?”

I advise, “there is always risk in hiring, but it’s not just an insider’s lack of association management skills that carries risk to the board and members of an association that hires an insider.”

“An outsider’s professional distance or separation from association members may actually reduce some risks inherent in selecting an association CEO,” I add.

My advice demands explanation. I start by agreeing to the obvious: an insider already knows the industry and people within the industry. If the primary job of the CEO is to be the sole representative of the association in markets or before elected officials, then being an insider is not so much an advantage as it is a requirement of the job. Management of the association is of secondary to negligible importance.

This works well when an association’s leadership is comfortable investing total control of the association in paid staff members. For-profit companies are often run this way. But nonprofit associations, are most often run quite differently, or at least the leadership prefers them to be run differently.

Membership organizations, trade associations, and any other organization where members are also active volunteers and assume elected leadership positions work hard for their organization. Members often see volunteering for membership on committees and the board as a way they, as volunteers, can guide management of the organization’s activities and can gain an opportunity to represent the organization in public and professional forums.

Members often expect their elected leaders to take a prominent role in representing the organization’s interests. And here, I am not referring to the all-too-common dilemma of volunteer leadership stepping into the roles of professional staff and micro-managing staff administrative duties. Instead I’m talking about stepping into legitimate roles for volunteer and elected leaders of organizations and associations.

When an insider is hired as CEO, with strong insider credentials (or perhaps even a “following” among a segment of the membership) the new CEO may perceive or even seek a mandate to “become the face” of the organization, as opposed to enabling elected leadership to be viewed in this role. This can set the stage for an immediate or future potential for conflict with volunteer-leaders, as the new CEO exerts control over the extent to which elected leaders may lead.

It happens all the time. Some CEOs actively manipulate volunteer positions and elections to maintain this control, even hiring staff who are assigned “hidden responsibility” of ensuring only the “right” volunteers make it to positions of “authority.”

One of my long-time associates found himself in conflict with a board that had evolved since his hiring as CEO. He was already well-known within the profession when hired, especially among a certain group. Officers and board members initially paid little attention to how the CEO represented the professional association, but after a few years as new officers and board members were elected and appointed, these new leaders began to demand an active role for themselves in representing the organization. They also began to exercise an increasing level of scrutiny of the association’s operations. The CEO often differed in opinion with the new officers and board members. But it really wasn’t a matter of right versus wrong. It was a test of wills, with the winner taking the lead in representing the interests of the association. Of course there are no real winners in such senseless battles.

For the CEO who wins such tests (or preempts the battles in advance), the association’s members (organization) lose the collective value of involvement and the diversity of thought presented by the many volunteers who do (or potentially would) work hard for the organization and move into leadership positions. For the officers/board that wins, the usual result is a search for a new CEO. In that, the organization invariably suffers, as searches are costly, the organization stutters, and there are no guarantees the next CEO will work out.

In my example, the board chose a new CEO with no experience in the profession represented by the association. That CEO has been in place now for much longer than had been my friend when he was asked to resign. As a matter of interest, my friend had been preceded by a long-time CEO who also had little professional experience in the association’s field.

Thus the process of nonprofit CEO recruitment may not be as simple as finding someone in “the group” to lead the organization.

(c) Rudolph Rosen 2015

Rudolph Rosen is author of the book, Money for the Cause: A Complete Guide to Event Fundraising a peer-reviewed textbook on fundraising management and increasing fundraising success through effective business management and volunteer and staff empowerment and training.