Leading from the front... not bringing up the rear
The central hypothesis of the New Reality is that technology can and will affect every aspect of how non-profits operate (to varying degrees). Yet when we look across the sector, the conditions aren’t currently set up to facilitate this shift. Within this context, leadership - of all forms, and at all levels - was by far the most frequently mentioned topic across the interviews carried out for the New Reality, and the concerns raised here should be a wake up call to any established organisation in the sector.
Before throwing punches it’s important to recognise that until a few years ago, the sector had actually been doing pretty well under the stewardship of incumbent leaders. Non-profit organisations both large and small had been sailing the fretful waters of policy change and shifting supporter demands whilst growing in the process (according to a 2014 study by SCVO the third sector has doubled its income in the past decade despite the recession). So why is leadership coming under such fierce criticism now? Jon Alexander provided this concise summary:
The New Reality's contributors are making a clarion call for pioneering leadership: CEOs, senior directors, trustees and chairs to seize this opportunity to use digital transformation to drive a new era of social impact and to also recognise that `business as usual’ is a more inherently risk-laden choice than creating space for experimentation and action.
4 stand-out issues were identified around leadership in this period of change:
1. Sector leadership isn’t currently demonstrating vision or bravery in digital transformation
2. Responsibility for the process has been delegated away from senior levels
3. Digital leaders and champions within the sector are often focused on delivery not strategy
4. Trustees are failing to support proactive change
1. Develop your vision and be brave
A handful of organisations have used the period of change caused by the financial crisis as an opportunity to reassess the feedback loop, adjust their business models and they’ve come out swinging:
Others have battened down the hatches and are sitting tight in the anticipation that the storm is weatherable. It may prove to be so, but meanwhile, it might also break up the boat before it blows itself out.
It’s becoming increasingly apparent that this changing landscape calls for a new style of leadership - one that is playing to win. And the game is all about finding better ways to serve audiences and run services. Bravery could mean:
- Stopping some existing operations to free up space and budget for digital planning and delivery
- Investing in unfamiliar skills like data science over traditional ones like marketing
- Replacing trustees who aren’t up for the journey
It may even mean going back to square one and completely reassessing the shape of an organisation in light of the new potential value offered by digital services:
Is digital really the bottom of the list of CEO’s priorities?
Some interviewees made a link between lack of vision in this area and a perceived lack of urgency. This appears to be backed up by recent research from ACEVO and CAF. The recent ‘Social Landscape’ study asked 427 CEOs ‘Which are the three most pressing challenges facing your organisation?’ The list included options around finances, awareness, resourcing – and only one option for ‘New technology - online and mobile solutions for giving and communication...’, which ranked 16 out of 18 - almost the bottom of the list of CEO’s priorities, below everything from ‘maintaining volunteer engagement’ to ‘finding skilled staff’.
The message this reflects back to ACEVO’s own membership is dangerous: it says “it’s OK, other CEOs don’t think technology is a priority either”. It also seems to suggest that even though sector leaders have a huge list of worries, they don’t yet see how prioritising technology might help them find the answers. The message that this is urgent isn't getting through.
According to the majority of the New Reality cohort - the majority of sector leadership isn’t playing to win here – and we don’t yet know what the costs of watching from the sidelines may be. The answer to delivering greater social value exists, but only if we find leaders brave enough to take some risks. Otherwise the consequences may be dramatic:
Case study: Brave leaders = great successes at Penguin
Anna Rafferty was Digital MD at Penguin from 2009 to 2014:
"I was lucky to have worked with two great leaders who fully understood the need for digital transformation. At Penguin John Makinson the Chair was very active in social transformation. He was very supportive, very interested, and very brave. At Pearson (Penguin's parent company) Marjorie Scardino the former CEO really lived the core values of 'Decent', 'Innovative' and 'Brave'. She did things like giving me access to an innovation fund where I could apply to for money to do things that were outside business as usual. I used that to deliver projects like the Penguin online dating business - a joint venture with Match.com. The incredible surprise it generated meant that we were on the front page of major broadsheets, and in press everywhere from Toronto to Tobago. The experiment was all about using our brand digitally elsewhere, and selling our expertise around metadata rather than our content. It worked, it got good PR and it made us money."
2. Don't delegate it
Byron Dorgan once said, “You can delegate authority, but you cannot delegate responsibility.”
Many of the contributors to the New Reality shared the view that the responsibility for delivering impact at scale through digital had indeed been erringly delegated away from senior leadership. This appears to also be borne out by the experience of requesting interviews with CEOs for this study – the response was typically positive, but most CEOs asked first if this should be a conversation with their Head of Digital in place of themselves.
Numerous studies* have highlighted that digital has yet to find a permanent ‘home’ and can variously be found in fundraising, marketing/comms and IT. But these studies may be missing the critical point - the question is not where can digital live within an organisation to be effective? But, how can digital be harnessed if it only lives in one place? Trying to ‘own’ digital from one functional perspective limits its potential: to support an effective change process all functions must be enabled - from the Director of fundraising to the Director of HR (see more on HR's role in the Culture theme). The current picture of many digital operations is one that is deeply silo’d, and disempowered.
In many commercial organisations the post of Chief Digital Officer (CDO) has been introduced to raise the profile/weight of technology within organisations. See: Guardian and Techcrunch articles on this.
A handful of non-profits have followed suit (the Met in the US and Royal Historic Palaces being notable examples), but as yet, the New Reality’s cohort remained unconvinced that a permanent role at this level was the real solution (although seen as a definite step in the right direction):
Creating a temporary role at director level (a 2-3 year FTC post), combined with a serious evaluation and up-skilling in digital know-how for all senior management is one solution (with the obvious caveat that they must work together against traditional silos to be effective).
Among interviews there were many examples given where senior teams were constantly “at each others throats”, and rarely in a mood to see how collaborating on digital projects could offer cross-functional benefits. In a more positive example David Steadman, an executive director at Action on Hearing Loss shared this insight about how their senior leadership team work together to effectively support new initiatives:
It is an unhealthy organisational culture where work aiming to secure a positive future for the company has to be done in secret, yet this is clearly happening. Interviewees who’ve successfully led and managed change processes around digital often cited examples where work was done ‘under the radar’ following unsuccessful attempts to engage senior leadership. Others said that they sought out ‘the real leaders’ within their organisations - managers with some power and budget who were prepared to help work against the grain to make tech-enabled projects happen.
In the New Reality, your CEO is your head of digital.
3. Digital champions must focus on strategy not just delivery
Most references to ‘leaders’ in this theme are about the most senior levels of leadership within an organisation - the CEO, senior directors and board of trustees. This section is an exception - focusing instead on the specific digital leadership within organisations, only a handful of whom are currently at director level.
Let’s be clear: the demands on digital leadership are vast. Heads of Digital are expected to be experts in everything from social media marketing to digital fundraising, from data use through to systems integration. Nonetheless some interviewees raised the question of whether we have been guilty of fostering digital leaders with high tactical competence and delivery skills, over more strategic (and potentially more impactful) behaviours in the sector.
A third of study contributors felt strongly that existing digital leaders were not able to achieve their ambitions without further support or intervention from higher up. And it appears that this is creating an even bigger problem: 10% of the study participants had either left internal roles within the sector – or were intending to leave – because of a deep frustration over the barriers blocking digital transformation.
Interviewees from cross-sector organisations involved in this study suggested that the conversation amongst digital leaders in non-profits is changing from one of frustration at budget and resource limitations (this still exists as a concern but to a lesser degree), to a firm call for greater prioritisation and more structure around the process of tech enablement. That certainly looks like more strategic progress, but the question remains about whether this push is being effectively supported, and whether the distractions of daily digital delivery are significantly impeding organisations’ digital transformation processes.
There are, of course, some inspiring stories of success showing how and where digital leaders in organisations are making significant headway in partnership with senior leadership. But it’s also apparent that every success required a hard-fought battle to win support in the first place.
Given that Heads of Digital are chomping at the bit to drive digital transformation, but are sometimes struggling to be heard due to their limited representation at director level, it is also relevant to consider whether change will ultimately be led from the the bottom up rather than the top down.
The dominant view from the New Reality’s cohort was that even though the bottom up approach may be able to deliver the bulk of the transition, there must be explicit permission and endorsement given from senior leadership to get the ball rolling.
4. Trustees are failing to support proactive change
The role of charity trustees in enabling and supporting change was raised by over a quarter of interviewees, with clear frustrations bubbling up about the perceived risk-averse behaviours of most boards:
There is clearly a problem here.
Nesta outlined the urgency of this issue in their 2014 Going Digital report “Getting buy–in from trustees and management is crucial. Even if it requires a shift in culture, it is important to educate people as much as possible”.
And whilst the sector isn’t ignoring the issue – significant numbers of the organisations who have been involved in the study are actively in the process of recruiting new trustees, some with the explicit intention of bringing in digital knowledge – even this strategy is not a sure-fire way to raise support for transformational change. A word of warning was offered by two contributors:
Fortunately these problems are surmountable and evidence was offered by a handful of The New Reality’s contributors of some trustees really championing the use of digital within organisations. Laila Takeh provided this comforting contrast:
The New Reality cohort identified the age profile of the average trustee as a key challenge that many were grappling with: 2.1% of all charity trustees are under the age of 30, with the average age being 57 (source: Charity Commission). This is an issue that has been gaining traction more widely for a while now (see this Guardian piece for example).
Although bringing a younger generation into trusteeship may result in resistance from existing trustees and senior management (see this paper), it is an approach that has been endorsed commercially. The benefits of the diverse viewpoints brought to boards by digital natives should not be ignored or underestimated.
What is clear is that for existing boards there is work to be done. All non-profits without a clear tech champion should develop a programme of trustee resources to educate and press the scale and urgency of this New Reality. A presentation from the Head of Digital about ‘how the new website is doing’ won’t scratch the surface.
According to the New Reality’s contributors - outside a handful of inspiring individuals - senior leaders in non-profit organisations (of all sizes) are failing to embrace the digital transformation opportunities on offer. This applies to: CEOs who have mistakenly delegated all responsibility for 'digital' to middle management; trustees who think digital is just for the young; and to other senior executives who have yet to reassess their strategies in light of the potential digital technology offers.
The very real risk of losing relevance in a competitive market over the next 5 years has been recognised by some enlightened leaders, but not enough action has happened to date. The importance of the pioneer or inspirational change-maker cannot be ignored, whether that’s the CEO, a leading trustee, or a senior director who has both the will and capacity to push this forward. This doesn’t mean that leaders need to understand the technology itself, simply that we cannot unlock the next stage in social impact without it.
Case study: The value of active board-level leadership
For CEOs, executive directors and trustees:
Remember, until you’ve got this nailed, you are Head of Digital. Ideally find a digital transformation champion or coach. This person is your critical friend – they may be inside your organisation already – or you may need someone with an external point of view. Listen to them and let them support you in realising your ambitions
Make time to listen. Make the most of other conversations that are already happening – meet with your digital and technology agencies to hear what they have to say, seek out the spaces where the debate is going on and turn up with your listening ears on
Set targets. Put targets around digital transformation in every directorate’s strategy
Let the experimentation commence! Commit to creating the budget and space for some tech-focused R&D to happen
Hire someone senior to help. If you still really feel this still has to be delegated, don’t keep ‘muddying through’. It’s not going away. Put a director in charge of this and seek buy in from the senior levels within your organisation and your trustees to open a digital transformation post. This is a priority hire, but a temporary one: a 2-3 year post for someone who has a background in strategy and implementation
Break the silos. Focus on breaking down any traditional silos that are frequently your organisation from getting the most out of the technology
Build digital knowledge into your trustee board. If you don’t have a clear tech champion on your trustee board, ask yourself and your senior team why not. If you can’t get buy in from trustees straight off the bat, develop an evidence base and an education programme around trustee resources. You are laying the foundations for when you revisit the issue with a bigger call to action