What should your leadership focus be right now?  Are you asking the right questions?

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Nonprofit leaders are busy acting on what they believe to be the best investment of their time, and theory about stages of growth doesn’t always seem particularly useful. This article is focused on how leaders should prioritize their time and important decision-making considerations at each stage.

There are decades of management articles on organization stages. The terms used to describe the stages in this article come from Susan Kenny Stevens. Stevens argues that these stages are not always sequential, and my 25-plus years of experience working in the sector affirms this.  The stages are important because many management gurus assert that the future of an organization is determined more by internal structure than by outside forces.  Certainly, outside forces have an impact, but whether an organization grows, evolves, and weathers a storm well is impacted by internal factors over which leaders have much more influence.

Since the stages are not always sequential, reality is not always as neat as the stages that follow. For example, sometimes organizations can take off quickly and encounter the growth stage while still in start-up mode.  Also, “mature” organizations often encounter a need to change their focus to better respond to community needs and they then pivot back to the growth phase. 

I am currently working with an organization that has existed for decades, but I would argue is somewhere between successfully turning around and the very early growth stage. They have never been able to build adequate capacity and have relied heavily on volunteers throughout their long history.  As a result, clear systems have never developed, and their hours/ability to grow their impact remains limited. For them, the maturity stage never involved the creation of needed capacity and processes, but they hovered for more than a decade between growth and decline with maturity characteristics being only that they continued to offer the same set of programs in a similar way for many years, using the same staffing structure.  Often, when this is the case, organizations remain small and move toward decline more quickly. In fact, in the last five to ten years there were some early signs of entering the decline stage for this organization. However, this organization currently has creative and innovative leadership and is seeking ways to build momentum and capacity toward growth.

The seven stages pictured below are summarized from Stevens’ work.  As you read, consider where the organization you serve is currently, and what that says about your needed focus. 

1. Idea: This stage is before tax-exempt status has been secured. The organization founder or founders are formalizing the idea and dreaming about how they might act on it. 

Organization Characteristics Potential Problems Encountered Needed Leadership Focus
  • There is a small, inner circle that is likely does not represent diverse perspectives and may not represent those the “idea” could impact. 
  • All work is likely done through volunteers.
  • Might be seeking or studying a solution for a problem they are concerned about. 

Conceptual problems with the service framework likely in this stage and include:

  • forming an organization to meet a need already being met by another organization.
  • Building a service model around assumptions about what others need that are inaccurate.
  • Not knowing enough about researched best practices to create a strong start.

Asking a diverse group questions like: what am I missing?  What am I failing to ask? Is this a valuable investment of time to explore? Is there a better way to go about it? Is anyone else doing it?

  • Talking and gathering information with those most impacted by the problem being solved.
  • Learning about similar program models that have worked.
  • Learning from multiple individuals with diverse perspectives steeped in nonprofit work.  This can help ensure services are not duplicated and that important questions are asked early.

2. Start-Up: This is a key stage that sets the history/foundation for the organization and can dictate future success.

Organization Characteristics Potential Problems Encountered Needed Leadership Focus
  • Energy begins to form around the idea and business planning begins.
  • Recruitment of the first board of directors takes place.
  • Tax-exempt status is secured.
  • Most or all of the work is done by volunteers.
  • The board that is formed is not based on the knowledge or skills needed but on close friends who are willing to give their time because someone asked.
  • If legal council isn’t sought, the formation could be faulty (bylaws, etc.).
  • Volunteers doing the work either don’t follow through or begin to get tired.
  • Any services that begin may be inconsistent or have barriers in when they may be offered due to having no paid staff to support the work.

Asking questions like: what characteristics and skills do we need in our board? What can we accomplish with our current resources? How might volunteers be involved in communication? What do we need to communicate, when? How do we build a plan for long-term financial stability?

  • Seek volunteers or pay experts for council related to the best practices of building a governing board. This should include an assessment of the characteristics and competencies needed in your board.
  • Build early, simple communication systems about your work, and processes to thank your donors.
  • Have an attorney file your tax-exempt status and write your bylaws.
  • Be strategic in forming your initial board.
  • Create an early plan for financial sustainability that works toward diverse funding streams and allows the hiring of paid staff over time.
  • 18-month, adaptive strategic planning.

2. Growth: This is when the community starts to embrace the vision and program growth begins.

Organization Characteristics Likely Problems Encountered Needed Leadership Focus
  • Chaos and excitement reign!
  • Organization capacity doesn’t keep pace with growth, at least in the early stages. 
  • Due to limited staff to keep up with the growth and a lack of formal programs and operational systems, the pace is fast and chaotic.
  • Over time, staff and volunteer burnout.
  • Inconsistent decision-making.
  • Not following through on commitments to those served or to funders.
  • Running out of money.
  • Failing to manage risk and ending up with negative press.

Asking questions like: How do we best share our impact? How do we measure our impact? What structure will be best to meet our big goals? What resources (staff and systems) do we need to realistically accomplish our goals? How do we get those resources?

  • Assessing the structure/capacity needed to successfully achieve your big growth goals.Strategic planning.
  • Building diverse, financial resources to grow capacity.
  • Building systems and processes, including written policies and procedures for managing risk.

3. Maturity: The organization is more stable and capacity begins to catch up with program growth.  Systems and processes develop, and these typically have both some positive and negative impacts. This stage can last many years or even decades and looks very different in the early stages of maturity than a decade later. Some organizations stay here until growth or a pivot is needed and then they go back to the third stage. Others become very rigid and unresponsive to community needs and move toward stage five, decline.

Organization Characteristics Likely Problems Encountered Needed Leadership Focus
  • More individuals are being served and with less chaos.
  • Key policies and processes exist.
  • There is a team of staff able to meet organization needs; for some organizations, this is still leaner than others. 
  • The organization is more known in the community and is building community trust. Over time, lots of policy and red tape can make innovation difficult or can make individualized approaches in working with staff and those served more difficult.
  • Becoming overly systematized and unable to innovate or adapt.
  • Not adapting the staff structure and core competencies as the organization needs change. 
  • Not making room for diverse perspectives.
  • Failing to make consumer-informed decisions.
  • Relying too heavily on one large funding source.Not remaining abreast of changing needs and best practices.
  • Becoming too trusting and not managing risk. 

Asking lots of people questions like: what am I missing?  What am I failing to ask? Is this still a valuable investment of our time? Is there a better way to go about it? How can we be more responsive to those we serve? To our staff?

  • Constantly re-evaluate your practices with emerging needs and research.Intentionally integrate consumer voice into decision-making.
  • Seek a balance between standardizing practices and innovative exploration of ideas.
  • Seek diverse perspectives across the organization.Look for ways as the hierarchy grows to ensure appropriate delegation and autonomy in decision-making.
  • Remain community-involved and connected with a focus on relationships.
  • Look for ways to leverage your maturity by building partnerships with more grassroots organizations and by seeking a collective impact approach to the problem you are solving.

    • Decline:

Organization Characteristics Likely Problems Encountered Needed Leadership Focus
  • Limited staff or board engagement.
  • A we’ve always done it this way mentality.
  • Community relationships are not as robust as they once were.
  • Funding decreases.
  • Disconnected from stakeholders, including those served.
  • Services less relevant.
  • No funding to operate and likely need to let go of staff and potentially decrease services offered.

Asking questions like: what is working and what is not? Is what we offer still relevant? What is the most efficient and impactful way to meet our mission? Where can we cut resources and still have impact? Is someone else doing this better? Should we let them do it or support them in their work?  

  • Assess what the mission needs most right now as streamlining takes place to keep the doors open.
  • Seek external perspective.
  • Innovative problem-solving.
  • A willingness to assess honestly if they are the best to meet the mission and if so, to begin a plan for change.
  • If an organization is going to successfully enter the turnaround stage and move toward growth, often, a leadership change is required.

    • Turn-Around:

Organization Characteristics Likely Problems Encountered Needed Leadership Focus
  • There is new energy in board and staff leadership.
  • Community engagement increases.
  • A new plan is in place and it is innovative and consumer/client-centered.
  • Overcoming negative perceptions from the recent past.
  • Leadership burn-out in the late stages of turn-around and early stages of growth.
  • Failing to remember learning from past failures as things shift.

Asking questions like: what can we do right now to ensure we stop any ongoing financial shortfall due to how we are operating? What do we need right now in our leadership? How can we be more innovative?  Are there ways we can partner with others to hone what we do best? What does the community need most?

  • Gather innovative and diverse perspectives.
  • A shift in strategic focus.
  • Relationship and resource development.
  • Innovation in programming with a refocus on consumer/client needs.

    • Terminal:

Organization Characteristics Likely Problems Encountered Needed Leadership Focus
Begin the process of closing doors and gifting any remaining resources to a similar mission in compliance with bylaws.
  • There is not enough money to pay operational bills.
  • Staffing and programs have been cut to the point of not being effective anymore.
  • A path to turn-around is not seen.Leadership remains stagnant.

Ask: How do we make the best use of remaining funds for the good of the mission?

  • Seeking expert advice to close in compliance with the law.
  • Clear, positive external communications.

Heightened Development loves working alongside leaders as they ask these questions, re-focus their perspective, and develop a structure and plan that propels them to greater impact.