Operations

Leadership Development for Your Nonprofit

| Updated April 10, 2018

Leadership development planning and implementation

Nonprofits depend on good leaders to guide, inspire and engage. To be successful, leaders must identify impending challenges and the leadership skills needed to overcome them — and invest in training employees who have the potential to lead in the future. All too often, however, leadership development is relegated to the sidelines.

Here's what your nonprofit needs to know about leadership development.

Leadership development: Why it's key

Leadership development is the identification and development of the people who'll lead the most critical parts of your nonprofit. This includes the executive director or chief executive, those reporting directly to him or her, the managers who run key departments and programs, and the people who have the potential to fill these positions in the future. In partnership, these are the people responsible for your organization's impact.

Leadership development can provide a high return on investment for any nonprofit. Consider the benefits:

  • Reduced staff turnover
  • Increased employee, volunteer and donor satisfaction
  • Increased efficiency and productivity
  • Improved ability to reach organizational goals

However, not just any staff training will produce great leaders for your nonprofit. Focused leadership development training is crucial for helping potential leaders stretch and grow so they'll have the specific skills — and confidence — needed to one day take the reins.

Assessing your organization's leadership needs

The first step in creating a leadership development plan is assessing your organization's leadership needs. Consider:

  • Long-term goals and strategies
  • How you'll meet these goals
  • What kind of leaders you'll need
  • How you'll develop these leaders

Once you've mapped out your future leadership needs, consider whether or not your current staff can meet these needs and how you might capitalize on in-house talent. Depending on the size of your organization, a talent review could encompass current leaders and those they manage directly or the entire staff. Analyze each person's performance and potential and determine potential next steps. Take into account aspiration, ability and engagement.

You'll likely find that some people should maintain their current roles. Others may be ready for a gradual expansion of responsibilities or an entirely new role and new challenges.

If your nonprofit is struggling to assess leadership needs, you might consider hiring strategic external support, such as a consultant, to assist. If there's no room in the budget to hire a consultant, research local service grants in support of leadership development. Or recruit an executive experienced in leadership development to your board, making him or her head of a board committee focused on leadership development.

Creating a leadership development model

Your leadership development model should reflect the needs and culture of your organization and the community you serve.

Senior team members should be asked what they think the leadership of their departments should look like in the next few years. Is there enough internal talent to support this leadership? It's also important to find out what the staff is currently doing to develop leadership skills, whether they have the resources they need, and what's working and what isn't.

The board should ask similar questions of the executive director or chief executive. What will the executive leadership team look like in a few years? Does the organization have the talent to support upcoming strategic priorities? What is the executive director doing to develop internal talent or his or her own skills? Are the necessary resources available?

Ultimately, your leadership development model should include:

  • A clear plan of action. As a vision of your nonprofit's future leadership team, the model should include the capabilities and roles you'll need to achieve your future goals — and the specific steps to build that team.
  • Expectations for senior leaders. Senior leaders should be held accountable for growing their team members. Tactics might include goal-setting sessions, performance evaluations and regular check-ins to emphasize leadership development.
  • Expectations for executive leaders. Likewise, it's up to the board to hold the executive director or chief executive accountable for developing senior leaders. This may include having a development plan in place and regularly measuring progress against specific leadership development goals, such as at annual planning meetings.

Using the 70:20:10 learning model as a guide

You might guess that training programs are crucial to supporting leadership development, but best-practice principles such as the 70:20:10 model for learning and development suggest otherwise. This model demonstrates that:

  • About 70 percent of learning happens on the job during carefully chosen assignments aimed at stretching an employee's skills
  • About 20 percent of learning comes from managers and peers helping the employee with the assignment
  • Only 10 percent of learning comes directly from training

Although formal training, conferences and books play a role in leadership development, they're likely not enough on their own. Leadership is learned by doing.

Evaluating leadership development success

To get a full picture of the effectiveness of your leadership development program, it's wise to look at a variety of measures — preferably comparing results before and after the program launches. Consider, for example, looking for trends in performance appraisal ratings, customer satisfaction scores, employee engagement surveys and staff retention rates. You'll also want to ask how the process is working for the participants. This can be done with a survey or more informally in one-on-one or group settings.

Another important way to evaluate the success of your leadership development plan is to calculate your return on investment, either for an individual or a group of employees. Start by looking at one of the measurable goals you used to create your leadership development plan. Identify the key performance indicators linked to this goal, such as revenue in a specific area. Then, target employee skills that can be developed to change this key performance indicator.

Make sure you have a baseline measurement of your key performance indicator before training begins. Then, measure again after 3 to 6 months of training. The change in your key performance indicator from the baseline is the net gain. You'll divide your net gain by the total cost of the training, such as the cost of staff time spent or a facilitator fee. This will provide your return on investment.

When calculating return on investment, use the most accurate numbers possible and look closely at your final figures. If your return on investment is low or negative, consider the possible reasons. Did you train the right employees? Was the training ineffective or did it target the wrong areas? Did you choose the right key performance indicator? If your return on investment was high, do you know why? Will you be able to replicate these results?

If you plan to hire someone to help train your employees, be sure to ask how he or she evaluates the success of a leadership development plan. He or she might help you design your own evaluation tool.

MissionBox editorial content is offered as guidance only, and is not meant, nor should it be construed as, a replacement for certified, professional expertise.

References

Knowhow Nonprofit: Capacity building

Stanford Social Innovation Review: Leadership development: Five things all nonprofits should know by James W. Shepard, Jr. (2014)

The Bridgespan Group: Nonprofit leadership development: What's your "plan A" for growing future leaders? by Kirk Kramer and Preeta Nayak

Looking Glass Institute: Nonprofit leadership development: A model for identifying and growing leaders within the nonprofit sector by Leslie Bonner and Jessica Obergas

UNC Kenan-Flagler Business School: Beyond smiley sheets: Measuring the ROI of learning and development by Keri Bennington and Tony Laffoley (2012)

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