SECTION: PEOPLE

30609129A LIFECYCLE STAGES OF DEVELOPMENT IN A NOT-FOR-PROFIT ORGANISATION

Published: 06.09.2012 |
Last Updated: 08.10.2013
Neil Pope
Neil Pope
Neil Pope

Neil is a founding Director of 2into3 and principle consultant of its Leadership Recruitment practice. This paper is based on his experience working as senior executive in an ultra-high growth plc., managing turnarounds, founding organisations and 25 years of professional...

CAPACITY BUILDING & ORGANISATIONAL LIFE CYCLES

Background:

Organisational life cycles(1)  provide a model for capacity building for NFPs which propose that over the course of time, organisations move through a fairly predictable sequence of developmental stages. The premise is that resources, requirements, opportunities, and threats both inside and outside the organisation will vary depending on the stage of development in which the NFP finds itself.

Typically NFPs move through four distinct ‘build’ phases. The ability of not-for-profit leadership to recognise these critical phases is vital to the organisation’s success. Armed with the knowledge of not-for-profit life cycle phases allows management and NFP boards to project future needs, make decisions proactively and anticipate challenges.

It is knowing and identifying each cycle correctly that will allow Board leadership to identify their place on the organisational map and any potential crises in advance, plan for each eventuality and ensure the organisation is prepared and equipped to move at a more consistent pace through the organisational stages whilst maintaining a capacity for innovation and preserving brand value and goodwill. It’s also comforting to know that what NFPs are experiencing is normal and inevitable. 
 

Challenges:

One of the big challenges for NFP Boards is in understanding where an organisation sits in the development lifecycle due to the lack of clear measures of improvement in organisational effectiveness. For the NFP sector the nearest proxy measure for mission performance and organisational effectiveness is to survey the views of all staff. Most employees chose to work for NFPs because of the value they place in the mission served. Their job satisfaction or lack thereof is directly linked to perception of their employer’s effective management of resources in addressing the mission. The commissioning of well-defined and anonymous staff satisfaction surveys is rarely carried out directly by Boards.

It usually takes years for these most corrosive symptoms of organisational failure to appear. Faced with a sense of isolation in the early days of organisational dysfunction created by stagnancy in development, good staff will simply leave and move to a better managed employer. Unfortunately for the service user in this situation, it is likely that they have no alternative provider and are stuck with an inefficient service increasingly delivered by disgruntled or disinterested staff.

 

LIFECYCLE STAGES OF DEVELOPMENT IN A NOT-FOR-PROFIT ORGANISATION

Phase I: Common Purpose

Typically, the first Phase in the incubation of an organisation is the gathering of people through common interest, purpose or practice. These can be community groups, support bodies or appreciation societies where there is an exchange of knowledge, innovation and resources mainly within the group. For the most part these organisations are controlled by volunteers along informal and collective lines. The group’s leaders are motivated to make improvements to their lives and those of their community. Everyone pitches in to get things done across fundraising and services. The organisation expands and grows because it is addressing a real need in the community and receives support accordingly.

 

Crisis 1

As it expands one or two staff may be added but with a fast pace of growth soon comes a crisis of leadership, in direction and executive accountability. This Phase continues until a strong, energetic and ambitious leader emerges who is able to set a renewed vision and mission for the organisation, who can develop a strategic plan, allocate defined job responsibilities and differentiate executive and governance responsibilities for the Board.

 

Plateau 1

Exiting this Phase of crisis depends on the ability of the organisation to make the appropriate appointment of someone with entrepreneurial vision and strategic capability, the communication and media skills to raise awareness of the cause and engage a broader constituency of supporters, along with programme management and first line management skills. Transcending this first Phase crisis also crucially depends on the ability of the Board to release executive authority to the Director. Most organisations in the voluntary and community sector do not develop their capacity for impact beyond this stage of development due to the cost of investment in leadership.

 This cycle of investment, innovation, and renewed leadership vision is illustrated by Charles Handy in his use of the sigmoid curve(2)  as a means of presenting the cycle of creative destruction and renewal in organisations.

 Fig 1
 

 

Phase II: Entrepreneurial leadership

When an exceptional individual is appointed to the leadership role they bring intelligence and insight to recognise the broader need and opportunity presented for the organisation. They have the ability to harness broader resources in order to achieve transformative change for the benefit of the group and the general public good. They will have the charisma to build a shared vision across the group, the creativity to develop a novel programme of work and have the temperament to extend awareness of their dream to win support from other likeminded people outside the group.

These leaders are the entrepreneurs who get society changing ideas off the ground. They are risk takers who do not seek reward by financial gain. They seek impact and are rewarded with high levels of recognition. Their focus is firmly fixed at the visionary grand project level. 

Crisis II

These risk-taking entrepreneurial leaders, however, tend to exert absolute control and as a result the organisations develop with very little delegated authority. The very thing that grew the organisation from Phase I to Phase II successfully, namely that charismatic and visionary leader, is most likely to be the single biggest issue stopping the organisation advancing to Phase III.

 There is little focus on the development of succession management or broader capacity building throughout the organisation. Where managers are appointed it tends to be on the basis of personal trust and loyalty rather than competency. Every decision must go through the leader and this sets the limit of the organisation’s ability to develop impact beyond the capacity of this single individual. This is a crisis of delegation or autonomy.

 In the commercial sector this exceptionally difficult executive leadership transition of ceding control to others is motivated by share ownership and the potential for wealth for founders and early stage leaders. There are very few examples of Executives successfully leading organisations on from Phase II to the next stage of development, even in the commercial sector. To do so requires an exceptional opportunity for broader impact (i.e. international expansion) and matching personal ambition.

 A significant number of NFPs plateau at this point of development until the Executive Director retires, is incapacitated due to stress related illness, or a new Non-Executive Director triggers a Board intervention.

 

Plateau II

Because of the relative lack of competition, the perpetual structure, and lack of limited term executive contracts, we can see this plateau of development go on for years and sometimes decades in some NFP organisations. As time goes on the organisation becomes institutionalised around the personality of the leader, strangling opportunity for progressive innovation, efficiency and efficacy.

For many organisations the realisation of their vision requires the organisation to engage with and compete for resources in the whole community in addition to strategically aligned grant makers or likeminded civic innovators. That requires sophisticated marketing, communications and fundraising functions led by mature managers along with a functional organisational structure to support the programme scale of the organisation and the increasing importance of partnerships and alliances.

This step from specialist niche into the mainstream of broad public engagement is a far more difficult transition than the first. It is a landscape scattered with failure and acrimonious ‘personality clashes’   between Chairperson and Executive Director and is marked with collateral damage to reputations and brands.

To prevent this situation it is imperative that the Phase II Executive Director is engaged for a limited term contract to take the organisation from strategic position A to position B. For the right Executive, this is an exciting leadership project which plays to their strengths and enhances their reputation in the market. Once completed, they have increased their value as leaders and are highly marketable, provided they don’t stay too long and fall into the mire of administrative failure. The Board must take responsibility for ensuring there is a framework for the organisation to help its longest serving people understand for themselves where they fit in and also supports them in achieving a new alignment. The Board or its selection subcommittee must independently recruit a new leader with strong professional management skills.

The ability of the Board to perform this crucial recruitment process successfully depends on their level of engagement in, and ownership of, the strategic vision and mission of the organisation. If this has been preserved along with the Board’s independence then using this crisis to assess, plan and adjust the organisation helps prevent failure, accelerates the pace at which an organisation becomes sustainable, preserves public confidence and institutional knowledge, and helps maintain a culture of efficiency and innovation.

In a situation where the Executive Director has been in place for much longer than seven years in a high need/ high growth environment, it is almost certain that the Board has become strategically disengaged from its mission and vision.

Phase III: Execution Management

For organisations that have successfully navigated through to the next stage, performance development is now about continuous incremental improvement rather than the great deed. It is about having people who can manage through the introduction of controls that allow expansion of services whilst minimising risk and increasing predictability and reliability of outcomes. If the crisis stage has been well managed, the Founder/ Social Entrepreneur may now be in a figurehead role such as Lifetime President with their personal values exemplified by an ever growing and more impactful organisation.

A Chief Executive with strong General Management competency is responsible for strategic leadership and the development of a professional management team. The evidence of this operational capacity attracts funding and income from a wider variety of sources and the organisation expands. Funding dependency is the most common trigger for the next crisis.

Crisis III

In developing the organisation’s management capacity, its systems, processes and controls, the organisation’s greatest danger is stagnation caused by loss of control through over-extension, the building of hierarchical bureaucracy and a choking of creative capability. The organisation loses agility and becomes vulnerable to political change, forces of globalisation or the introduction of external radical innovation. This is referred to as ‘the crisis of red tape’.

Plateau III

The way forward is reinvention, to revisit the mission and vision, develop a new strategy and ignite a renewed culture and agenda of innovation. Opportunities for consolidation or merger will be considered and the organisation will certainly require restructuring to remove functional or geographical silos. This requires sophisticated strategic level HR, organisational development and change management capabilities. Strategy, structure, systems, skills, staff and style must be developed and aligned in a wholly integrated fashion to the new mission and goals. Some of the organisation’s staff will have difficulty in adjusting to a cross functional/ cross organisational environment requiring far greater levels of self-discipline and strong influencing skills to develop collaboration rather than the management of formal systems and processes of control.

Phase IV: The Perpetual (Innovation) Organisation

This fourth phase of development has much in common with stage one and organisations that successfully achieve stage four development have established a balance between the professional management of corporate services and controls, organisation funding and the innovative programmes created and run by a collaboration of: front line staff; voluntary supporters; service users; analysts; technical experts; finance, fundraising, HR, marketing and communications resources; project and programme coordinators. Whilst organisations at this level of development continue to be challenged by constant changes in the world around them, they have the capacity to respond and adjust rapidly, preserving their brand and intellectual capital.

Few not-for-profits in Ireland have reached this level of organisational development. In the international not-for-profit world an organisation that exemplifies this stage of organisational development is Ashoka. Architected according to its founder,  Bill Drayton’s, vision of a ‘team of teams’, the organisation operates in 70 countries with over 2000 teams sharing resources, knowledge and expertise in a mission ‘to shape a global, entrepreneurial, competitive citizen sector: one that allows social entrepreneurs to thrive and enables the world’s citizens to think and act as changemakers’.

Charting a Pathway to Sustainability

The following illustration is a summary of this paper’s model for guiding the most efficient pathway through these four main phases of development towards organisational sustainability. The chart highlights the key crisis points and their triggers. A more detailed summary table of the features of each development stage is contained in Appendix 2.

 Fig 2


 

 

CONCLUSION

The not-for-profit sector has the potential to play a critical role in the advancement of civic society in Ireland. The ever widening gap in service provision left by church and state will eventually be filled by those who can demonstrate competency, organisational capacity and financial sustainability. For the not-for-profit sector to deliver on this requirement depends on building more advanced Phase IV organisations.

Building sustainable capacity must be the focus for boards of management. If organisations are going to change and develop through the phases of organisational development it is essential to recognise where they are now, where they have come from and where they are going. The lifecycle model contained in this paper is aimed at prompting that discussion and providing a frame of reference for the boardroom. 

Appendix 1: 2into3 NFP Specialists- Leadership Recruitment

2into3
The Not-For-Profit Specialists

2into3 is a professional services firm with a dedicated focus on addressing the needs and challenges of the not-for-profit sector. We offer our clients a unique portfolio of consulting and recruitment services. As a result we have a deep understanding of the sector and bring experience no other Irish-based firm can offer.
2into3’s Consulting Practice supports organisations in the development and shaping of organisational strategy, fundraising strategies, innovation strategies and digital marketing strategies.
We are also Ireland’s only specialist leadership recruiting service for the not-for-profit sector. Our experience allows us to recognise the particular needs of organisations and understand the ever increasing demand on the capabilities of top level executives. 2into3’s commitment to the sector gives us a special insight into the complex challenges and constraints leaders are expected to contend with when managing an increasing need for effectiveness and efficiency within this environment.
2into3 have invested in the cultivation of a substantial pool of national and international talent spanning sectors and comprising people who wish to utilise their professional capabilities to impact a civic mission in Ireland. Our Search and Selection capability is supported by an extensive network of fundraising and development professionals, industry contacts, and circa 17,000 senior executives.

www.2into3.com


 

Appendix 2: NFP Organisational Lifecycle Table

My Top Tips
Top Tips
1
Build diverse and independent boards, where board members are strategically engaged in capacity building and understand where their organisations sit in the lifecycle of organisational development.
2
Boards must independently manage Chief Executive succession and plan for terms of rotation of no longer than 7 years.
3
Recruit only when the board is fully engaged with the strategy and mission. To deliver strategic change, use a recruitment process which offers external objectivity and gives access to the best matched talent.
4
Develop processes which allow independent assessment of staff attitudes towards organisational effectiveness. This will serve as an approximation to a management dashboard for assessing the direction of impact development.
Suggested reading
1
Evolution and Revolution as Organizations Grow. Harvard Business Review, 50(4), 37-46
Greiner, L. E., (1972)
2
The Empty Raincoat. Random House, UK
Handy, C., (1994)
3
Sustaining Nonprofit Performance: The Case for Capacity Building and the Evidence to Support It. Brookings Institution Press, Washington, DC
Light, P. C., (2004)

 Foot Notes:

1: Several models of organisation growth have been developed over years to explain how organisations grow and what challenges they encounter in different stages of their lifecycle. The first widely recognised model is by Larry E. Greiner,which was published in Harvard Business Review in 1972. He used five growth phases: growth through creativity; growth through direction; growth through delegation; growth through coordination; and growth through collaboration. Each
growth stage encompassed an evolutionary phase ("prolonged periods of growth where no major upheaval occurs in organisation practices"), and a revolutionary phase ("periods of substantial turmoil in organisation life"). Since then people such as Adizes (1979) have followed his work and expanded the model for the commercial SMEs, whilst others such as PaulC Light (2004) have developed applications for the NFP sector.

2. Handy in his 1994 book The Empty Raincoat suggests the sigmoid function represents the development of many naturally occurring complex processes including organisations. It is more commonly called the learning curve.

 

 

 

 

SECTION 2: PEOPLE

30609129A LIFECYCLE STAGES OF DEVELOPMENT IN A NOT-FOR-PROFIT ORGANISATION

Published: 06.09.2012 |
Last Updated: 08.10.2013
Neil Pope
Neil Pope
Neil Pope

Neil is a founding Director of 2into3 and principle consultant of its Leadership Recruitment practice. This paper is based on his experience working as senior executive in an ultra-high growth plc., managing turnarounds, founding organisations and 25 years of professional...

My Top Tips
My Top Tips
My Top Tips
1
Build diverse and independent boards, where board members are strategically engaged in capacity building and understand where their organisations sit in the lifecycle of organisational development.
2
Boards must independently manage Chief Executive succession and plan for terms of rotation of no longer than 7 years.
3
Recruit only when the board is fully engaged with the strategy and mission. To deliver strategic change, use a recruitment process which offers external objectivity and gives access to the best matched talent.
4
Develop processes which allow independent assessment of staff attitudes towards organisational effectiveness. This will serve as an approximation to a management dashboard for assessing the direction of impact development.
Suggested reading
Suggested Reading
Suggested Reading
1
Evolution and Revolution as Organizations Grow. Harvard Business Review, 50(4), 37-46
Greiner, L. E., (1972)
2
The Empty Raincoat. Random House, UK
Handy, C., (1994)
3
Sustaining Nonprofit Performance: The Case for Capacity Building and the Evidence to Support It. Brookings Institution Press, Washington, DC
Light, P. C., (2004)

CAPACITY BUILDING & ORGANISATIONAL LIFE CYCLES

Background:

Organisational life cycles(1)  provide a model for capacity building for NFPs which propose that over the course of time, organisations move through a fairly predictable sequence of developmental stages. The premise is that resources, requirements, opportunities, and threats both inside and outside the organisation will vary depending on the stage of development in which the NFP finds itself.

Typically NFPs move through four distinct ‘build’ phases. The ability of not-for-profit leadership to recognise these critical phases is vital to the organisation’s success. Armed with the knowledge of not-for-profit life cycle phases allows management and NFP boards to project future needs, make decisions proactively and anticipate challenges.

It is knowing and identifying each cycle correctly that will allow Board leadership to identify their place on the organisational map and any potential crises in advance, plan for each eventuality and ensure the organisation is prepared and equipped to move at a more consistent pace through the organisational stages whilst maintaining a capacity for innovation and preserving brand value and goodwill. It’s also comforting to know that what NFPs are experiencing is normal and inevitable. 
 

Challenges:

One of the big challenges for NFP Boards is in understanding where an organisation sits in the development lifecycle due to the lack of clear measures of improvement in organisational effectiveness. For the NFP sector the nearest proxy measure for mission performance and organisational effectiveness is to survey the views of all staff. Most employees chose to work for NFPs because of the value they place in the mission served. Their job satisfaction or lack thereof is directly linked to perception of their employer’s effective management of resources in addressing the mission. The commissioning of well-defined and anonymous staff satisfaction surveys is rarely carried out directly by Boards.

It usually takes years for these most corrosive symptoms of organisational failure to appear. Faced with a sense of isolation in the early days of organisational dysfunction created by stagnancy in development, good staff will simply leave and move to a better managed employer. Unfortunately for the service user in this situation, it is likely that they have no alternative provider and are stuck with an inefficient service increasingly delivered by disgruntled or disinterested staff.

 

LIFECYCLE STAGES OF DEVELOPMENT IN A NOT-FOR-PROFIT ORGANISATION

Phase I: Common Purpose

Typically, the first Phase in the incubation of an organisation is the gathering of people through common interest, purpose or practice. These can be community groups, support bodies or appreciation societies where there is an exchange of knowledge, innovation and resources mainly within the group. For the most part these organisations are controlled by volunteers along informal and collective lines. The group’s leaders are motivated to make improvements to their lives and those of their community. Everyone pitches in to get things done across fundraising and services. The organisation expands and grows because it is addressing a real need in the community and receives support accordingly.

 

Crisis 1

As it expands one or two staff may be added but with a fast pace of growth soon comes a crisis of leadership, in direction and executive accountability. This Phase continues until a strong, energetic and ambitious leader emerges who is able to set a renewed vision and mission for the organisation, who can develop a strategic plan, allocate defined job responsibilities and differentiate executive and governance responsibilities for the Board.

 

Plateau 1

Exiting this Phase of crisis depends on the ability of the organisation to make the appropriate appointment of someone with entrepreneurial vision and strategic capability, the communication and media skills to raise awareness of the cause and engage a broader constituency of supporters, along with programme management and first line management skills. Transcending this first Phase crisis also crucially depends on the ability of the Board to release executive authority to the Director. Most organisations in the voluntary and community sector do not develop their capacity for impact beyond this stage of development due to the cost of investment in leadership.

 This cycle of investment, innovation, and renewed leadership vision is illustrated by Charles Handy in his use of the sigmoid curve(2)  as a means of presenting the cycle of creative destruction and renewal in organisations.

 Fig 1
 

 

Phase II: Entrepreneurial leadership

When an exceptional individual is appointed to the leadership role they bring intelligence and insight to recognise the broader need and opportunity presented for the organisation. They have the ability to harness broader resources in order to achieve transformative change for the benefit of the group and the general public good. They will have the charisma to build a shared vision across the group, the creativity to develop a novel programme of work and have the temperament to extend awareness of their dream to win support from other likeminded people outside the group.

These leaders are the entrepreneurs who get society changing ideas off the ground. They are risk takers who do not seek reward by financial gain. They seek impact and are rewarded with high levels of recognition. Their focus is firmly fixed at the visionary grand project level. 

Crisis II

These risk-taking entrepreneurial leaders, however, tend to exert absolute control and as a result the organisations develop with very little delegated authority. The very thing that grew the organisation from Phase I to Phase II successfully, namely that charismatic and visionary leader, is most likely to be the single biggest issue stopping the organisation advancing to Phase III.

 There is little focus on the development of succession management or broader capacity building throughout the organisation. Where managers are appointed it tends to be on the basis of personal trust and loyalty rather than competency. Every decision must go through the leader and this sets the limit of the organisation’s ability to develop impact beyond the capacity of this single individual. This is a crisis of delegation or autonomy.

 In the commercial sector this exceptionally difficult executive leadership transition of ceding control to others is motivated by share ownership and the potential for wealth for founders and early stage leaders. There are very few examples of Executives successfully leading organisations on from Phase II to the next stage of development, even in the commercial sector. To do so requires an exceptional opportunity for broader impact (i.e. international expansion) and matching personal ambition.

 A significant number of NFPs plateau at this point of development until the Executive Director retires, is incapacitated due to stress related illness, or a new Non-Executive Director triggers a Board intervention.

 

Plateau II

Because of the relative lack of competition, the perpetual structure, and lack of limited term executive contracts, we can see this plateau of development go on for years and sometimes decades in some NFP organisations. As time goes on the organisation becomes institutionalised around the personality of the leader, strangling opportunity for progressive innovation, efficiency and efficacy.

For many organisations the realisation of their vision requires the organisation to engage with and compete for resources in the whole community in addition to strategically aligned grant makers or likeminded civic innovators. That requires sophisticated marketing, communications and fundraising functions led by mature managers along with a functional organisational structure to support the programme scale of the organisation and the increasing importance of partnerships and alliances.

This step from specialist niche into the mainstream of broad public engagement is a far more difficult transition than the first. It is a landscape scattered with failure and acrimonious ‘personality clashes’   between Chairperson and Executive Director and is marked with collateral damage to reputations and brands.

To prevent this situation it is imperative that the Phase II Executive Director is engaged for a limited term contract to take the organisation from strategic position A to position B. For the right Executive, this is an exciting leadership project which plays to their strengths and enhances their reputation in the market. Once completed, they have increased their value as leaders and are highly marketable, provided they don’t stay too long and fall into the mire of administrative failure. The Board must take responsibility for ensuring there is a framework for the organisation to help its longest serving people understand for themselves where they fit in and also supports them in achieving a new alignment. The Board or its selection subcommittee must independently recruit a new leader with strong professional management skills.

The ability of the Board to perform this crucial recruitment process successfully depends on their level of engagement in, and ownership of, the strategic vision and mission of the organisation. If this has been preserved along with the Board’s independence then using this crisis to assess, plan and adjust the organisation helps prevent failure, accelerates the pace at which an organisation becomes sustainable, preserves public confidence and institutional knowledge, and helps maintain a culture of efficiency and innovation.

In a situation where the Executive Director has been in place for much longer than seven years in a high need/ high growth environment, it is almost certain that the Board has become strategically disengaged from its mission and vision.

Phase III: Execution Management

For organisations that have successfully navigated through to the next stage, performance development is now about continuous incremental improvement rather than the great deed. It is about having people who can manage through the introduction of controls that allow expansion of services whilst minimising risk and increasing predictability and reliability of outcomes. If the crisis stage has been well managed, the Founder/ Social Entrepreneur may now be in a figurehead role such as Lifetime President with their personal values exemplified by an ever growing and more impactful organisation.

A Chief Executive with strong General Management competency is responsible for strategic leadership and the development of a professional management team. The evidence of this operational capacity attracts funding and income from a wider variety of sources and the organisation expands. Funding dependency is the most common trigger for the next crisis.

Crisis III

In developing the organisation’s management capacity, its systems, processes and controls, the organisation’s greatest danger is stagnation caused by loss of control through over-extension, the building of hierarchical bureaucracy and a choking of creative capability. The organisation loses agility and becomes vulnerable to political change, forces of globalisation or the introduction of external radical innovation. This is referred to as ‘the crisis of red tape’.

Plateau III

The way forward is reinvention, to revisit the mission and vision, develop a new strategy and ignite a renewed culture and agenda of innovation. Opportunities for consolidation or merger will be considered and the organisation will certainly require restructuring to remove functional or geographical silos. This requires sophisticated strategic level HR, organisational development and change management capabilities. Strategy, structure, systems, skills, staff and style must be developed and aligned in a wholly integrated fashion to the new mission and goals. Some of the organisation’s staff will have difficulty in adjusting to a cross functional/ cross organisational environment requiring far greater levels of self-discipline and strong influencing skills to develop collaboration rather than the management of formal systems and processes of control.

Phase IV: The Perpetual (Innovation) Organisation

This fourth phase of development has much in common with stage one and organisations that successfully achieve stage four development have established a balance between the professional management of corporate services and controls, organisation funding and the innovative programmes created and run by a collaboration of: front line staff; voluntary supporters; service users; analysts; technical experts; finance, fundraising, HR, marketing and communications resources; project and programme coordinators. Whilst organisations at this level of development continue to be challenged by constant changes in the world around them, they have the capacity to respond and adjust rapidly, preserving their brand and intellectual capital.

Few not-for-profits in Ireland have reached this level of organisational development. In the international not-for-profit world an organisation that exemplifies this stage of organisational development is Ashoka. Architected according to its founder,  Bill Drayton’s, vision of a ‘team of teams’, the organisation operates in 70 countries with over 2000 teams sharing resources, knowledge and expertise in a mission ‘to shape a global, entrepreneurial, competitive citizen sector: one that allows social entrepreneurs to thrive and enables the world’s citizens to think and act as changemakers’.

Charting a Pathway to Sustainability

The following illustration is a summary of this paper’s model for guiding the most efficient pathway through these four main phases of development towards organisational sustainability. The chart highlights the key crisis points and their triggers. A more detailed summary table of the features of each development stage is contained in Appendix 2.

 Fig 2


 

 

CONCLUSION

The not-for-profit sector has the potential to play a critical role in the advancement of civic society in Ireland. The ever widening gap in service provision left by church and state will eventually be filled by those who can demonstrate competency, organisational capacity and financial sustainability. For the not-for-profit sector to deliver on this requirement depends on building more advanced Phase IV organisations.

Building sustainable capacity must be the focus for boards of management. If organisations are going to change and develop through the phases of organisational development it is essential to recognise where they are now, where they have come from and where they are going. The lifecycle model contained in this paper is aimed at prompting that discussion and providing a frame of reference for the boardroom. 

Appendix 1: 2into3 NFP Specialists- Leadership Recruitment

2into3
The Not-For-Profit Specialists

2into3 is a professional services firm with a dedicated focus on addressing the needs and challenges of the not-for-profit sector. We offer our clients a unique portfolio of consulting and recruitment services. As a result we have a deep understanding of the sector and bring experience no other Irish-based firm can offer.
2into3’s Consulting Practice supports organisations in the development and shaping of organisational strategy, fundraising strategies, innovation strategies and digital marketing strategies.
We are also Ireland’s only specialist leadership recruiting service for the not-for-profit sector. Our experience allows us to recognise the particular needs of organisations and understand the ever increasing demand on the capabilities of top level executives. 2into3’s commitment to the sector gives us a special insight into the complex challenges and constraints leaders are expected to contend with when managing an increasing need for effectiveness and efficiency within this environment.
2into3 have invested in the cultivation of a substantial pool of national and international talent spanning sectors and comprising people who wish to utilise their professional capabilities to impact a civic mission in Ireland. Our Search and Selection capability is supported by an extensive network of fundraising and development professionals, industry contacts, and circa 17,000 senior executives.

www.2into3.com


 

Appendix 2: NFP Organisational Lifecycle Table

 Foot Notes:

1: Several models of organisation growth have been developed over years to explain how organisations grow and what challenges they encounter in different stages of their lifecycle. The first widely recognised model is by Larry E. Greiner,which was published in Harvard Business Review in 1972. He used five growth phases: growth through creativity; growth through direction; growth through delegation; growth through coordination; and growth through collaboration. Each
growth stage encompassed an evolutionary phase ("prolonged periods of growth where no major upheaval occurs in organisation practices"), and a revolutionary phase ("periods of substantial turmoil in organisation life"). Since then people such as Adizes (1979) have followed his work and expanded the model for the commercial SMEs, whilst others such as PaulC Light (2004) have developed applications for the NFP sector.

2. Handy in his 1994 book The Empty Raincoat suggests the sigmoid function represents the development of many naturally occurring complex processes including organisations. It is more commonly called the learning curve.