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8
Working with External Consultants

I believe the real difference between success and failure…can be very often traced to the question of how well the organization brings out the great energies and talents of its people.

—Thomas J. Watson, Jr., founder of IBM, A Business and Its Beliefs (1963)

As the case of the Northern Virginia Association of REALTORS® in Chapter 6 described, it can be hard for a board to know where to start a change process. Not every association will require an entire team of specialists, but all associations ignore at their own peril the value of leveraging existing knowledge. External consultants provide expertise to governance changes that may not be available internally. Given the emotional nature of change and change management, consultants provide the view of an objective outsider with no vested interest in outcomes. They help boards sort through needs, provide them with a broader frame of reference, coach them through leading change, and add credibility to the process with stakeholders. They also can save a board time and energy, and reduce experimentation, by bringing a portfolio of tested tools and strategies.

Block's (2000) description of a consultant as “a person in a position to have some influence…but who has no direct power to make changes” has particularly ambiguous meaning when the consultant is also brought in as an interim leader. As our cases reflect, the termination of an ineffective CEO may be followed by the hire of an interim executive. Such personnel may be brought in for short or long time periods, to keep a hand on the tiller while either supporting or facilitating the board's hire of a new CEO.

Concepts and Application

Engaging Board Consultants

As boards restructure, consultants serve many legal, organizational, financial, and facilitative roles. Our cases also described the involvement of attorneys and accountants, to name a few. A consultant can be brought in for group facilitation, organizational assessment and analy-sis, or to help guide a nonprofit association to think though a particular issue or problem, draft bylaws, restructure budgets, guide the board, or implement the change.

But the consultants most instrumental to board change will be those who specialize in organizational and board development. The vast majority of governance consultants available to the nonprofit sector, especially those in high demand and who come with excellent references, are very well versed on governance best practices and experienced in assisting an organization with change. The American Dental Education Association, whose case follows this chapter, involved a consultant who supported the board in leadership building, strategic direction, and organizational restructuring. In addition, with the consultant's help, ADEA completely reenergized the board by introducing out-of-the-box thinking to their board retreats. As remembered by ADEA Consultant, Joshua Mintz:

This all came from the conversation around a desire to reenergize and rejuvenate, to have the board embrace something bigger—the lessons of leadership elsewhere, the context of community, the values we care about—and use these to inspire and reengage us. Following one retreat where we learned about George Washington and the Jay Treaty, one board member later said, “Last night I was thinking, and aren't we doing the same thing that Washington did? Why isn't ADEA looking at working more in a global culture?”

Engaging Interim Management

A particular kind of consultant, an interim leader, can provide either startup or transitional leadership in the case of a sudden loss or a planned turnover. Interim leadership is opportunity for an association to adopt a proactive response to change. Using an interim can provide a trained executive to steer the ship, providing day-to-day management and oversight while acting as an objective liaison to the board as the governing body focuses on the organization's strategic issues and the search. An interim can provide board and other staff breathing room and a facilitated opportunity for timely reflection about the specific qualities, skills, and experience needed in their next leader.

In a scenario where a longstanding executive director resigns suddenly, the interim leader not only can provide a smooth and orderly transition but also can make substantive—and long-overdue—improvements to the functioning of the organization. The interim can produce an organizational assessment and address specific operational issues so that the new executive then can hit the ground running without having to do a fix. Or the interim may be brought in so that the board can give a longtime, valued executive a sabbatical to prevent burnout and allow the executive to recharge batteries.

Jeffrey R. Wilcox, CRFE, president and chief executive officer of the Third Sector Company, describes the practice of short-term nonprofit executive leadership as being “in the midst of a significant landscape change from its traditional beginnings.”

Today the marketplace offers interim management through private practitioners, practitioner cooperatives, nonprofit management support organizations, single-focused proprietary organizations, and multifaceted private firms that include interim management as a component of a larger suite of services. Today, the faces of interim executive management for nonprofit organizations are known to have assumed at least seven distinct roles in providing specialized leadership continuity:

The executive transition interim

The leave-of-absence interim

The new executive position interim

The organizational dissolution interim

The merger-and-acquisition interim

The court-appointed interim

The chief operating interim

Source: Wilcox (2014).

Successful Engagement of a Consultant

In addition to conducting appropriate reference checks, any consulting contract should be vetted by an association's legal counsel. The Compassion Capital Fund National Resource Center (2014) offers, through a publicly funded portal, a useful 40-page guide for engaging a consultant. To hire a consultant for any purpose, this manual observes the importance of thinking through goals, scope of work and authority, and deliverables.

Signing a Contract with a Consultant

Define the scope of consulting to be provided and outline the expected deliverables. If a final written report is expected, be sure this is included in the contract.
Ensure what the fee will be for the services to be provided. Understand how the consultant arrives at their fee.
In the case of billable hours, understand what a “billable hour” means in their language, what is that hourly rate, and after defining the scope of consulting/expected deliverables, ask for an estimate with a not-to-exceed number of billable hours.
Determine how the services will be provided (onsite, virtual, a combination thereof).
Ensure there is a written and signed contract prior to the commencement of any services.
Ensure that the contract has a termination clause.
Ensure that the contract has a start date and end date, with a clause for extension if mutually agreed to in writing.
If out-of-pocket expenses are to be incurred and reimbursed from the organization to the consultant, ensure that these are clearly spelled out in the contract and require receipts for payment.
Ensure that there is a confidentiality clause.
Ensure that there is a clause stating that the consultant is operating as an independent contractor and has no rights as an employee.
Ensure that the contract contains any references to consultant insurance or bonding if appropriate.
Ensure there is an indemnity clause.
Require a W9 from the consultant upon contract signing.

Summary

In no instance in our interviews did we hear association leaders who regretted bringing in an organizational development and change consultant. They were more likely to tell us they wished they had done it sooner. Consultants—especially those who specialize in change management—bring a particularly valuable frame of reference. While they should be carefully vetted and supervised, clearly their involvement in nonprofit management and the enormous growth in the nonprofit consulting industry offers something of real value to governance change. The case of the American Dental Education Association that follows illustrates in greater detail how a good consultant can support successful governance change.

Using a Consultant to Improve the Leadership Lens of Governance

Case: American Dental Education Association

Next time you take your child (or yourself) to the dentist, give a nod of thanks to the American Dental Education Association. ADEA's relevancy to dental education has never been stronger. Learn how a transformed board made it happen.

Founded in 1923, ADEA calls itself “The Voice of Dental Education,” representing all U.S. and Canadian dental schools and many allied and advanced dental education programs, corporations, administrators, faculty, and students. Its mission is to lead institutions and individuals in the dental education community to address contemporary issues influencing education, research, and the delivery of oral health care for the overall health of the public (www.adea.org/about_adea/who_we_are/Pages/default.aspx).

Dr. Richard Valachovic came on as executive director of what was then known as the American Association of Dental Schools in 1997. At that time the association had an executive committee, which served as a governing board with 11 members, and a house of delegates, which served as its legislative body. Each year the house of delegates elected a president-elect, who subsequently moved into the president role and then became immediate past president. Seven member councils represented key constituencies like faculty, hospitals, and sections. Under the bylaws, the executive director was a voting member of the executive committee.

Challenge: Are We Still Relevant?

Valachovic described how the change process began:

Universities had closed seven dental schools in the 1980s and 1990s. Additional schools were in jeopardy of closing. A collective sensibility of the deans of key dental schools was that “we really need to do something. If these closures continue we're going to be in for some serious problems.”

There was a lot of concern that we needed to demonstrate the value of dental education that dental schools, residency programs, and allied dental programs needed to show the public why oral health care was a critical part of overall health care. The National Institutes of Health reports that dental disease is a number one health priority.

We recognized that we needed to think differently about our mission and membership—that we needed to truly represent the entire dental education community, not only the dental schools. We formed a restructuring committee in 1998 that recommended expanding our membership to include allied dental education programs, advanced (specialty) programs, students, and corporate members. And we needed to model this expanded mission through our name, our brand and our governance. We needed to show that we were more than what we had been.

Valachovic cited a critical catalyst for change that was circulated to the leadership at the time, a report called “Dental Education at the Crossroads: Challenges and Change” (Institute of Medicine, Washington, DC, National Academy Press, 1995). The report observed that oral health care was not uniformly attainable across the nation and also noted the array of groups committed to improving access. The report highlighted common goals and opportunities for collaboration and innovation and galvanized the organization to look at everything differently. The House of Delegates took up recommendations in 2000.

Strategy: Restructure to Allow for Growth

Valachovic described the tasks:

We went through a restructuring process because the old name, governance structure, and membership composition was not reflective of the mission and constituency we needed to represent in order to have impact. We needed to bring everyone under the umbrella. First, we changed our organization to the American Dental Education Association to reflect the fact that we were now representing every part of dental education.

Strategy: Create a More Inclusive Board Leadership Structure

Then we changed our executive committee, which had really only been functioning as a committee that would manage the work of the association between the once-a-year delegate meetings. We needed to form a new board of directors that would no longer be perceived as a small, closed group of people. Moving to a board with representation from many stakeholder groups created more meaningful ways to foster engagement and inclusiveness throughout the association and lent credibility to the fact that we were representing everyone in dental education.

The entire restructuring process took place over two years. Dr. Lily T. Garcia, current board chair, offered this perspective:

ADEA's board wasn't changing because of exponential growth but to allow for exponential growth, even more strategic changes in the organization. I became a member in 1994 and didn't join the board until 2008. In the beginning, from the outside, it looked like there were just a few people managing everything. From this ground-level, new-member perspective, it didn't feel very inclusive. But things were changing.

Today, the whole role of the board has evolved. Decision making is not emotional or adversarial; it's healthy—they all offer their individual perspectives about their own constituencies, but all respond to the impact it would have on our association as a whole and for the good of all.

ADEA brought in Josh Mintz of the management consulting firm Cavanaugh, Hagan, Pierson & Mintz in 2002 to help ADEA with the changes, including leadership building and organizational restructuring. Mintz recalled the importance of creating clear expectations about service on the ADEA board:

The new board composition represents the entire spectrum of the membership. When the board comes together, the different perspectives brought by the seven councils add great value, but it's also a challenge for board members to balance “representing their constituency” and thinking about the greater good for the association as a whole. There's a lot of commonality in goals, but we still have multimillion dollar enterprises sitting next to individual faculty members. Their perspectives and interests can be really different.

This makes the conversation pretty rich. The fiduciary part is easy. On the policy part, the right balance takes some learning. In the first year, you often see a new board member say, “On behalf of our constituency…” but quickly learn not to look at decision making solely in that way. They adopt the appropriate fiduciary duty of loyalty. It's part of the culture. But there is definitely a learning curve and some give-and-take on the part of the whole board. Where appropriate, the individual constituency voice is being listened to and is part of the process.

Another big area of change was the way the board conducted its meetings. Valachovic explained:

What we learned from the initial experience of school closures is that our board must be proactive. We need to always have a good evidence base to respond to issues. So we begin every board meeting with a discussion of the changing environment for our work.

For example, even before the Affordable Care Act became law, we were discussing its impact on dentistry. We had to know what an “essential dental benefit” meant. If we were going to increase the number of children coming into dental offices, what did that mean for dental education and how we prepare the future workforce? If it was going to increase the number of Medicaid patients, what did that mean for dental education?

We were successful at building coalitions to advocate for including pediatric dental care as an essential benefit in the ACA. So today, every kid in the country now has access to oral healthcare because of that work.

Board chair Garcia noted that ADEA has a policy center to give the board the data and information needed for meaningful discussions. The outcome, according to Valachovic, is:

Our board now comes to the table with a pretty good handle on what the issues are and they don't get bogged down in the weeds or involved in operations such as how a policy is carried for by the staff after a decision is made. We come with a common language and evidence for our conversations and from there comes decision making. Our meetings are run that way by our chairs and this has really worked out very well.

Mintz observed:

Many associations start a board meeting “getting the basics out of the way first,” leaving the discussions of key strategic issues until later in the agenda. Inevitably, the meeting runs long, and the substantive strategic discussion either gets abbreviated or deferred to the next meeting. At ADEA, the board meeting begins in the afternoon and the first item for discussion is a “mega-issue” conversation. This is followed by dinner together that first night where the conversation typically continues in a less formal environment. The more typical fiduciary grunt-work of the board is pushed off to the second day of the meeting.

ADEA also uses its annual board retreats as a means to shift board culture and encourage big strategic thinking. A new design to the retreats increased the board's capacity to make big, bold conceptual leaps in their deliberations.

Previously the board retreats were essentially extended board meetings with the same format and people, just more time. Valachovic thought, “Let's find something new.” So he asked Josh Mintz, the consultant, to help him design a more engaging day of learning. It was to be outside of their “dental box,” so to speak. Valachovic wanted to take his board somewhere to learn about leadership and then apply those lessons to the association.

Over the years, the board has been to Mount Vernon to study the leadership lessons of George Washington, to the Folger Shakespeare Library to learn about the politics of leadership using Julius Caesar, and to the National Museum of the American Indian to explore non-Western models of leadership. They visited New Orleans to learn about leadership in the response to Hurricane Katrina. And this past year, they met with Robert Parris Moses, leader of the Mississippi Freedom Project on leadership in the civil rights era.

Valachovic explained the impact on the board:

Going somewhere on a learning journey together not only builds board relationships, which is hugely important, but provides an opportunity to look at different models of leadership. This took a huge leap of faith on the part of our board members. We were asking them to take time to learn about something completely unrelated to dental education and then apply those lessons to our field. But it has been hugely successful and resulted in a totally different way in which our board now talks about things.

Garcia was enthusiastic:

I love it. Each year, the chair has the opportunity to identify a theme that is meaningful to them and to help design a learning event that builds off of that topic. For me, that was the civil rights era. It is not necessarily about dental education. It's about what makes us leaders.

Concluded Garcia:

I don't know how one can explain the unintended consequence of positive change—how this change in culture affects our feelings about ADEA—unless you have been actively engaged in the change. What you went into and what you are now a part of are two different organizations. We went from good to great and still have more and even greater possibilities ahead and you think, this is bigger than you. It's inspiring. And it's fun.

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Table of Contents for Chapter 8: Working with External Consultants

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Concepts and Application

Engaging Board Consultants

Engaging Interim Management

Successful Engagement of a Consultant

Summary

Table of Contents for
Chapter 8: Working with External Consultants