As managing non-profit organisations becomes increasingly complex and challenging, it is necessary to step back and reflect on trends likely to impact organisations in the coming year. Times of reflection are not something we prioritise, deeming them a luxury compared with meeting current demands. Yet, such times are necessary to ensure we can lead and adapt to emerging changes and give the organisations we lead the best chance of success.
One of the consequences of not allowing ourselves time to reflect is that we lead our non-profit organisations using outdated service delivery models that worked in the early 20th century. Unaware of the changes, we do not know how to adapt the management model to one necessary for success in the 21st century.
This blog examines some emerging trends and what they mean for organisations.
Leadership trends in 2024
Leadership starts with the board of management. This is a simple fact that many Boards do not fully appreciate or understand. The failure of a Board to fully understand this fact is commonly seen in two ways.
- Many Boards will use the mantra “we do not get involved in operational matters” as an excuse to distance themselves from difficult leadership decisions. Boards should not involve themselves in operational matters. However, difficult leadership decisions will often impact operating procedures. Boards must understand this rather than abdicating responsibility to the CEO or Director.
- The second example where Boards demonstrate a failure to understand their role of leadership is with cultural change. Boards often fail to understand their role in setting and reinforcing the organisational culture. This failure places the CEO in a no-win situation when bringing about cultural change.
Two trends impact this area of leadership that Boards and CEOs/Directors need to consider moving into 2024.
For many non-profit organisations, particularly small to medium-sized organisations, the Board of Management is made up primarily of baby boomers. That is, people born between 1946 and 1964. While not discounting the individuality of the board members, each generation has several defining characteristics when it comes to the qualities and characteristics they bring to the workplace. For example, young people who are Gen Z tend to be socially aware and entrepreneurial within the workplace. Baby boomers are often characterised by how they define themselves by their roles. Their loyalty to the role means they often struggle with work-life balance or remain in positions detrimental to their well-being. They also value hierarchical structure within the workplace.
Baby boomers bring these characteristics with them when they come onto Boards. For example, they are concerned with organisational structure, which tends to be hierarchical. They are also job-focused and can demand the CEO or Director demonstrate the same qualities, which is often judged by how many hours the CEO puts into the role and what additional duties they take on. This can lead to tension when a CEO has a clearer understanding of the importance of maintaining boundaries and having a work-life balance.
While not denigrating the commitment and investment of baby boomers, the characteristics they bring to boards are one of the reasons many non-profits have a service delivery model based on a 20th-century model.
Some of the other characteristics are:
- They are often more wedded to preserving the organisation's history and how services were provided than how services now need to be adapted and changed to meet the changing needs of community members.
- For many Boomers, technology is not as intuitive as it is for Millennials and Gen Zs. This means there is often a failure to understand the potential of technology and social media to enhance and build the organisation and its impact on the community.
- Boards that are predominantly Baby Boomers are strongly risk-averse, which means calculated risks that would enhance and potentially build the organisation are not taken. This reinforces the status quo and ‘doing things as they have always been done’.
One emerging trend that Boards must grapple with in 2024 is the increasing number of Millennials and Gen Zs who want to contribute by serving on Boards.
As discussed, Millennials and GenZ bring different characteristics to Boards. For example, these generations bring a digital-first approach. They are confident and skilled at using social media and digital platforms to engage with communities and causes in ways that can cause anxiety for Baby Boomers, who are generally more hesitant with social media. They also emphasise sustainability and the willingness to take risks to ensure sustainability. This takes higher priority than organisational history.
What does the influx of Millennials and GenZ mean for Boards?
When considering succession planning, Boards often discuss the need to attract Millennials and GenZ. Many times, having attracted a younger person, the Baby Boomers on the board will continue to hold power and shut down the younger person's ideas and enthusiasm. This can set up a destructive power dynamic at a Board level. It is often portrayed as an essential disagreement between those who want to hold onto the organisation's history and those perceived as not understanding the importance of history. In reality, it is a difference in generational perspective and how each generation wants to utilise their strengths.
Boards that have mainly Baby Boomers as members need to think through how they will share power and responsibility with Millennials and GenZ in constructive ways. Failure to adapt to the perspectives and strengths of Millennials and GenZ will condemn Boards to increasing irrelevance, particularly when staying current with technology.
The traditional model of leadership for non-profit organisations is hierarchical. This is to have a CEO or Director who is expected by the Board to manage every situation, particularly when the non-profit is a small to medium-sized organisation.
This expectation, which is very much a characteristic of baby boomers, is unrealistic and unreasonable in the 21st century.
Fractional leadership is an emerging trend where organisations temporarily hire external executive talent to fill specific roles. For example, one area where it can be productive to have a fractional executive is the HR area. Many CEOs in small to medium-sized organisations find HR matters time-consuming, emotionally draining and anxiety-producing. HR matters are also costly if mishandled, many of which are due to the inexperience of the CEO. Having an executive deal with this area on a part-time or as-needed basis provides the benefit of working with a seasoned executive without committing to long-term expenses.
These executives often bring a wealth of experience and different perspectives that can benefit the organisation.
The increasing numbers of Millennials and GenZ who want to serve on Boards of Management and the use of fractional executives are two trends that Boards and CEOs must think through in 2024.
Technology trends in 2024
Technology will continue to grow in importance for the non-profit sector in 2024. Many Boards, particularly when most board members are Baby Boomers, fail to understand the importance of investing in technology.
This failure is usually demonstrated in two ways.
- Firstly, investment in technology is viewed as diverting funds away from direct service delivery rather than understanding that investment in technology is essential to service delivery. This perspective is based on a failure to truly understand how society is being driven by technology and how technology impacts the social problems many non-profit organisations were set up to deal with.
- The second way this failure is demonstrated is the failure of many non-profits to budget for investment in technology.
This failure to invest directly impacts the staff's job performance. For example, one larger non-profit organisation had allowed their IT systems to deteriorate to such a point it would take staff anywhere between 20 to 40 minutes to log onto their work platforms in the morning because each time a staff member arrived and logged on, it crashed the system for staff who were already logged on.
Boards must understand the importance of investing in technology, particularly in the 21st century. Technology is integral to service delivery.
Technology ensures a non-profit’s adaptability, resilience, and success in the changing landscape.
It is not just the importance of staff being able to log into work systems to perform their jobs, as discussed above; the power of data analytics allows organisations to make informed decisions about service delivery.
Many non-profit organisations will spend a day reviewing their strategic plan, yet rarely is that review conducted with data showing the trends over the past one or two years. Data is rarely used to determine where the organisation will invest its time and resources over the next one to three years to achieve its mission and vision. One reason for this is that the data is not of sufficient quality to allow such decisions to be made with any confidence.
The rise of social media, particularly the growing importance of videos in digital content, provides new opportunities for non-profit organisations to tell their story and connect with people authentically and meaningfully. With videos, stories come to life and capture attention.
The visual medium is powerful in conveying the human element of an organisation, hence making it more relatable and evoking an emotional response in people.
Telling the story through video marketing is essential for diversifying an organisation's fundraising strategy.
Traditional fundraising techniques are increasingly ineffective both in time and human investment required to generate diminishing returns. At the same time, digital fundraising provides new opportunities to engage with a broader audience and do so cost-effectively.
The other advantage of video marketing is that it allows an organisation to target its messaging to niche audiences rather than having a blanket scattergun approach.
The emerging trends of 2024 provide both an exciting and challenging opportunity for non-profit organisations. Exciting because there are so many opportunities to do something different, to take an informed risk to message a larger audience and to create new service delivery models better suited to the 21st century. It is challenging because it requires boards of management to step outside their comfort zone and traditional ways of doing things and begin to hand over power to millennials and GenZ and build on their strengths for the future.