AgendaReview Staying Fit Case

CEO/Executive Director Role

Board of Directors (Trustees) Role

Case Study: Staying Fit, inside and outRetirement community in Santa Barbara is part of

the largest nonprofit retirement living services company in So. Cal.

Santa Barbara location decides to invest in a Fitness and Aquatic center to be used by residents and seniors living nearby.

Center provides exercise pool, strength training and a conditioning room. Physical therapy is provided on site.

Off hours rents the facility to community at large.Helps to keep cost of services lower for seniors

Staying Fit: Meeting an unmet needCenter develops a lifestyle model of

services designed to meet both social and physical needs of its client.Socialization for seniors is a stubborn

challenge.

The center promotes more independence, socialization and availability to community at large.Provides volunteer and back to work

opportunities for seniors.

Case: Entrepreneurship & ChangeThinking about the “iceberg” analogy of

organizations:

Can you think of any circumstances/ threats that could cause Vista Del Monte to abandon the new program?

What should Del Monte do ensure the “Vitality” program remains permanent part of Vista Del Monte?

Organization is like an icebergOn surface formal aspects: Constructed and visible

• Policies & Procedures • Technology• Structure• Chain of command• Stated objectives

More than Meets the EyeBeneath the surface organic, dynamic,

evolvingSocial processes & aspects of the organization

Embedded knowledge/skills Attitudes Assumptions Unhealthy conflict Underlying skills Informal interaction Political behavior Group norms

Strong Culture: Vista Del MonteVision

Preserving the not-for-profit heritage of “Doing Good . . . And Doing It Well” through a human services delivery system that makes a difference in the quality of life of those served.

Mission

Meeting needs through excellence in human services.

Parent Company ValuesCustomer Satisfaction

Integrity in relationships

Individual initiative, expression and creativity

Teamwork and trust

Fiscal responsibility

Innovative services and products

Exercise: Head of Selection Committee for HSOInterview candidates for a CEO/Executive

Director position at an HSO

What qualities are you looking for in the perfect candidate

What questions will you ask in the interview

CEO Enigma: Different Type of LeaderThe HSO manager has to be proficient in the art

of management and in public policy.

The HSO leader must be knowledgeable about the technology the firm provides.

This situation creates a potential source of difficulty and problems in running the organization.

Balancing fiscal and service needs presents employee management challenges.

HSO: Management ChallengesHSO are typically “lean” at the management level,

therefore the ED or CEO plays a complex role (wear many hats)

Pay is much less than FPO counterpart ($30k-$200k)If paid too much HSO may loose legitimacy and is

scrutinized

2 primary responsibilities that fall into HSO management. 1) operational manager-things running smoothly,

efficiently, resources being properly used 2) fund raiser-Securing funds necessary for the HSO

to continue operation

Not easy to find both skill sets in one person

Role of the CEO (Ex. Dir)Chief role model: Strive for Excellence

Changing from caretaker of the firm to professional manager.

Moving away from focusing on internal operations.

The future ED/CEO role more strategic and requiring skills associated with professional managers. Delegating authority, managing the firms relationships

with other organizations, developing strategic focus.

Changing CEO RoleCaretaker Professional Mgr.

Central/Delegation Authority Centralized Authority Delegate

Internal/External orientation Internal focus Mgmnt of external environment

Organizational goals Operational Efficiency Organizational effectiveness

Management style Superficial, ad hoc Long term strategic

Operations focus Production/Maintenance Adaptation/Development

Openness to new options Little Considerable

The CEO JobImplement board policy

Plan & coordinate policies for governing program of services

Guide staff in formulating strategies to achieve HSO objectives

Manage personnel according to HSO policy

CEO Job ContinuedManage external relations

Attend all board and ad-hoc committee meetings

Keep Board informed about finances, operations and HSO programs

What Makes a Good CEOStaff Perspective:AccessibilityAvailabilitySense of humorEmpathy and concernCandid forthrightGood listenerResponsiveHard workingRole model

Board Perspective:CompetitivenessVisionLeadershipAbility to work with

diverse groupsFinancial acuity

Most from service provider ranks do not have training in financial management

ED/CEO Decision Making:FPO Vs HSOIn an FPO management have a fiduciary

responsibility to shareholders to maximize return on investment.

Decision making in FPO is bracketed around responsibility to shareholder interestsaligns the financial survival of the firm with the actions

of the CEO.

HSO management decisions are focused on serving the firm reason for being (firm mission)Beholden to Board of Directors and stakeholdersFinancial resources typically do not come from the

“customer of services” Output of HSO does not garner $ directly.

How Do Organizations Maintain Public Trust

They Operate According to Rules and Honor Agreements and Contracts

Board of Directors/TrusteesOrganizational governance: methods/practices for

ensuring accountability, fairness, and transparency in a organization’s dealing with all of its stakeholders

Follows BylawsNonprofit articles contain the organization’s basic

information (name, registered agent, office address, etc.) and tax exemption information

Bylaws: organizations operating manual

Important to ensure HSO is operating within its charter and does not violate tax exempt status

Board of Directors/Trustees: RolesA group of volunteers elected to the

position

Acts on behalf of interests and values of the community and constituents of the HSO

Responsible for the general direction and control of the agency

Legally responsible for making sure the organization remains true to its mission

Roles of BOD (cont.)

Select the executive staff through an appropriate process

Provide ongoing support and guidance for the executive; review his or her performance

Ensure effective organizational planning

Safeguards assets

Ensures HSO operates in the public interest

HSO as Tax Exempt OrganizationsTax exempt status allows:

Attract tax deductible contributions.

Access to grant funding opportunities.

Provide officers and directors legal protections.

Exempt from Income and property taxes.

Legal Aspects of HSOTax exempt status must be approved and

changes to mission can potentially jeopardize status.

Must conform to Governance and other organizational practices or lose its status. i.e. HSO possess Board of Directors or Trustees that over

see the firm operation.

Can not lobby on behalf or advocate for any political candidate or cause.

Can not operate for any private enterprises/individual economic benefit.

See IRS Publication 4220

Informal Role/Behavior of the BODBOD can be a source of legitimacy-high profile

folks.

BOD can provide status to its members.

BOD members can be active or not involved (giving their name to the cause)

BOD can be symbolic.RLA had 33 members ’92-’94 & 72 ’94-’97

Balance of Power between CEO and BOD.Boards can be weak or strong, personalities determine

HomeworkBibb County Case

Why do people need help: bad decisions or social consequences/costs (1-2 pages)