Hidden dangers in Indian non-profits

Hidden dangers in Indian non-profits

In the for-profit enterprises, it’s probably smoother to use culture and financial rewards as a placater to bring in talent, from outside, if an internal successor is not available. The not-for-profits don’t have that luxury

Srinath SridharanUpdated: Wednesday, November 16, 2022, 03:06 AM IST
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Representative Image | Pixabay

It is estimated that there are more than 30 lakh non-profits, also known as non-govermental organisations (NGOs), in India. Varying in organisational size and number of stakeholders, these impact-organisations operate in the areas of food, clothing, shelter, healthcare, education and humanitarian needs, to name the prominent ones.

Since they are not primarily motivated by financial returns, they don’t have many stakeholders who question them about their ability of organisational continuity. Even their donors who contribute to them are happy with the impact reports and satisfying their altruistic curiosity. No one asks if they will survive another day.

Most of the founders, or the main trustee, in these impact-organisations are patriarchs in their own right — especially in the non-profit space, as their organisations are identified with those special individuals. That they have built their organisation makes them believe they are invincible, to their own detriment. The sufferer is not them but the organisation. People who would have a difference of view with them in many work aspects, will end up leaving sooner than later. Those who think that they stand a chance of becoming the successor if they stick on are generally disappointed.

From the patriarch’s perspective, they have seen it all. They have heard it all. They have faced obstacles and more, and persevered, and built a formidable organisation or business or legacy. That is their biggest vulnerability. Yet most of them are highly educated, regarded, well travelled and well-intentioned. They are aware of how to get things done to create an impact through their organisation. The trouble is that non-profits don’t have a set retirement age. Even if there were one, many new glamorous-sounding positions could be created to enable the patriarch’s continued grip on the organisation.

The celebrated management author Jim Collins, in his book Good to Great speaks of a leadership model he calls “a genius with a thousand helpers”. This describes a leader who is great at what (s)he does, and therefore, ends up making all the critical decisions. Over many years, they become indispensable for the entity, due to their experience and knowledge. The leader fails in perspective, simply because (s)he has not built any of her/his colleagues to raise above the ranks.

All-rounder boss

Leaders who are indispensable take pride in personally engaging in each project; mostly to the extent of micromanaging their teams. They often focus on flawless execution, and in the process, create an environment where others in the team are either afraid to take on greater responsibilities or are never given the chance.

The founder generally also has built a track record of successfully raising funds for the non-profit organisation. This fear of missing out on those funds also makes the other board members stay away from raising the topic of succession planning. After all, those members are simply contributing their time pro bono for social causes and don’t want any work burden to come to them. This is where governance fails, that they don’t see the larger potential destruction if there is no identified succession plan. Since no personal financial-profit motive is present in public trusts or NGOs, this missed governance requirement does not get attention for a debate.

This is where one is equally amazed as much as appalled at these well-intentioned Indian leaders. Despite their erudite knowledge and versatility of traditional learnings, they seem to believe in their own immortality. That’s where altruism ends, and the need for personal satisfaction and desire for legacy creation takes over, subconsciously.

Succession issues

A leader who cares about people development takes proactive succession planning very seriously. listing critical positions and preparing for contingency situations. Leaders who do not prepare for their succession are really doing a disservice to their organisation.

A leader needs to be able to designate a successor and to actively prepare that person to take over. Proper preparation includes advanced training, adequate mentoring and a fair amount of coaching. That includes working with this successor on areas of improvement and leadership gaps, without creating a clone of themselves. It is also about sharing the impact-organisations legacy, learnings from its struggles and growth pangs, transfer of knowledge systems, etc. It is about being able to transition a new leader in their role while respecting the (new) leadership style.

This brings us to one of the hardest things to do as a leader — to intentionally make oneself dispensable! To be able to let go with confidence, knowing you have honed your team to take care of business. This issue of lack of succession planning hurts the not-for-profit sector more harder. In the for-profit enterprises, it’s probably smoother to use culture and financial rewards as a placater to bring in talent, from outside, if an internal successor is not available. The not-for-profits don’t have that luxury of either funding or cultural resilience to test an external candidate.

This is why it is imperative that leaders in this space proactively accept that what worked as their leadership style may or may not work in the current and future context. And a reason precisely why they must not comment on leadership styles of their successors — either from the boardroom or the armchair. As long as the values are maintained and cultural boundaries are respected, the successors must be free to adopt their leadership style.

Another oft-repeated exercise is that of what I call the “messenger in the building” syndrome. A long-serving leader typically has built an informal and deeply entrenched network of those who pass on news, views and comments. The biggest folly for the leaders is to fall prey to such a framework and over a point in time, that adds to their own vulnerabilities and insecurities. A self-aware and self-confident leader, who is secure in what (s)he does and wants to do with formal retirement time, knows to build the next line of management.

A worthy successor, at the right time, not too late, is the true legacy. Bluntly speaking, if the organisation were to be left dry, without an identified successor, no one would talk of the previous 10-50 years’ selfless leadership of the patriarch. No one would give credit to the massive impact work they had done so far; they would only talk of failed legacy in not identifying a successor. The patriarch who had demonstrated tenacity all his leadership would have failed in that most important one, for himself and the organisation.

But who will ask the ‘indispensable’ leader about this? It’s the touchiest agenda that can ever be written for a meeting! Everyone is happy with their nuts and cookies and special lunches in every such important meeting.

For the present, Indian not-for-profits are sitting on this painless tumour, that could very well turn malignant without preventive care. Even if 5% of Indian non-profits don’t have a succession leadership in place and potentially could shut shop, that’s 1,50,000 entities.

Dr Srinath Sridharan is a corporate advisor and independent markets commentator. He tweets at @ssmumbai

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