Interim CEO: More Profit at a Nonprofit Means More Community Services
The board of a nonprofit asked an interim CEO for help. What they got was beyond their expectations.
This multifaceted regional nonprofit has served its community for 100 years to help poverty-stricken seniors with self-sufficiency and to empower them to stay at home as long as possible. The organization’s services include transportation, which started ten years ago, and is a high-tech donation facilitation company that now serves as the back office for thousands of other nonprofit organizations.
Though it is a nonprofit, the organization operates more like a for-profit, with many of the same goals and challenges. One of the organization’s largest divisions was faced with concerns regarding the sustainability of the business, finding the right person to lead it, and had already experienced at least one failed CEO hire for the division. The board was well aware of numerous issues but was not exactly sure where and how to address them without the right leadership in place.
After a bit of research, the board decided to try out an interim CEO in the role.
The Interim CEO’s results
Six months later, they were pleasantly surprised by the amount of progress and the cultural fit of the interim CEO, Robert —so much so that they offered him a permanent CEO position.
Even though Robert had no tenure at either company or the intimate business knowledge that other senior executives may have had, to say he had stabilized the business is an understatement. Robert was able to come into the nonprofit and create positive change with his skills and expertise alone: skills he had never used in the nonprofit community before.
As the interim CEO, Robert’s four-pronged approach to evaluating the business—infrastructure, culture, mission, vision—led him to make significant changes in those areas. First, he quickly reviewed the budgets and reduced unnecessary expenditures. Next, Robert restructured the team to get rid of an unnecessary layer of management. “I basically took restrictions off department heads and allowed them to do their jobs without interference,” he said. He also diversified the newer business portfolio, allowing other organizations to offer services through the organization’s call center, and brought their archaic software system into the twenty-first century with a cloud-based filing system and improved security.
He also implemented change management practices and gave department heads more responsibility, allowing for quicker improvements at all levels. The company culture moved away from operating in departmental vacuums to operating as parts of the bigger picture and vision. They launched their first mobile application and opened a new off-site call center. They were also able to increase the sales and marketing staff while decreasing operational staff.
The impact of all of these adjustments was astonishing. The division achieved a 34 percent increase in annualized donations. Their outsourced marketing costs were reduced by over 60 percent while maintaining the same amount of services. Between the increased marketing budget and new efficiencies put in place, their call centers were able to significantly increase their calls per week.
Robert’s secret? Part of it can be attributed to his mindset. “My first rule as a temp is to respect the temple I am walking into,” says Robert. “It’s important to know you are not there to save the company but to help them on a better path.”
One year later, the company has continued to grow substantially.
Striking a balance between respecting an organization’s existing culture and leveraging the interim executive’s knowledge, skills, and experience is an art as much as it is a science. Especially in the nonprofit world, mission and vision drive action—a lesson that can also drive takeaways in the for-profit world. Robert’s successes in his interim role came rapidly, and they came on the heels of failures by others from “within the industry.” Fit and passion with the company combined with new ideas can yield better results.