Monday, November 25, 2013

Things No One Will Tell You 3: CEO Performance Planning and Evaluation Methodologies

By Virgil Carter

What’s the best method for CEO annual performance planning and evaluation?  I suppose the answer is, “it depends!”  This is because every non-profit organization has its own unique culture, strategic and operating situation and personalities, which evolve and change over time.  Thus, there is really no “one size fits all” methodology.  That said, there are several major approaches for CEO annual performance planning and evaluation that may help to put in place what will best fit and work best for every organization and CEO.

There is (or should be) a common purpose for performance planning and evaluation:  help the organization to improve each year by helping the CEO to improve annually.  It’s important to recognize the connection between successful organizational performance and successful CEO performance.  One doesn’t often happen without the other!   It’s usually the CEO, who leads the staff, and is responsible for the organization’s annual program planning, budgeting and execution.   It’s often the CEO who helps identify the strategic directions and priorities of the organization.  Thus, the CEO is a very valuable person for the organization’s success.  Volunteer leaders should understand the direct connection between organizational performance and CEO performance and, thus, be committed to helping support and improve CEO performance each year in a constructive and positive manner.

Each non-profit organization has its own special culture, it’s “life-style” and value system.  Annual CEO performance planning and evaluation should fit the organization’s culture.  The following table illustrates a range of association cultures or “life-styles” and the characteristics of CEO planning and evaluation systems which fit each culture.
It’s worth pointing out that the “ambiguous” category is in recognition of the situation where some associations attempt to use either a “generic” style of performance planning and evaluation that may have been handed down over time from within the organization, borrowed from another organization and/or attempts to fashion a planning and evaluation process which will represent a broad range of priorities and ideas, i.e., a smorgasbord!

Categories of Association Culture or “Life-Style”
Organizational Success—Basis for CEO Performance Planning
Metrics & Evaluations
Organizational “Fit”
CEO objectives focus primarily on organizational performance, i.e., strategic objectives, business operations, etc.
Performance-oriented measurements for strategic and/or business operations; programs & products often seen as operational means to strategic ends
Appropriate where organization puts priority of implementing strategy & successful business operations; innovation & change may be common
Annual objectives focus primarily on continuity & maintenance of status quo programs and products
Metrics for how well CEO maintains existing key programs & products seen as ends in and of themselves
Appropriate where operational predictability and consistency have priority; strategy is secondary; change is infrequent
Annual objectives focus on forming & maintaining key relationships w/other organizations & individuals according to organization’s purpose
Metrics may be very difficult to identify or measure; may focus on “soft” data, i.e., “activity summaries”,  “committee reports” & personal commentaries
Appropriate where external relationships are critical for organizational purpose, i.e., umbrella, coalition, clearinghouse, cooperative & similar
Critical competencies-oriented
Annual objectives focus on the competencies key to the success of the overall organization and/or its specialized membership
Metrics may be tangible but elastic; may identify target goals, documented activities; measurements of business operations in direct support of competencies
Appropriate where organizational success is tied to critical competencies, i.e., resource & donor development, advocacy, etc.
Annual objectives may either be undefined, or a “smorgasbord that attempts to combine objectives from various association cultures and personal priorities across an organization
Metrics may often be based on generic template; taken from some other organization; may reflect “one size fits all” perspective
Eventually unsatisfactory; frequently leads to a frustrating experience; typically results from lack of focus or lack of conscious attention

The table illustrates a wide range of association cultures or “life-styles” and attempts to show how different they may be when it comes to CEO performance planning and evaluation.  While many organizations may have elements of some (or all) of these cultures, when it comes to CEO performance planning and evaluation it really is important for the volunteer leaders and the CEO to reach common agreement on what is truly most important—what matters most when it comes to organizational performance.  Remember, the purpose of planning and evaluation:  helping the organization improve through helping the CEO to improve!

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