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Confronting
Reality to Achieve Corporate Transformation: A
Blueprint for compiled April 2004 by Wayne Praeder Introduction Note some candidates for the board show their disdain for accountability
by making no campaign promises. Others just make claims as a way to get
elected believing that the rules which apply to the rest of us do not apply
to them. In reviewing previous candidate’s
statements in Chess Life I noticed that nothing that was said appeared to
have been accomplished or even attempted on the membership’s (your) behalf.
Therefore, rather than a description
of what I have done in the past I focused my May Chess Life statement on what I would do in the future if
elected so you (the membership) can hold me accountable for pursuing that
result. This included working towards:
I’d
like to use this platform to put those proposed actions into context and to
help give you a perspective of how that fits into an overall approach. When
selecting a candidate to vote for I suggest you look carefully at what they
currently are doing, what conflicts of interest exist, their game plan, and
what skills they will bring to bear on your behalf. The Not-for-Profit Setting The
USCF is a membership corporation. The purpose of the federation is educational and
instructional, to broaden and develop chess as art and recreation, as a
significant element of culture in Members The Executive Board
has both a legal
responsibility to discharge a public benefit purpose (its mission) as well as
a moral obligation to meet
the expectations of those on whose behalf the organization exists (its
membership). When asked the question -- why should I join the USCF -- I can
talk about the benefits members receive but that is not why the organization
exists. Outside that right now I don’t have a compelling answer. Perhaps that
is our problem, as our reason to be has gotten lost. However, one thing I’ve
learned in volunteering to serve on the board that is a good reason to join
is our members themselves. I’ve had a chance to interact with some truly
committed people who feel that playing chess is fun and can have an impact in
people’s lives. Our grass roots USCF members are truly the gems of the sport.
Whether USCF members are donating money or time, in my view the future now
could not be in better hands. Hats off to our members! It is their corporation and we have not yet
begun to tap our most valuable resource, our membership. Money As you may be aware the USCF has been
struggling financially. In today's uncertain economic times there requires a
different level of focus and commitment from nonprofit organizations. In
today's climate of increasing liability exposure, nonprofit organizations
must demonstrate their willingness to be accountable. The way to reach this
goal is to have a strong businesslike board. A businesslike board should have
two broad categories of directors. First, you need advocates for your mission
-- people who passionately believe in what you do. These people keep you
honest to the first rule of not-for-profits: mission, mission, and more mission. The second group of
people you need are businesspeople, and these folks keep you honest to the
second rule of not-for-profits: no money, no mission. These two groups provide a dynamic and very
healthy tension on the board and help the organization balance the needs of
the two primary rules. Both groups need to clearly understand they are accountable
to the membership, which is the third rule in this equation: no members, no
money. Because of this our financial recovery must
be our most pressing priority.
Management To quote USCF
President Marinello: ‘Let's face it: Our Executive Board and our
Delegates are enthusiastic amateurs. We use the word "amateurs" in
its best sense -- we are all "lovers" of chess. But our operations
are now too large, complicated, and far-flung to be managed by amateurs, no
matter how enthusiastic and well meaning. We need a high-quality board of
experienced and successful people, and a sophisticated professional staff
that runs our nonprofit business according to best modern practices.’ The Executive Board
by default has the principal responsibility for fulfillment of the
corporation's mission and the legal accountability for its operations. Board
members therefore hold the key to organizational accountability and are its
guardians on behalf of you -- the membership. This means that the board is in
charge of establishing a clear organizational mission, forming the strategic
plan to accomplish the mission, overseeing and evaluating the plan's success,
hiring a competent executive director and providing adequate supervision and support
to that individual, ensuring financial solvency of the organization,
interpreting and representing the membership to the organization, and
instituting a fair system of policies and procedures for human resource
management. The board in essence directs, oversees, and measures how the
mission is accomplished. Right now, to be effective in my opinion, the board
needs professional people with experience in the above disciplines who are
willing to roll up their sleeves and pitch in. The Challenge Since 1980 the USCF
has ended up with a negative annual fund balance at least sixteen times.
Another negative annual fund balance is expected this year. Some would argue
this condition has occurred even more often as Life Member Assets and other
segregated funds were commingled with operating funds masking the annual
result. As of this year our Life Member Assets are now, for all intents and
purposes, gone. The fundamental problems facing the USCF can be summarized
into three distinct areas that must be addressed. The
purpose of the USCF is solid but seems to have been lost or diluted.
Over time the corporation emphasis appears to have shifted from chess
promotion to chess promoters. The schemes employed vary but are often
oriented around using USCF membership dollars to subsidize or compensate
tournament organizers/directors or related service providers. Alternately
under priced memberships are sold or given away to claim a membership gain
while leveraging our financial future. Thus, in the view of many, the focus has
become internal rather than external and means have become ends. As a result,
there is no clear-cut membership facing business plan, no validated strategic
goals, and no accountability for meeting these nonexistent goals. The USCF is
facing an identity crisis. We must get our original purpose back to the
forefront of all that we do. No Fiscal Discipline The folly of the
last decade for the USCF has come from a focus on increasing the number of
members and the amount of sales revenue without regard for expenses. Overly optimistic revenue projections and artificially
inflated reporting have been additional problems. The budget is largely
ignored once passed. If
the board wants to do something, it votes for it, whether there is money
available or not. If the Executive Director wants to cut a deal with someone,
or wants to hire new staff, they just do it, regardless of budget. There is
simply no reliable financial oversight. The
USCF must learn to ground and manage its budget and reporting processes in
reality. Lack of Accountability For more than a
decade now the Executive Director or their equivalent has ignored the
direction of the board. We
have been unable to put in place an Executive Director who will obey board
financial or program directives. We have also had Presidents who
have ignored such directives. The Board of Delegates and Executive Board also
have ignored the direction of the membership or had their own agendas. No one
has been held accountable to produce results on behalf of the organization.
Special interests and secrecy have been major organizational issues.
Organizational accountability must be improved. Generating Energy for Transformation
Focus on Core Program
decisions need to be based on a strategy platform that focuses the mission on
outcomes. Understanding exactly where the money comes from and where the
money goes for each core program is essential to keep the mission and
associated outcomes on track. By identifying program costs, we will be in a better
position to determine which activities deserve our time and attention. We
must tighten our focus on core activities that are central to our mission and
do them as well as possible -- quality is what will matter in our services
and programs. Now is the time to prioritize and scale back our activities to
focus on core items such as the Chess Trust, ratings/rules infrastructure,
the magazine/web information, and chess governance. From there we should
rebuild our services consistent with the mission and consistent with what you
the membership feels is of value. Membership dues
should address core programs and all other activities/services should be self
supporting and fee based. Dues and membership benefits need to be right sized
accordingly. We must also maintain a balanced budget while accomplishing
mission results. Thus, we need to take a hard look at our revenue and
expenses and at this point plan for the most likely and worst-case scenarios
for our organization, and develop strategies to deal with each one. Communicate Clearly, Honestly
and Regularly To manage
speculation or fear of the future, we must communicate both formally and
informally with the membership on a regular basis about what's happening with
the organization, and keep the lines of communications open with the members.
Better disclosure of corporate information will help with this communication.
Communications must be a two way street. Far too often, we think we know what
our membership thinks and needs. Businesses such as ours can't be successful
if they don't continue to meet the real needs of their membership. There
should be few activities as important as finding out what the membership
thinks and wants for outcomes, products, and services as well as finding out
what they think of ours. Fortunately, there are a variety of practical
methods that organizations can use to gain feedback from its membership. Engage and Tap Skills for the
Organization Board improvement
is important. Board members must always place the USCF needs first and not
have their interests divided with those of other organizations. Every board must be willing to accept and
even thrive on change. Self-assessment, new perspectives, and different ideas
keep the board and organization moving forward. All boards need to select
members with the skills and aptitude that meet the organization’s needs. We
must look for ways to increase the skills of our current board or make
changes in board membership so that we have the right sets of skills and
commitment required for today’s uncertain environment. Board skills that are
even more critical in these times include financial management, fund raising,
information technology, and communication. We also need to better engage the
talents within the federation to help the board with all the work that needs
to be done. Rather than using board committees as dumping grounds we must
reengineer, empower, and challenge our committees to meet objectives and
produce results required by the board. Effort must
be expended by the USCF to solicit the help of the membership. The
organization must be more open, inclusive, and results oriented if it is to
regain the trust of the membership. Along with earned trust will come new
blood and participation. One of the key
duties of a board is to hire a competent and professional chief executive to
run daily operations. Part of this duty assumes that there is a valid job
description and a performance evaluation process in place. The board's role
is to oversee that the organization is well run; not to interfere in the
domain of the chief executive. The chief executives performance affects the
performance of the entire organization. Clear objectives and limitations
combined with regular evaluation of the chief executives performance is important to produce useful results and to improve
organizational performance. Renew the Strategic Plan Strategic planning
is an important management tool. As with any management tool, it is used for
one purpose only: to help an organization do a better job - to focus its
energy, to ensure that members of the organization are working toward the
same goals, to assess and adjust the organization's direction in response to
a changing environment. In short, strategic planning is a disciplined effort
to produce fundamental decisions and actions that shape and guide what an
organization is, what it does, and why it does it, with a focus on the
future. Any merger considerations must be part of this planning process to
properly determine that it is the right solution for the organization’s
restructuring needs. We must reassess and develop an organizational strategy
that everyone understands. We need to balance short-term and long-term
planning, so that the organization can respond quickly to this month's
challenge while still keeping your eye on the future. Every organization has
competitors, including not-for-profits. They compete for donations and grant
funding, skilled personnel, and for market share with the products and
services they provide. In order to be successful, they must provide services
that are in demand at a price
that allows the organization to sustain its mission-driven operations. We need to clearly establish the goals and vision for our
future. Closing the Gap We must be able to
create new meaning for our organization. An important component of this task
is to articulate a new strategic intent for the business, one that explicitly
connects important membership needs with the core competencies of the
corporation. We must ground the new vision in a business success model that
tests its assumptions and provides metrics to gauge progress toward it. Then
we must facilitate an honest assessment of the capability of the organization
to renew itself. Nothing less than an examination of
the total system will suffice. No sacred cows can be allowed to graze
undisturbed. From this process, the major gaps separating the current
organization from the desired organization and our future vision must be
identified and prioritized. Only then will we be in a position to distill a
limited set of corporation-wide transformation initiatives that are needed
to focus the organization and define the new critical path for our success.
To jumpstart the process our first small steps must be to focus on core mission and strengths;
communicate clearly, honestly and regularly; engage and tap skills for the
organization; and renew the strategic plan. At this point we should be able
to begin our transformational journey. Your Vote Can Make a Difference Well meaning as
they may have been, your leadership has let you down in the past and there
was little you could do about that except leave the organization. Now you
have the opportunity to vote and make a difference. I’d like to be part of
that difference. I’m an independent business
professional and feel I can bring something useful to the USCF. I hope you do
too. Whether you are interested in having me represent you on the board or not, I encourage you to vote. Together I
believe we can create a better USCF. |