Perhaps the biggest gift you’ll ever give: Your ego

A quick internet search provides the definition of ego as “a person’s sense of self-esteem or self-importance.”  Often the term ego is employed in the context of a negative personality trait, such as “He has a massive ego; he never admits he is wrong.”  In reality, having an ego is not an inherently bad thing – in fact everyone has an ego – you can’t be human without one.

So why would I make the assertion that your ego might be the biggest gift that you could possibly give to your not-for-profit organization? It comes down to the frequency with which an individual not-for-profit leader’s ego gets in the way of that organization’s sustainability.

The question of sustainability has always been part of the conversation within and among not-for-profit organizations. During the last three years of significant, rapid change, it is increasingly common for the topic of sustainability to arise. I would guess that this topic has been discussed at your organization. In fact, if this topic has not come up at your organization, I would suggest it’s worth thinking about why that is.  Just because no one has wanted to talk about it (yet) doesn’t means it’s not there.

Sustainability doesn’t have to be an existential thing (although sometimes it is). Often the focus is on a particular element or program of the organization as opposed to the entire organization. Right here in this community and across the region, there has been an increased volume of situations where a not-for-profit organization has discontinued a program, closed a service location, spun off a service line, or merged itself into another organization in recognition of the idea that something they were doing is no longer sustainable.

This is usually a healthy change. Getting out of an unsustainable activity frees up resources that can be focused on the organization’s more sustainable work. Organizations often experience increased quality of service in remaining programs, increased employee morale, and a better sense of mission and organizational purpose after jettisoning an unsustainable part of the operation. (Admittedly, these improvement elements may not be immediately felt on “day 1;” sometimes there is a transition period before benefits are recognizable. But the benefits are no less real.)

Unfortunately, there are many cases where an unsustainable program or operational element is not effectively addressed. There are also cases where an entire organization’s sustainability is questionable, but the organization’s leadership is not “doing” anything meaningful to address the situation. There are a lot of potential reasons for this: The biggest is ego.

Think about the timing of what I will call “sustainability events.” By sustainability events, I mean mergers between not-for-profit entities, program spin-offs, and other organizational changes made where one of the primary reasons for the transaction is sustainability or the elimination of an unsustainable situation. The timing of such transactions is most often when a key leader from one of the organizations, the program in question, or the part of the operation that requires change, is ready to leave or has already left their leadership role.

Let me be clear, this is not a judgement or accusation that anyone involved in one of these sustainability events is doing something wrong. I’m also not asserting that wrong-doing occurred in situations where a sustainability event was cancelled or otherwise not pursued. There are lots of reasons that a sustainability event would or would not be completed. But it is more than coincidence that mergers and other major sustainability events are often timed to coincide with the date a person in a leadership position is ready to move on.

In other words, a person with a large enough role in the decision-making process to influence the outcome and a large enough ego to believe that they can do better than anyone else in the particular situation must step aside so that the sustainability event can move forward. All too often, the needed change must wait for this individual to be “ready” for the change.

This is most often observed when the sustainability event is a merger, where one organization has the opportunity to merge into another and thereby cease to exist as a separate organization. There are cases where such a merger will clearly be beneficial in terms of continuing the work of the organization, helping those who the organization serves, and positioning the operation for long-term success. But it may not be the best for someone’s ego.

When the organization merges itself out of existence, what does the leader of the organization that no longer exists do? How does that person self-identify? What happens to that person’s sense of self-importance? What if that person isn’t financially ready to move on? How does that person’s ego recover?

The individual in this position is often a long-term, respected leader. Sometimes this person is the founder of the organization. It can be very difficult for this person, as well as for others involved in the decision, to envision the organization and its programs moving forward without this person retaining their decision-making role. A sense of loyalty to this individual can sometimes cloud people’s sense of loyalty and commitment to the organization and its mission.

So, what can an organization do when faced with an unsustainable situation and leadership who can’t or won’t bring themselves to allow the solution to move forward because of the effect it will have on his or her ego?

The first thing is call this out as a phenomenon. Ask if there is an individual whose ego is impacted by the proposed merger. Ideally, this conversation would have been going on before the merger opportunity even presents itself. A focus on the organization’s mission rather than its leader is healthy. This sounds obvious, but all too often it goes unsaid because everyone around the table assumes that everyone else has the same understanding and will act accordingly. Or people assume that bringing this up will offend someone. In this context, if you feel someone will be offended by this, that is a good indication that the someone you are thinking about is the person with the ego.

Second, be consciously objective. When considering an arrangement to merge one organization into another, decide based on objective measures. Typically, these measures revolve around three things:  financial position and financial performance, programmatic synergies, and organizational culture. If the merger makes sense based on an objective evaluation of these measures, don’t let an ego overrule or veto the decision. If the conversation turns to talk of the personalities of the individual leaders, call that out as a tangent and ask the group to focus on mission and not ego.

Third, consider the alternative. If the organization is truly in a situation where sustainability is questionable, allowing one person’s ego to control the decision-making is dangerous. What good does it do to have that one individual feeling good about his or her ego while the organization continues on an unsustainable path?

Fourth, get help from an objective third party. This could be as informal as reaching out to a trusted advisor such as an attorney or CPA for a conversation, or it could involve engaging an experienced consultant to study the situation and present formal recommendations. However you do it, acknowledging that the people involved in the decision have a stake in the outcome, and getting input from individuals whose egos are not involved in the ultimate outcome, is of value.

Fifth, acknowledge the gift. The idea that a key person is willing to set his, her, or their ego aside and do something that is for the best of the organization, its mission, and the people the organization serves, is an enormous gift. The leader who willingly does this deserves the organization’s gratitude. The question of financial consideration being provided to that leader tends to arise. There are situations where compensation of some sort to that key person is included in the overall plan, but such an arrangement is very situation specific. Transparency with the governance group of both organizations in a merger situation is imperative when the possibility of compensation of this nature is discussed.

Finally, if you are the leader with the ego, it’s ok to consider what a major transaction like a merger or other sustainability event means for you personally. But don’t let that paralyze you or the organization. Take the time to self-assess your state of mind and readiness to let go. If you don’t think you can be objective, acknowledge the struggle to the organization’s governing Board and ask for their help.

Not-for-profit organization leaders put the organization’s needs first on a regular basis. Putting the organization ahead of personal ego when considering a sustainability event may be the largest gift a not-for-profit leader can ever make.

Jeff Paille is a CPA and partner at the Bonadio Group and has consulted with tax-exempt organizations for almost 30 years.