Generative Leadership with Kevin McCort

Generative leadership means getting the board at the appropriate level, and keeping them there in a very successful and strategically beneficial way. Kevin McCort, CEO of the Vancouver Foundation, dives deep into generative leadership when working with your board. Kevin shares his journey towards taking the shift from being in the international realm for 25 years working with two leading Canadian international development organizations, to the domestic with Vancouver Foundation. Not one to stand still, he takes us to the restructuring he implemented in the organization when he was appointed as leader and discusses how he managed the organization across the people behind it, highlighting the importance of bringing everyone in the know about the operations.

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Generative Leadership with Kevin McCort

On this episode, we’re going to be diving deep into working with your board on Generative Leadership. Getting the board at the appropriate level and keeping them there in a very successful and strategically beneficial way. Leading us through that discussion, I’m very pleased to have our guest, Kevin McCort, who is the CEO of the Vancouver Foundation. Welcome, Kevin.

Thank you, Douglas.

It’s great to have you on the show. Before we get into working with boards and what you’ve learned over your time as CEO of two organizations, tell the audience a little bit more about yourself.

I’m the CEO of the Vancouver Foundation. That’s a role I’ve held since 2013. Prior to that, I spent 25 years in the international development realm. I’m working on community development and humanitarian response work in about 50 different countries. That work was with two leading Canadian international development organizations. The first was with the World University Service of Canada and then the second was with CARE Canada. I was with CARE for over twenty years and the last six of which were as the CEO. When I joined the Vancouver Foundation, it was quite a big shift in terms of the realm from the international to the domestic. The great similarity between those two experiences was the focus on understanding what community priorities are and organizing, marshalling resources. As they say, time, energy and talent in response to community priorities and a process that was remarkably similar in two very different contexts.

Let’s look at that first context. You had been with CARE for fourteen years before you became the CEO. What was that transition like?

It was more abrupt than I had anticipated but it was part of the longer-term plan. I started with CARE and this is something that I like to point out to people that are entering the philanthropic sectors. I took a job on a three-month contract filling in for someone who went to Angola. I made myself useful enough in the organization that when he came back, I was offered a permanent position. I worked my way up through the organization over a number of years. I was taking leadership roles on domestic teams. Teams that were based in Canada but that were deployed internationally. I worked in Zambia as the Country Director in the Zambia Office for a number of years and then came back to Canada. I was identified as a potential successor.

The organization was doing succession planning and identified me at one point in the years after I returned from Zambia as a possible successor. I was given a number of roles in the organization that would expand my understanding of how the organization worked in different aspects. I also was fortunate enough to do an Executive MBA while I was the Senior Vice President. That was part of the succession planning but as I mentioned and in response to your question, the transition was more abrupt than I had anticipated. The previous CEO resigned and it was a context of some turmoil in the organization. Fundraising was dropping and government relations were tense on a couple of projects that were funded by the federal government.

In the end, the CEO felt that it was time for him to move on. He resigned and subsequently took up a position with the University of Toronto in their International Studies program. He kept very much involved in the field but stepped aside from the CEO position. Because it was an unanticipated resignation, I was appointed as the interim CEO. That was a role I held for nine months. During that process, when I was asked to act as the interim CEO, I said to the Board Chair at the time, “I’m quite happy to take this role but I’m going to very much act as if I were the CEO.” I didn’t view my interim appointment as a placeholder. I viewed it very much as I was the CEO. I wasn’t necessarily in that role on a permanent basis. That sets the context for how I was put into the position and some of the expectations around it.

Kevin, one of the things you hear a lot of people who move into those interim roles say, “This is what I’m going to do. I’m going to act as though I’m fully in the role. I’m not going to just be a placeholder.” I’ve never heard anyone say, “I’m just going to be a placeholder.” How did you dig into that and how did you communicate at least to your leadership team that you were there not as the interim leader but as the leader?

One of the first things that we did was we had a fairly substantial capital campaign underway to try and raise money for a particular program that we were embarking on. One of the first things I did was I closed the campaign down. I didn’t feel it was going to hit its results and we were spending money that we didn’t have. I also reorganized our program department. We had traditionally put our program and our operations together under a single vice president. I felt that at the time, the organization needed to separate those two so that the people that were managing the infrastructure, we had 30 offices around the world where we’re delivering programs. We needed to put a real focus on the operations of those offices regardless of what programming that flowed through them, whether an office was delivering an education program, health program or an emergency response program.

I want it to have the separation between what we refer to at the time as the plumbing and the water. I restructured the organization. A number of very concrete steps that showed some things were stopping and other things were starting. I did that with the board so that they were fully apprised of what I was doing and why I was doing it. We made some staffing changes as well. Some people were let go and others were promoted. I started to shape the senior management team of the vice presidents that worked with me. I had a significant role in shaping who was on that team.

That is definitely not standing still. After nine months, the board handed you the medallion of office and you are off to the races.

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On hindsight, yes that’s how it worked. The board during that process while I was acting, they did go through the process of preparing for a search. They worked with search firms. They identified the candidate profile, all of the things that you would do to replace a CEO. The board and the governance committee did those things. When it came time for them to decide, “Do we hire a search firm? Do we launch a search? Do we go with Kevin, who’s been doing this job for nine months?” They felt that the search might yield me anyways and so they decided not to proceed with a search but to transition me from interim to permanent.

It sounds like a very logical thing to do. Now, you’re in the job permanently and you’ve restructured the organization. What was that first day as the full CEO like? Do you remember going into the office that day and realizing that this was a different chapter?

No, I don’t think I did and I would have to say, I probably should have but we were so deep into the changes. It was more a sense and it was a signal both to me and to the team that the board was happy with where we were going. Probably all of us, the staff, myself and the board realized that is a more of a step of endorsing a direction as opposed to a significant milestone in itself. It was more of, “We like what we’re doing here. Let’s put everybody at ease that there is not going to be a change in the foreseeable future and let’s confirm the direction that we’re on.”

You’ve mentioned a couple of times working closely with the board through that transition? As a first-time CEO, what was that learning curve like in terms of managing those relationships and conversations with the board?

One of the things that we knew from our experience that the board, for several years while I was in the senior management team, hadn’t had much exposure to the full senior management team. They generally worked with a CEO and the Senior VP but they didn’t have a lot of direct interaction with other members of the senior management team. That’s another thing that I changed. I wanted the board to see that there was a team of five of us that were responsible in different parts of the organization that I was the CEO, but I depended on my team. A lot of the process was introducing the board. CARE has a big and robust board. We had 21 board members at the time and I had a senior staff team of five plus myself.

A lot of what we did were introduction exercises where people get to know each other. Lots of presentation style and discussion style where people could get to know each other through the work that they do and the staff can get to know the board members through the work that they do. We spend a lot of time in that first year expanding the relationships between board members and staff, recognizing that there weren’t enough of those connections in existence. That was probably the most significant part. What we also found was, as we were making changes in our operations, we discovered in the process that a number of the board members didn’t know about the operations.

We had kept that an inside baseball approach, where the staff knows how it operates and the board was involved in questions beyond operations. We felt it was actually important that we bring the board into operations. It was a conversation that a lot of people debate is the role of the board in governance and operations. There are times when boards do need to be in the depths of the operations and we brought them in pretty deeply to demonstrate the changes we were making and gain their support. Getting them to know each other and bringing them in a deeper level than normal into the operations because of the nature of the changes we were making characterized that first year.

I think it’s very true the tension between how far into the operations do you want the board looking, but I think it’s critically important that boards know what the core business of the organization is. They understand the levers of revenue and programmatic success. If they don’t have any exposure to the operations, it’s very difficult for them to ask the hard questions or even to contribute positively to the strategy going forward. Their advice isn’t based on the knowledge of what’s happening in the day-to-day. It’s not necessarily going to be on target.

That’s very true and when we looked around the board table, we had people with substantial operating experience in their private realms. It seemed to me to be a resource wasted if I didn’t bring them in to enhance our operations. There was no sense that we knew everything and we brought these people on the board to take advantage of their willingness to contribute their knowledge. We were making big changes to our operational structure and we had a talented board ready give. It seemed to be evidently sensible to bring them to a fairly deep degree and very much as you said, knowing that the better they understood the operations, the more relevant their advice would be.

You’re speaking my language and making sure that you’re getting the most out of the individual board member sitting around that table. It’s hard to have them advice on change when all they receive are written reports or PowerPoint slides. You bring them in, you create this change in the organization and the change starts to work. At what point do you start thinking, “I might be ready for my next challenge?”

For me, it was six years and we accomplished many of the things that we wanted to. The organization had an annual deficit when I became CEO. We were able to, in one year break even, the next year and every year after that post surplus. Financially we did the turn around that we wanted to do. I will recognize that there were two areas, where for the organization to move on to its next level, that I didn’t have, in one case, the skill set and the other, the attitude that was necessary. I recognize that in myself that I thought I need to be more specific about it. The organization, I felt needed to make some changes around its public fundraising and I’m not by virtue of my experience a public fundraiser. I thought that the next CEO should have a deeper skill set in that realm than I had. I felt that it was important for the organization going forward.

The CARE family has fourteen members working in 80 countries and we were engaged in some very significant or global organizational restructuring work and most of that aligned with our colleagues in the US. I felt that I had put my energy into the restructuring of our domestic operations. The global restructuring was going to probably take another five years. I felt I didn’t have the stamina to do global restructuring that was going to take another five years. I thought for this next phase, the next CEO has got to come in and be ready to commit to that for the full five-year process. I looked at a combination of, I didn’t feel that my skill set was perfectly aligned with the future and I also didn’t feel I could last another five years. I thought it was probably time for me to go.

It’s a lot of introspection and personal strength to be able to see that in yourself and then make a decision.

I was also helped by the fact that over the years I’ve worked with people who have been in the position where the board came to them and said, “It’s time for you to go,” and I didn’t want to be that guy. I wanted to be the one who said, “I think it’s time for me to go,” before somebody else walked up and said, “I think it’s time for you to go.” That was perhaps a bit of the motivation but also to put it into final context is I was 21 years in one organization. That’s admittedly in a variety of different positions both in Canada and overseas. I also felt that I wanted to look for a new organization or new context, to see if I could take the skills and apply them in a new context. There was the opportunity to take on a new challenge. Where I didn’t feel like I can commit to a new challenge in the same organization, I certainly felt ready to do it somewhere else.

Let’s move on to that because you moved to the Vancouver Foundation, one of the oldest and most successful social profit organizations in British Columbia. A real leader in the community of foundation movement in Canada. I’m going to push you here. You’ve got to remember the first day walking through the door at the Vancouver Foundation. What was that like starting your second CEO job?

That was a bit more watery legs and weak knees because I’m walking into an organization that had a long history, substantial resources and did things that I didn’t know how to do. I would go back to when I was being recruited for the position, I was quite clear with the board that I had never managed and responsible for endowment management. At CARE, we raised money and spend money. We didn’t save it. There was a whole skill set area that I had no experience in overseeing. I also was clear to the board they knew that I’m not from British Columbia. I’m not from Vancouver. My social network in this city and this province is underdeveloped compared to other candidates they would have looked at.

I knew what I could do and I guess I came into it thinking in the three realms, where I’ve got to be good at. I’ve got experience in one of them. I’ve got the aptitude to be successful in the other and I’ve got a staff team that can help me in the third. Recognizing my weaknesses but also knowing, where I would have to turn to learn and to strengthen them. You walk through and you meet a lot of fresh faces and new people. They’re looking at you as quizzically as you’re looking at them trying to figure each other out. It was definitely nerve-wracking but I also was buttressed by the fact that the board chose me. The board went through an extensive process. They felt I was the right person. I put my nerves aside and say, “Others have confidence in me, I better have confidence in myself.”

That sounds very good and coming into an organization like that, the fresh faces, as it relates to the board you had been at CARE long enough that you knew the rhythm of the board. You knew the culture of the board even though you’ve been hired by this board and you have that shined to you of the board’s choice. What was it like getting to know the rhythm and the pattern of the board with the Vancouver Foundation?

It was both a bit abrupt and a bit interesting. I joined in September and the first board meeting was happening probably three weeks after I joined. Faye Wightman, the previous CEO and I, we had a three-month overlap. We worked at that board meeting together. That was a helpful and supportive transition. Then the board has an annual retreat which they do in October. I led that on my own, the development of it with the Board Chair, the agenda and the facilitation of the day. It wasn’t very long between the start and being in a position to lead a day-long board retreat. At the end of that, one of the board members came up to me and said, “That was different.” I was like, “Different how?” That’s often the segue into criticism but it was different. What I had heard from the board is what they wanted to be engaged in was conversations about what our challenges are. Conversations about what our opportunities are.

I structured the day around exploration. It was a pre-strategy. It wasn’t a strategy meeting in the way that some of them may have been expecting, where they would be presented opportunities and choose between A, B or C. I was saying to the board, “I’m learning, here are the questions that I have. You have been on the board for years. Some of you have been living in this context longer than I have. I’m going to guide you through the things that I’m learning.” It set us off on a strong footing because I think what it showed the board was that I wasn’t afraid to identify what I didn’t know. I was also not afraid to create a context, where they had to show what they knew. I was going to make some assumptions about why they’re on the board, the knowledge they had and set up a process where they could show that. We had those conversations.

You are making the point that we’re in this together, both the CEO and the board. We’ve got to figure out the answers to these questions and what we’re going to do with those answers once we have them.

Emphasize the fact that we’re a team. We all have different expertise, perceptions, and histories but we can use the processes and facilitation techniques to bring those skills to bear.

One of the changes that you made that has always been fascinating to me in a very positive way was the decision to move away from doing contract program delivery. Maybe you could talk a little bit about that with a special eye on the conversations you had with the board about that significant change.

The foundation had a successful run with municipal, provincial and federal governments in attracting funding through contribution agreements, to deliver a wide range of programs. The Greenest City granting program with the City of Vancouver, a program with a provincial labor ministry around strengthening human resource capacities of nonprofits, federal contribution around helping immigrants attach to the workforce. A range of relevant programs funded by three levels of government, to deliver programs and services for a British Colombians. It’s very reminiscent of the work I did at CARE because some 85% of the $150 million we spend a year at CARE, came through contribution agreements from mostly provincial federal governments and UN agencies. I’m very familiar with that line of business and how an organization, even what the skills it needs to have to deliver with this work and the relationships it needs to have.

When you want to get into a decision about strategy, the underpinnings of operations are important. Click To Tweet

I looked at that and felt it didn’t fit with a community foundation. My impression and belief around the community foundation network were that we’re primarily a place where citizens come to pool their resources and to do things that they want to do. I didn’t see the foundation as an organization that you could hire to do things on behalf of someone else. It felt like a poor fit of an organization that would seek contribution agreements and then delivers services, while we were also funding charities too sometimes deliver those same services. It seemed to be all good work but it didn’t speak to our core strength and in fact, in some cases may have put us in competition with the very charities that we exist to support.

We had the conversations with the board about what is our core purpose, what activities support that core purpose and what activities might actually work in cross purposes to the core. We came to the conclusion that contribution agreement funding was one of those things that put us across purposes. We decided to wind down, complete all of the programs we were doing and not seek new ones. That was a fairly significant impact on the foundation. We had at the time probably about twenty-some staff that was working on these various programs. It was $2 million to $3 million a year in revenue and we felt that it was probably best if we didn’t do that again.

It’s a very big shift there and one of the things that I observed with social profit boards is the hardest thing for them to do is to say, “No, we’re not going to do that anymore,” and to put an end to either a program, an event or some fundraising strategy. What was that conversation like with the board? How did you propose it to them and what was the initial reaction?

Part of it also, I had to reflect on my own capacity as a manager. With all of these programs, each one of them had an executive director or a leader who reported to me in addition to the staff of the foundation, I found that I had nine or ten direct reports. I simply can’t work like that and move with any sense of fairness, rolled them under somebody else and gave them an extra two or three reports. That was not a practical thing. I can’t manage it and if I can’t manage it, there’s a risk. That was a part of it there as we’ve taken on these programs but by virtue, we were importing risk with them as well. The other aspect here is contribution agreement management comes with financial risk in and of itself.

Part of it was a risk conversation, “What risks are we taking on and how can we mitigate them? Here’s the opportunity by eliminating the program, the risk goes away.” That was on the one side. The other side was with this newly liberated time and focus, “Where are we going to spend it?” Rather than spend our management time supporting these programs, we can spend it on our core which is supporting British Colombians to be the best donors they can be through Vancouver Foundation and being a great grant maker. The core of our mission is to support philanthropists and to fund charities. By closing down the third division of being a great implementer of funded programs, we could in fact take that energy and spend it on the first two. It was a commitment to the board that we can mitigate risk but more importantly, we can add the resources that were dedicated to those programs back into our core.

Once that decision was made, did you have board members who wanted to come back and revisit that decision after it had been made?

No, we never had any second guessing or regrets. Part of it was because I did the same thing at the Vancouver Foundation that I was doing at CARE was to ensure that the board members had many contacts with the staff. We work with a committee structure here. Each board committee works with one of the VPs so there are many sources of information flowing back and forth about what’s happened in the organization. The board members would be working with the VP of Finance, VP in Development or VP in Granting and they would hear through those channels independently of what I’m telling them. They would hear from them some of the benefits that were starting to appear in the organization by this renewed focus on our core business. They were able to get independent information from their own contacts in the organization, not vetted through my office that they could see for themselves what was happening and make their own decisions.

You make that transition, you doubled down on the core business. How many years are you into that process?

I’m in my sixth year.

Since you made the decision to move away from the service delivery?

That decision was made most immediately. One of them is going because we had a substantial amount of funding from the province that we were using. We’ve subcontracted that to other charities. We subbed it out. That work is going and they’re doing far better work than we could have accomplished. It’s an interesting story because the money that we received, we had a program and we did great on phase one of the programs. The phase two of the program depended much deeper roots in the community than the foundation has. We were able to identify partners to execute on phase two and again, all parties felt that was a better set of outcomes. The core funder was happy to see us recognize our limitations but rather than say the program can’t be done, to say we found partners who can actually take it to the next level. One of those programs that I inherited back in 2013 is still running.

We went through a number of ways of transitioning. Some finished completely, the final report was submitted and the project was closed. Others transitioned to independent self-sustaining organizations, others are carrying on but under the management of other charities. Each one had a different wrap-up phase, which extended over a number of years. That was also the commitment that we made to the board as if nothing would be abrupt. Everything would be done consistent with the objectives and the aims of the original funding. We’re lucky that they were all good programs for good reasons and we were able to identify better ultimate outcomes for them and keeping them ourselves or seeking another phase.

There are three things that you’ve shared that everyone should think about in their own organizations. You talked a lot about getting people to focus on the core business of the organization, both at CARE and at the Vancouver Foundation. I like your whole team approach of exposing the senior leadership team to the board in an active in a meaningful way. You gave them a role and not just sitting as wallflowers at the board meeting. You’ve talked in two of your examples about getting to the board to have that deep operational engagement and to understand what’s happening at the organization so that they can be better board members. Those are exceptional takeaways from a lot of great work that you’ve done over the years.

The third one is very relevant. They even had conversations at the Vancouver Foundation on a specific aspect of the model, where we recover our costs. We are in it every day. We know it well and we were making some assumptions about what the board members knew which turned out to be wrong as they often are. We backed up and went through the cost recovery model in more detail. We had a number of epiphanies and a-has and that enriched our subsequent conversation. It proved yet again how valuable that can be. When you want to get into a decision about strategy, the underpinnings of operations are important for people to know. It doesn’t complicate this question of who’s responsible for the operations. It clarifies who understands them.

That is a special perspective. Thank you very much for sharing that and everything else here on the show. Thanks for being a part of it.

Thanks, Doug. I’ve enjoyed the conversation.

Important Links:

• Vancouver Foundation
• World University Service of Canada
• CARE Canada
• Greenest City
• http://VancouverFoundation.ca

About Kevin McCort