Great change needs good leadership

It’s easy to find examples of both excellent and execrable change management in the not-for-profit sector. Too often, not-for-profits and charities find themselves in the news because they’ve lost the support of stakeholders or members, broken the law or bungled the communication in making an important change.

Communication and empathy are keys to NFP change management

Institute of Community Directors Australia executive director Adele Stowe-Lindner said good change management required great communication and empathy.

“Clear communication is not just a courtesy, it’s a leadership obligation. We’ve seen campaigns like the Voice referendum and climate-related behavioural change struggle partly because their messaging assumed too much and clarified too little,” Stowe-Lindner said.

She stressed that communication must be paired with empathy. “Together they address people’s practical need for clarity and the emotional challenges that arise when people feel they are losing something important.”

Institute of Community Directors Australia training lead Nina Laitala agreed that good communication was an obligation for leaders, and she emphasised the value of being attuned to different perspectives.

“Understanding how different stakeholders might see themselves or their position in regard to the change and what their reactions might be can help leaders to better engage individuals in the change process and help buy-in,” Laitala said.

“The role of leadership is to create a working environment that embraces changes as an opportunity rather than sees it as a threat. Understanding your people is fundamental to making this happen.”

Laitala also said NFPs needed to be more attuned than for-profits to organisational culture.

“Cultivating a culture that is adaptable to change is important, and that change should clearly align with the organisation's purpose”.

Having dealt with diverse NFP leaders, she said it was clear to all that “change is inevitable”, and in her experience, failure of change management could often be traced to the board – or other leaders – failing to have a clear plan, or failing to communicate change in a clear and timely fashion.

Questions NFP leaders must ask

Our newest help sheet, Ten questions every board director should ask about change management, emphasises the importance of understanding people and notes that “effective change management engages people, helping them to come along on the journey”.

The guide encourages leaders to ask these questions and more:

• How does this change address both organisational and individual needs?
• What framework or strategy is guiding our change management process?
• How will we address resistance to change?
• How are leadership roles defined in this change?
• What measures will be used to evaluate the progress and success of the change?

The power of mergers

A merger is one of the most profound changes an organisation can undergo, and in the past two years a number of organisations have demonstrated that mergers can be carried out with care and grace. They include:

• GiveOut and the Aurora Group, which merged in November 2024 to form the Rainbow Giving Alliance
• the food relief agencies SecondBite and FareShare, which in July 2024 combined the “community-led culture” of FareShare and the national scale of SecondBite, while retaining their own identities
• two of Victoria’s longest running drug and alcohol services: in 2023 Windana effectively took over the TaskForce Community Agency, expanding services and taking on most Taskforce staff.

Save the Children’s Paul Ronalds, who presided over STC’s merger with ChildWise in 2017 to improve help for vulnerable children, argued in a 2021 keynote talk for ICDA that more organisations should consider mergers if they will help their mission.

Our Community managing director Denis Moriarty has said mergers and collaborations will become more common in the sector amid tight funding and rising demand for services.

“Those able to continue operating independently – and avoid merger temptations – will still need to collaborate effectively with their sector counterparts to best achieve their missions,” he said.

Restructures can help organisations step up

Many organisations seeking renewal are doing so by restructuring the legal form of their organisations, often shifting from an incorporated association structure to that of a company limited by guarantee (CLG).

Despite additional costs and rules, the move can suit organisations seeking to unlock funding opportunities and expand to a national footprint.

Those that have made the jump recently include:

• the Australian and New Zealand Society for Geriatric Medicine (ANZSGM), which transitioned from a NSW incorporated association to become a CLG last year, enabling the organisation to register as a charity and achieve more strategic goals
• Four Winds, a musical not-for-profit also based in NSW, which last month became a CLG as part of a strategic plan aimed at diversifying audiences, securing finances, addressing climate change threats, and many other goals.

Change can mean trouble

Not all transitions are smooth. For example:

• AusCycling’s massive merger involving 18 separate local and state cycling organisations into a single member-controlled organisation involved some painful scrapes during its five-year shift to becoming a national body.
• Swimming Australia sparked global news interest when it failed to implement reforms it had agreed to under a new constitution in 2023. After promising to expand its voting process and install more women in top positions, it failed to make those changes to the satisfaction of World Aquatics and faced being expelled from the global governing body.

Being informed about change

Organisations must know their ground, which is why ICDA provides news and resources to help organisations understand their operating environment. These include:

• The Community Compass, which steers leaders in the right direction when it comes to understanding public and stakeholder perception.
• ICDA’s Not-for-profit Agenda news webinar, which provides insights from the sector’s top thinkers addressing issues such as the federal budget, major reviews and campaigns.
• The weekly Community Advocate and the monthly Community Directors Intelligence, which highlight top NFP trends and resources for leaders.