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A Nonprofits Investments in Leadership Development Pay Off

January 22, 2010
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Related Topics: Career Development, Behavioral Training, Employee Career Development, Retention, Featured Article
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Virginia Blood Services illustrates the physics of leadership development: Every action has an equal and opposite reaction.

The action is a deep commitment to growing leaders internally. The reaction is enviable declines in employee turnover, tangible recognition as a top employer, and an against-the-grain ability to thrive despite a punishing recession.

Turnover at Richmond-based Virginia Blood Services topped out at 52 percent in 2000 but is down to about 8 percent this year. Virginia Blood Services not only avoided layoffs in 2009, but added 30 employees to its workforce. The company also handed out raises and maintained contributions to its defined-contribution retirement plan and other benefits at prior-year levels.

Virginia Blood Services supplies blood and patient services to about 20 Virginia hospitals. Volunteer donors supply about 110,000 units of blood each year, enough to serve about 300,000 patients. Once the blood is collected, technicians manipulate its various components—red cells, platelets and plasma—in a process known as manufacturing. The variety of blood components produced is based on the needs of area hospitals.

Although technically a nonprofit, Virginia Blood Services is licensed as a pharmaceutical manufacturer by the federal Food and Drug Administration. The company generates annual revenue of $35 million from service fees charged to hospitals for supplying tested blood for use in transfusions.

“We are a medium-sized business; we just happen to be tax-exempt,” says Robert E. Carden, president and CEO of the 280-employee company.

Leadership development became a priority as Virginia Blood Services embarked several years ago on a quest to become an “employer of choice,” Carden says. Much of the training focuses on the factors that typically motivate employees. It’s not necessarily more money, but the opportunity for interesting work and professional achievement that keeps employees from jumping ship.

“We do a great job of teaching people how to manufacture components, but we were not teaching technical people how to manage others. We knew that we needed to establish that foundation,” Carden says.

Virginia Blood Services uses its leadership development program to bolster the skills of existing managers, as well as to target people who are considered management material. It emphasizes the important day-to-day role that managers play in building trust and good working relationships with employees.

Treena Fartsi, a manager of production and distribution, says she was both honored and humbled at being selected.

“It makes me want to work harder,” to become even more of an asset to the company, Fartsi says.

Consulting firm Titan HR Inc., also of Richmond, customized learning material for Virginia Blood Services, basing it on the organization’s values, mission and policies. Six classes of four hours each, spread over 12 weeks, were used to hone leaders’ skills in six critical areas. Each session built upon the previous one, and included a mix of homework and “at work” assignments, says Jan Bazow, who heads the leadership practice at Titan HR.

“At the beginning of the program, everybody got to take a 360-degree feedback assessment that gave them a snapshot of how they are perceived on specific behaviors. That helped them discover the areas of growth that they needed to work on,” Bazow says. Those growth areas might be deficits in particular skills, knowledge or abilities.

Program participants were chosen from various departments, including health services, recruitment and sales. The opportunity to grow professionally was a key enticement.

“That was what they were told: ‘You’re being selected for your potential to lead,’ ” Carden says.

Clinical instructor Debbie Alley was among those chosen to participate. Alley says the recognition entails a new responsibility on her part.

“It puts some amount of pressure on a person to be viewed as a potential leader, but I feel that I have been given the resources to achieve it,” Alley says.

Leadership challenges for nonprofits
Virginia Blood Services is bucking a trend for nonprofits, which nationally are in the midst of a leadership crisis. U.S. foundations and charities will require nearly 80,000 new senior managers by 2016, according to The Bridgespan Group, a Boston consulting firm to nonprofits.

Two factors contribute to the gap: The number of nonprofits has tripled during the past two decades, and many nonprofit leaders are baby boomers nearing retirement age. In an April report, “Finding Leaders for America’s Nonprofits,” Bridgespan notes that nonprofits faced the prospect of filling 24,000 leadership vacancies in 2009 alone.

Despite this void, nonprofits have been postponing or cutting back leadership programs, says Don Crocker, executive director of the Support Center for Nonprofit Management in New York. He says many are wary of spending scarce resources on anything other than delivering services.

“But that’s a mistaken notion. Losing people affects your ability to serve clients,” Crocker says. “Nonprofits that are the most sustainable realize that they have to continue to provide professional development as well.”

The commitment to growing leaders internally contributed to Virginia Blood Services being named a top employer by the Richmond Human Resources Management Association and the Greater Richmond Chamber of Commerce in 2005 and 2007. It was a finalist in 2006.

Although winning was gratifying, Carden says the leadership training accomplished a more enduring goal: getting individuals to take the initiative in shaping policies, making improvements to operations and pursuing any training they might need to fulfill their job duties.

“We didn’t try to buy employees off with picnics or big cash rewards,” Carden says. “We’ve always told them that, for all intents and purposes, we are an employee-owned company. We don’t have shareholders to report to, so our company is what we make of it.”

Technically oriented employees are very familiar with following a set of standard operating procedures, so being able to give them a process to follow takes some of the fear out of a leadership development program, says Eleanor Boens, Virginia Blood Services’ vice president of organizational development.

“We had a class on constructive discipline, and [afterward] one of our managers—who is a good technician but very quiet and retiring—thanked us for giving them a process to work through,” Boens says.

Virginia Blood Services also uses a predictive index tool by PI Worldwide in Wellesley, Massachusetts, to foster better communication and behavioral training. It breaks communication styles down into four basic personality types: bold, expressive, sympathetic and technical.

Tanisha Chavis, a collections manager, says it helped her learn different styles of verbal and nonverbal communications, including how to read body language.

“The facilitator gave us a quote that has stuck with me: ‘People don’t care how much you know until they know how much you care,’ ” Chavis says. “I have tried to implement that quote into my everyday life by showing staff that I care about them and their growth within the organization, but at the same time letting them know that I will also correct them when they are wrong.”

The emphasis on leadership training has given Virginia Blood Services a national reputation too. Boens says the organization is fielding calls to help establish community-based blood centers at hospitals in other U.S. states.

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