Issue #152, Winter 2007

Out Front & In Sync

What kind of leadership does the community development field demand in the 21st century?

By Keith Getter and Leonardo Vazquez

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Eras in Community Development: Late 1800s to Early 2000s

Leadership and Management

Resources

Rodney Fernandez embodies the complexities of community development today. Sitting in a hotel restaurant after a symposium on leadership in the field, the 62-year-old executive director of the Southern California-based Cabrillo Economic Development Corporation wears a guayabera shirt, drinks an iced tea, and talks in a friendly, easy manner. It’s just what you might expect from a “grass-roots guy” who helped start an organization that originally protected farm workers from being evicted from a labor camp.

Yet Fernandez is also the CEO of a largely self-sustaining multimillion dollar not-for-profit business. Now in its fourth decade, Cabrillo builds housing, provides homeownership counseling, and conducts planning throughout Ventura County, Ca. Fernandez peppers his comments with the kind of language (“sustainability,” “succession,” “strategic planning”) you might expect to hear in Fortune 500 company conference rooms. And when he talks about leadership or helping Cabrillo thrive, he says things that seem counterintuitive in a field built by strong, charismatic leaders, focused on serving the poor and disadvantaged.

“I think in order for us to remain a not-for-profit, we have to make a profit,” Fernandez said. Later, he talked about how effective leaders need to learn to “let go” to build stronger organizations. As he describes it, executive directors who want to sustain their organizations have to support as much as they direct. And he has embraced the new community development leadership paradigm he espouses, putting it into practice at Cabrillo.

Community development has never been easy, but according to experts and executives interviewed for this article, leaders today face a wider range of challenges, complexities, and contradictions. (See “Balancing Act”) Organizations have to work toward their mission and their financial bottom lines. This requires leadership that is collaborative, flexible, results oriented, nimble, and adaptive. In other words, the traditional models of leadership—embodied by the general barking orders or the visionary who provides inspiration from a soapbox—are ineffective for today’s world of community development.

According to those who have been in the field for decades, community development organizations once held a special place in the eyes of progressive professionals and government funders. Today, these organizations are among many actors competing for the same funding, employees, and even customers and clients. Forty years ago, executives of successful community development organizations could have been the go-to people for virtually all questions dealing with their organizations and communities. Today, there are too many demands for quick answers and too much information for any one person to handle. The successful community development organization today is a dynamic blend of several organizational models: charity, small business, advocacy group, public relations firm, planning and research agency, and—often—developer, builder, and realtor.

Leadership is the art and craft of influencing people to move toward a shared goal. Successful leaders understand and respond to conditions, opportunities, and constraints in their groups, organizations, and communities. Community development leaders have always had to be creative and collaborative to help organizations survive financially while serving communities that often lacked the money to keep those organizations in business. But the balance of leadership skills that help organizations succeed has changed over time.

Forty years ago, the prevailing style of leadership was like a preacher of a new church—someone who could mobilize individuals and conflicting groups around clear visions of the future. In the 1980s and 1990s, as their success created greater expectations, funders demanded more accountability, and government support dropped, community development leaders became like boat captains. They worked to stabilize and steer their organizations through changes in funding and funder expectations. Now, leaders who want to thrive in the 21st century should think of themselves as band leaders: people whodirect and harmonize a never-ending performance, but who rely on their bandmates to make—excuse the pun—sound decisions.

Community Development with a Strong Hand and an Outstretched Arm

The world of community development in the 1960s and 1970s was much different from today. First, it was new, and few people knew what to expect. (To be precise, what was new was the model of locally led community organization funded mostly by government. Before that, community organizations were funded mostly by private donations and grants.) There were many fewer organizations and more government funding available for each organization. And perhaps most significant, community development organizations could take more risks and focus on their social service mission.

The preacher was the dominant model of successful community development leaders in the 1960s and 1970s. Preacher-leaders mobilized residents around a distinct vision for the future. Through their transformational leadership skills—which affected how followers believed and felt, as well as what they did—they were able to get the most of the dwindling resources of communities in decline. They were also creative. Just as clergy in religious organizations today are the spiritual centers of their congregations, preacher-leaders were also the face of their organizations to the outside world. With the support of government funders and large charities, preacher-leaders built the foundation of the modern community development field.

“Mobilizing skill was the key in the late 1960s,” said Xavier de Souza Briggs, a former assistant secretary of the Department of Housing and Urban Development and now a professor at the Massachusetts Institute of Technology. “The fiscal environment was much more generous and much less driven by public-private partnerships and complex financial deal-making. There was more room to fail at financial and other ventures.”

The early executives of community development organizations were what are known as “transformational leaders.” These types of leaders are able to generate shared interest in a vision and shape their disciples’ beliefs about the opportunities, costs, and risks to achieving that vision. The earliest generation of community development corporation leaders was creating a new type of organization—locally led but largely funded by the government— and strove to convince residents and agency representatives alike that this model could work.

Just as clergy have to navigate between two worlds—the spiritual and the human—early community development corporation leaders had to balance the concerns of their government funders with the demands of residents who were sometimes angry with government policies and practices. This ability to move from what Briggs calls “the suites to the streets” was one of the keys to the success of Franklin Thomas, a New York City deputy police commissioner who founded the Bedford-Stuyvesant Restoration Corporation in Brooklyn, according to a profile of the organization in the Pratt Institute Community Development Corporation Oral History Project. “Because of the respect he had earned in Bedford Stuyvesant, as well as the public and private sectors, Thomas was able to bridge some of the divisions in the community,” the report says.

The early generation of community development leaders benefited from having charitable patrons in government, little competition, and the freedom to take risks and fail. That changed in the 1980s and 1990s, and so too did the type of leader that found success in the field. The transformational leader had to become a better manager.

A Steady Hand in Stormy Conditions

By the late 1970s, the community development field was enjoying success and growth. Organizations were diversifying their services and were being helped by national intermediaries that provided funding and technical assistance, as well as a supportive president (Jimmy Carter) and Congress. Then came the Reagan presidency. President Reagan, followed by President George H.W. Bush, cut federal funding for community development efforts, according to Alice O’Connor, who wrote about the history of federal policy in low-income neighborhoods in Urban Problems and Community Development. Programs such as Urban Development Action Grants, Community Development Block Grants, and others were cut or eliminated. “Pushed to do more with less, community development corporations (CDCs) moved aggressively to become more efficient operators and to tap into local and private sources of development support,” O’Connor says.

During the 1980s and 1990s, foundations and corporations were more supportive of community development, but became increasingly less charitable. Board members and program officers of funding organizations wanted their grantees to focus on tangible outcomes and to see their dollars as social investments, not charity.

In the ensuing 20 years, community development organizations became more like for-profit businesses in their growing focus on management systems, financial sustainability and accountability, as well as strategic, long-term, and succession planning. Executives had to learn to manage—that is, to control and command—as well as to lead. And they also had to become comfortable and knowledgeable about accounting and budgeting practices. The successful leader in that environment operated like a captain.

Captains control the direction of their boats, are responsible for the health of the crew and the efficiency of their systems, and navigate their boats through treacherous conditions. The captain of a community development organization focused on sustaining the organization—in other words, “keeping the lights on.” This often meant pursuing ventures that brought in more money, such as development projects outside of the neighborhood, even if they didn’t directly help community residents. It also meant putting more resources into financial and other management systems. Money that in the 1970s might have paid for a community organizer was now being used for a business administrator.

Because directors and executives had less room to fail, they sought out more people who were educated in business or management skills. That meant hiring more individuals who were not from the community and who may be from different ethnicities, cultures, and classes than their constituents. In 2003, New School University surveyed 80 people who were executive directors of community development organizations in 1987. About two-thirds of them were white and 70 percent to 80 percent of them were men. Although the community development field is growing more diverse, according to the New School study, people of color are still underrepresented, said Kenneth Wade, CEO of NeighborWorks America.

Community development organizations (CDOs) have always had to deal with the problems caused by the loss of the businesses in their neighborhoods. But in the 1980s and 1990s, more businesses began to show greater interest in low- and moderate-income communities. The federal Low Income Housing Tax Credit Program, started in 1986, made affordable housing more cost-effective for developers. Also, in the 1990s, the saturation of retail in the suburbs and the prospect of gentrification in older urban communities encouraged more businesses to market to and locate in communities they would have fled from 20 years earlier. What’s more, the business world began to compete with community development organizations for talented professionals. CDO leaders now had to offer more benefits, which put more pressure on them to focus on the business side of their work.

As community development organizations became more successful, they also increased the expectations of funders, stakeholders, and partners. It was no longer enough for executives to tell and sell wonderful visions; they had to prove that they could reach their destinations efficiently and effectively.

As the nonprofit sector was becoming more corporatized, businesses were becoming more like communities. Management experts such as Peter Drucker, Peter Senge, and Warren Bennis were convincing corporate executives to listen to their employees and give them more opportunities to influence the direction and values of their firms.

These thinkers also saw that the world of business and organizations was moving too fast for any one person to manage all the information needed to make informed decisions. The Internet and other technologies were making more information available, but also speeding up the pace at which clients and customers expected answers. Globalization meant that businesses were affected by economic changes anywhere in the world. For community development organizations, this meant that businesses could move in and out of communities more easily and that neighborhoods could be inundated with immigrants from countries that may have been unknown to existing residents. Few captains could adapt quickly enough to these changing weather conditions.

“Some of our most successful community development organizations were started by community organizers who were able to develop the [necessary] business skills,” said George McCarthy, a senior program officer in development finance and economic security at the Ford Foundation, who administers a program that focuses on using homeownership to build assets for low-income families and their communities. “As we professionalized community development, we began to select for folks with business skills to scale up and manage the enterprises. But as we pass the torch of leadership from the organizers to the business managers, we’re missing some of the key talents that the previous leaders brought from the community organizing side.”

Community Development in the 21st Century: Strike Up the Band

The world of community development today makes it difficult for a senior manager to be a captain. There are too many challenges and opportunities—too much information, period—for one person in a growing organization to manage. The key, Fernandez says, is “letting go as a leader. You have to nurture and develop your senior management team.”

“Lots of stakeholders expect more [from community development organizations],” Wade says. “Government stakeholders are expecting community developers to produce more.”

“You’re not going to get by with low levels of productivity,” he adds. “The standards are higher and the pressures are greater. There is more attention paid to the professionalization of the field.”

The successful community development leader of the 21st-century organization is likely to be a lot like a band leader—responsible for making the different sounds of various instruments come together in harmony. Band leaders coordinate with their musicians but can’t control how well they play on any given day. Musicians have to be motivated to bring their art to their highest levels. And like all creative professionals, they want the independence to make their own contributions to the band. The successful band leader motivates as well as directs.

In the late 1960s, community development organizations struggled to get banks to offer mortgages in low-income communities. Today, CDOs work hard to help low-income residents avoid getting trapped by predatory lenders. In the 1970s, CDO leaders organized residents to demonstrate against absentee landlords and uncaring banks. Today’s CDO leaders are just as likely to be landlords (albeit better than the ones they replaced) and to sit with bank directors who would like to provide loans or grants. In the late 1970s, a CDC was one of the few attractive places for a community-oriented professional who didn’t want to work for government. Today, that professional might be just as likely to work for the social-investment arm of a major corporation.

Today’s leaders must balance: • People-based versus place-based solutions—Should a CDO focus on providing services, training and empowerment to people who might leave the neighborhood, or should it focus on improving conditions in the neighborhood, even if that doesn't have an immediate impact on the lives of residents. As a neighborhood revitalizes (or gentrifies, depending on your perspective), what responsibilities does a community organization have to the more well-off residents of the neighborhood?

• Professional versus grassroots orientation—Would a community organization be better off promoting staff who come from the community, even if they don’t have the same business skills as someone who might come out of a graduate program or another type of organization?

• The desire to serve a home community versus the desire to generate more revenue by expanding outward—A typical organization in the 1960s or 1970s worked in a single neighborhood. Today, several large community development organizations build housing or provide services in multiple neighborhoods. How much of an organization’s limited resources should be spent on serving residents in the home community today instead of serving others to make money for tomorrow?

Another challenge is the growing ethnic and cultural diversity of workers, communities, and organizations in the 21st century. The diversity means a lot of people with different views about work styles, behaviors, and priorities for the organization. One of the more common conflicts cited by experts in nonprofit management is between professionals who came of age in the 1960s and those who began their careers 20 or more years later. Older professionals, inspired by the idealism of the civil-rights movement and following in the footsteps of World War II-era parents who made many sacrifices, tended to see their work as a calling that required an enormous commitment of time and energy. Younger professionals are also committed to the goals of community development, but tend to want more of a balance of work and life.

According to Patrick Corvington, a senior associate at the Annie E. Casey Foundation who began its leadership development unit, younger professionals gravitate toward organizations that are transparent and participatory. They also want work that has prestige, performance-based compensation, challenging and interesting assignments, and opportunities for advancement and the acquisition of new skills. What may appear to an older professional to be a lack of commitment or even selfishness may seem to a younger professional to be a set of reasonable expectations.

Thus, just as a band’s sound can be richer with more musicians and instruments, the 21st-century community development professional benefits by building the capacity of staff and residents to become leaders.

“I’ve seen one formula for success—organizers who become charismatic leaders and gain the business acumen to take their organizations to scale,” McCarthy said. “What remains to be seen is whether another formula for success is possible—a leader with business acumen who can gain organizing skills and become a charismatic leader.”

These tensions are particularly challenging for captains focused on sustaining their ships and preachers focused on reaching their vision. One of the things that preachers and captains have in common is that they stand apart from their colleagues—the preacher at the pulpit, the captain barking orders from the pilot house. Today’s band leader is likely to be one of the musicians, and not necessarily the lead singer. That type of leader excels by allowing and helping other musicians to perform at their highest level—and gives them some opportunities to shine in the spotlight.

The effective leader of the 21st century, said nonprofit organizational consultant Mark Levine, is someone who “gives up control to build power.” Levine demonstrated the idea—drawn from the work of Harvard public policy lecturer Marshall Ganz—at a recent NeighborWorks symposium with a graphic of Ganz’s “leadership-rich” structure that puts the executive in the middle, not at the top, of a network of leaders. A leadership-rich organization, Ganz and Levine argue, has the internal strength to thrive even in difficult times. In Levine’s view, the bandleader’s job is to build the ensemble.

As Rodney Fernandez anticipates stepping down as Cabrillo’s executive director, he recognizes the value of building a leadership-rich team as a key to the sustaining the group’s effectiveness. Determined to create that kind of structure, he is modeling the essential attributes of the 21st-century community development professional leader for his staff: paying attention to professional workforce and organizational development, staying attuned to the community’s needs, and knowing when to step out of the spotlight so others can grow.

At the symposium, Fernandez demonstrated that he’s walking the walk. A leader from Cabrillo Economic Development Corporation was a featured speaker—but it wasn’t Fernandez (although he was there). It was Jill Bangser Fioravanti, a special projects manager. Fernandez is working to ensure that the ensemble he’s building keeps performing after he’s left the stage.

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