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Leadership Transition & Succession Planning

Massive Leadership Change is Upon Us

Each day 11,000 Americans turn 65. Additionally, the majority of nonprofit EDs/CEOs are 50 or older and more than half of nonprofit leaders are expecting to leave their jobs within the next five years. Yet, less than 30% of nonprofits have a succession plan in place in anticipation of these changes. Ready or not, leadership transition and succession are a part of the new normal for nonprofits.

The good news is that preparing for these changes is not rocket science! You and your organization are probably more prepared than you realize, and getting fully prepared requires common sense, a few tools, and some support.

Different Stages, Different Work

There are five distinct stages of leadership change:

  1. Planning for an unplanned or emergency succession
  2. Transition planning – the leader's process of planning their own departure
  3. Succession planning – the organization's process of planning for the departure of a current leader
  4. Implementing leadership change – announcing the departure, managing internal and external relationships, and selecting an interim or new person for the role
  5. Supporting the on-boarding of a new leader

First Thing's First: Emergency Succession

Every organization should have an emergency plan. Rather than think about those buses that are proverbially aiming for ED/CEOs, think in terms of the more likely prospect of a leader being ill of a period of time, having to take an extended leave for family reasons or living on short notice for another job. We also have to think about natural disasters that might result in the leaders not being able to serve. In all of these cases you will not have months to pull together a succession plan and process.

So plan now for this possibility. Here are the basics:

  1. Document all important information: passwords, suppliers and vendors, bank account numbers, insurance policies, funding commitments and a list of grants in process, partnerships with contacts and links to documentation, and emergency contacts for all staff. If you do not have offsite backup or cloud-based storage today is the day to do that! There are many inexpensive options that allow you to store your most critical files and information. (If you have Microsoft Office 365, cloud storage is built in.)
  2. Decide now who is next in charge if there is an emergency. Define a chain of command in your emergency plan. Who is the 2nd in command if the ED is not available? And then, who will serve if that person cannot? There is much more to an Emergency Plan but these to step are the essentials to cover the sudden departure of a senior leader.  For more information on emergency planning, check out the 501 Commons Prepare/Respond/Serve program.

Building Your Transition Plan

If there is an incumbent ED/CEO, that person needs to develop a transition plan. A "Succession Plan" is for the organization, while the "Transition Plan" is for and about the ED. Each component interacts with the other but is, of necessity, separate. There is a great deal of universality to succession and transition, but each organization and individual brings a unique set of circumstances and will have a somewhat unique path through leadership change.

You will need to develop a plan for transition of both external and internal roles of the departing leader. These are the questions to ask as you build a transition plan:

  • What is the general or specific timing you have in mind?
  • What comes next for you? Full retirement? Consulting? Travel?
  • What are the big buckets of work/projects you want to complete before you leave? (Note: it is likely that not all of these will get done!)
  • What opportunities or areas of development does the current leader feel should be a priority of the next leader?
  • What work needs to happen to support, build, and develop your board/executive committee through the process?
  • What work needs to happen to support, build, and develop your leadership team?

It is critical that the departing leader establishes a clear and unchanging departure date so that the organization can work diligently to get ready for that day.  If the date is left unclear, it is likely the organization and board will be unprepared and the transition will inflict greater stress and damage on the organization.

Establishing the Succession Plan

The timeline and process for the succession plan is going to be heavily influenced by the organization's reaction to the departure of the leader.  There are many possible actions the board can take when an ED transition occurs, including:

  • Promoting an internal candidate
  • Hiring an interim ED
  • Conducting a search for a new ED
  • Merging with another organization or spinning off programs
  • Shutting down

Five Action Steps

Whichever of these paths your organization follows, the initial process will need to include the following steps:

1. Establish your target transition date for the ED/CEO to leave.

2. Meet with the board chair and key board members to:

  • Discuss the implications for funding, staffing, and programs
  • Discuss opportunities and challenges presented by ED transition for the organization
  • Discuss the potential for merger, consolidation, or termination of programs
  • Establish who will lead the process (executive committee or a new search committee

3. Plan a closed executive session with the executive committee or full board to:

  • Discuss the implications for funding, staffing, and programs
  • Discuss opportunities and challenges presented by ED transition for the organization
  • Discuss the potential for merger, consolidation, or termination of programs
  • Establish who will lead the process (executive committee or a new search committee)

4. Identify resources required for the recruitment process (may include a search firm, consultant, or internal staff)

5. Develop an initial communications plan for an internal and an external announcement – this needs to come from the board, but will likely benefit from ED input

6. Determine what needs to happen in terms of board recruitment, training for resources during this process

7. Determine whether some additional strategic planning work needs to be done to support the selection and on-boarding of a new leader

8. Hold a closed executive session to initiate the hiring process for the new ED or interim executive. (Learn about using interim executives and search for recommended IEDs.)

9. Have the departing executive update the Emergency Plan, Business Plan (including a multi-year budget) and Development Plan. This is easier to do if these documents already exist so develop these tools before a transition.

Keys to Success

A well-planned succession can provide an organization with an opportunity to best position itself for the future. Ensuring that succession proceeds as smoothly as possible hinges on five keys to success:

  1. Board leadership must become well informed about best practices in leadership succession, be able to devote a significant amount of time to the process and be committee to creating a positive environment for the new leader.
  2. If the organization is large enough to have a management team that team needs to have adequate time to take on the additional work during transition and have the support of the board.  If the organization does not have a management team, the board may need to provide some additional hands on help or bring in some volunteer professional support to supplement staff  who will take on additional responsibilities.
  3. A strategic business plan (not something that has been "on the shelf" for years!) related to the current mission and vision of the organization that will ensure that the board hires for the future, not the past.
  4. Resources set aside to fund the succession process, AND invest in the staff and board during this period
  5. A shift away from seeing the succession process as a loss and toward envisioning it as an opportunity for the organization, the departing leader and the organization's stakeholders

Succession is much more than handing over the keys to a new leader.  Start now to ensure that leadership transition will strengthen rather than weaken your organization.

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