Succession Planning Best Practices 2021 – Leadership, the cornerstone of high performance, helps your organization set out on a journey to make it even stronger.
More than a decade ago, Bridgespan Group president and co-founder Tom Tierney predicted a nonprofit leadership deficit due to the industry’s growth and baby boomer retirements. One consequence of this trend is the increase in CEO turnover, a process often feared. It is also a process that many organizations are not prepared to handle. In the 2017 National Index of Nonprofit Board Practices, BoardSource found that only 27 percent of nonprofit boards have a written leadership succession plan. But it shouldn’t be like that.
Succession Planning Best Practices 2021
We can’t claim to have all the answers, but lessons from Leap Ambassador community members and other thought leaders provide useful guidelines for a planned and successful transition. With thought, planning, communication and time, a change in nonprofit leadership can be a positive experience for organizations of all sizes.
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Bob Rath, CEO of Our Piece of the Pie for 23 years, started the conversation among Leap ambassadors by sharing his personal succession journey with refreshing honesty (see attachment). His message prompted Ken Berger, Chip Edelsberg, Linda Johanek, Bridget Laird, Amy Morgenstern, Lou Salza and Rick Wartzman to share their stories and advice.
We present a summary of their views below. But we’ll start this gathering with some encouraging words from Laird, the current CEO of WINGS for Kids: “When I was going through the CEO succession process, I would hear negative things that basically boiled down to, ‘Ugh, that was it.’ nightmare.’ It was the complete opposite for me.”
Succession planning is one of the most important responsibilities of a nonprofit board of any size and is critical to high performance. However, many boards still do not prioritize this. Morgenstern, a leader in nonprofit management and planning, shares:
“I’ve come across some boards that think that if they refer to a succession plan, they’re signaling that the current CEO needs to go, and they don’t want to send the wrong message. In other cases, it’s to avoid a change in senior management. , They refuse to take this management responsibility seriously.. Having a succession plan is an important high-quality board practice (for the current director as well) Organizations should do this before starting to consider the retirement date. EXECUTIVE DIRECTOR”.
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Succession planning is not a one-time exercise or a boring thing to check off a to-do list. The real purpose of succession planning is for an organization to prepare for what a leadership transition entails and to develop its internal talent pool long before the successor happens. A principle from the Courageous and Adaptive Leadership pillar and the Performance Imperative Board describes it best:
“Executives and boards of directors are engaged in succession planning for CEOs, board chairmen and other leadership roles. They place executives in roles to challenge them and prepare them for more responsibility.”
For example, one organization’s succession plan required promising leaders to be given additional responsibilities or special assignments, some outside their comfort zone, to assess their capacity for leadership roles. Long before it was time for a leadership change, the organization knew about the capabilities of potential internal candidates.
Leaders who lead with the best of intentions can cope with the difficult decision to leave an organization. As Johanek, a member of Leap’s support team who spent nine years as director of the Child and Domestic Violence Advocacy Center in Cleveland, OH, says, “A CEO, especially a long-term CEO trajectory, he has to realize that the time is right. come out and make way for a new visionary”.
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In 2015, Salza, then head of school at Lawrence High School, decided he was ready to retire in 2018. So he asked for guidance. He says: “I have a wonderful network of colleagues and friends across the country. There are colleagues who are steps ahead of me on the escalator. I always ask, ‘How was it for you?’ What worked? What didn’t work? What advice can you give me?’ I’m going into this next phase of my life with my eyes wide open. And I’m not particularly worried about it.”
“My personal journey began 11 years ago, and my biggest obstacle was rejection. I didn’t think I would ever leave. After I broke this obstacle, which took several years, I quickly became angry ( I’m not usually an angry guy.) I then spent some time negotiating with myself and others about how it could work, spent some time being depressed, and then moved on to accepting it.
“For me, acceptance is a clear case of no regrets. When I got there two years ago , I started a conversation with the chairman of our board about the date of my exit and the plan of how we will get there we will arrive.”
Successful transitions can take anywhere from six months to four years or more, depending on the complexity and size of the organization, from the time the outgoing CEO first thinks about leaving to the time the new CEO is in place and ready to lead. take
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Even with a generous six-month stint with the acting director, Laird still wished for more time. “I wish we had more time to navigate the relationship with donors. I would like to see some thoughts on best practices for relationship management and delivery.”
In his opinion, he believes that “The key to our success was timing. The process was not rushed. It was probably about four years from the time the discussions started until the founder was found.”
Rath’s transition also provided plenty of time. He says: “This public part of the successor schedule began about nine months before my expected departure, including a four-month cushion. Our calendar milestones for our successor activities include the announcement in January, the search process begins in February. candidate interviews in April and May, presentation in June and organizational succession in September.”
Once the succession process is underway, it is important for organizations to try to avoid other leadership transitions (such as board chair) to preserve organizational stability. As a result, a key component of Rath’s succession plan was to “confirm the leadership of the board for the transition period.” When Laird was promoted from COO to CEO, she and the founding CEO asked the board chairman to serve an additional term. Laird was initially appointed CEO for six months, while remaining a founding CEO. “I shadowed [our exporting director] during this iteration,” Laird says. “I went to every meeting and listened to the arguments. I could talk to him after every meeting and understand the ‘why’ behind his decisions. It was very valuable to me and the organization.”
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Make sure everyone knows who is responsible for the process and select the person(s).
Rath describes one approach: “I asked for a small committee of the board that I could talk to openly … and a trusted advisor to help guide the whole process. That [advisor’s] role was critical during the 18-month private deliberation period. “.
A designated leadership structure to manage the transition helps ease anxiety among employees and stakeholders. And functionally, it allows the organization to think critically about the skills and characteristics needed in the next CEO. This team must establish a schedule, communication rules, and metrics, and continuously manage the transition toward these goals.
Defining a detailed set of goals and outcomes for the transition period will help preserve institutional knowledge and make the most of the CEO’s time.
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In order to impart institutional knowledge during the last ten weeks of the transition, Johanek made a special effort to include the interim director in various meetings and functions. “I was still the CEO and I had the authority to make decisions, but I knew that the interim CEO would have to live with the results. So in many of our meetings I would say, ‘This is my opinion, but what do you want.’ because you will soon be making these decisions yourself?'” he explains. “It was a great process that allowed for meaningful discussions. It was a release process for me and a recovery process for him, an important part of the transition.”
When Edlsberg decided to step down as executive director of the Jim Joseph Foundation, he used a series of meetings to implement the goals of the transition. “We’ve brought [the incoming director] into the office a couple of times… I’ve talked to board members like I do on a regular basis about the transition. You don’t want your board members to be surprised, even if it’s just a rumor. .. He and I met with leaders of the Jim Joseph Foundation’s major beneficiaries on strategic planning, board meeting agendas, governing documents, bylaws, employee performance reviews, and more.
Sometimes, significant overlap with the CEO is not possible. However, even in a short transition, CTC Academy Executive Director Berger, who has been an in-and-out executive director, advises, “There needs to be board involvement in developing a formal transition plan with steps and metrics.
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