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It's Later Than You Think
Succession Planning for Nonprofit Organizations
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By Nick Van Hevelingen, Consultant

Designing a formal CEO or Executive Director succession plan may not be the highest priority for most nonprofit boards of directors at the moment.* Given the current economy, just finding enough money to avoid program and staff cuts is very likely the top - if not only - priority of the board. Based on Growth Design's experiences, succession planning usually is near the bottom of a long list of other board obligations and priorities - if it makes the list at all.

A number of explanations for this can be offered. Board members are often reluctant to advocate undertaking a new and time-consuming project when there's a chance they'll be off the board before the plan is put to use. Another reason we have encountered is the concern that an incumbent CEO will interpret the desire for a succession plan as an indication of board dissatisfaction with his or her performance. Finally, there is also a frequent assumption that a succession plan simply isn't necessary. Board members believe that when the time comes, a Search Committee will either identify an obvious candidate, or, if there isn't one, will put the position out for search.

Part of the complacency of boards around succession planning can also be attributed to the quality of a current CEO's performance. An organization fortunate enough to be led by a first-rate CEO is less likely to contemplate a departure, much less plan for it. Even in situations where a CEO is less-accomplished, but still capable of keeping the wheels on the organization, a board may be inclined to favor a known quantity over an unknown one. In either case, succession planning is not seen as a priority.

When a CEO is failing to perform adequately - if s/he is the reason a board wants a succession plan - two problems can arise: first, the most important is that the CEO isn't likely to be asked - or be willing - to partner with the board in the developing of a succession plan. In that instance, a board will lose the insights of the person best positioned to evaluate the organization's future leadership needs in terms of the strengths and weaknesses of the current staff, and the organization's management dynamics. Second, a sound succession plan requires a substantial investment of time to prepare. If an organization urgently needs a new CEO and the board doesn't already have a succession plan in place, then there's not likely to be time to create one.

Another challenging succession planning scenario can occur when the current CEO is also the founder of the organization, or has been the CEO since its creation. In such a case, there are likely to be board members who were also present at the creation, have a close and longstanding relationship with the CEO, and are likely stand by him or her no matter what.

In relation to succession planning and boards, Growth Design tries to impart to a simple, basic management finding based on our long experience across a variety of nonprofit organizations. In the end, it is only the CEO of a nonprofit organization who can implement the strategic vision and drive the operational success of that organization. It follows that making sure the right person is in the job is among the most important - if not the most important - responsibility of a thoughtful board.

It has been our experience as a firm that the creation of a succession plan by a board (as well as the leadership transition itself) will invariably present as many opportunities as challenges to the organization. Even with a strong CEO in place, the process of developing a succession plan will need to engage the board and senior staff in an important and comprehensive review of several issues key to the future success of the organization. These include a review of:

  • Vision, mission, and value statements, and strategic plan objectives:
    This can sometimes involve lengthy and tiresome discussion about where the comma goes, but it also highlights the surprising variety of ways in which board members and senior staff view the organization and its mission.
  • Performance of the board:
    • Are board members as knowledgeable as they should be about the organization?
    • Is the board used to full advantage?
    • Are all members required to serve on a committee?
    • Do all committee members have clearly stated goals and commitments?
    • Are they held accountable by the board chair or the Executive Committee if they fail to achieve those goals?
    • Are nominating processes and criteria consistent with the organization's real volunteer leadership needs?
    • Which board members are under - or over - utilized? Would some like to do more and would others like a break?
    • Does the board get all its information from the CEO, or is there formal oversight independent of the staff?
    • Are they largely in agreement about the goals of the organization and the way in which it should pursue them?
    • Does the board regularly set formal goals and objectives for the CEO and is the CEO truly held accountable for failing to achieve them?
  • Strengths and weaknesses of the current CEO:
    The importance of this part of the process is self-evident. It is often tempting for a board to try to replicate a CEO who has been successful. This is almost invariably a bad idea. Every CEO, no matter how capable, has at least one area of relative weakness. It may be that her successor should be particularly strong in that arena, even if she lacks other desirable competencies. The insights of the incumbent CEO - assuming she is able to be objective about her performance - are critical to the process, and the board should give them appropriate weight. Knowledgeable, objective, third-party observers who can offer assessments of how the CEO is perceived by the community at large and by other pertinent stakeholders such as the philanthropic community should also be queried.
  • Long-term strategic goals and objectives of the organization:
    Board understanding and agreement on how the organization looks today and how it should look in five years is the central question to be answered. This can also be the most complex part of the succession planning process. Responsible long-range planning requires at minimum a starting point and a destination. A board can't anticipate every eventuality along the way, but it should at least be clear on those leadership characteristics it appears will be most useful in ensuring that the organization will arrive at its preferred future.

There are many more opportunities that can arise from the succession planning process. Only when there isn't a plan does a leadership transition pose a serious threat to the integrity of the organization. In another article on succession planning, we will describe some nonprofit leadership transition scenarios and outline the appropriate responses to those scenarios.

For more information on how succession planning can benefit your nonprofit organization, contact Nick Van Hevelingen, Consultant, through the Growth Design Customer Service Center, 414-224-0586.

*Nonprofit organizations use a variety of terms to designate the most senior staff executive. CEO is used here

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