Succession Planning for Nonprofits of All Sizes

Board Cafe [1] • By Tim Wolfred and Jan Masaoka • February 17, 2009 • forward article

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The term "succession planning" brings to mind a large corporation with a long-time CEO first choosing, then grooming, a successor. But this practice is sharply declining even in large corporations and is even less relevant to most community-based organizations.

At the same time, more nonprofits are realizing that executive director transition is a crucial moment in an organization's life: a moment of great vulnerability as well as great opportunity for transformative change. Succession should be a topic broached even when no one is anticipating a change in leaders. And of course, illness and other events can lead to sudden and unanticipated departures.

Planning for executive director transition is called succession planning: thinking in advance about how to set the stage for a strong transition. In many cities, executive transition services are now available, including interim executive director placement, executive search, and transition management.

When to start? Now!

Succession should be a topic taken up now . . . whether or not you are anticipating a change in executives. Here are some questions and issues to be addressed now, and some that draw attention to longer-term planning. Taking steps now will increase your readiness for this inevitable occurrence and increase the likelihood of a positive transition.

If the executive is suddenly unable to serve, is it clear to everyone who will be the acting executive until the board can meet and decide? Who will speak to the press? Consider creating an emergency or contingency succession plan just in case.

Does the board of directors have the right mix for hiring the new executive? A board that has been grown to support a strong executive may not be well equipped to hire a new executive. For example, a board of all corporate vice presidents may raise a lot of money but may not understand the qualities that make for a successful nonprofit executive, or how to look for and screen candidates. One criterion for board recruitment should be: "Will this person be a good addition to a hiring process?" Executive directors should ask themselves: "Do I want this person on the board that hires my replacement?"

Is the executive director's job doable - that is, could the job be done by a regular human being? Too often a successful executive director has, over time, taken on so many responsibilities that it would be nearly impossible to find another such superhero. In a similar light: "Are management team members able to do their jobs?" Sometimes a broadly skilled executive will "carry" one or more management team members who can't handle their responsibilities on their own. If an organization can, for instance, transfer some finance responsibilities from the executive director to the newly created position of CFO, the executive director's job will become more doable and as a result, the board can hire from the pool of talented professionals rather than from the very small pool of superheroes.

Is the salary of the current executive director much lower than what you should pay a new executive? Sometimes a successful, long-time executive is being paid much too little. This ends up pushing other salaries down and makes it unlikely that qualified candidates would accept such a salary. On the other hand, sometimes an executive is making much more than is appropriate. Succession planning should include a longer-term effort to bring all staff salaries - including the executive's - into line with the market.

Can you get through a fundraising or income dip? The chief money raiser and/or rainmaker in most nonprofits is the executive director. It will take time for his or her successor to develop the relationships with donors and paying clients that are essential to the incumbent's revenue producing success. Succession planning should include raising funds for the transition: one 25-year executive we know is in the midst of a "legacy campaign" to give donors a chance to honor his community achievements with gifts to an agency endowment fund. Fundraising and business relationships can also be institutionalized by bringing board members and other staff into relationships now held only by the ED.

Are there any obvious candidates for the job? In some cases an executive director may have been grooming someone internally for the job. In other cases it may be assumed that the associate director or program director wants and will get the job. There may be a board member who feels that he or she would be the best choice. The decision to hire is the board's and any such unspoken assumptions should be brought to the board. If, for example, it does seem appropriate to groom a particular individual, the board should be part of that process. At the same time, it would also be a shame if a valued staff or board member were to depart on the mistaken assumption that the job has been promised to someone else.

When was the last time that succession was on the board meeting agenda?

The executive director may worry that bringing up succession planning is a signal that she is planning to leave. At the same time, board members may worry that bringing up the topic will incorrectly send a message to the executive that they want her to leave. One easy way to broach the topic without either of these fears coming to pass is to begin the discussion with a distribution of this article, and a first focus on an emergency, contingency plan.

Putting a good succession plan in place reflects a commitment to an organization that goes beyond its strong leaders to serve its community for as long as it is needed.

Tim Wolfred, Psy.D., is the author of Managing Executive Transitions, which looks thoughtfully at all aspects of executive director departure (buy here [4]) and helped lead the development the Next Steps program [5] for long-term and founding ED’s. He is a Senior Project Director at CompassPoint Nonprofit Services [6] in San Francisco, and consults across the country to nonprofits and funders in leadership development. He is a former executive director, former interim executive director (in 16 positions), and former elected official. When he meets with executive directors who are weeping, he usually picks up the check. :-)

Jan Masaoka is the Blue Avocado editor-in-chief.