The "peaceful transition of power" has been much in the news lately. Transitions happen every day in business and in the not-for-profit sector. In government, decisions are made by the voters. Among nonprofits, the responsibility falls to the Board of Directors.
According to Bridgespan research stretching back more than a decade, succession planning remains the number one organizational concern expressed by nonprofit boards and CEOs. BoardSource’s Leading with Intent survey indicates that only 33% of boards nationwide have an executive succession plan, but one-half of all CEOs intend to leave the post within the next five years. If succession planning is of such high concern, why is it not widespread?
Succession planning brings up a variety of emotions for those involved. CEOs might fear that bringing succession planning up implies they are ready to leave, or that engaging in the planning process too early might lead to powerlessness. Board members might fear they’re sending a signal to their CEO that they are unhappy with his/her performance, or that external stakeholders, including funders, might take it as a sign that something is amiss in the organization. Regardless of the emotions and fear involved, it is important to put concerns on the table and to clarify for all involved that the organization’s leaders are prioritizing the organization’s future sustainability and the needs of the community it serves.
Strategic Leader Development
In The Cycle of Leadership, Noel M. Tichy writes, “One of the biggest failings of any institution is the failure to develop leadership bench strength.” Strategic leader development and building leadership bench strength are the same thing! There is a caveat to the board’s involvement in this planning process since it extends beyond the executive. However, the board should assure that professional development has the financial resources necessary allocated in the budget. Strategic leader development can take many forms, but there should be a plan that explicitly addresses leadership and professional development within the organization. With input from the executive, the board should approve a professional development allocation for staff.
According to The Retention Dilemma from The Hay Group, employees stay longer when there is a sense of efficacy in their work and because they believe they're able to capitalize on their skills and abilities. By providing professional development aligned to organizational priorities, the board and executive leadership ensure that there is a bench of talent to help sustain the organization should employees transition. The investment in internal capacity building not only offers professional development and opportunities for advancement, but also creates an environment where there is the potential for lateral coverage among staff positions.
Making sure that the strategic leadership development is comprehensive relies on answers to these questions:
- Who is at the table to discuss leadership succession: identification, development, promotion, movement, and retention?
- Would the organization be able to sustain a decline in fundraising without a chief development officer, or the void created by a departing CFO? If not, what is the temporary fix for this critical role?
- How does the budget align with a commitment to leadership development?
Sowing the Seeds for a Fruitful Future
Transparency is crucial both internally and externally. Proactive communication about leadership changes alleviates the normal fears associated with change and uncertainty. Plan for this. Poor management of this process shakes organizational credibility and effectiveness. Leadership is relationship. Given that and personal dynamics, each of these situations comes with a host of feelings, egos, a sense of investment, and perhaps a sense of accomplishment or disappointment. Particularly if the executive departing is a founder, the transition can be even more involved.
Preparation can be the difference between success and failure. Board members who fulfill their responsibilities and are accountable stewards take a proactive approach to planning, whether it be financial, strategic, succession, etc. The same deliberation given to the annual review and approval of the budget should be given to the business of succession planning. Go for it — bring the future into the present!
Acknowledgements:
Makiyah Moody, senior consultant with La Piana Consulting
Dr. Robin Hindsman Stacia, BoardSource Senior Governance Consultant and Principal/Consultant of Sage Consulting Network, Inc.
