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September 15, 2014 - Kim Moore [see other posts]

Grocery Bills are Not Like Medical Bills

Boomer Succession

We are well into the long-dreaded (and perhaps long-awaited, for some) period in which nonprofit leadership transitions are happening all around us. Some weeks they come in threes, like the proverbial small-town funerals. Names we have associated with organizations -- and organizational names we have associated with individuals -- are changing so fast it is good we can handle the changes in Contacts instead of using old-fashioned Rolodex cards. We cannot help but be a little saddened in spite of the fact most of these are voluntary retirements.

In many nonprofit organization, a leadership transition is a potential disaster. Small, financially fragile organizations are particularly prone to transition problems. A hiatus in leadership can be very problematic when fundraising is a daily or weekly challenge or is built on a relationship basis with a few key donors. We have witnessed many troubling leadership transitions through the years, so I am going to dare myself to provide a few ideas about surviving the leadership vacancy -- planned or unplanned, voluntary or forced.

The critical role of the board
First, the role of the board is critical. The board frequently becomes the glue which holds the organization together. Research indicates that boards are often the most active and engaged during a leadership transition. The board chairperson is critical, as she or he will be central in at least arranging the search process, if not leading it. In many small organizations, there is not a second in command with the interest or skills to assume leadership. Great care needs to be taken in moving such a person into an interim position. If that person is clearly not an acceptable applicant, this truly interim nature of the position should be made clear from the beginning in order to avoid misunderstanding and potential politicking. All board members need to understand this and back board leadership in implementation.

The succession plan
Of course, great boards and capable CEOs have a written succession plan in place for all foreseeable circumstances which forms the pre-determined approach for filling the leadership void. This plan should not be treated as cast in stone, but changes from it should be made very carefully and not under the duress of political pressure from one or more potential candidates or their supporters. A national group called TransitionGuides (now part of Raffa PLC) provides great traning and examples of succession plans. We used them in Kansas about a decade ago to work with organizations well ahead of the boomer transition period.

The hand-off and the outgoing CEO
The outgoing CEO's involvement in the decision about new leadership should be minimal, in my opinion. This is a board matter. Other staff should work with the board to facilitate the search process; the outgoing CEO should be excluded from any but the most preliminary discussions, with the possible exception of informal advice if desired by the board chair. It is a real danger to give an outgoing CEO any role in the organization post-entry of the new CEO. This can be somewhat hard for all concerned, but the problems of a large period of overlapping presence (beyond a week, I think), a secondary role like development director or even a board position (full, advisory, or ex-officio) is very likely to mean ongoing trouble. Capable and well-meaning people really make mistakes by allowing an ex-CEO role beyond informal, limited consulting at the specific request of the new CEO. We have seen these ex-CEOs form back channels with boards to undercut the new CEO. Think how hard it will be for the new CEO to terminate the ex-CEO if problems develop at any level. CEOs who truly care about their life work with a nonprofit organization graciously get out of the way while remaining verbally and financially supportive.

The case for an interim CEO
In some cases, groups with adequate resources really need to consider an interim CEO. This is particularly beneficial if the organization needs to re-create itself or re-direct itself. A period of three to six months with an interim can help a board determine what the next CEO should have for skill sets, networks and passion to meet the organizational challenges ahead. Organizations with very long-term executives (or founders) might find an interim particularly useful. Many churches (but not in my denomination) have found interim pastorates to be the bridge over an otherwise troubled succession from the beloved pastor to the new person. My guess is that many capable retired boomer nonprofit leaders are going to be interested in being interims in the coming years; supply will not be a problem.

The pitfall of micro-management
One last warning...once a board gets energized with the whole succession process it can fall into a new micro-managing frame of mind. This is frequently evidenced by requests for multiple forms of information from the new CEO; new committees with roles like communications, personnel, facilities, etc. which mimic management functions; longer and longer meetings; and too many "parking lot" discussions without the CEO. It may be important for boards to conduct a self-assessment within the first year or two of life with a new CEO so a new balance of policy/management (board/staff roles) can be determined as is appropriate for a thriving nonprofit. In this self-assessment process, a safe and effective way for staff, including the new CEO, to provide its assessment of the board is best practice and critical.

Leadership transitions do bring some sadness in many cases. There are always risks involved in these processes but, when the transition is done well, new leadership will bring great opportunity for many organizations to move in new directions, adopt new and better practices, and create more impact.