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Starting With The End In Mind

Updated: Feb 1, 2023

Leadership transitions have huge consequences for nonprofits. A successful transition creates an environment where the organization thrives. As I’ve shared before, according to research from McKinsey & Company, under a smooth transition, the new leader’s team is 13% less likely to leave the organization. However, a poor transition often means team members are 20% more likely to become disengaged or leave the organization.

The high-stakes nature of a leadership transition is one reason why I focus much of my work on equipping nonprofit leaders with the skills needed to manage this change effectively. Still, even the most successful leadership transitions require a succession plan. Succession planning, especially after a new executive director takes the reins, can feel a bit unnecessary, yet it’s crucial to have a plan to ensure your organization maintains proficient leadership at all times.

There’s always a chance an executive director will accept another role at a different organization. And life circumstances can change, whether it’s caring for a new child, elderly parents or one’s own health. Even anticipated changes, such as an executive director’s retirement are inevitable at some point.

Put simply, it’s risky to operate without a succession plan. Abrupt leadership transitions without a succession plan leave the board in a lurch. What’s worse, this often means they lack critical information needed to bring on the best next person for the job. This also makes it hard for the next potential executive director to obtain key details about the role and what the organization needs in its next leader, which I covered in my recent blog post.

An Investment, Rather Than a Safety Net

A strong succession plan will help your nonprofit weather the challenges of change, both expected and unexpected. I’d also encourage leaders to look at succession planning as an investment in their organization’s future, rather than a safety net.

Planning for succession forces organizations to be intentional about keeping talented professionals in the pipeline and training them to step into a leadership role. This helps identify gaps in training and leadership skills across the organization. By gaining awareness of these gaps early, you can find ways to cultivate and develop the skills of potential internal candidates so they’re ready to step up should an opportunity arise. Not only is this beneficial for succession planning, this also helps retain talent and boost morale.

From an operational standpoint, creating a “deeper bench” of future leaders will strengthen the team’s alignment toward a strategic vision and diversify your organization’s internal knowledge base. This empowers each team member to understand how they fit into the overall mission and make a meaningful impact. This also helps avoid bias and other challenges that may come along with assuming there is an ‘heir apparent’, as this Harvard Business Review article explains.

Most importantly, succession planning allows the leader and the board to align on the future vision for the nonprofit. It’s an opportunity to explore the current challenges that need to be handled and what potential challenges lie ahead, what the desired outcomes are for the organization and what success looks like.

Interestingly, several executive directors I’ve spoken with shared they believe they should have a 2 to 3 year contract with the chance to renew so each party has a chance to lean in again or move on.

The nature of social change is that there is always something else to do. The issues nonprofits address are challenging and complex. In this environment, it’s easy to get hyper focused on the program and zoom past milestones that mark success, making it difficult to gauge a job well done. Likewise, it’s not always obvious when it’s time to move on.

Succession Planning Checklist

Now that I’ve outlined the value of succession planning, I’ll explain how to put pen to paper and create a plan.

One: The board initiates succession planning.

Since it is the board’s responsibility to support and oversee the executive director, the board should initiate succession planning for the role. By definition, the board has a fiduciary duty to act in the organization’s best interests and ensure its sustainability. This is reliant on having strong leadership in place to guide the organization. Oftentimes, boards may avoid bringing up succession planning because they don’t want to cause concern with the current leader. However, it’s much better to have a succession plan in place before you actually need to use it. In fact, I recommend that boards proactively approach succession planning upfront with new executive directors.

Two: Each staff member documents their roles and responsibilities annually.

Having documents that provide a clear overview of each staff member’s role is hugely beneficial in many ways. For one, this information makes it easier to identify internal candidates who would be best suited for a leadership role in the event of an executive departure. At the same time, this can reveal where skill or knowledge gaps exist within the organization. When the board and current leadership understand where those gaps are, they can invest in the right training and development opportunities in a way that supports the organization’s continuity. Additionally, when the time does come for a leadership transition, these documents will help the new leader get a grasp of who’s who and who’s responsible for what. This is especially helpful when a new executive director was hired externally and doesn’t yet have all the context that an internal hire would.

Three: Leaders align with board members on strategy.

A lot of work goes into a leadership transition so it’s crucial that leaders are aligned with the board from a strategic standpoint. Everyone should have a sense of what immediate and long-term challenges their nonprofit is facing, what outcomes need to be achieved and what success looks like. When there’s strategic alignment, it is much easier for nonprofits to be proactive in recruiting future leaders and minimize disruption during the transition process. From crafting the job description to communicating the change to staff, leadership should be aware of who’s responsible for what and act with intention.

Four: Develop clarity on the skills needed to achieve desired outcomes.

To be ready to recruit and hire, the board and hiring committee should be clear on what skills and knowledge your organization needs in its next executive director to achieve its goals. Naturally, this requires a solidified vision for the organization’s performance, growth and any other program goals that the new leader will be responsible for during their tenure. Avoid being too high level with these details. If your organization needs someone who is adept at public speaking - say that, instead of using a platitude like “must be a good communicator.” There’s no need to overcomplicate the job description, but it does need to be simple, clear and regularly updated to reflect the needs of the organization.

Five: Mentor staff according to the future needs of the organization.

Before a succession occurs, nonprofits should cultivate their internal talent pool and find ways to prepare staff for greater responsibility. Consider giving a promising staff member a stretch assignment to challenge them and better understand their capacity for a leadership role. It’s also a good idea to cross-train staff members so that a leadership transition or unexpected staffing vacancy won’t disrupt operations or derail important initiatives.

Likewise, your organization should ensure that a leadership departure wouldn’t negatively impact external relationships with key donors or partners. Some simple ways to prevent this include encouraging others in the organization to connect with major stakeholders or involving another staff member when there’s an engagement with a large donor. For example, if the executive director has a meeting with a donor, invite others to join if appropriate. Or ask for help when planning for the meeting. This will help others on the team understand what a leadership role entails and what it looks like in action. So much can be learned through observation - from how an executive director should dress, speak and interact.

Six: Encourage staff to step up to the mantle of leadership.

Like I said, observation is a powerful tool, but learning through experience is the best way to prepare staff for leadership. One way is by giving a promising staff member a stretch assignment like I mentioned earlier. If you choose to assign a stretch project that falls outside of their comfort zone, consider offering the staff member coaching support as well. This will provide them with a trusted resource who can help them grow their self-awareness, overcome challenges, and identify the steps necessary to achieve their professional goals.

In addition to stretch assignments, role swaps can be a great way to hone an individual’s leadership skills. Role swaps, where the individual takes on some of the leadership responsibilities during a non-critical time, is an excellent opportunity for hands-on training. They also can see first-hand whether this role is one they’d enjoy. Similarly, another good time to let a staff member test their leadership skills is if someone in a leadership role takes maternity, sick leave or a sabbatical. These leadership “test drives” empower potential successors to find their voice as a leader so they can lead with authenticity and confidence.

Current Leaders: Don’t Treat it Like a Threat

My advice for current executive directors is to avoid viewing a succession plan as a threat or a lack of trust in your capabilities as a leader. It’s really a safeguard for the organization’s future and when the board is vested in that, it shows they’re invested in the program. Nonprofits should make succession planning a part of the job from day one and even the interview process.

It’s common for boards to avoid the topic of succession planning because they don’t want to send the wrong signal, but strong, trusting relationships are built on candor. As I mentioned in another blog, leaders who commit to candor share the important truths around their challenges and experiences. And they openly share positive and negative elements of the organization’s journey that are essential to long-term sustainability.

Board should also use this work as a performance assessment or evaluation tool and reward the executive director’s success with bonuses or other benefits. This gives executives clear benchmarks to work towards, a path for improving their skills and allows their job to intentionally evolve with the needs of the organization. Meanwhile, this provides an avenue for their success to be recognized and appreciated.

Expect Some Bumps Along the Way

Although succession planning shouldn’t be perceived as a threat, that’s not to say it’s without its challenges. I’ll cover some common roadblocks that may arise.

One: There’s a lack of alignment on a successor.

One potential challenge is that the board is not aligned with the executive director on who the successor should be. Perhaps the executive director has spent time cultivating a promising staff member but the board decides they are not the right person for the job. This can be frustrating. However, it points back to the need for alignment on the vision for the organization’s future. When the board and executive director have stacked hands on the vision, that will translate to alignment on what skills and abilities are needed in the successor to execute on that vision.

Two: It feels like extra work.

Creating a strong succession plan does take effort, but it’s important work. Executives should review their workload and consider which tasks or projects they can delegate to another staff member. The benefits of this are twofold: executives have more time to focus on succession planning while another staff member has the opportunity to broaden their skill set and take on more responsibility.

The key is for the board to set succession planning as a priority, setting benchmarks and targets, as well as providing leadership bandwidth to implement.

Three: It’s difficult to get clarity about the future of the work.

In most organizations, leadership will face uncertainties about the future of their roles or decisions that need to be made. That’s why establishing a culture of candor is so important. Like I explained in an earlier blog - for the board and executive director, who rely on one another constantly to make decisions and lead the organization as a whole, honest communication is essential. An honest, direct conversation about which objectives are absolutely essential for the organization to achieve versus which are worth pursuing but deemed less essential will provide clarity.

One can also consider a workshop with board members and the executive director that’s dedicated to establishing a shared vision for the future. Having a third-party coach or facilitator can lead to productive dialogue and reveal opportunities to push a program forward.

Four: It’s hard for leaders to have enough self-awareness to do this.

Leadership transitions, whether you’re an incoming executive director or departing, require a strong sense of self-awareness. I appreciate how one former executive director put it:

“I think most executive directors have all their board members either tied down to the minutiae, or the opposite, where they provide the vision and the board is like, ‘Wow, the executive director, she's really painting this amazing picture, and I'm on board. I just have no idea how to do what she's doing.’ And so you have to build that ladder that gets them from the ground level of being inspired to the top level of what does it look like when they're up there and how do we get them to the top level of understanding and passion and competency?”

- Storied Awareness Interviewee

A solid succession plan hinges on leadership’s ability to honestly assess their own strengths and knowledge gaps as they relate to the organization's strategic plan. For tips on how to do this, check out this blog post. Doing so will help guide decision-making and ensure resources are allocated effectively in the event of a leadership transition.

Five: There’s limited opportunity for staff to give and receive feedback.

Keep lines of communication open and be transparent, where appropriate, between staff members and leadership. This will help prevent leadership opportunities or stretch assignments from being pushed to staff members who might be viewed as potential leaders but don’t actually want the role. Likewise, when assessing staff members' capabilities for leadership with challenging assignments or role swaps, make it a priority to give them feedback and a full evaluation of how it went. This will help foster a culture of trust and continuous improvement across the organization.

Don’t Risk Unraveling Your Hard Work

Even if your organization has recently made a smooth leadership transition, you still need a comprehensive succession plan in place. Operating without one is like sewing a quilt, but not stitching the final seam. It leaves the risk of one loose thread unraveling all your hard work.

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