The Importance of Succession Planning for an Organization's Leadership

Hi, DonorDreams Readers! Hope this week is treating you well! It’s Marissa here, with a great post written by Heather Eddy, President and CEO of KEES: Kristner Eddy Executive Services and Alford Executive Search. While we’ve talked a lot about retaining key employee in the past few posts, today Heather talks about how to plan for when people move on to another opportunity. Succession Planning along with employee retention makes for a strong nonprofit. Thanks again, Heather! Enjoy!

Although this blog has covered retaining employees for the past two posts, sometimes it is time for people to move on, even a revered and beloved leader. How an organization and it’s leadership undertakes this transition says a lot to other employees. It can make a big difference in general employee satisfaction and what might trigger a good employee to leave. A Board may not realize it, but having thoughtful and articulate plans in place about the organizations future (Strategic Plans, Succession Plans, Compensation Plans, Capital plans, etc.) speaks volumes to the general employee base.
Succession Planning is a term used in private and nonprofit sectors (less so with governmental entities) to describe the batonprocess that an organization (typically a Board of Directors) undertakes to plan for its next leader. Interestingly, with the term being common in leadership lingo, a limited number of organizations actually have a written Succession Plan. How do we know this? It is a question that we survey groups about frequently. The responses often come back as: maybe, no, I don’t know, yes-we’ve had a few meetings about it, yes-it’s in my head, and my favorite….yes – we talked about it once and someone has the notes somewhere. An idea, wish, intention or concept or does not truly constitute a solid Succession Plan. I find that less than 15% of the nonprofits we interact with have a written Succession Plan that is that is widely understood by organizational leadership (Board and Executives), and could be accessed and implemented with ease. Note – often times the “emergency “plan (what to do when the ED gets hit by a bus or wins the lottery) is confused with the Succession Plan. The two can be related, but are entirely different.
A relevant and ideal Succession Plan should have an overview of the following, with specifics to be filled in at the time certain triggers occur. A Succession Plan should be reviewed every 2 – 3 years if the sitting leader will be there for a while, and every 1 – 2 years as s/he gets closer to natural retirement.

  • An overall philosophy of leadership and the role of the Executive leader
  • A clear statement of the Board’s role in finding, hiring, evaluating, growing, and changing leadership.
  • An ideal timetable for a natural transition process to occur (having a 90-day buffer helps)
  • A job description of the current Executive leader and all of the immediate, direct reports.
  • An organizational chart, identifying the key functional areas of leadership, and which direct report or other key staff person “back-fills” the top Executive in these functions. Note: this could add another dimension to the plan if all/most of the top leadership is roughly in the same 5-year window of possible retirement and/or the same team has been in place for 15+ years.
  • Current thinking (point in time) about the organizations greatest needs in the coming 3 – 5 years. This can be derived from Strategic Planning.

If your organization does not have a written Succession Plan in place, I urge you to have a conversation at the next Board meeting. Try to gain a commitment to invest time in addressing the points above. The Board may not be ready for a full Succession Planning process, but at least document the above six points and make sure the whole Board is on the same page. If the commitment is there to do more….ask the Governance Committee, Executive Committee, or ad hoc Committee to take this on as a special project (60-90 days with 2 – 3 meetings and follow up in between).
We urge you/your organization to not only focus on Succession Planning, but what we call Leadership Transition successionPlanning2Planning. This type of planning focuses on how an organization transitions, whether to a new executive leader, an entirely new leadership structure, or growing leaders within the top levels of leadership as the organization grows.
With the enormous workforce transition we will undergo, in all sectors, not just nonprofit, hiring managers (Board’s included) are struggling to find desired talent brings skills to meet current needs, and potential grow with the organization. In some nonprofit sub-sectors, it is anticipated that as many as 20% of the leaders currently at the helm will retire in the coming five years. It is also estimated in those same sub-sectors that, perhaps, at best, 4 – 8% of “ready” next leaders are in place. This upcoming gap is a direct result of nonprofits doing a great job of hiring good talent and getting every bit of expertise they can, but failing to invest in that good talent, to make it great talent. There is an enormous need for organizations to grow and develop talent, at mid and upper levels of management, to meet this potential gap. Does your organization have a leadership development program? If so, please tell us about it in the comments.
Leadership Transition planning helps you define what you have, what you want, what you need/think you need and what is a realistic expectation for the leader(s) at the next phase to meet organizational needs. It then guides you to put that transition in to a timetable, articulate the resources needed (often budget related), and define how you will communicate with internal and external audiences. Based on the type of leadership transition coming up, the timetable and audience focus could be completely different. And, based on the organizational capacity, the ability to invest resources in developing and transitioning leaders varies greatly. Leadership Transition Planning is a process that should be collaborative between the top Executives and the Board. Both leadership groups have a vested interest in the organizations future success, and should work together to ensure the right leader(s) are in place to achieve that success.
While your organization many not face an imminent retirement or departure of its top leader, both Succession and Leadership Transition Planning are essential for the continuity and sustainability of your organization.

Non-profit executive directors are not zombies or vampires

undeadI know that this may sound silly, but I think it needs to be said for the record. Non-profit executive directors (e.g. CEOs) are not the undead. They do not live forever. They will leave your agency some day. And every board should be preparing for that eventuality.
Let me assure you that you are not “jinxing” yourself by being proactive.
Here are a few questions you should be able to answer well in advance of the day when you executive director submits their resignation:

  • Will you bravely move forward into the future with an interim executive director or will your board form a management team?
  • How do you intend on building a large, qualified applicant pool?
  • How will you screen those resumes?
  • How will the board determine which skill sets and competencies are necessary for the next executive director to possess in order to take the agency from Point B to C?
  • How will you develop interview questions based on teasing out these competencies and skill sets?
  • Who is responsible for recruiting the search committee? Who should be asked to sit on this committee?
  • Have internal candidates been getting groomed? If so, how will those candidates be treated?

Many non-profit organizations start to address some of these issues through the creation of a succession plan.
Click here for additional resources pertaining to success planning provided by the National Council of Nonprofits.
Does your non-profit operate with a succession plan? If so, what is in it? Looking at the aforementioned list of bullet points, is your agency able to answer these questions today? If not, what steps can you take to start addressing these issues in the next six months?
Please scroll down and use the comment box below to share your thoughts and experiences. We can all learn from each other.
Here’s to your health!
Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

Will you know when it is your time to leave and how to do so gracefully?

the end1Welcome to O.D. Fridays at DonorDreams blog. For the last few years, we’ve looked at posts from John Greco’s blog called “johnponders ~ about life at work, mostly” and applied his organizational development messages to the non-profit community. For the foreseeable future, John is taking a break from blogging and our Friday organizational development blog series will morph into something else. Stay tuned!

In this week’s post titled “Your Stage Now,” John announces to the world that he needs a break from blogging. He simply tells us that he is going on hiatus, and he isn’t sure if and when he will start-up again. In the meantime, he invites everyone to use his blog platform to share their organizational development stories.

After shaking off the suddenness of this announcement, John’s post reminded me of a time when I was an executive director working for a local non-profit organization. During that time, it wasn’t uncommon for the following three questions to visit me like the ghosts of Christmas past, present and future:

  1. Will this board meeting be my last? Is this the meeting when my board will ask me to leave?
  2. Will I know when it is time for me to go? Will I be able to leave or will I be asked to leave?
  3. When it is my time to go, will I be able to fade from the stage with grace?

Yes, those six years of my life were filled with anxiety and stress. No, I was not fired. In fact, I like to think I did a nice job. I did leave on my terms, and I think I left gracefully.

John’s post this morning brought all of those memories flooding back mostly because he exited the stage with class, dignity and grace. His post also reminded me of how many non-profit professionals (and even board volunteers) I’ve seen throughout the years who are completely and utterly unprepared for this moment. It is as if they never contemplated the possibility and it crept up on them like a stealthy cat.

the end2Here are just a few examples of what those situations looked like:

  • The board terminating their executive director due to performance issues.
  • The non-profit professional deciding it was time for a change, which usually meant they were leaving for greener pastures (or so they thought).
  • The executive director resigning because a BIG issue was about to bite them in the butt, and they would rather pull the pin on the grenade instead of being shot by the board.
  • The fundraising professional being squeezed out as a result of a new boss being hired with new priorities in the middle of a re-org and shake-up.
  • A non-profit professional suddenly realizing that it is time to retire and move into their golden years.
  • A board president quitting suddenly because their child is no longer involved in the agency.

Upon leaving the stage, I’ve seen lots of good and lots of bad. I’m sure you have, too, Sometimes people just run away and hide. Other times, I’ve seen the big hook used to pull that person off of the stage. The following are just a few things that I’ve seen and heard that make me cringe:

  • I’ve heard executive directors and fundraising professionals assuring donors, volunteers and board members that everything will be OK after they leave. (This feels pretentious and always leaves me wondering if they have doubts that everything is going to actually be OK.)
  • I’ve heard bad mouthing and airing of grievances. (This looks cowardly and spiteful.)
  • I’ve seen people simply take their hands off of the wheel in their final days and weeks on the job. (This looks reckless.)

You’re probably thinking that in these situations those were “bad people“. The reality is that I’ve seen both poor professionals and iconic professionals do things like this. I’ve also seen volunteers who I revere accidentally step into some of these pitfalls.

the end3The definition of the word “grace” according to a Google search is: “simple elegance or refinement of movement“.

The previous bullet points are not good examples of “grace“. However, when I think about myself, I know that I am not a naturally graceful person, which is probably why I obsessed about “the end” and felt the need to think through and plan my exit. (Yes, I recognize that I have control issues and I am working with my counselor to address this. LOL!)

While I encourage you to not obsess (like I did) over what the end will look like, I think it is healthy to contemplate it from time-to-time. And when the end does finally come, I think it is responsible to put a thoughtful plan in place to ensure a graceful exit with a smooth transition.

The following are just a variety of different links and resource that I think you might find useful:

Do you have any tips or tricks for how to exit the big stage with grace? Do you have a story about a fellow co-worker or board volunteer who left in a less than perfect way? If so, what could they have done differently to make it a better departure? Please use the comment box below to share your thoughts and experiences. We can all learn from each other.

On a personal note, I want to thank John Greco for providing the DonorDreams blog readers with countless “Organizational Development Fridays” over the years. I wish him a restful break and hope he comes back to the blogosphere when he is ready because the world is better place when he is blogging and sharing his perspective on how to grow our organizational capacity and manage change.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847

State of the Nonprofit Sector: Remainder of 2013

Good morning, DonorDreams blog subscribers. I thought I’d give you a day off from my random non-profit and fundraising thoughts by offering you an awesome guest post by Ashley Halligan. She is a managing editor at Austin-based Software Advice and a very talented freelance features writer. Check out her book project on Facebook:  Enjoy!

State of the Nonprofit Sector: Remainder of 2013
By: Ashley Halligan

state ofSix weeks into the new year and last year’s reports are coming to surface helping shape the expectations for the remainder of this year in the nonprofit sector.

With the beginning of President Obama’s second term, a recovering economy, and a fiscal cliff, nonprofits have – well – a lot to discuss and anticipate in 2013.

Several reports have been released in the past month that indicate 2012’s performance and trends, offering insight as to what to expect this year. Among those things are hiring trends, succession planning, adoption of mobile technology, social giving campaigns, and, most predictably, differing opinions on the impact of tax reform and proposals on the missions of nonprofits.

More Hiring & Succession Strategizing

The Improve Group and Nonprofit HR Solutions released a report that showed 44 percent of the nation’s nonprofits planned to create new positions this year. Positions in direct services in fundraising were at the forefront of organizations’ plans to hire.

According to the same study, 70 percent of nonprofits lacked a formal succession plan, though those who had implemented a strategy reported that it brought their organization peace of mind, developed talent, and retained staff. Experts expect focus in this area to become a primary area of focus this year.

Deploying More Technology & Social Giving Campaigns

Another main area experts and reports agree on is the increase of technology deployment in the nonprofit sector. In particular, a Blackbaud report shows that mobile technology will be significant this year with more than two-thirds of surveyed NPOs planning to utilize more mobile tech this year.

Additionally, more and more nonprofit technology companies are emerging giving organizations in this sector far more options, ranging from fully integrated suites to specialized programs for basic needs like fundraising or donor management.

This year a bigger emphasis is expected to be seen on social giving campaigns as well. The 2012 Nonprofit Social Network Benchmark Report says to expect three things:

  1. The monetization of Facebook
  2. More usage of Google+
  3. Increased fundraising efforts through Twitter

Some are Weary of Tax Uncertainties, Others See Promise

Tax promises and concerns, however, are still at the top of mind in the nonprofit sector. Till months pass and charitable giving trends can be analyzed, long-term impacts of the American Taxpayer Relief Act can’t be certain. Some think the act could positively impact giving by $3.3 billion, while others still fear proposed tax ceilings fearing a negative impact of the same amount.

This is a big year for nonprofits. A lot is yet to be determined. What is your take on the state of nonprofits for the remainder of 2013? Feel free to leave your comments below or reach out to us directly.

ashley sig

Non-profit organizations turn, turn, turn . . .

Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking more closely at a recent post from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

Today, I am focusing on a post that John wrote that was inspired by a baby crib mobile. He uses the mobile as an analogy for organizational change and equilibrium. Throughout his post he references both major and minor changes in the corporate landscape and talks about how those cultures balance and re-balance.

As I dwell on this post, I think about a number of non-profits who I’ve had the honor of working with throughout the years:

  • There is the organization who employed one of the most talented fundraising professionals I ever knew, and they decided not to re-hire the position after his departure. Needless to say, their resource development efforts are struggling.
  • There is the agency whose most influential and engaging board volunteer resigned due to “burn out,” and they decided to not find ways to keep him engaged. Needless to say, he faded away and isn’t even a donor anymore.
  • There is an executive director who freaked out after the economic crash in 2008, decided to lay off his grant writer and assumed on all of those responsibilities in addition to his regular responsibilities. Needless to say, someone is feeling overwhelmed and burned out.

I think the baby crib mobile is such a great analogy for what non-profits deal with on a daily basis. In fact, I think it is even more appropriate for non-profit organizations than for-profit corporations. Why? Simply look at how much juggling the average organization does because of significantly limited resources. Consider how much more important a board of directors is to the functioning of a non-profit organization compared to a for-profit corporation. So, when one talented employee or influential board volunteer leaves, then everything feels off off-kilter and the struggle for equilibrium feels like a roller coaster ride.

Looking at a non-profit through this mobile lens, I see a chaotic, whirling dance of people that’s bobbing and dipping and threatening to crash and burn.

The difference between a non-profit organization crashing and burning versus re-balancing to find a new equilibrium is huge and highly dependent on their approach to managing change. To some extent, I also believe that organizational cultures that embrace planning at their core and actually implement and adhere to those plans (e.g. succession plan) during times of change are the most successful at re-balancing in a graceful manner.

Those organizations, who don’t have very much capacity and make poor decisions during tumultuous times, end up in crisis. Sure, balance is ultimately achieved, but at what price?

The bad news for these types of non-profits is that change is a constant in our world, and their baby crib mobile probably looks like the tangled and dysfunctional one that hung above my crib (because you know that I was the kid who could never leave anything well enough alone).  🙂

Looking back at the three examples that I described at the beginning of this post, I see a common thread . . . LEADERSHIP. I am talking about both board leadership as well as executive leadership. There is no doubt in my mind that the key to successfully keeping your organization from getting tangled and unbalanced is talented, engaged and committed leaders.

And isn’t that just the perfect cherry on top of the sundae when you look back of all of this week’s blog posts? Again, I want to thank my friend and colleague, Dani Robbins, for guest posting all week-long on board development and executive leadership. I am very happy that she will be contributing a board development post to DonorDreams blog every month.

After reading John’s blog post, I can’t get this song out of my head. So, I thought it would be appropriate to end this post with it.


How chaotic is your organizational mobile? Do you have a story about how your agency managed “change” really well? Please scroll down and share it with the rest of us in the comment section.

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC!/eanderson847