Nonprofit Succession and Transition Planning
I recently received a note from Interim Executive Director who simply stated, “This is an interesting time at our agency.” The code words “interesting time” turn out to be euphemism that I have heard from more than one nonprofit agency that did not adequately plan for the succession of leadership. Without a clear succession plan, nonprofit leaders spend more time, energy, and money, managing leadership transition. Often such transitions are treated as a crisis rather than a valuable and proactive opportunity of change that can strengthen an organization.
To understand how pervasive the lack of succession planning is one only need to consider last year’s Pacific Northwest Nonprofit Survey report. One of the most startling data points from this large survey was that only one in ten nonprofits have a written succession plan to guide the process in the event of a planned or unplanned executive leadership transition. Really? 90% of nonprofits have not taken the time to create written succession and transition plan? Oy vey!
Let us be very clear. A succession and transition plan is an intentional written document and supporting policies to guide the planned or unplanned transition of nonprofit executive leadership. While such planning for nonprofits is traditionally thought about as a process reserved for replacing an executive director, the most forward thinking nonprofits will have a succession plan for other key positions in an organization as well.
In this post I want to push you to think beyond, “I know this is important but we just can’t find the time and resources” excuse for not planning. Here are four core reasons why proactive succession and transition planning is essential to your nonprofit organization.
1. Opens a Strategic Decision Making Process: I believe that the most valuable aspect of succession planning is that it opens up a strategic conversation between your nonprofit board, staff members, and other key stakeholders. While succession planning is not intended to be strategic planning (tho it can be part of it), the succession and transition planning process offers a chance to think and act strategically. Succession planning allows you to identify gaps in current leadership, anticipate future leadership needs, and, done correctly, leads to stronger organizational leadership today.
A strong succession and transition plan involves an assessment of the management team as well identifying other organizational staff members who might be or contribute to the future leadership, if (and when), leadership vacancies occur. The cascading effect that should follow is that leadership development, cross- training, and mentoring or coaching of staff in order for them to develop a deep understanding of your nonprofit’s inner workings becomes part of the organizational culture — here and now. Succession planning is about building leaders with the efforts starting today and not at some point in the future.
2. Reduces Anxiety: At its best, all leadership transition creates some anxiety. Change management literature is clear about the role of anxiety that accompanies transitions. Anxiety about change is normal. Whether it is the departing leader, the board of directors, staff members, or organizational partners (including funders), those connected to leadership transition experience anxiety. However, anxiety needs to be managed and a written, proactive succession plan is the best intervention to reduce anxiety. Planning for the future normalizes change and creates a purpose and direction when the inevitable does happen. During the process of change, a team has more control when there is clarity around the expectations of the leadership transition, milestones, and timelines. It is in the absence of such clarity that a board member or Interim Executive Director might confess, “This is an interesting time at our agency.”
3. Minimizes Disruptions: A succession and transition plan also helps a nonprofit maintain a high level of functioning during the transition. Everyone know who is doing what, when, and how. Conversely, perhaps the greatest vulnerability created by the absence of a written succession and transition plan is the disruption that it can cause within the nonprofit. A vacuum is created when there is no plan for how to ensure that organizational operations continue and how leadership is managed during the transition. It is unfair, if not unrealistic to expect staff and board members to compensate for the lack of forethought and planning. I will be blunt on this point. Leaving a nonprofit to flounder without a plan when there is a leadership transition is poor leadership and governance that borders on negligence and malpractice.
4. Creates a Return on Investment: The return on the time your agency invests is planning is the final driver for succession and transition planning. Creating a succession and transition plan is an energizing to an organization and a relatively low cost process when done in advance of a succession –even if you use a consultant. However, I have spoken with more than one nonprofit board chair scrambling to deal with an unplanned leadership transition where the deferral of planning has created an excessive burden on the whole organization. Decision-making is often clouded and the nonprofit board and/or organization staff often confuses expensive nonprofit recruiters or “emergency executive director” service providers with an emergency transition plan. At the point of this crisis, nonprofit organizations are willing to spend two or three times as much money to solve a problem that could have been prevented through a positive planning process. Further, research from national advisory firm CEB, suggests that there is a “long-tail” of costs and loss related to productivity and leadership that can be attributed with poorly planned transitions (CEB Blog Post).
Strategy+Business magazine calls poor corporate world succession planning a $112 Billion Problem and given the nonprofit data about how poorly nonprofits do in succession planning, we can see that nonprofits are acting just like corporations. Not a flattering assessment. The lack of planning for succession and transition drains energy, efficiency, and resources from the mission-focus of too many nonprofit organizations.
In short, the importance of proactive nonprofit leadership succession and transition planning cannot be underestimated. Responsible nonprofit boards and leading edge nonprofits invest in succession and transition planning. Conversely, for the rest of the sector, where the process of succession planning never reaches the top of the “to-do” pile, the consequences are significant. Neglecting succession planning it is too often at an organization’s peril and is realized only when the board and staff find itself living though the reality of organizational leadership change unprepared. The time to opt in and develop a nonprofit succession and transition plan is now.
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