La Piana Consulting // April 12, 2018 13:56
The Crisis/Opportunity of an Executive Transition
The departure of a CEO or executive director is a destabilizing event for any organization, but it can also create the conditions for unlocking innovation. With 67% of nonprofit leaders planning to leave their current position in the next five years, such sweeping changes could send the sector reeling, or be a catalyst for creative strategic responses — it’s how we prepare that will make the difference.
Many nonprofits are woefully unprepared, let’s be honest. Fewer than 25% have a succession plan, despite warnings since the early 2000s about the looming leadership deficit. The 2008 recession may have postponed some retirement plans, but ten years later we’re faced with the reality that leadership turnover can only be deferred for so long.
So why are succession plans still so rare? Because these are hard conversations to have; they tap into professional and personal emotional territory. To help nonprofit leaders and their boards approach these critical conversations with greater confidence — and in a constructive way — we offer seven tips, summarized below and described in more detail here.
1) Have conversations about succession planning before you need to.
2) Set the context.
3) Know where you want the conversation to go but be open to new information.
4) Pay attention to your own intentions and emotions.
5) Listen to and be receptive to the reactions of others.
6) Try to "add light and not heat."
7) Close every conversation with next steps.
Navigating a Successful Succession
Starting the conversation is a first step toward developing a thoughtful plan. Taking such a proactive approach opens up the potential to not only avert a crisis but to identify and seize strategic opportunities.
One example is that leadership transitions can be a catalyst for conversations about a potential merger. This isn’t about a lack of confidence in bringing up next generation leadership from inside the organization or the ability to hire from outside. It’s more about recognizing that two organizations may be good candidates for merger, but the question of “Who will lead the new organization?” posed a barrier — until now.
Another area of opportunity is strategy development. A departing long-term leader likely made their mark on the organization in a profound way, much of which may have served the organization well; even so, it may also have contributed to complacency in “the way we always do things,” or stuck thinking. Engaging in strategic planning with a succession lens can result in a fresh take on the organization’s overall direction. There that there are two schools of thought about the sequencing of strategic planning vis-à-vis a leadership transition: On one hand, engaging the board in strategic thinking may help inform the search for new leadership; on the other hand (and what we see more commonly), the newly-hired leader will likely want to be part of developing the strategy they are tasked with carrying out.
- Finally, it is important to recognize that for many organizations, a leadership transition puts the board front-and-center in a way that may feel unfamiliar or uncomfortable. It can be an opportune time for the board to seek external expertise to help navigate the intersection of governance, strategy, and change management that lies at the heart of a successful leadership succession.
What are your most pressing questions about leadership transition? What have you experienced as the greatest barriers to succession planning? Share in the comments below or contact us by email.