Five Common CEO Succession Mistakes

(and How to Avoid Them)

In an earlier post, I proposed that every nonprofit CEO needs an exit strategy because every career and every job ends in a transition, eventually. It’s just a matter of when, how and how well-managed that transition will be when the time comes. I also proposed that departing CEOs face three jobs, two of them new. In addition to leading the organization, part of the CEO’s leave-taking process should involve helping ready their organization for the transition and preparing themselves for life’s next chapter. Building on that article, here are some common CEO succession mistakes that nonprofits frequently make and how you can avoid them.

  1. Reacting rather than “proacting.”

Often the board responds to the CEO’s departure announcement by rushing through the process, trying to fill the position as quickly as possible. Hiring a chief executive is a critical project where cutting corners can have a tremendous cost. It’s one of the board’s prime responsibilities—a responsibility that they should undertake carefully and deliberately. Frequently boards are put under the gun because the departing CEO doesn’t disclose their departure intentions soon enough. Executives wait too long because they fear becoming a lame duck or they’re uncertain about how the board will react to the news.

How to avoid it: Begin the succession preparations as early as possible; at least a year or more is ideal to lay the best groundwork. If you must hold off on telling the board you are leaving (say, until less than six months before your departure), then encourage the board to appoint an interim or acting chief executive. Bridge leadership will give them time for a thoughtful search and selection, and they won’t feel compelled to rush the transition process. (See the Executive Interim Network on LinkedIn. Or search “nonprofit interim executive” on LinkedIn. There are many talented executives who have experience in guiding organizations across a gap in CEOs. )

  1. Underestimating the challenges of a chief executive transition.

Many boards grossly underestimate the challenges involved in a CEO transition. This is especially true when that change involves a long-term or founding executive. The board sees it solely as a hiring problem. In reality, it’s a major organizational change project that includes a hiring process at its core.

How to avoid it: Make sure the board looks beyond the search and takes into account the change management aspects of the transition. Ensure the board recognizes all the dimensions of the CEO role and that they see this is a “big deal” change for the organization, its people, and its community.

  1. Not making the job doable for the successor.

Many currently seated executives grew into their roles as their organizations grew up around them. As a result, many CEO jobs are overly complex and sometimes idiosyncratic. Without some job redesign, the weight of current responsibilities might crush a successor, or it may be difficult to find candidates to fill a role that’s overly influenced by the unique character and interests of the departing executive.

How to avoid it: You and the board should take the time to unpack and refit your job. Jettison what no longer fits. Drive out the complexity where possible, especially responsibilities that are particular to your unique interests or that require a peculiar skill set. Look at the bench depth and configuration of your senior management team, specifically the opportunities for delegation. Consider augmenting or reconfiguring the management team if necessary.

  1. Facing the rearview mirror instead of the windshield.

Instead of taking the time to plan and calibrate the position to the future, sometimes the board just dusts off the current job description. Job descriptions are usually ancient artifacts – relics from a time gone by. And when they are up to date, they frequently reflect leadership qualities that got the organization to where it is today. Those may not be the best leadership specs to guide your nonprofit into the future.

How to avoid it: In addition to unpacking and refitting, the job needs to be recalibrated to the current and future leadership needs of the organization. Make sure the board has a deep discussion about the organization’s future direction. Ensure they consider what kind of leadership that future organization needs, and further, that they use that knowledge to shape a fresh set of job requirements.

  1. Overestimating the board’s ability to execute the search and manage the transition on their own.

Your board may have members with hiring experience in their professional lives, but hiring a nonprofit chief executive is fundamentally different than hiring for most other jobs. First, the transition is a complicated organizational change process that requires deft political skills, good communications, and project management capability. Second, too often boards don’t recognize what they don’t know about the CEO job. They see a sliver of the job around board meetings, but not the rapid-fire, day-to-day environment, the gear-shifting between leadership and management, or the range of responsibilities involved in the job and the mental bandwidth required to cover them all.

Even the best, most engaged boards rarely understand the full nature of the CEO’s job without some serious preparation and support. Moreover, the search and selection process and the transition management are two unique and taxing responsibilities for a part-time volunteer board.

How to avoid it: Make sure the board chair appoints the best leadership on the board to the planning committee. Encourage the committee to carefully consider their capacity for managing the project. Ensure that they have appropriate support to manage this complicated set of processes. Insist that they get outside counsel to guide them if necessary. (There’s an excellent resource on LinkedIn: see the Alliance for Nonprofit Management group page. The Alliance has members who are skilled at leadership succession, executive search and transition – specifically for nonprofits.)

The bulk of these CEO succession mistakes can be avoided by planning well and starting that planning early. There are two terrific tools for getting the process started without having to announce your departure intentions. The first is sustainability planning — planning that ensures that the organization is as stable and sustainable as possible before your successor takes over. The second is the development of a board-adopted CEO succession policy. Working through the development of this policy will build the board’s outlook and competency around the succession process, again without you having to state your departure intentions.

A sustainability plan and a succession policy are good management tools that every organization should have in place, reflecting practices that any organization can undertake at any time. Free guides for both of these tools, including templates, are available here.