Is Your Nonprofit Ready for the Boomer Retirement Wave?

The wave is here and building

In 2011 we witnessed the beginning of a major social phenomenon that received very little attention in the media — the leading edge of the Baby Boom generation began to turn 65, the traditional age for retirement. This age cohort, born in the 19 years between 1946 and 1964, added nearly 80 million* residents to the US population. By contrast, the 19 years following the “Boomer generation” saw only 66 million births, including the 12 years between 1965 and 1976 that are commonly characterized as the “Baby Bust.”

Demographers are fond of saying that “demographics is destiny.” Having this huge swath of the US population heading towards retirement years followed by a much smaller cohort has obvious implications. While turning 65 doesn’t mean automatic retirement (especially in today’s economy), it certainly puts one in the neighborhood. Because of this demographic phenomenon coupled with the explosion of nonprofit organizations between the late 1960s and 1980s, many nonprofit organizations –admittedly not all – are led by chief executives who are part of the Boomer generation. While it’s not going to happen all at once, particularly over the next decade we are going to see a dramatic sea change in leadership, throughout society including the nonprofit sector. The implications for nonprofit organizations are profound, both the service implications as well as the management and leadership issues, which is the focus of this article. So, as leaders, what can we do?

Chart of US Births from 1940 to 1994

Put succession planning on the table

In many organizations, it seems that no one wants to bring up the “S-word.” We must get beyond our discomfort with succession. Leadership turnover is a fact of life. Every career ends in a transition. It’s simply a matter of when, how, and how well the organization has planned for the transition. Succession planning is a terrific tool for getting over the fear of the S-word and putting appropriate plans in place. An emergency backup plan – a plan that outlines key roles, identifies critical relationships, and designates backup for those roles and relationships – not only helps organizations plan for the worst-case scenario, but by going through the actual planning process, helps to illuminate bench depth and related issues. A board adopted succession policy helps the board think through how it would handle a CEO transition before it’s confronted with it. The emergency backup plan and succession policy are succession essentials that every organization should have in place, at least for its CEO if not its entire management team, regardless of their age demographic. These are critical tools that, as part of its fiduciary role, the board should expect its organization to have in place.

For transitions likely to occur in the next 2-5 years, a departure-defined succession plan can help leaders ensure that their organization is in the strongest possible position to weather the transition. For example, when an organization considers the departure of a long-term or founding executive (positions that are typically difficult to adequately fill), a departure-defined plan can help unpack the job and make the job more doable for his/her successor. Leader development plans can help you cultivate leadership within your organization, increasing your bench depth in the near-term and cultivating potential successors for the long-term.

Increase your transition savviness

For organizations that are facing an imminent transition – leadership turnover that will take place in the next 18 months – executive transition management is a tool developed to guide organizations through a three-stage process to manage the turnover effectively and increase the organization’s capacity to deliver its mission in the process.

Even if your organization is not facing imminent retirements among your staff, they will certainly be happening around you. Take a look at the demographics in the state offices that control your grants and contracts. Look among your critical alliance partners and referral sources. What about the association leaders who represent you in your state capitals and in Washington, DC? Over the next few years, there is going to be a changing of the guard. You must be prepared to do more relationship cultivation and adjust to the new leaders around you than you have in previous years.

Be prepared to reach deeper in the ranks

Recently, a national leader in the developmental disabilities field asked us, “Where’s the generation following our current crop of CEOs?”  Our response was, “They are there, but there are fewer of them.” Essentially, this question was, where are the leaders in their mid-30s to mid-40s? This is the “Baby Bust” generation, born between 1965 and 1976. The reality is that this age cohort is about half the size of Boomer generation – about 42 million compared to about 79 million boomers. This mathematical fact has some leaders worrying about an impending leadership deficit. This is nonsense. The people are there.  We also don’t know how Boomers will approach retirement. Common speculation is, because of health and economic reasons, they will stay in the workforce well past 65. We just need to think and act differently – begin to develop leaders earlier, grooming younger leaders than we might have in past years, develop more savvy about working across generations, and potentially redefine jobs to accommodate an aging segment of the workforce that, for economic reasons, may have to work at least part-time well past retirement age.

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*This also includes the net effect of immigration – 75 million births plus immigration minus emigration, or about 79 million. A version of this post previously appeared in LINKS, the newsletter of ANCOR – the American Network of Community Options and Resources.