While every nonprofit and its executive director transition is unique, leadership transitions tend to follow seven broad patterns. Each of these types requires its own set of actions to manage the transition effectively.
We’ll get into the types in a moment, but first, let’s look at some of the overall factors that most influence the transition and, therefore, the approach to managing it.
There are executive-related factors such as the circumstances surrounding their departure, how long the executive has been in the role, the executive’s impact on the organization, and whether the executive is a founder or a founder-like leader who has reshaped the organization.
There are also organizational factors, such as size, maturity, operating conditions, culture, and outlook. Together, these factors shape the succession situation.
Across all these transition types, the board must resist the temptation to view the succession process as merely a hiring challenge. As I’ve noted in another article, executive succession and transition involve organizational changes that extend far beyond deciding who sits in the CEO’s office.
Type #1 – The High-Performing Organization
The organization is performing well and is well-led. Most or all of the programs and business components are performing well or at an exemplary level. Usually, this type involves a departing executive who’s leaving on good terms — a respected executive who may even be beloved by the organization. Often, they’re a “hard-to-follow” leader, another type we’ll cover in a moment.
Challenge
The transition management challenge is to sustain the organization’s record of success.
Key transition management actions
- Don’t skip the assessment. Take the time to identify the key factors driving the organization’s success. Then take those factors into account when defining future expectations, the requirements for the role, and the type of leader needed for the position. Avoid fixating on the departing leader’s characteristics; instead, look closely at the organization and its leadership needs. Then identify the leadership requirements for the new executive.
- Resist the temptation to find a successor who is just like the departing executive. Everyone must recognize that the leadership attributes that brought the organization to where it is today may not guarantee success in the future. It’s not about filling old shoes but about defining the new shoes and filling them.
- Take a hard look at the executive’s current responsibilities and workload. Given the executive’s likely tenure, the board may be facing the challenges described in the section on “hard-to-follow executives” below.
- Consider using events or other activities to help people come to terms with this change and bring this leadership era to a positive close. Receptions and roasts — and even that much-maligned retirement dinner — are important rituals that provide a psychological line of demarcation.
Type #2 – The Underperforming Organization
The organization is performing poorly, or it may have peaked and could start to decline without a change in direction or strategy. Everyone involved — funders, board members, and key staff — may believe the organization has lost its mojo and is in serious need of revitalization.
This is one of the most challenging transition types because it lacks the energy and excitement of a “sustained success” situation, which we covered above. Nor does it have the “house on fire” clarity of a turnaround, another transition type we’ll discuss next.
Challenge
The board’s challenge is to diagnose the problems, reorient the organization, and reimagine the executive’s role. That’s a lot to ask; they’ll undoubtedly need outside help — a consultant skilled in conducting organizational assessments. Some organizations in this situation, depending on size and level of malaise, will hire an intentional transition or turnaround executive — someone who’ll come in for, say, 12 to 24 months — to shepherd the organization through a deliberate change process.
Key transition management actions
- Diagnose the situation. Conduct an organizational assessment, or, better yet, an organizational sustainability review to get a handle on the underlying issues that the transition must address.
- Determine whether the situation is approaching a turnaround. If so, the board should bring in an interim or transition executive to help turn the corner. (Sorry, departing CEO. If the organization is in this situation, you’re probably not the best person to lead the turnaround.) The interim should be someone from outside the organization — a seasoned executive skilled in leading turnarounds.
- Reorient the CEO job. Define a vision for the revitalized organization and outline the major elements of the revitalization plan. Then translate that into specifics — the leadership characteristics and early-stage priorities for the new executive.
- Be honest with the candidates during the search process about the rejuvenation required.
Type #3 – The Turnaround
Organizational conditions have reached a perilous state. The organization may be facing extreme financial or political challenges. In short, the organization is in some level of crisis. The situation might be further complicated by mismanagement or a scandal that erodes confidence and morale. It might also involve a messy departure of the incumbent executive, which we’ll discuss in a moment.
Challenges
The board must meet the situation head-on, which requires acknowledging the crisis and then working to understand the underlying issues. They must avoid the “hide, hire, and hope” approach some boards take. Facing a turnaround, some boards either discount the situation or minimize the problems. Then they hire a new executive in the hope that the new executive can pull the organization out of the tailspin.
The board should call a timeout and appoint a skilled interim executive to help resolve the situation, stabilize the organization, and develop an action plan. This might involve a turnaround plan, a merger or acquisition, or a divestiture and the closing of the organization.
Key transition management actions
- Stabilize the management situation by appointing an interim executive if necessary. This likely means looking outside the organization for someone whose skills match the challenges the organization faces.
- Make an initial assessment of whether the organization is viable or can be made viable.
- Decide whether the organization should continue — or whether a merger, acquisition or a plan to close the organization is in order. (See the article, Two Courageous Questions to Ask Before Launching Your Executive Director Transition for more on winddowns and mergers and a list of resources.)
- If the decision is to move forward, work with the interim to further stabilize the organization and craft a turnaround plan. This will involve more in-depth organizational work. Most likely, the board will need external assistance with assessment and planning.
- During the search process, avoid “over-steering” in the opposite direction when hiring the new executive. Boards sometimes over-steer by focusing on avoiding the perceived deficiencies of the former executive in their next hire. The board needs to take an objective, balanced view of the organization’s present and future leadership needs as the basis for the job specs.
- Be honest with candidates about the organization’s challenges and the board’s commitment to working with the new executive to build toward a new future.
Type #4 – The Hard-To-Follow Executive
The departing leader is a founder, a long-tenured executive (10+ years in the role), a transformational leader who’s substantially grown or reshaped the organization, or any other larger-than-life CEO. Comments about the transition may include statements like “hard act to follow” and “big shoes to fill.”
Challenges
Because of the imprint they leave on the organization, the departure of a founder, long-term, or transformational executive will likely be seen as a sea change. The transition may also involve major changes to the CEO role, the executive team, or other aspects of the organization because they’re deeply linked to the departing leader’s thinking, skill set, and personality. There are also strong emotional bonds that are about to be severed.
Beyond finding an appropriate successor, the board’s key challenges include careful communication about the departure, unpacking and reshaping the CEO role to ensure it’s doable for a successor, and rethinking the board’s and the executive’s respective roles. Resist the temptation to seek a successor who’s a mirror image of the departing executive.
Key transition management actions
- Make sure the departure announcement is well-planned and carefully handled. The news of the executive’s departure could send shockwaves throughout the organization.
- Recognize that the transition may also involve significant changes beyond who sits in the CEO’s office. This includes changes to the chief executive’s role, possibly to the executive team, and to other aspects of the organization.
- Unpack, refit, and recalibrate the CEO role to ensure it’s successor-ready. Take a hard look at the executive’s responsibilities and workload. The board should make every effort to ensure the executive role is manageable for a successor, for example, by eliminating extraneous duties that may have accumulated for a long-tenured executive, or by augmenting the senior leadership team to provide the new executive with additional support.
- Unpack to understand the role in practice, not just what’s on paper.
- Refit to remove outdated responsibilities, delegate those that no longer fit, and add those that are missing.
- Recalibrate to reflect the future leadership needs of the organization. The board must get clear about the organization’s direction and consider that as they update the job responsibilities and qualifications.
- Recognize that changes to the management team may be needed downstream to accommodate the newly defined CEO role. The team may need to be augmented to assume those delegated duties and possibly address roles and gaps the current executive has been covering.
- Resist the temptation to find a successor who’s a mirror image of the departing executive. As in Type #1, it’s not about filling old shoes but about defining the new shoes and filling them.
- Reassess the board’s roles and be prepared to recreate the board-executive relationship. The board-executive relationship is the most important in the organization. The dynamics of that relationship should be re-examined when transitioning to a new CEO. The board’s composition may also need to be re-examined.
- As in Type #1, consider using events or other activities to help people come to terms with this change and achieve a positive closure to this leadership era.
Type #5 – The Messy Departure
The departing executive has been fired or forced out. Although the termination might have been abrupt, the situation might have been festering. As a result, it has likely affected staff morale and possibly stakeholder confidence.
Challenge
The board needs to take action on several fronts at once, especially if there was misconduct or a dramatic event that precipitated the termination.
Key transition management actions
- Stabilize the organization. Messy departures create an emotionally charged environment. Address staff morale in the near term and stakeholder confidence in the long term. That requires both attention and communication. The next two actions may need to be taken in parallel with the stabilization work.
- Sort out the communications plan. The board might need crisis communication support if the termination involved a public breach of trust or a scandal.
- Appoint an acting or interim executive. This might be an acting executive from within the management ranks or a skilled interim executive from outside the organization. In either case, the situation calls for someone who can stabilize the organization, restore morale, and build trust.
- Avoid “oversteering” when hiring the new executive. Don’t let the perceived deficiencies of the former executive color the hiring process. Instead, focus objectively on the organization’s current and future leadership needs.
- Don’t heap the blame on the departing executive. Making them a scapegoat or magnifying their shortcomings can mask other contributing factors, such as the board’s culpability in allowing the situation to occur.
Type #6 – Internal Promotion
The board promotes an internal candidate without conducting an executive search. This isn’t an exclusive type, as it could occur in combination with any of the previous situations.
Challenges
The board shouldn’t use a promotion to bypass the work involved in conducting a vigorous search and a rigorous selection process. An open, competitive search that considers external and internal candidates equally is usually the best way to ensure the board’s due diligence. If the decision is to move forward with a promotion, it should be preceded by the same preparation as for a full-on executive search — preparing the organization, preparing the job, and so forth. And it should be followed by good onboarding and proper post-hire support.
Key transition management actions
- Carefully weigh the pros and cons of this approach. Don’t use promotion as a way to avoid the work of conducting a proactive search.
- Don’t skip the “prepare” task as discussed in the article What to Do When Your Executive Director Leaves. As with all transitions, the board must understand the scope, nature, and dynamics of the circumstances surrounding it. Attention must also be given to the other preparation steps: preparing the organization and ensuring the job is successor-ready—unpacking, refitting, and recalibrating the job as discussed above.
- Use a rigorous vetting process and don’t confuse familiarity with experience. Boards sometimes place too much weight on a candidate’s knowledge of the organization or familiarity with the candidate, and they may overcompensate for missing critical skills. Knowledge and familiarity are no substitute for skills, experience, and leadership attributes. The board should be rigorous in reviewing candidates, whether they’re internal or external.
- Don’t skip the “onboarding and support” task. Regardless of where they’re coming from, the new executive will still face a learning curve, and there’s always an extended period of adjustment and relationship-building. In short, just because it’s an internal candidate doesn’t mean it’s a “plug-and-play” situation.
Type #7 – First Hire
The organization is hiring its first executive because it’s a startup or an established nonprofit shifting from all-volunteer management to paid staff.
Challenges
In established organizations, the key challenge is separating board members’ and volunteers’ hands from management roles, creating a clear distinction between what’s now management and what’s now governance. That involves clarifying the executive’s job, reimagining the board’s and volunteers’ roles vis-à-vis the executive, and managing everyone’s expectations “now that we have staff” to avoid overloading the new executive.
Key transition management actions
- Design a realistic set of duties and expectations for the new role.
- Communicate clearly what’s changing and what’s not — which decisions and responsibilities will be transferred to the executive.
- Use a proactive process to redefine the roles of volunteers and the committees that have operational functions.
- Proactively redirect the board’s role from management to governance.
- Manage expectations. Recognize that this is a cultural change, and old habits die hard. It may take time to bring people around.
Conclusion
While every organization’s situation is unique, these seven situations represent common archetypes.
For help sorting out your organization’s transition situation, click here to send me an email with your questions or book a free one-on-one call.
And for more on managing executive transitions, see the related articles below and check out my new book, The Nonprofit CEO Succession Roadmap: Your Guide for the Journey to Life’s Next Chapter.