While every nonprofit and its executive director transition are unique, these leadership transitions tend to follow seven broad patterns. And each of these types needs its own set of actions to manage the transition well.
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 their departure circumstances, how long the executive has been in the role, their impact on the organization, and whether the executive is a founder or a founder-like leader who has reshaped the organization.
And there are organizational factors, such as size, maturity, operating condition, culture, and outlook. Together these factors shape the succession situation.
Across all of these transition types, the board must avoid the temptation to see the succession process as merely a hiring challenge. As I’ve pointed out in another article, executive succession and transition involve organizational changes that reach 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’s perhaps even beloved by the organization. Often, they’re a “hard-to-follow” leader, another type that 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 that are driving the organization’s success. Then take those factors into account in defining the future expectations, the requirements for the executive’s job, and the type of leader needed for the position. Avoid getting fixated on the characteristics of the departing leader, and instead, look deeply at the organization and its leadership demands. Then identify the leadership requirements for the new executive.
- Resist the temptation to find a successor just like the departing executive. Everyone must recognize that the leadership attributes that got the organization to where it is today may not spell success in the future. It’s not about filling old shoes but defining the new shoes and filling them.
- Take a hard look at the executive’s current responsibilities and workload. There’s a high probability that this executive has been in place for a while, so the board may be facing 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 come to positive closure of this leadership era. 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 think the organization has lost its mojo and is in serious need of revitalization.
This is one of the most challenging transition types because it doesn’t have 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 that we’ll talk about next.
Challenge
The board’s challenge is to diagnose the problems, reorient the organization, and reimagine the executive’s job. That’s a lot to ask; undoubtedly, they’ll need outside help — a consultant who’s skilled in conducting organizational assessments. Some organizations in this situation, depending on the organization’s 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.
- Decide if the situation borders on 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 pull it out.) The interim should be someone from outside the organization — a seasoned executive who’s 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 needed.
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 resulting in an erosion of 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 doing what some boards do, which is “hide, hire, and hope.” Facing a turnaround, some boards discount the situation or minimize the problems. Then they hire a new executive with 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 sort out the situation, stabilize the organization, and develop an action plan. This might involve a turnaround plan, a merger/acquisition, or divestiture and closing the organization.
Key transition management actions
- Stabilize the management situation, appointing an interim executive if necessary. This probably means reaching outside the organization for someone whose skills match the challenges the organization is facing.
- 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 down 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, then work with the interim to further stabilize the organization and craft a turnaround plan. This will involve some more in-depth organizational Most likely, they’re going to need outside assistance for the assessment and planning.
- During the search process, avoid “over-steering” in the opposite direction when hiring the new executive. Boards sometimes over-steer, 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 present and future leadership needs of the organization as the basis for the job specs.
- Be honest with candidates about the organization’s challenges and the board’s commitment to work with the new executive to build towards a new future.
Type #4 – The Hard-To-Follow Executive
The departing leader is a founder or a long-tenured executive (10+ years in the role), or a transformational leader who’s substantially grown or reshaped the organization, as well as any other sort of larger-than-life CEO. Comments about the transition may involve 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/transformational executive will likely be seen as a sea change for the organization. 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. And, there are strong emotional bonds that are about to be severed.
Beyond finding an appropriate successor, the board’s key challenges involve a combination of careful communication about the departure, unpacking and reshaping the CEO job to ensure it’s doable for a successor, and rethinking the board’s and executive’s respective roles. And resist the temptation to try to find 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 a shock wave throughout the organization.
- Recognize that the transition may also involve significant changes beyond who sits in the CEO’s office. Certainly, this means 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 job to ensure it’s successor-ready. Take a hard look at the executive’s responsibilities and workload. The board should make every effort to make sure the executive job is doable 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 holes the current executive has been covering.
- Resist the temptation to try 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 defining the new shoes and filling them.
- Reassess the board’s roles and be prepared to recreate the board-executive relationship anew. The board-executive relationship is the most important in the organization. And the dynamics of that relationship should be re-examined when transitioning to a new CEO. And the board’s composition may need to be re-examined too.
- As in Type #1, consider using events or other activities to help people come to terms with this change and 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. So, it has probably had an impact on 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 usually involve an emotionally charged environment. Attend to staff morale near-term and stakeholder confidence longer-term. That involves 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 some crisis communication help 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 it might be a skilled interim executive from outside the organization. Inside or outside, the situation calls for someone who can stabilize the organization, restore morale, and build trust.
- Avoid “over-steering” when hiring the new executive. Don’t let the perceived deficiencies of the former executive color the hiring process. Instead, focus objectively on the current and future leadership needs of the organization.
- Don’t heap the blame on the departing executive. Making them the scapegoat or magnifying their shortcomings can mask other contributing factors, such as the board’s culpability in allowing the situation to happen.
Type #6 – Internal Promotion
The board promotes an internal candidate without conducting an executive search. This isn’t an exclusive type, as it could be in combination with any of the previous situations.
Challenges
The board shouldn’t use the promotion as a means 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 responsibility is carried out. 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 means to avoid the work involved in conducting a proactive search.
- Don’t skip the “prepare” task as discussed in the article What to Do When Your Executive Director Leaves. As in all transitions, the board must understand the scope, nature, and dynamics of the circumstances surrounding the transition. And attention must be given to the other preparation steps: preparing the organization and making sure that 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 put too much weight on a candidate’s knowledge about the organization or their familiarity with the candidate and thus 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 it’s an established nonprofit that’s shifting from all-volunteer management to paid staff.
Challenges
In established organizations, often the key challenge is peeling the board members’ and volunteers’ hands off the management roles, creating a 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 are going to be transferred to the executive.
- Use a proactive process to redefine roles — the roles of volunteers and the committees that have operational functions.
- Proactively redirect the board’s role away from management to strictly governance.
- Manage expectations. Recognize that this is a culture change, and old habits die hard. It may take time to bring people around.
Conclusion
While every organization’s situation is different, these seven situations present 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.