In troubled financial times and baby boomers reaching retirement, changes in leadership will be commonplace as staff is cut, and board members and executive officers move on.
But "transition" doesn't mean "crisis." It can be an opportunity to re-evaluate, re-organize and re-energize an organization, panelists said at the October Governance Matter Roundtable.
Proper planning prevents crisis. Your agency's response should not be an "ohmygod!" moment; it should be the time to pull out a transition plan that was prepared before the transition occurred.
"Few things affect an organization more than executive change," said John Corwin. Change at the top dramatically affects all aspects of the organization. Insecurity will be particularly acute if the person departing was a founder.
- Funders worry that the program will suffer.
- Staff morale plummets as people wonder if their jobs are secure or vie for promotion.
- Key relationships -- with funders, vendors or clients -- may be lost.
- Key projects may slow down or stop if the departing person was their driving force.
- Institutional knowledge may be lost.
- Services to clients may suffer without leadership.
A good plan considers all these stakeholders.
At a minimum, a transition plan should include communication with media, with funders, with staff and with clients.
"Communication is vitally important," said Jonathan Small, who works for the Nonprofit Coordinating Committee of New York. "Put yourself in the other person's shoes. If you were a funder [or staff member or client], what would be on your mind? Reach out and answer their concerns."
Board members may have to take on different roles during transition, said William Falahee, controller for the I.M. Kaplan Fund. The board may need to be more hands-on, contacting funders and working with staff in ways beyond the norm.
"Capturing information is very important," Small said. "People who have been around a long time know stuff. Is that knowledge somewhere others can access it?"
Preparing for transition requires that more than one person knows how things get done, whom to contact, which funders to approach about a given project. It means keeping job descriptions up to date.
"Develop a bench, not necessarily a successor," Corwin said. "Reduce dependence on one person."
A good plan should prepare for change in any critical position. The knowledge of key people outside the executive offices should be shared and documented as well.
Do it before you need it
If everyone is happy with current staff and agency direction, a transition plan is still needed. "If a succession plan is not in place, that is a red flag regarding stewardship," Corwin said. A transition plan for key staff and board members is, he said, part of "best practices" for any organization.
And really good leaders, whether board chairs or executive officers, will care about what happens after they leave. They'll want an effective plan in place that minimizes disruption in the organization.
Boards may be reluctant to broach the subject of people moving on, especially if they are dependent on or attached to the executive officers or board chair. They may find it easier if the idea is presented as a fact of life: Funders want to have confidence in continuity. You are at risk if you aren't prepared so be prepared.
Interim executive officers
A plan may include hiring an interim person, someone "pre-fired," with whom staff and board members can speak openly, and who can be objective about problems and changes that the board and the new, permanent leadership must address.
When no transition plan is in place, an interim executive is virtually required, the panelists agreed, to give the board a chance to assess where it wants the organization to go and what skills are needed in a new leader to achieve those goals.
"If the first thing you say is 'Oops! We've got to get someone,' that means you need to bring in an interim executive," said John Brothers, a senior fellow at the Support Center for Nonprofit Management, which works with organizations on planning for change at all levels.
"An interim executive director is a fantastic opportunity for an organization to take a look at itself, for strategic planning, for figuring out where you want to go," said Corwin, who serves as an interim chief executive for nonprofits in transition.
The needs of the organization may not be apparent until the interim executive comes in, listens to people, objectively assesses problems and suggests solutions. The replacement executive may need a different set of skills than his/her predecessor simply because the environment has changed.
More importantly, as an organization grows up, its needs to change. The entrepreneurial skills required by a start-up organization may not be appropriate for a mature organization. The board will have to look at its strategic plan -- where it wants to go from here -- in order to define the qualities needed in a new executive, Brothers said. In fact, the process for selecting a new executive is a form of strategic planning.
Role of the former executive
The panelists agreed that, as a rule of thumb, the outgoing executive officer or board chair should not become a member of the board. The inherent comparison of the two as they sit at the conference table is likely to become a problem.
That doesn't mean "out with the old, in with the new." Ideally, the new chair or executive officer will have easy and frequent access to his or her predecessor, but the new person should decide how that access is used. Best of all are overlapping terms in office, which allow the transfer of "added value" knowledge.
In time, the former leader may come back on the board, after the new leadership has had time to make their own mark on the organization.
Nonprofit organizations that need help planning for transition or that are embroiled in transition without a plan, can draw on many resources, including: