Suppose the founder or long-time executive director of your not-for-profit organization is scaling back on her workload and making plans to retire. What will her departure mean for your organization? If your nonprofit has a well-crafted succession plan, it’s likely to survive any leadership transition. But if you don’t have a plan, your organization could endure a rocky period, and possibly close. Even if your top leader intends to remain in the job for years, illness or another unanticipated event could disrupt plans. For these reasons, every nonprofit needs a formal succession plan.
Good succession plans anticipate all variables. Assembling a succession plan team of managers, professional advisors and board members can help ensure your nonprofit builds a workable plan. The team will want to consider following these five steps:
- Define the Role
Before you fill the shoes of a departing executive, you’ll need to understand the role. If you’re replacing a founder, that person likely had a big hand in shaping your organization and its values. This includes establishing your nonprofit’s mission, building its financial support network and creating a vision for its future. Other long-serving executives may have had a similar impact on the role.
But times change. You may not want to fill a founder’s shoes with someone who will be as broadly involved in your nonprofit’s operations. For example, your organization may have grown significantly, making micromanagement of its managers, departments and programs impractical. So think about where your nonprofit is today and where it’s likely going. Then detail the attributes the position will require. You may decide that the leadership position needs to be split in two or even into more positions to be effective.
- Get Board Buy-in
When developing the plan, the team should solicit feedback from your full board of directors. In fact, the board’s vision for leadership should be reflected in the criteria for the job. For example, board members may want the next leader to arrive with a proven fundraising record and be prepared to focus on growing your nonprofit’s donor base. Or they may want a leader well-versed in policy issues, who will be able to advance your organization’s cause with the media and politicians.
It’s important that employees (particularly, the current executive director) and the board are on the same page and able to come to mutual decisions. After all, the succession committee will want to leverage the personal and professional connections of board members when it comes time to recruit a new executive.
- Anticipate Scenarios
Another consideration is the nature of a succession. Be sure to map out several scenarios:
Emergency situations. These occur when a top leader unexpectedly dies, becomes disabled or resigns with little notice. They usually require the succession team to drop everything and search for a replacement. You might want to give the team the option of hiring an interim executive while it looks for a permanent leader.
Planned departures. This is common when a leader retires and provides ample notice before the event. Planned departures give the team more time and greater flexibility. In these circumstances, your nonprofit should be able to find the best fit for the job, with input from the current executive.
Strategic changes in leadership. Some leadership transitions have the potential to become contentious. If, for example, your board wants to make a change but encounters executive hostility, they may need to work with outside counsel. However, good communication and sensitivity to feelings can go a long way in preventing such conflict.
- Groom the Best and Brightest
You team may already be aware of a highly qualified candidate waiting in the wings. Or the field may be wide open. In most organizations, the search begins internally, particularly if the top leader works closely with a deputy.
If your executive hasn’t mentored a possible successor, put in place a program to groom future leaders. This program should target the best and brightest in your organization and provide them with leadership skills. This may require additional training, educational coursework and special assignments. Be sure potential successors are enthusiastic about pursuing a possible management role and understand expectations.
- Pull the Trigger
The optimal time frame for an executive search is six months to a year, but it can vary widely based on the position and your organization’s needs. Make sure you factor in time to recruit, perform reference checks, conduct several rounds of interviews and winnow down the choice to one.
When you’re ready to offer the job to a candidate, formalize the terms in writing with legal counsel. Your board will likely be involved in crafting the compensation package.
Even the best succession plan can’t anticipate every possible obstacle. However, documenting a plan now can help prevent panic when you need good sense and cool heads to prevail.
Michael Cecere, CPA, MST is a Gray, Gray & Gray partner and chair of the firm’s Non Profit Practice Group. He can be contacted by telephone at (781) 407-0300 or via email at: email@example.com.