Why is succession planning taboo?

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Did you ever wonder what two words would cause accomplished adults to behave like ostriches burying their heads in the sand?  The answer seems to be “succession planning.” Apparently nonprofit board members and executives will do everything possible to avoid hearing or speaking those words. Yet succession planning is essential, and should not be taboo.

Interestingly, this phenomenon is not limited to nonprofits. According to research published in the Harvard Business Review, the for-profit “CEO succession process is broken in North America,” with about “half of companies with revenue greater than $500 million hav[ing] no meaningful CEO succession plan.” Even among “those that have plans [most] aren’t happy with them,” with “only 20% of responding HR executives [reporting they] were satisfied with their top-management succession processes.”

Still, that’s no excuse for nonprofits. A nonprofit undergoing a leadership transition is at a very vulnerable point in its lifecycle. All leaders leave at some point, sometimes unexpectedly, so all organizations need to prepare for this eventuality. But unfortunately, succession planning – if not “ostrich-inducing” – is the “elephant in the room” that no one wants to acknowledge. We hope that instead of avoiding this delicate issue, boards will behave responsibly by teeing up the issue of succession planning for a direct discussion. Board members who ignore succession planning do so at their nonprofit’s peril. They are ignoring serious risks to the future stability of the nonprofit, and abdicating their own fiduciary obligation to take care of the nonprofit (the legal “duty of care”).  

When approaching succession planning, recognize that there are at least three distinct scenarios to address. The first involves “emergency” transitions, whether temporary (such as caused by a major illness) or any other unplanned departure. Taking a regular look at the organization’s plans for emergency leadership succession, such as annually during the CEO’s evaluation, keeps it fresh which can mitigate confusion in an emergency. The second scenario addresses the advance planning that most people associate with “succession planning.” The final scenario is often the most overlooked: onboarding the new leader. Too often nonprofit board members think that their job is over once a CEO vacancy is filled. Ideally onboarding is a long process that provides new CEO with support throughout the first year.

The responsibility for a smooth transition lies not just with the board of directors. Current CEOs/executive directors who are planning to leave have a huge responsibility too. Ideally they will help prepare the organization for a smooth transition of leadership. We find the candor and wisdom of outgoing CEO, Dennis McMillian, of the Foraker Group in Alaska compelling as he describes how he knew when it was time to leave and helped his organization prepare for his transition; and this post to be inspiring, as it describes a thoughtful and transparent leadership transition at the Princeton Community Foundation. In it, Nancy Keiling, former CEO of the Princeton Area Community Foundation, describes her role as the departing CEO, and how the community foundation approached its goals of both successfully onboarding the new CEO, and keeping the board engaged as the new CEO stepped into the traces.

Engaging in a thoughtful succession planning process for both staff and board leadership is a key factor for a nonprofit’s ability to adapt and thrive. In its most recent national study of board governance practices, Leading with Intent, BoardSource reports that only 34% of nonprofits have written succession plans in place, while 50% are facing a leadership transition in the next five years. BoardSource goes on to note that: “Boards are weaker at the more adaptive work (work where the problems are more complex, the path is not proscribed, and multiple solutions are viable)” than the technical work, such as legal compliance. This is as true when dealing with board transitions as it is with transitions of the paid chief executive, as the findings underscore that recruiting/identifying the right board members is increasingly difficult. When polled, both board chairs and CEOs (22% and 25% respectively) reported that “building a stronger leadership pipeline” was among the top 3 areas needed for board improvement.

Despite the taboo nature of the topic, we are pleased to report that state associations of nonprofits play a leadership role in keeping the conversation about leadership succession front and center in nonprofit board rooms around the country and offering individual organizations assistance, ranging from executive transition services, to peer learning programs for board chairs and CEOs, and even board member recruitment resources. From Alaska to Maine, state associations of nonprofits in our network speak boldly about the challenges confronting nonprofits during leadership transitions, and work hard to offer practical resources and individual assistance to help nonprofits navigate successful searches and onboarding of new leadership. However, a huge challenge for all charitable nonprofits remains. Leaders leave. And when they do, the resulting transition can make or break the nonprofit’s future.

To discover the leadership transition resources available to your nonprofit locally, connect with your state association of nonprofits.

Starting points for successful leadership transitions:

  • We’re glad you’re here. Here are the keys. We’re tired.” Why don’t boards do a better job of following through to help onboard the new CEO they just hired? A thoughtful orientation for a newly hired executive is so important, yet it’s a hard thing for boards to do right: Boosting nonprofit board performance where it counts (Stanford Social Innovation Review).
  • Transition readiness planning” may sound less threatening than “succession planning.”
  • Four case studies of founder transitions (Raffa)
  • What factors can torpedo a successful transition of leadership? Here are 5 (Huffington Post)
  • More resources about succession planning (National Council of Nonprofits)
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