Executive Director Succession Planning: Preparing the Way for Leadership Transitions

Succession planning is the process of preparing for a change in staff leadership with the intent of assuring an organization’s sustainability through such a transition. A succession plan outlines the agreements board and staff members make about how the organization will develop and what actions will pave the way for leadership succession. Succession planning can also help an organization address the human side of change, including acknowledging the legacy of the departing executive director and setting the stage for the next staff leader.

Two approaches to succession planning have gained currency: Emergency succession planning involves defining backup procedures for fulfilling key executive director functions in the event of an unexpected departure or a planned short-term absence. Succession planning for strategic development involves assessing and strengthening management and governance capabilities and systems; this includes leadership development efforts and planning activities that involve the board and staff. Although succession planning may be triggered by a planned departure (e.g., an executive director plans to retire in two years), the process is useful whether or not a timeframe has been established for the current director’s tenure.

Although succession planning has generated a buzz in the foundation world and among organizations that provide technical assistance to nonprofits, it hasn’t caught on widely in the nonprofit sector. A national survey of 2,200 executive directors commissioned by the Annie E. Casey Foundation found that although more than two-thirds plan to leave their jobs within five years, most lack succession plans. In a recent article in The Chronicle of Philanthropy, Casey’s director of leadership lamented, “Succession planning is so important, but no one is doing it.”

There are many reasons executive directors and board members are reluctant to initiate conversations about leadership succession. Executive directors and the organizations they lead are often closely linked; letting go of the position may mean a loss of identity, community, and connections. Even when executive directors are ready to move on, the question “What next?” is not easily answered. In some cases, long-term executive directors have made financial sacrifices and lack adequate resources for retirement. Some staff leaders fear being forced out of their positions before they are ready, and others feel disloyal broaching the subject of succession.

For board members, the prospect of a change at the helm may raise fears about the organization’s future direction and financial prospects. Boards often rely heavily on their executive directors as visionaries and fundraisers. Conversations about executive director succession often point to the need for boards to step up to their governance responsibilities more fully. Finally, most board members are inclined to be supportive of executive directors and may perceive succession planning activities as a vote of no confidence.

The benefits of succession planning include lessening the potential negative impacts of an executive director turnover, such as a decline in fundraising, cutbacks in programs, anxiety among external stakeholders, and turnover in other staff positions or on the board. Other benefits are subtler. For example, the process of succession planning tends to reduce the intense feelings of isolation carried by executive directors, especially long-term directors, who are contemplating leaving their positions. As one director of seventeen years said during a recent board-staff work session on succession planning, “I feel a sense of relief. I no longer feel that this is all on my shoulders.”

Succession planning can be empowering for staff and board members as well. A succession plan creates positive pressure to deepen and broaden leadership capabilities among staff, rather than overloading the executive director. Similarly, if board members are engaged in planning for staff leadership succession, they are better prepared to eventually manage an executive director transition—one of their most crucial governance responsibilities.

Emergency succession planning, which is essentially the “backup plan” for a short-term absence of an executive director (or other positions), is a positive step for nearly any organization. A short-term absence may be planned—a vacation or sabbatical—or unplanned, such as an illness requiring medical leave or a resignation that leaves a gap between the departure of one director and the hiring of another.

An emergency succession plan answers questions such as: Who is authorized to appoint an acting executive director? Who will handle the work of the person(s) filling in for the executive director? How much authority will the acting executive director have? Who needs to be informed of the leadership transition, and how will stakeholders be notified? Who is authorized to speak for the organization? And, if the absence is permanent, how and when will the board initiate the search for a permanent executive director? An emergency succession plan can be created as a DIY project. The succession planning workbook developed by TransitionGuides includes handy worksheets to help accomplish the task.

Whether or not the departure date for the executive director has been set, a strategic development approach to succession planning may be initiated through an organization’s strategic planning process. This approach is also appropriate when a departure timeframe is known, such as a retirement, and ample lead-time is available. In taking a strategic development approach, the goal is to create a more sustainable organization. This includes assessing the organization’s culture and taking stock of key functions—financial management, fundraising, board development, etc.—as a basis for mapping out a succession plan, generally with a horizon of more than a year.

The executive director plays a primary role in defining and shaping an organization’s culture. Unfortunately, a group’s shared cultural assumptions (“how we do things around here”) usually operate outside of awareness and are taken for granted as “right and good.” According to culture expert Edgar Schein, if we are asked to discuss cultural assumptions, we tend not to examine them but to defend them, because we have invested emotionally in them. This is one reason the impact of culture is often underestimated during change initiatives including executive director succession.

At a recent conference workshop on succession planning, a board member of a Habitat for Humanity affiliate shared a story that illustrated the cost of failing to consider organizational culture as part of an executive director transition. When a personable but disorganized director left his post, the board determined that a more “business-like” staff leader was needed. They hired a retired businessman with a track record of private sector success. Unfortunately, the new executive director had no clue about how to lead an organization with a strong volunteer culture—an organization dependent on volunteer crews to achieve its mission. The director lasted three months and the board went back to the search, having learned the hard way that they needed a director attuned to the organization’s core value of nurturing volunteer spirit.

As part of succession planning, organizations have the opportunity to assess their organizational culture through sharing stories or taking part in other activities designed to reveal the cultural “glue” that holds their ways of operating in place. Once cultural assumptions have surfaced, a group can determine which of these norms are useful going forward and which have outlived their usefulness.

In pursing succession planning with an eye toward strategic development, an organizational assessment helps to clarify current strengths and weaknesses. The following framework, developed for the Neighborhood Partnership Fund’s Succession Planning Project, provides good starting point for an assessment dialogue on the front-end of succession planning. The functional areas included are board development; management, including staff development; financial management; fundraising; strategic planning; community relations; and public policy and advocacy.

• Board Development involves efforts to assess needs, recruit, train, engage, and evaluate board members. A strong board assures continuity through an executive director turnover. Board development often needs attention to prepare the board for its responsibility in selecting the organization’s next executive director, as well as to take on expanded communication roles with stakeholders during transition times.
• Management, including Staff Development. Management, in broad terms, involves attending to the whole organization—including the systems, communications, and modes of decision-making that enable an organization to carry out its work. Staff training and leadership development efforts are often incorporated within succession planning, as well as opportunities for individuals to take on new leadership responsibilities.
• Financial Management involves the policies, procedures, and systems for managing finances with accountability and transparency. In preparation for a leadership transition, it is critical to assure that financial management systems are in order, well documented and backed up.
• Fundraising includes the strategies, systems, and relationships an organization has in place for resource development. Organizations often experience a dip in fundraising with the departure of one executive and the integration of another. Therefore, an organization’s fundraising systems and financial position must be carefully considered in planning a transition. In addition, relationships with funders that have been forged by the executive must be passed to others in the organization.
• Strategic Planning is the process by which an organization reflects on its performance, shapes its vision and charts its course for the future. The process of creating or updating a strategic plan provides a natural opening for board and staff members to address leadership succession. Sharpening an organization’s strategic direction is an important precursor to recruiting a new executive director.
• Community Relations include formal and informal efforts to promote the organization and its mission to diverse stakeholders, constituents, clients, and partners. Because the executive director is often the public face of the organization, a change in leadership can be worrisome to stakeholders. A thoughtful communications plan should be incorporated within the succession process to keep stakeholders informed and to frame the transition as a natural part of the organization’s development.
• Public Policy and Advocacy involves monitoring public policy developments and taking appropriate advocacy actions to influence the larger political and economic system that in turn influences an organization’s ability to carry out its mission. Public policy and advocacy work that is dependent on the executive director will require special treatment during an executive transition.

When combined with an exploration of organizational culture, an assessment of the “state of the organization” based on functional areas helps to focus succession planning. Some areas will require more attention than others: Do financial management practices need to be formalized? Are donor relationships centralized in one person? Is board development work needed? Is the strategic plan gathering dust on the shelf while the organization struggles to choose among programming opportunities? As the board and staff clarify the areas needing development, a timeline can be created mapping the specific actions to be taken in preparation for leadership succession.

Through the Neighborhood Partnership Fund’s Succession Planning Project last year, I had the opportunity to work with organizations on every step of the succession planning process. What stood out most from those experiences was the dedication and courage of those involved, including executive directors, senior staff, and board members. These nonprofits had well-established directors seeking to strategically develop and prepare their organizations prior to their departures. Here are some of the main lessons learned:

Identifying positive core values eases the anxiety associated with leadership succession. Our succession planning work affirmed that naming what will go forward (core values) helps people to manage the loss associated with leadership succession. Through a process of sharing stories of “the organization at its best,” participants articulated the core values associated with their organizations. This was powerful for executive directors, because they saw that the “heart” of the organization was understood by others and would be well-tended beyond their tenure. It was also powerful for board and senior staff members, who will need to articulate the “intangibles” of the organization as they identify and integrate the next executive director and others new to the organization.

Participatory planning methods build ownership of succession plans. For each organization, the involvement of a board-staff steering committee throughout the succession planning process built ownership in the results. Planning activities included organizational assessment conversations, and a half-day work session attended by board members and senior staff with opportunities to exchange perspectives on the organization’s issues and needs. The work session culminated in a jointly created two-year timeline of major actions related to leadership succession.

For long-term directors, ample lead-time is desirable. For nonprofits that have grown up in tandem with their founders or other long-term executive directors, leadership succession is complex and often points to the need for additional infrastructure. Our succession planning work highlighted the dilemma facing many nonprofits with long-term staff leaders: These leaders have built up extensive knowledge and manage many partners, projects, and relationships. All this cannot simply be “replaced” by a new hire. Through succession planning, board and staff members developed a fuller understanding of organizational realities and needs. Their succession plans defined concrete steps for organizational development. Examples included strategic board recruitment for particular skills, expansion of management staff, and additional fundraising systems and/or initiatives.

Succession planning paves the way for acknowledging legacy. Founders and other long-term executive directors are heavily involved in many aspects of the organizations they lead, but the work of acknowledging and celebrating their legacies falls to others. Succession planning is a vehicle for board and staff members to begin thinking about how they will acknowledge the executive director’s contributions—publicly and privately—and how the organization will build on the director’s legacy.