Successful Succession for Continued Leadership

Corky McReynolds, PhD, Director / Professor Emeritus (retired)

Introduction & Background

Our profession is being impacted as retirements are increasing, and the dynamics of leadership transitions can be challenging. Many organizations are asking how to maintain momentum as leadership changes. This discussion focuses on a topic usually referred to as “succession planning.” However, there needs to be more clarity about what succession planning really is and what it means to a nonprofit organization. Based on the literature’s definition, most nonprofits are not genuinely practicing succession planning. This article presents the nature of succession planning and how it is integrated with the other processes that impact leadership change.

Definitions

Leadership Continuity Plan — A comprehensive plan to identify and develop positions, people, and placements in the event of key leadership unplanned or planned change. The Leadership Continuity Plan includes the Succession, Contingency, and Leadership Transition Management plans.

• Succession Plan — A long-range development process that invests resources to build internal capacity and continuity for the replacement of people in key leadership positions.
• Contingency Plan — The Leadership Contingency Plan identifies an immediate and temporary replacement for the ED/CEO or other key leadership positions in the event of an emergency or sudden absence of the ED/CEO.
  • Short-Term Absence — 3 months or less
  • Long-Term Absence — 4 months or more
  • Acting ED/CEO (or other lead position) — A temporary (short or long-term) internally assigned role to serve as ED while remaining responsible for their permanent position.
  • Interim ED/CEO (or other lead position) — A temporary (usually no more than 12 months) and external seasoned professional hired to serve as ED, who only assumes the duties of that position. 
• Leadership Transition Management — The process that prepares an organization for the planned replacement and transition of the ED/CEO includes three stages: organizational readiness, search and screen options, and transition activity for new leadership success. 

Succession Planning 

Succession planning is the process of “having the right people in the right positions at the right time” (Atwood, 2020). The concept of succession planning arose from small family-owned businesses to identify an heir apparent. Nonprofits do not normally operate this way, so the concept evolved into identifying an individual to take over leadership if something happened and the Executive Director/CEO was suddenly unable to continue. The process of a temporary new leader is the result of a contingency plan, rather than a succession plan.

A Succession Plan requires a long-term investment of funds and time to develop the staff capacity to fill roles across the organization. This is a proactive process that requires an organizational assessment along with identifying the skills needed for future leadership (Wolford, 2009). To meet the industry’s definition of succession planning, the organization must budget funds for staff and board development, build shared leadership, and prepare for executive leadership (Atwood, 2020). A nonprofit ED/CEO’s responsibility for the succession plan is to build individuals for leadership in the profession, rather than to identify an individual as their permanent replacement (McReynolds, 2006).

A Succession Plan identifies an individual(s) and/or position(s) that could serve as an ED/CEO. Key skills for that position are listed, and an individual identifies gaps they may have. For example, a key skill may be financial management, but the individual may not have that knowledge or experience, so they enroll in a nonprofit financial management course. The organization pays for the course under the goals of the Succession Plan. In addition, the current ED/CEO or designee is assigned to mentor the individual and engage them with the organization’s financial management processes and procedures. Through formal education, direct experience, and mentoring is now prepared to serve in an ED/CEO capacity. However, this process does not identify this person as the heir to the position. Rather, the purpose is to prepare the individual for advancing in the profession.

Leadership Contingency Plan

The contingency plan is what many nonprofits call their succession plan. The question is, if there is an immediate departure of the ED/CEO who temporarily takes over? If the organization has had an active Succession Plan in place for a couple of years, then one or more individuals should be already identified and prepared for the role. If the organization does not yet have a Succession Plan, or the plan is new, then the Contingency Plan provides options for the board to consider and implement.

There are two basic options.

1. Acting (Internal) ED/CEO is a current staff person with qualifications to serve in that capacity. The contingency plan should identify the position rather than an individual since personnel could change. However, an individual could also be named since roles and positions within the organization could also change. If a #2 position (Associate, or Assistant Director) has been demonstrated in the organizational chart, then the Acting role should be automatically assigned to that position.
   • If an Acting is assigned, that person carries out the ED/CEO role while also remaining active in their original role. If the organization has the resources, then the Acting may be able to serve solely in that role while their position assignments can be distributed.
   • If the ED/CEO has a planned return, no other action must be taken.
   • If the ED/CEO is not returning, the board engages in the Leadership Transition process, which includes the eventual Search, Screen, and Select activities.
2. Interim (External) is a trained professional from outside the organization’s staffing resources. The Interim ED/CEO is a professional and is often a retired former ED/CEO. This can be expensive, and care should be taken to assess the approach and full costs of contracting a professional Interim. An interim can be a current or former board member with the experience and skill set needed for the position. This approach must also be approached with care, making sure the interim has the skills and the right attitude with no hidden agendas.

The board should establish limitations on the levels of responsibility. Both Acting and Interim roles are temporary, so some boundaries should be provided. Examples include no major shift in the organizational direction and no major expenditures without board approval.

Leadership Transition Management

Commonly referred to as the Search and Screen process, there are other activities to be included that lead to a more comprehensive and successful result. There are three phases to replacing a full-time permanent ED/CEO (Wolfred, 2009).

1. Organizational Readiness is a set of internal explorations of the state of the nonprofit. During leadership change it is a good time to reflect on the current position of its direction, culture, and sustainability. This is less important if the nonprofit has a legacy of strategic planning with a current and viable vision and healthy culture. In this case, the internal assessment may be limited to interviewing and or surveying key stakeholders, staff, and board. If the organization faces substantial challenges, a deeper look into operations may be necessary. All of this is important information to align the anticipated needs of the organization with the next executive leader. If a search firm or a professional interim is contracted, then this assessment is usually part of that role. 
2. Search & Screen (S&S) is the process of seeking and reviewing applicants and then reaching a point of assessing final candidates that could serve as the next ED/CEO. (McReynolds, 2006). An ad hoc committee of board, staff, and a key stakeholder or two should be appointed to oversee the process. If a professional consultant or search firm is contracted, then the process is managed externally with committee engagement. If the process is handled internally, then the committee is engaged from the very beginning to the final decision. Careful consideration of cost and desired results must be a factor when engaging with an outside search firm or consultant.
3. Transition is the organization’s responsibility to adequately guide the transfer of exiting leadership and the new leader entering the position. The ad hoc S&S team should sunset after its final recommendation has been forwarded to the board and a new leader has been contracted. A new ad hoc transition team should already be identified with the role of celebrating the former leader, welcoming the new leader, and providing orientation to things as trivial as the location of the ED/CEO’s office to as important as introductions to key donors and stakeholders. 

Why not keep this role with the S&S? First, it is a different responsibility although certainly a couple of S&S members may wish to continue, especially for the incoming board chair or key staff person. Secondly, the S&S folks, as a committee, are tired and have completed their role. New energy for a transition team with a new role will aid in the new leader's success.

Leadership Continuity Plan 

This article describes three distinct and interrelated processes that, working together, can build and maintain leadership continuity during leadership change and transition. A Succession Plan builds capacity for future leadership. A Contingency Plan fills immediate and temporary leadership needs. The Transition Plan identifies, secures, and aids in the success of new and permanent leadership.

The current board and ED/CEO should review and determine the status of their plans and which plan may be needed, revised, or completed for leadership continuity and organizational well-being.

Summary

This article introduces the concepts and practices of leadership transition, but many details remain for each process. See resources for complete process descriptions.

Although somewhat outdated and needing more specific information on increasing opportunities for diversity, the monograph In Search of Extraordinary Leadership does describe best practices for the Search & Screen process. Refer to Succession Planning Basics for those details and Managing Executive Transition for the overall process.

A few pointers from years of experience working with executive leadership transitions include:

• Be careful of executive search firms that remove the early stages of the process from the S&S team. Best practices keep the S&S in control of all stages to keep the process open and inclusive.
• Communicate the progress to the board and staff on a regular basis, keeping individual applicant names confidential until the final candidates are invited to the organization.
• The S&S should include the board, staff, and a key stakeholder or two while keeping the team to a manageable size of 7-9 members.
• A Succession Plan only exists if funds are allocated and used for professional development. 
• Always keep the celebrations of the outgoing leader separate from the incoming leader.
• Don’t panic, and don’t rush the process to replace a leader.
• Avoid the temptation to hire a new leader that mirrors the outgoing leader.
• A transition team is an undervalued and critically important part of the new leader’s experience.

Although retired from consulting, I am happy to discuss leadership continuity based on the information in this article. You can reach me at .

References: Succession Plan/Leadership Transition 

Books

• Atwood, C. (2020). Succession Planning Basics. ATD Press.
• Bridges, W. (2009). Managing Transitions: Making the Most of Change. De Capo Press.
• Gilmore, T. (2003). Making a Leadership Change. Choice Press.
• Kelly, M. & Powell, M. (2022). Who Comes Next? Leadership Succession Plan Made Easy. Sound Wisdom.
• McReynolds, C. (2006). In Search of Extraordinary Leadership: Securing Your Next Executive Director. Association of Nature Center Administrators.
• Tebbe, D. (2008). Chief Executive Transitions: How to Hire and Support a Nonprofit CEO. Board Source.
• Wolfred, T. (2009). Managing Executive Transitions: A Guide for Nonprofits. Fieldstone Alliance.

Articles/Handouts

• Adams, T. (2006). Staying Engaged, Stepping Up: Succession Planning and executive transition management for nonprofit boards of directors. Annie Casey Foundation.
• Wolfred, T. (2008). Building Leadership Organizations: Succession Planning for Nonprofits. Annie Casey Foundation.
• NA. (2008). ETI Overview of Succession Planning. Greater Milwaukee Foundation.
• NA. (2021). The Clarity Transition Guide to Emergency Succession Planning. Blue Avocado.
• NA, (2018). Graceful Exit: Succession Planning for High-Performance CEOs. Leap of Reason Ambassadors Community.

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