Succession Planning

A change in executive leadership is inevitable for all organizations and can be a very challenging time. A successionplan policy is a tool to help an organization be prepared for planned or unplanned absences of the director, clarifyingauthority and decision-making, and thereby maintaining accountability and ensuring stability.

Elements of a Succession Plan Policy

• Statement of commitment to prepare for inevitable leadership change.• Statement of commitment to assess leadership needs before beginning a search.• Plan to appoint interim leadership to ensure smooth operations and compliance with contractual

obligations.• Outline of succession procedures including:

o internal management succession to the interim position,o time frame for making the interim appointment,o time frame for appointing a board transition committee, ando roles of the transition committee, e.g., communication with stakeholders, identifying a transition

management consultant, conducting an organizational assessment and designing the search plan.

Sample Executive Succession Plan Policy

Policy Statement:

A change in executive leadership is inevitable for all organizations and can be a very challenging time. Therefore, itis the policy of the [ORGANIZATION] to be prepared for an eventual permanent change in leadership - eitherplanned or unplanned - to insure the stability and accountability of the organization until such time as newpermanent leadership is identified. The board of directors shall be responsible for implementing this policy and itsrelated procedures.

It is also the policy of the board to assess the permanent leadership needs of the organization to help insure theselection of a qualified and capable leader who is representative of the community, a good fit for the organization'smission, vision, values, goals and objectives, and who has the necessary skills for the organization. To insure theorganization's operations are not interrupted while the board of directors assesses the leadership needs and recruits apermanent executive officer, the board will appoint interim executive leadership as described below. The interimchief executive officer shall ensure that the organization continues to operate without disruption and that allorganizational commitments previously made are adequately executed, including but not limited to, loans approved,reports due, contracts, licenses, certifications, memberships, obligations to lenders or investors of the[ORGANIZATION], and others.

It is also the policy of the [ORGANIZATION], to develop a diverse pool of candidates and consider at least threefinalist candidates for its permanent CEO position. The [ORGANIZATION], shall implement an externalrecruitment and selection process, while at the same time encouraging the professional development andadvancement of current employees. The interim CEO and any other interested internal candidates are encouraged tosubmit their qualifications for review and consideration by the transition committee according to the guidelinesestablished for the search and recruitment process.

Procedures for Succession:

For a temporary change in executive leadership (i.e., illness or leave of absence) refer to the organization'sPersonnel Guidebook. In the event the chief executive officer (CEO) of the [ORGANIZATION], is no longer able

to serve in this position (i.e., leaves the position permanently), the executive committee of the board of directorsshall do the following:

1. Within 5 business days appoint an interim CEO according to the following line of succession:a. chief operating officer (COO) of [ORGANIZATION]b. senior vice president of the parent affiliate of the [ORGANIZATION]C. external consultant (with experience as an interim executive director)

2. Within 15 business days appoint an executive transition committee, in the event that a permanent change inleadership is required. This committee shall be comprised of at least one member of the executivecommittee and two members of the board of directors. It shall be the responsibility of this committee toimplement the following preliminary transition plan:

a. Communicate with key stakeholders regarding actions taken by the board in naming an interimsuccessor, appointing a transition committee, and implementing the succession policy. Theorganization shall maintain a current list of key stakeholders who must be contacted, such aslenders and investors of the [ORGANIZATION], foundations, government agencies, and other.

b. Consider the need for consulting assistance (i.e., transition management or executive searchconsultant) based on the circumstances of the transition.

c. Review the organization's business plan and conduct a brief assessment of organizationalstrengths, weaknesses, opportunities and threats to identify priority issues that may need to beaddressed during the transition process and to identify attributes and characteristics that areimportant to consider in the selection of the next permanent leader.

d. Establish a time frame and plan for the recruitment and selection process.e. Refer to the CEO Hiring Policy and Procedures in the Personnel Guidebook for additional

procedures.

The board should use similar procedures in case of an executive transition that simultaneously involves the chiefexecutive officer and other key management. In such instance, the board may also consider temporarilysubcontracting some of the organizational functions from trained consultant or other organizations.

Succession Planning and Sustainability in Nonprofit Organizations

> Executive The secondTransitioninitiative in a series

concerningleadership succession planningfrom the Executive TransitionsInitiative.

by Mindy Lubar Price

In the previous issue, we detailedthe importance of having anemergency succession in place.This article will discuss succes-sion planning as an ongoing partof organizational developmentand Sustainability in nonprofitorganizations. Effective succes-sion planning requires a strongpartnership, built on trustbetween the Executive Directorand his or her board of directors.It is also an indicator of a healthynonprofit organization, somethingto look for before funding anorganization or sitting on anonprofit board.

In the case of nonprofit organiza-tions, succession planning means"building our bench strength" anddeveloping a pipeline of leaderswho are strong and capable.Leadership development innonprofit organizations can bedifficult due to scarcity ofresources, time, and money.Nevertheless, the intention todevelop and maintain strongleadership is a strong determiningfactor in an organization's futureviability. Moreover, practicingongoing succession planningprinciples keeps an organizationprepared in the event that thereshould be a leadership vacancy.A successful pipeline includesboth employees of the organiza-

tion and the board of directors:people who are able to take on avariety of leadership roles withinan organization at a time of need.

Strategies to develop these lead-ers need to fit with theorganization's overall strategicplanning process and need to beoccasionally reviewed andupdated - just like all other goalsand objectives of the organization.This type of succession planning,when incorporated into all prac-tices of an organization, helps tostrengthen the organization'scapacity for long term Sustainabil-ity. When can this work begin?The answer is now. Successionplanning is something to considerwhen an organization does itsannual budget preparation. Takea look at how many resourcescan be dedicated to staff trainingand development and to boardleadership development.

Just like effective fund develop-ment and sound fiscal practices,succession planning can bebrought into an organization'spractices immediately. In additionto providing external opportuni-ties for staff and board to growtheir leadership capabilities, it isalso important for staff to be"cross trained" in each other'sduties and responsibilities. If anorganization's size permits, it isalways a best practice to havetwo to three individuals on thesenior leadership team ready andprepared to fill in for the execu-tive director in the event of anunanticipated absence. This doesnot mean that any of those indi-

viduals will necessarily be aninterim executive director, nordoes it mean that they are ulti-mately being groomed for theexecutive director position.Rather, it gives these individualsthe opportunity to learn theessential roles and responsibilitiesof the executive director for theirparticular organization. With asuccession plan in place, if thereis an executive director vacancy,the process of managing thattransition is much easier. Theensuing transition managementand search process can be main-tained at a very healthy pacewhen an organization is able tosupport day-to-day functionsbecause of their succession plan.

Succession planning should be ashared responsibility between theexecutive director and the boardof directors. It is important tonote that in larger organizationsthe succession planning goesbeyond just the roles of the exec-utive director and looks at theentire senior management team.It is the responsibility of everyexecutive director to identifystrong leaders within his or herorganization and to help themgrow. It is also incumbent uponthe executive director to clearlydelineate his or her key tasks asthe top professional at the organi-zation. The executive director,however, cannot develop asuccession plan in isolation of theboard of directors or it will neverbe successful. Talking about staffsuccession planning can also spurthe board of directors to look atboard succession planning as

well. Some organizations willestablish a succession planningsubcommittee of the board aseither an ad hoc committee or atask force that meets at leastannually or semi-annually tomake sure that essentialelements of succession planningare in place.

Senior staff welcome the oppor-tunity to develop theirleadership abilities. Staff areusually supported in their effortsto grow their programmatic ortechnical expertise, but arerarely given the opportunity togrow their broader leadershipabilities such as administration,financial management, funddevelopment and board relation-ship cultivation. When thesetypes of responsibilities arevalued and nurtured, a succes-sion plan can be put into placemore easily.

Not only is it essential todevelop a succession plan, butonce you have one, it is impor-tant to inform your staff, board,external stakeholders and funders.Staff will gain confidence, know-ing that the organization isprepared for what could be apivotal time of change in its life-cycle - an executive transition.The board and potential funderscan invest their time and moneywith the assurance that theorganization will last.

Succession planning should beaddressed even when there isno reason to believe that a lead-ership transition is about tohappen. Tim Wolfred and JanMasaoka of Compass PointNonprofit Services, a programpartner to the Executive

Transition Initiative in Wisconsin,recommends that organizationsask themselves the followingquestions when developing asuccession plan:

+ Does the board of directorshave the right mix ofmembers for hiring a newexecutive?

+ Is the executive director'sjob, as it currently stands,doable? Particularly infounder-led organizations, anexecutive director's job can solarge or unique that it is notpractical that any new singleindividual will be willing orable to take it on. The new jobdescription may have to bechanged.

^ Is the executive director'scompensation level equi-table? Another essential aspectin succession planning is ananalysis of the compensationfor the current executive direc-tor. It does not serve anyorganization well to under-payor undervalue an executivedirector.

Another important reason to dosuccession planning is that itdirectly impacts the effectivenessof the next executive director,since it allows an organization toremain as healthy as possibleduring a transition and gives anew executive director a clearmap of where the organizationneeds to go. Succession planningis really about ensuring continu-ity in an organization's functionsover time. This process has longbeen overlooked in the nonprofitsector, but organizations of allkinds are beginning to implement

succession strategies into theirplanning processes. Having asuccession plan in place offersgreat rewards for the staff, board,funders and the larger commu-nity, The development of internalleadership benefits every organi-zation and often cultivates newvisions to help the organizationfulfill its mission.

In addition to the strategies listedabove, here are a few more stepsan organization can take to ensurea smooth executive transition. InCarol Weisman and Richard I.Golclbaum's book, Losing YourExecutive Director Without LosingYour Way: The Nonprqfits Guideto Executive Turnover, theysuggest the following ways togroom nonprofit leaders:

+ Encourage and provideopportunities for staff to attendconferences and seminars thatemphasize leadership andmanagement skills. Today'snonprofit leaders need todevelop a myriad of talents inorder to fulfill their complexand dynamic positions. Anexecutive director who encour-ages his or her managementteam to expand their skills isnot only strengthening theorganization, but is also send-ing a strong message to thestaff of how valuable they are.

+ Create occasions for key staffto interact with the board. Forexample, department headscould be assigned to someboard committees; or, somemembers of the senior leader-ship team might be asked

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