The Importance of Succession Planning for an Organization’s Leadership


Hi, DonorDreams Readers! Hope this week is treating you well! It’s Marissa here, with a great post written by Heather Eddy, President and CEO of KEES: Kristner Eddy Executive Services and Alford Executive Search. While we’ve talked a lot about retaining key employee in the past few posts, today Heather talks about how to plan for when people move on to another opportunity. Succession Planning along with employee retention makes for a strong nonprofit. Thanks again, Heather! Enjoy!


Although this blog has covered retaining employees for the past two posts, sometimes it is time for people to move on, even a revered and beloved leader. How an organization and it’s leadership undertakes this transition says a lot to other employees. It can make a big difference in general employee satisfaction and what might trigger a good employee to leave. A Board may not realize it, but having thoughtful and articulate plans in place about the organizations future (Strategic Plans, Succession Plans, Compensation Plans, Capital plans, etc.) speaks volumes to the general employee base.
Succession Planning is a term used in private and nonprofit sectors (less so with governmental entities) to describe the batonprocess that an organization (typically a Board of Directors) undertakes to plan for its next leader. Interestingly, with the term being common in leadership lingo, a limited number of organizations actually have a written Succession Plan. How do we know this? It is a question that we survey groups about frequently. The responses often come back as: maybe, no, I don’t know, yes-we’ve had a few meetings about it, yes-it’s in my head, and my favorite….yes – we talked about it once and someone has the notes somewhere. An idea, wish, intention or concept or does not truly constitute a solid Succession Plan. I find that less than 15% of the nonprofits we interact with have a written Succession Plan that is that is widely understood by organizational leadership (Board and Executives), and could be accessed and implemented with ease. Note – often times the “emergency “plan (what to do when the ED gets hit by a bus or wins the lottery) is confused with the Succession Plan. The two can be related, but are entirely different.
A relevant and ideal Succession Plan should have an overview of the following, with specifics to be filled in at the time certain triggers occur. A Succession Plan should be reviewed every 2 – 3 years if the sitting leader will be there for a while, and every 1 – 2 years as s/he gets closer to natural retirement.

  • An overall philosophy of leadership and the role of the Executive leader
  • A clear statement of the Board’s role in finding, hiring, evaluating, growing, and changing leadership.
  • An ideal timetable for a natural transition process to occur (having a 90-day buffer helps)
  • A job description of the current Executive leader and all of the immediate, direct reports.
  • An organizational chart, identifying the key functional areas of leadership, and which direct report or other key staff person “back-fills” the top Executive in these functions. Note: this could add another dimension to the plan if all/most of the top leadership is roughly in the same 5-year window of possible retirement and/or the same team has been in place for 15+ years.
  • Current thinking (point in time) about the organizations greatest needs in the coming 3 – 5 years. This can be derived from Strategic Planning.

If your organization does not have a written Succession Plan in place, I urge you to have a conversation at the next Board meeting. Try to gain a commitment to invest time in addressing the points above. The Board may not be ready for a full Succession Planning process, but at least document the above six points and make sure the whole Board is on the same page. If the commitment is there to do more….ask the Governance Committee, Executive Committee, or ad hoc Committee to take this on as a special project (60-90 days with 2 – 3 meetings and follow up in between).

We urge you/your organization to not only focus on Succession Planning, but what we call Leadership Transition successionPlanning2Planning. This type of planning focuses on how an organization transitions, whether to a new executive leader, an entirely new leadership structure, or growing leaders within the top levels of leadership as the organization grows.

With the enormous workforce transition we will undergo, in all sectors, not just nonprofit, hiring managers (Board’s included) are struggling to find desired talent brings skills to meet current needs, and potential grow with the organization. In some nonprofit sub-sectors, it is anticipated that as many as 20% of the leaders currently at the helm will retire in the coming five years. It is also estimated in those same sub-sectors that, perhaps, at best, 4 – 8% of “ready” next leaders are in place. This upcoming gap is a direct result of nonprofits doing a great job of hiring good talent and getting every bit of expertise they can, but failing to invest in that good talent, to make it great talent. There is an enormous need for organizations to grow and develop talent, at mid and upper levels of management, to meet this potential gap. Does your organization have a leadership development program? If so, please tell us about it in the comments.

Leadership Transition planning helps you define what you have, what you want, what you need/think you need and what is a realistic expectation for the leader(s) at the next phase to meet organizational needs. It then guides you to put that transition in to a timetable, articulate the resources needed (often budget related), and define how you will communicate with internal and external audiences. Based on the type of leadership transition coming up, the timetable and audience focus could be completely different. And, based on the organizational capacity, the ability to invest resources in developing and transitioning leaders varies greatly. Leadership Transition Planning is a process that should be collaborative between the top Executives and the Board. Both leadership groups have a vested interest in the organizations future success, and should work together to ensure the right leader(s) are in place to achieve that success.

While your organization many not face an imminent retirement or departure of its top leader, both Succession and Leadership Transition Planning are essential for the continuity and sustainability of your organization.

HeatherEddy

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About DonorDreams

Erik got his start working in the non-profit field immediately upon graduation with his masters degree in 1994. His non-profit management and fundraising experience numbers nearly 20 years. His teachable point of view around resource development is influenced by the work of Penelope Burk and those professionals subscribing to a "donor centered" paradigm. Donors have dreams and it is our responsibility to be dream-makers because donors are not ATMs.

Posted on April 23, 2015, in human resourses, leadership and tagged , , , . Bookmark the permalink. Leave a comment.

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