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9 Tips for Effective Succession Planning

9 Tips for Effective Succession Planning

As an organization evolves, it will inevitably face changes in leadership. While many of these transitions are anticipated, as when additional leadership roles are established or when a leader retires, other times the agency faces the dilemma of filling an unexpected opening. The key to making any leadership transition a seamless process for staff and clients alike is to develop a thoughtful succession plan that will guide decisions when the need arises. Here, we offer fundamental succession planning tips that can help your organization to Prepare for Greatness!™ 

Why Participate in Succession Planning?

Succession planning should be proactively and thoroughly analyzed, planned for, and reviewed, in the same manner that an organization does so for budgeting, daily operations, and strategic planning, among others. While there are many motivating factors for an agency to participate in succession planning, two key elements at the forefront are to:

  1. Ensure Organizational Sustainability – First and foremost, having a well-developed, formal succession plan supports organizational sustainability, while preserving the continuous coverage of duties critical to an agency’s continuing operations. 
  2. Increase Transition Success – Thoughtfully considering succession possibilities will lead to smoother transitions. The executive director or CEO serves as the direct line of communication between the board of directors and agency personnel; he or she is responsible for providing the leadership and guidance to help the organization meet its strategic and operational goals and fulfil its mission. He or she also provides an understanding of the intentions and policies of the board of directors by informing and guiding senior staff leadership, administrative functions, and operational staff in the daily work of the organization.  It is important to ensure a continuity of this leadership in the event of unplanned and unexpected changes, as well as during planned changes due to termination, resignation, or retirement of top leadership, including the executive director or CEO.

According to The Bridgespan Group, succession planning remains the number one organizational concern expressed by nonprofit boards and executive leadership. Additionally, BoardSource recently reported that only 34 percent of nonprofits surveyed report that they have a written succession plan in place – yet, half of all CEOs intend to leave their positions within the next five years.  

Key Succession Planning Considerations

  •  Always include the board of directors and all senior leaders in succession planning, its implementation, subsequent monitoring, and future reviews.
  • When listing potential candidates, consider maintaining an adequate level of staff diversity, recruiting a wide range of individuals who provide the skills your agency will need in the future, and cultivating long-term employee retention.
  • Develop a short list of potential leadership successors who possess the ability to lead effectively and recognize the emerging needs of the organization, matching each individual to the most appropriate position.
  • Consider how vacancies may arise – while some are easily identified, as when an executive retires or is promoted to another position, others will be unexpected and provide no advance indication or notice. By properly planning for these scenarios beforehand, selecting a replacement will be less daunting and will support a smoother organizational transition.
  • Consider whether the placement of an interim leader would be of greater benefit than placing someone in a position quickly just to fill a vacancy. This is especially important for the highest-level positions in the agency where it may be beneficial to seek outside candidates for consideration.
  • Succession planning must include planned, unplanned, temporary, and long-term absences. Unplanned vacancies require emergency transition plans that outline the delegation of responsibilities and authority during leadership disruptions.

Communicate and Keep Communicating

Communication is essential. Communication means transparency. Thoughtful and timely communication before, during, and after any leadership transition will go a long way in supporting the success of a new leader and the organization – keeping the focus squarely on fulfilling its mission of serving others.

Planning Tips for Leadership Transitions

  • Secure agency-wide commitment and continued support to ensure a smooth and successful transition.
  • Identify current and/or potential challenges and the corresponding leadership qualities necessary to effectively navigate these adversities.
  • Adopt an Emergency Leadership Transition Plan to address the timely delegation of duties and authority whenever there is an unexpected transition or interruption in key leadership.
  • Identify opportunities to cultivate the leadership skills of current staff and board members, thereby ensuring a selection of emerging leaders who are prepared as needs arise.
  • Cross-train staff to minimize disruptions from unexpected personnel changes.
  • Create a formal plan that adequately supports newly-placed employees that includes coaching, mentoring, and defining job-related goals and responsibilities.

Who is Responsible for Planning for Leadership Transitions?

Generally, a board of directors is responsible for initiating a succession plan for an executive director or CEO. The board must understand that succession planning is a critical component for ensuring the short and long-term sustainability of an organization and must be considered a proactive risk management strategy. Succession plans should be carefully reviewed on an annual basis. 

The Human Factor

Succession planning discussions often bring apprehension to many within the organization. Those in leadership roles may see this as a sign that their performance is lacking or signals that they are considering leaving the organization, while staff may misinterpret planning as an internal power struggle, among others. Regardless of the concerns that surface, it is paramount to unambiguously clarify that leadership is simply prioritizing the agency’s future sustainability and the needs of the community it serves. The ideal time to conduct such planning is while there are no transitions taking place, allowing for greater focus of planning without additional pressure.

Questions to Consider

  • If an executive is suddenly unable to serve, is it clear within the agency who will fill that role until a permanent replacement is selected? Does the board of directors have the expertise required to evaluate and appropriately fill the position? 
  • Are the responsibilities of the leadership position reasonable and manageable? That is, can this position realistically be served by one individual? 
  • Is the position’s salary commensurate with those for similar positions in comparable organizations? Wage data compiled from a variety of statistics can be found by visiting the Bureau of Labor Statistics  and the Nonprofit Time’s Nonprofit Organizations Salary and Benefits Report.  
  • For nonprofit agencies, does the executive director also serve in the chief fundraising and development role? If so, what impact does this have on overall fundraising activities and organizational revenue?
  • Are there any obvious internal or external candidates for the job? 

Assigning an Interim Leader

Changes in leadership are inevitable, including those that are unplanned and immediate, as when an executive director is no longer able to fulfil his or her responsibility and the position is vacated. Often, the board president will work closely with the agency’s executive leadership team to identify a potential temporary replacement and offer this recommendation to the full board of directors for approval. The board will meet with the candidate, determine his or her ability to fulfil the role, and swiftly act to appoint the candidate to this interim role, as appropriate.

Following the appointment of the interim leader:

  • Immediately notify the entire board of directors;
  • Communicate with organizational staff;
  • Direct the communications team to send press releases, communications, electronic messages, etc. to critical governmental and funding partners, families and clients served by the agency, community business partners, and the public to announce the interim appointment.

Soon after, the executive committee should meet to determine:

  • Anticipated length of appointment:
    • Short-term (three months or less)
    • Long-term (greater than three months)
  • Permanent
  • At what point in the future the interim position should be permanently filled
  • Key benchmarks and timeframes to be provided for the board

Selection Process for New Agency Head with Advanced Notice

When an agency head provides proper notice of intent to resign from his or her position, an official transition team should be assigned to conduct a formal search for a new executive director or CEO. The committee should include board members, senior staff representatives, and other relevant stakeholders associated with the organization. 

The committee should consider the following when conducting its search:

  • Always consider both internal and external candidates for the position; this may include conducting a national search unless there is an internal candidate who is appropriately prepared and qualified for the job.
  • Determine whether the agency’s senior-level positions could and/or should be realigned to meet the agency’s current and future needs.

Do Not Underestimate the Power of Time

It is not unusual for the head of an organization to give upwards of two years notice of his or her planned departure. However, this announcement can mistakenly be met with a “we have plenty of time” response from those involved in filling the future position. Procrastinating to fill what is arguably the most critical leadership role in the agency will often lead to unnecessary confusion and disruption throughout all levels of the agency. 

While the future is not easily predicted, taking advantage of all the time an organization is given to fill key leadership roles will not only allow the search committee to make intentional, strategic choices, those who are served by the agency will benefit, as well. Through a well-executed plan, an agency ensures that the transition is a time of focused, organized, and thought-out change. After all, uninterrupted mission fulfillment is at the forefront of every public service agency. 

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