valley nonprofit resources 818/990-0176, [email protected]. ...

Valley Nonprofit Resources www.valleynonprofitresources.org 818/990-0176, [email protected]. 1

Planning for the Next Generation of

Nonprofit LeadershipPresented by

Valley Nonprofit Resources and Valley Care Community Consortium


Discussion Agenda

1. Focusing the Discussion2. Transition Overview3. How Transition Works4. ETM Transition Support5. Leadership Challenges6. Transition Can Derail the

Organization7. Making Transition a Win-Win


What is your experience with

leadership change and/or transition?

What practice worked best?What would you never do again?What are your concerns about leadership transition in your

organization?

Focusing the Discussion


Transition Overview


Transition Impact

1. Can strengthen or weaken organization.

2. Can be transformational.

3. May require pause, clarify and, sometimes, regroup.

4. Sustaining effectiveness during transition is a major achievement.

5. Treat as neutral “space” where needs are assessed from new perspective.

6. Focus beyond transition: focus on emerging stronger, more dynamic organization.


Transition Can Be Costly

70% = crisis or departure of founder or visionary leader.

Common trend after departure: repeated executive turnover, extended periods of under performance.

Most vulnerable transition situations:

• Departure of founder or long-term or visionary leader.

• Transitions in start-up organizations.

• Turn-arounds in response to crisis.

• Small and/or no management depth or infrastructure.

• Funders tied to departing exec.


Typical Time and Money Costs

Typical: 4 to 8 months.If not done well: one to two years.Direct costs: $1,500 to 40,000.Additional costs:1. Strained relationship between board

and current exec. 2. Community change efforts derailed.3. Staff and board turnover.4. Lost opportunities for growth.5. Programs shrink or critical services

go out of business.6. Similar to experiencing death.


Senior Executive Deficit Fears

•10% of nonprofits experience transition each year (22,000)

•Increase expected: 2006 = 58,000 new positions, 2016 = 640,000 new senior positions (2.4 X current number) By 2016 = 80,000 senior managers needed each year.

•1 ED in 5 plan to leave in 5 years, 2 X more likely to leave if low compensation.

•2/3 of those leaving are first time Execs, only 20% want to be Execs again, 50% are not leaving to retire. (CompassPoint)

BB-78M just turned 60, Gen X - 38 million, Millennials - 50 million. Not just leadership issue: fewer people to do work, new generation have differing needs and expectations.


Are you anticipating retirement/departure of your top

executive(s) in the next five years?

What has been done to prepare for transition?

Can your board manage the transition in an efficient, responsible manner?


Managing Conflict and Solving Problems

How Transition Works


Getting Ready

1. Reflect on future direction of the organization. 2. Build a clear picture of what is needed, develop strategies for

addressing those needs.3. Is interim management needed? (Can be helpful if next step is

unclear or exit of leader happens quickly.)4. Is significant change, merger or closure actually what is

needed? (This is great time to think about those choices.)5. Given choices, what will be required attributes of the new ED?6. Identify key leadership functions of position to be filled.7. Cross-train staff in these roles - transition will take more time

than planned.8. Strengthen admin functions.9. Don’t rush to hire.10. Plan quality good-bye event and end for departing staff.


Departure Date (18 months - 3 years)

Revisit or update strategic plan (balance providing direction and allowing the new ED to set his/her mark).And/or conduct board and organization self-assessment. Create a succession plan.Review important staff competencies and relationships.Understand role the exec plays. know where the organization is over dependent on ED.Begin cross-training and handing off of roles and crucial relationships.


Departure Date (one to two years)

Too short for any major planning process. Use assessment to clarify strengths and competencies and how to prepare for life after ED leaves.MUST: Can the board manage the transition and provide leadership to the organization?Time will go quickly so get going NOW and stay focused.Focus on keeping transition process in motion every day, every week.Remember personal as well as organizational issues. It will be painful in some way for all.


Transition (Less than a Year)

ETM process may be most important when transition is short.Decide quickly what the leadership needs will be.Decide if an interim executive is needed.Decide how you will capitalize on board/staff skills, and volunteers to carry out key tasks.Board MUST prepare itself to work with a new leader as soon as possible in positive and forward looking manner.


Executive Transition Committee

Establish consistent message with executive about reason for departure and transition.

Preparing for the new hire will include planning, resolving ambiguities, addressing structural changes, etc.

Again, decide if an interim director is needed.

Decide how to conduct the search: search firm, do it yourself?

Use organizational audit to determine key challenges for next ED.

Ensure new ED’s success: rituals, community introductions, performances goals.

Again, arrange proper send-off for departing ED.


Step One: Departure Date Announced

1. Take stock of environment, identify new strategic directions, and begin to make changes based on challenges and opportunities.

2. Place transition in the broader context of the ongoing plan and/or the life cycle of the organization.

3. Develop transition plan and connect it to the strategic plan.4. Appoint a Transition Committee. Keep the committee diverse

and representing all aspects of the organization.5. All announcements reinforce idea that ED and board are on the

same page, in harmony about change.6. Initial priorities for new or interim exec director are determined.7. “Fix” infrastructure so it is as strong as possible.8. Decide if ETM or Search firm will be used, then get them on

board as early as possible.9. Determine compensation package, may influence search choices.


Step 2: Recruitment and Selection

1. Do your best during the search to maximize organization’s ability to continue top quality service and focus on mission.

2. Now is time to hire an interim ED, if needed.

3. Develop job description with lots of input.

4. Use proactive process to find diverse and qualified candidates.

5. Finding right leader in alignment with the organization’s vision for future is critical. Interview questions must be carefully developed.

6. You know the rest: interview candidates and select finalists.

7. Select best choice and make offer.

8. Board and new ED develop formal “social contract” spelling out priorities, key tasks, roles and procedure

9. Authority and hierarchy are clearly spelled out.


Step 3: Post Hire and Leader Shifts

1. Successor needs two years to learn the position and organizational culture. (Expect bumps along the way)

2. ED reviews plan to help them guide and grow the organization.

3. Informal support group, peer network or targeted coaching can be helpful for new ED.

4. Any continuing role of current ED must be limited or very clearly defined.

5. Allow for “grieving” period for departing executive.

6. Keep organizational change at a minimum post-hiring period. (6 months at least is good time-frame for this period)

7. Successor should not feel they must conform to former executive director’s style, however, he or she may want to understand existing work styles and procedures and use those that work well. In this way the successor begins to establish his/her own style.


Leader Involvement in Transition

Make an intentional choice on how ED and Board will handle process.

1. ED leads the board in key decisions about transition = does not leave room for board to assume full responsibility. Board may not step up to the challenge.

2. On-call seem to work best = Board makes key decisions and calls on the ED as needed. Boards may need to be strengthened and bolstered to do task. (most typical nonprofit choice)

3. Hands off is most radical choice = ED announced resignation date and lets the process unfold. Works best when board has sufficient leadership to guide the process or organization needs to end dependency on ED. If board can’t, won’t, org. cost can be great.

(CompassPoint)


ETM Transition Support


Exec Transition Management (ETM)1. Best for start-ups to $5 million a year

budgets.2. Combines traditional executive search and

organizational development services.3. Involves three stages: 1. getting ready, 2.

recruitment and selection and 3. post hire.4. Can be tailored to broader development

needs of the organization.5. Cross-training of top execs usually required,

administrative systems reinforced.6. Can adapt to your unique needs more

readily than search firms.


How ETM Works

Begins before the current leader leaves - EMT helps you: 1. Identify why ED is leaving, what issues the organization

faces, explores whether or not interim services are needed.

2. Identify key ED functions, how will they be supported when ED leaves.

3. Determine attributes/competencies needed from new ED.4. Help you decide if organizational changes are needed.5. Reflect on life cycle issues and identify capacity building

needs if any.6. Help you build strategic direction based on challenges

ahead, 7. Prepare appropriate start/good-bye for departing ED.


Other ETM Services

Identify key issues that can influence transition, capacity building opportunities, timeline for managing the transition.Coach board and current ED through the transition.Can plan for unexpected transition.Supports the board in their role in transition.Find candidates for new position and for interim director.Connect exec with others in similar situations.Find solutions for whatever needs make themselves known.


What transition methods might work best for your organization:

ETM services or Exec Search Firm?

What needs to happen in your organization to keep services and programs, fundraising, and ED tasks successfully moving forward during

transition?


Leadership Challenges


Leadership Matters

Essential to broader organizational issues and customers and reputation.

Replacing creative energy can be major challenge to a successful transition.

If the transition fails, loss is often to constituents and/or clients not just to the organization.


Challenge to Leader

Interwoven identify: • Can leader establish an identify separate from organization? • Can key publics be convinced that the organization is sustainable without the leader?Letting go of position and power can challenge leader self-worth:• Professional uncertainty - can skills be used in another organization?• Loyalty trap - staying too long, feeling pushed out.• Will they survive without me?• Under-compensated - can ED afford to leave?


Challenge to Organization

Fear: can we do this without leader? Can we envision a new executive?Departure will expose weaknesses. You will discover how much the exec does. Others, including board, have to step up to responsibilities.Define who is in charge of what? (Board involvement is likely to increase tension and conflict between board and staff.)Founder and/or staff and board may differ on values/programs that are important.Founder’s greatest asset is usually relationships with funders.

Be open to healthy self-examination about leadership.Usually need to rebuild funding and other resources after transition.May need to refocus the organization’s direction.

BOTH a good beginning and a good ending take place. Solutions will not be simple: openness, continued taking to each other, open conversation essential.Overlap of one to two months for present and past leaders for complex organizations, few weeks for small can be useful.


Legacy and Letting Go

There is no simple recipe for leaders seeking a positive transition.

Each founder/leader and their organization is unique.

Important to detach sufficiently to engage in a process of clarifying what legacy or values the organization should sustain and what can be changed.

Updating the strategic plan can sharpen the legacy.

Looking for a clone will only lead to disappointment.

As much as possible, provide balanced and positive perspective on founder’s contributions. Can be helpful if ED says what they want to be remembered for.


Transition Can Derail the Organization


Why Boards Fail at Transition

Inaccurate board perceptions, uninformed beliefs about org.Poor understanding of cultural dynamics.Distorted view of what the organization really needs.Failure to recognize the “real” role the ED plays.Assume “all nonprofits have deficits and don’t know how to operate” and hire to fix that.Don’t think through future needs and direction, don’t understand or value constituency’s best interests.Do not recognize organizational problems are related to a stage of growth not internal weaknesses.

Tend to hire managers rather than leaders: fundraising, finance skills more valued than whole systems thinking, ability to build shared vision, or facilitate relationships with multiple stakeholders The common (and justifiable) practice of keeping boards distant from day-to-day. Dialogue between board and staff often discouraged creating lack of connection, lack of understanding.Poor hire can strip an organization of the very skills and characteristics that made it successful.

(Deborah Linnell, Third Sector New England)


Boards Can Get it Right

Board members are there for mission not because of profession or connections.

Ask board members to intern in core work.

Involve staff and other stakeholders in hiring new ED.

Have board research life cycles so they understand reasons for organizational behavior.

Board should talk to clients, staff, constituents, funders about ED and organization.

When ED says I am leaving, do an exit interview about ED beliefs, style, and experience with boards and other stakeholders.

Assess the organization so that desired characteristics for new ED are clear.

Board needs to challenge their assumptions about what the organization needs.

Understand organizations needs for next five years.

Identify and focus on qualities that are essential for exec leader-ship regardless of who is hired.


Making Transition a Win-Win


Dangers and Opportunity

10% of all nonprofits change leadership each year (approxi-mately 22,000). (CP)Increasing frequency due to generational shift, dissatisfied exec directors/boards, nonprofit growth.Transition is fraught with risk, uncertainty.Poorly managed = decreased organizational efficacy, disruption or loss of quality services, and failure even for well-established organizations (during and after transition).Poor aspects of organizational culture becomes shaping agent of transition process.

Board members need to step up, accept responsibility in responsible manner.Can be a powerful - but often underused - opportunity to strengthen the organization.Transition “pause” can be pivotal moment to re-examine practices, positioning mission, direction and vision.Careful assessment, hiring can bring new energy and effective-ness for the organization.ETM services are growing and appear to reduce problems associated with transition.


Good Transition Model

Long-term ED announced departure in 2 years.ED wanted an orderly succession. ED helps recruit a more experienced board, board became more engaged, ED deferred more to board, board became stronger.Strategic plan was completed - also encouraged by ED as part of his exit strategy.ED recommends transition management consultant to work with entire organization.ED attends only one of successor selection meetings of the board, sharing thoughts about process and desired attributes of successor.

ED is kept informed through monthly conference calls with transition committee and consultant.Transition Chair and ED have lunch once a month to keep ED informed and talk about ED’s process for letting go.ED invited to meet final pool of candidates and provided input to search committee.Board makes final selection.Both organization and retired ED thrive.Hand-off was intentional, the ED contributions were celebrated, board stepped up, ED let go AND was included in process.


Help Boomers Transition Out

Help older generation leave – when it is time – in a way that celebrates their work and commitment.

Create next step (must be culturally sensitive):

Provide financial literacy or some kind of financial support for transition.

AND, look for ways to keep them involved.

Set up specific times and methods for Information and experience transfer.

Recognize and address our cultural disdain for elderly.


Increasing Odds for Successful Transition

1. Current exec director and board work together to plan transition. AND they include the staff.

2. Have adequate time to do a good job, focus on getting the task done.

3. Identify issues, accept them as inevitable (but not personal) and find a way to resolve them with wise and well-timed decisions.

4. Openly and thoughtfully address both personal and organizational issues related to transition.

5. First work through conflicting visions about how leadership transition will occur.

6. Board uses a consultant or search firm to help them carry out transition management steps.

7. Needed infrastructure improvements or reposition the organization and its programs are accomplished.


How to Reach Flo Green

Florence L. Green, Vice PresidentIdea Encore Network

andOwner, Florence Green & Associates

1508 Harvard, Suite BSanta Monica, Ca 90404

310-828-1146 voice 213-507-2639 [email protected]

valley nonprofit resources 818/990-0176, [email protected]. ...

Documents