Leadership Succession

Photo: Point made during succession planning discussion

Introducing Leadership Continuity into Your Nonprofit Culture

Though the concept of succession planning is common throughout larger organizations at the highest levels, this practice has been in decline in medium-sized organizations – including nonprofits.

Simultaneously, the global reach of nonprofits and the nature of nonprofit work has demonstrated a need for smooth, efficient transitions at the executive level. Not only is such a transition a tremendous risk for the organization, it’s also a great opportunity for growth and change. Because succession is only a topic brought up when a change is inevitable, it’s wise to plan ahead for every contingency and establish a path of succession even when no one in the organization anticipates a leadership change.

When considering your organization's plans for the future, ask the following questions:

When was the last time succession was on the board’s agenda?

While it’s understandable that an executive would worry when a board discusses succession, it’s important to routinely monitor the process and ensure succession goes smoothly – especially if the executive is sudden incapacitated or otherwise unable to serve.

Are there potential candidates already on staff? If so, what steps are being taken to ensure they’re prepared to take over in the future?

Grooming a successor internally is a sound strategy. At the same time, if the succession process doesn’t occur for several years, an organization may have trouble retaining that candidate. Even if a transitionary process is underway, considering outside talent should the primary candidate be unavailable or otherwise uninterested should be an equally important consideration.

Is the current board equipped to hire the right candidate?

Conflicts and disagreements within the boardroom can trickle out to larger aspects of the organization. For example, if a board is accustomed to working with a strong executive, a brand-new hire may not be the best fit. Instead, transitioning with an experienced candidate while a more in-depth search can be conducted could be a successful strategy.

Client Testimonial – How did Third Sector Company help NW Folklife with leadership succession planning?Rob TownsendFormer Executive Director, NW Folklife

Leadership Continuity

According to a recent study, less than 17% of nonprofit organizations surveyed say they have a succession plan in place. This despite more than 24% of nonprofit executives stating they plan to leave their organizations within the next 24 months.

Based on these numbers alone, the future of many – if not most – nonprofit organizations are at risk. Even worse, the majority of these organizations don’t even realize it due to a lack of succession planning and leadership continuity efforts established in their cultures.

Good succession planning is composed of five essential elements:

1) Contingency Planning – Contingency planning uses a series of “what if” questions to help an organization prepare for a sudden vacancy in any key position in the organization. Third Sector Company’s tools and processes can assist in creating an inventory of your organization’s vital information, so that you will be better prepared for an unexpected shift in leadership.

2) Executive Performance Planning and Review – Annual performance reviews allow an organization’s leaders to think about and discuss current priorities and future plans involving the organization and their role within it. It also provides a good opportunity to modify executive job descriptions as the organization evolves.

3) Executive Compensation Planning and Review – In order for an organization to attract the best talent to fill future leadership positions, it’s important to maintain a commitment to being a competitive employer. This includes budgeting for the cost of filling vacant positions at current market values, even if those values are higher than the person currently in the role has earned.

4) Board-Approved Succession Policies – We recommend creating three official succession planning policies for the executive director and board chair positions. It’s important to have separate plans for short-term, long-term and permanent vacancies. These should include strategies for processes such as appointing interim executives during leaves of absence and pro-actively performing executive searches before permanent departures.

5) Leadership Development Strategy – At Third Sector Company, we believe that the development of people is equally important to the development of money in an organization’s strategic plan. A leadership development strategy provides guidelines for supporting current staff and volunteers through training, mentoring, professional development experiences and growth and promotion opportunities within the organization.

How can Third Sector Company assist an executive and their organization during a leadership transition?Tim KittlesonSenior Professional Advisor, Santa Monica, CA

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Get in touch with us today to learn more about our succession planning services and how we can support your unique nonprofit organization. We have team members and affiliates located throughout the United States and Canada. Just contact the location nearest you to speak with one of our specialists.

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