Home | About TransitionGuides & Our Services | Events | Newsletter | Ask Us a Question | Need Transition Help Now? | Executive Jobs |

Capturing the Power of Leadership Change - Using Executive Transition Services To Strengthen Organizational Capacity
By Tom Adams

[Note: The following text is the executive summary from Capturing the Power of Leadership Change.  For a full copy of the paper in PDF format, click here.]

Effective leadership is a common and critical element of successful organizations. Not surprisingly, the period of executive leadership transition—the departure of a current, and the hiring of a new executive director or chief staff officer—is fraught with risk. Board leaders, in particular, fear transition because of the uncertainty it brings, the increase in their responsibility and the challenges of hiring an appropriate successor. Poorly managed, these transitions too often occasion a crisis, leading to decreased organizational efficacy and even failure. Even well-established organizations can falter during and after a leadership change.

Though they happen infrequently to individual organizations, leadership transitions are increasingly common in the nonprofit sector. A recent study of 130 community-based grantees of the Annie E. Casey Foundation found that 85% of executives will likely leave their position during the next seven years. Similar surveys suggest that this is representative of a larger generational shift in the sector’s leadership in the coming decade.

Link the negative outcomes associated with poor transitions and their increasing frequency, and one discovers a significant threat to the nonprofit sector’s performance, a threat with serious and potentially disruptive implications for the delivery and quality of services for vulnerable populations, including disadvantaged children and families.

Investigating and improving leadership transitions

In 2000, the Casey Foundation launched an effort to better understand executive leadership transitions in nonprofit organizations and explore the Foundation’s role in helping its grantees move successfully through these difficult periods. The Foundation supported an 18-month research process that included a literature review, a national and three-city scan of available transition services, a grantee survey, 11 consultative sessions with nonprofit leaders and capacity building practitioners, case studies of founder executive leadership transitions and hands-on practice with two management support organizations. The paper that follows represents the synthesis of much of what we have learned through this exploration.

Casey’s initial investment has generated growing interest among groups of nonprofit executives, their boards and funders. Workshops designed for founder executives considering a transition have been oversold. In foundation-supported programs in California and Maryland, demand for executive transition management (ETM) services and placement of interim executives doubled after each effort’s first year. Seven funders have joined with Casey to launch an ETM initiative in Maryland. The New England Regional Area Grantmakers and several New England foundations have begun a formal ETM planning process. Exploratory program development conversations are also underway with funders in Washington DC, Indianapolis, and the Twin Cities, among others. Each time this work around transitions has moved forward, we have experienced growing demand and promising results.

Transitions: Prepare, “pivot” and thrive

The Foundation’s research and experience to date suggests that executive transitions need not result in bad organizational outcomes. On the contrary, it has found that transitions are powerful—and under-realized—opportunities to strengthen nonprofits.[1] Proactively managed, leadership transitions provide a “pivotal moment.” Faced with a (sometimes disconcerting) pause in business as usual, organizations can re-examine current practices, positioning, even mission, direction and vision. Boards, with expert support from executive transition management (ETM) providers, can assess the situation, work through the hiring process, and implement strategies that enable an organization not only to survive a transition, but to thrive through it.

A developing model, hopeful results

An ETM model, first developed in the 1990’s and now refined, has already been found to reduce the risks of transitions and strengthen organizational health and effectiveness. A 1997 study, for example, retrospectively analyzed a five-year capacity building and executive transition initiative conducted by the Neighborhood Reinvestment Corporation, a national nonprofit serving more than 200 housing and community development organizations across the U.S. This research found that these organizations had significant increases in executive tenure (from 4.3 to 5.7 years), organizations ranked “healthy” (from 67% to 89%) and direct investment in communities served (from $146.7 million to $418.9 million). [2] More recent assessments of the ETM services of CompassPoint Nonprofit Services, a nonprofit training, consulting and research organization with offices in San Francisco and Silicon Valley, and the Maryland Association of Nonprofits, a regional association of grantmakers, point to similarly positive impacts and high levels of satisfaction with ETM service provision. [3]

ETM offers exciting potential as an entry point to a broad range of capacity building efforts. In addition to the outcomes described above, transition services have led to new Board leadership, sharpened strategic direction, improved financial management, led to new funding, and promoted thoughtful approaches to organizational restructuring and mergers. The potential of this intervention has encouraged the Casey Foundation to consider an even broader investment in a range of capacity building strategies designed to improve the performance of its grantees and more importantly generate better outcomes for children and families.

The following paper provides background on the challenges and opportunities associated with executive transitions and describes the model of ETM that has been in development during the last decade. Finally, it lays out a series of opportunities for funders and other partners to provide support for this developing service modality. We invite you to join us in this important work. Click here to read the full report (PDF).

Endnotes:

(1) One of the first to observe that leadership transitions were pivotal times for nonprofit agencies was Tom Gilmore. See:  Gilmore, T. 1988. “Increased Leadership Turnover: Problem or Opportunity.” In  Making a Leadership Change: How Organizations and Leaders can Handle Leadership Transition Successfully.  San Francisco: Jossey-Bass.

Others making similar points include:

Altman, Barbara W. 1995. Trends in Executive Transition:  A Conversation with John Isaacson.  Human Resource Management 34, No. 1.

Greene, G. May 3, 2001. Getting the Basics Right. The Chronicle of Philanthropy.

Farquhar, K. 1995.  Special Issue on Leadership Transitions, Human Resource Management 34, No. 1.

Hesselbein, F. 1997 Fall. The Challenge of Leadership Transition.  Leader to Leader No. 6.

(2) National Center for Nonprofit Boards. May 1997.  Crisis or Opportunity.  Board Member 6, No. 5.

(3) Allison, M. Summer. 2002.  Into the Fire: Boards and Executive Transitions.  Nonprofit Management and Leadership 12, No. 4.

Maryland Association of Nonprofit Organizations. 2001.  Executive Transition Customer Satisfaction Survey Results. Unpublished paper.

Tom Adams is the principal consultant to the Foundation for the development of executive transition services.  For more information, contact:

The Annie E. Casey Foundation
701 St. Paul Street
Baltimore, MD  21202
Tel:       410-547-6600/301-439-6635
Fax:      410-547-6624/301-439-6638
E-m:     tadams@transitionguides.com

TransitionGuides
1751 Elton Road, Suite 204 | Silver Spring, MD 20903
Phone 301-439-6635 | Fax 301-439-6638
info@transitionguides.com

© 2003-07 TransitionGuides, all rights reserved. Privacy Information.
3/25/04