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Prepare, Pivot & Thrive - Succession, Strategy, Sustainability & Search

Four Case Studies of Founder Transitions - Nonprofit Executive Search, Succession, and Planning

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The departure of a founder or a long time executive from an organization can be a defining moment for an organization.  It is the time when, separated from its principal motivator and leader, the organization’s board, staff and other stakeholders have the opportunity to come together and define an institutional space and direction for the organization.  Unfortunately, this process takes time and commitment, and usually occurs under difficult circumstances often caused by the stress and emotion of the transition.  How the board responds, the steps the founding executive takes to prepare the organization, and the skills and understanding of the new executive can all impact the outcome of this moment.

These cases are based on interviews with the departing executive, the successor and a board member who was engaged in the search.  These case studies are part of the ongoing work of the Annie E. Casey Foundation to explore the impact of leadership transitions on community-based and other nonprofit organizations that have a critical role in helping the Foundation carryout its own mission.  The following four cases each provide insight into the highs and lows of founder transitions.  The basics of each case are outlined individually—what happened and what some of the issues were.  However, in order to preserve anonymity, the preliminary lessons from the research are combined into one section with no attributions.

Case 1: Long time executive retires

The Situation

The organization was founded out of the moral imperative to feed, cloth and house the poor prayerfully.  A beloved executive with a 15-year tenure who brought the organization back from the edge of closure retired.

Preparing to Leave

For several years before her departure, she had been preparing the organization—telling the board and staff she was considering leaving, meeting with transition consultants to better understand the process and providing information to the board about the steps in transitions.  She sought out staff that she felt needed to be in place to stabilize the organization.  One year before she gave notice, she took the board to a training workshop about transitions and discussed what would happen when she decided to leave.  Finally, at a workshop about fundraising, she was challenged to think specifically about her legacy and goals.  Here, she verbalized that she wanted to leave by the next year, identified the things she wanted to do before she left, and began writing her own transition plan.

The Transition Process

With the help of a transition consultant, the organization began a thoughtful process of transition.  The new board president (the long-time board president had stepped down for personal health reasons) met with the transition consultant and decided that as a new board president she should not lead the search committee. She appointed a well-respected board member with a long history with the organization to chair the transition committee.  They identified the following as important:

  • As a beloved person was stepping down; it was very important to celebrate her legacy and engage the community in the search;

  • A clear communications plan was necessary to let stakeholders, donors, and institutional funders know what was happening during the transition;

  • Intense discussions were needed to clarify the core values of the organization and the characteristics of the person that would lead the organization into the future;

  • The transition committee would maintain constant communication with the full board and staff;

  • The board agreed that the committee would make the final hiring decision;

  • A new executive must be a unanimous decision of the committee.

The New Executive and Post Hire Time

Two months after the long time executive left, the new executive began.  The new executive is from outside of the immediate community and has extensive management experience.  She has a different style and different experiences which are shifting the culture and approach that the organization takes.  The successor says she worked in the interview process to let the transition committee get to know her and to understand her differences in style.  After being hired, she really tried to get to know each staff personally and professionally and feels like they have been welcoming and supportive in return.  She highlights the importance of communicating with the staff and board, she says she wants to “over-communicate” and notes, “it is hard and maybe she hasn’t done it enough but it is clear how important it is.”  She also says that the former executive has stayed engaged but has been incredibly gracious and considerate, and that her support is important.

Six months after the transition the organization’s budget is similar to its pre-transition level, their fundraising to-date has gone well, and they are engaged in a strategic planning process.  While the literature suggests that this transition process will last for at least another 6 months, and there are certainly challenges and issues yet to be addressed, the care and planning that this organization has taken in the transition process seems to be paying off.

Case 2: Entrepreneurial founder moves on

The Situation

The founder of a marine conservation organization wanted to avoid “the founder flounder,” so he decided it was time to move on.

Preparing to Leave

Nine years ago, a veteran diver recognized the destruction of coral reefs and an opportunity to work with the dive industry to protect the reefs.  He discussed the idea with friends in environmental conservation, but none of the organizations was in a position to take on the task. Faced with the prospect of either letting the idea die or doing it himself, he started a nonprofit.  He always said, "I’ll do this for 6 years," but he doesn’t think people believed him.  His commitment to leave grew with his own understanding of his strengths and weaknesses, and from seeing the impact of other founders who stayed on too long.

Of course, having decided to leave doesn’t make it easy.  As he noted, “it is like putting your child up for adoption.”  His leaving took place in a couple of stages, during which time he read about transitions and talked with friends and advisors.  He took a sabbatical during which it was unclear whether he would return and in what capacity.  Then he gave notice.  Like many founders, some of his concerns were about what he would do next and about how the organization would fare.

The Transition Process

The founder had told many executive committee members privately that he would be leaving, so when the formal notice came, the committee was able to move fairly quickly.  The executive committee charged the founder to begin preparing staff for transition and to inform staff and board of any funding or programmatic plans he might have for the organization.  They also set up a transition team and search committee.

The board contacted transition consultants, but they were unable to get the kind of direct advice and guidance they felt that they needed.  They didn’t have the money to hire a search firm, so they decided to manage the search on their own.  Three months later, they had a candidate that they were very excited about.  The candidate ended up not taking the position.  As the board president said, “We got left at the altar.”  Board members at that point were exhausted and decided they had to hire help.  The board committed to raise funds to hire a search firm.  Once a search firm was engaged, the process moved forward more quickly, however the organization was still without an executive for a year.

At the same time, the transition committee and the founder were feeling their way through the delicate dance of defining roles in the transition process and beyond.  This was particularly important since the founding executive was not retiring but was instead moving on to other work in a similar field.

The extended transition and search process had some pros and cons.  On one hand, the staff was able to step forward and take on leadership and management responsibility that would otherwise have been unlikely.  On the other hand, some programmatic decisions were delayed waiting for new leadership and funding.  Further, some funding fell through while the organization was in transition.  Finally, the drawn out transition process took much of the board's energy and there was little time and energy left for celebrating and honoring the founder.

The New Executive and Post Hire Time

The new executive has experience following an entrepreneurial leader and prides himself on “turning plans into reality.”  He is focused on further sharpening the programs, building internal systems and institutionalizing relationships (moving relationships to the organization as opposed to with the executive) with funders and partners.

Seven months into the new executive’s tenure, the organization has moved to new offices, the programs have written objectives and are coming in on budget, and they are financially “on track.”  Two staff people have left, in part due to the office move and one board member has left.  The organization has gained two new board members and the board is moving more towards active governance.

While the transition is continuing, this organization’s board and staff have grown and developed through the process, and the organization is positioned to successfully weather the loss of its founder.

Case 3: First executive retires

The Situation

The first executive of an interfaith coalition of congregations, dedicated to meeting the needs of the poor, retired.

Preparing to Leave

While the first executive was not part of the initial group of clergy and volunteers that wrote the charter for the organization, he was hired as its first executive director and had been the organization’s executive director for 27 years.  He decided that, “When I reached 65 would be time to leave.  I had other things I wanted to do and I thought it would be better for the organization to find someone new.”  It was a good time to move on—the organization was doing well and while he had decided it was time to retire, he didn’t feel as if he had “had enough.”  He was recognized as a powerful, influential, respected and well-liked member of the community and the primary spokesperson for the poor in the county.

Two conditions increased his level of comfort in leaving the organization.  First, the current board president at the time agreed to serve another term as president so there would be some continuity for the new executive.  Second, he helped identify and was very impressed with the extremely talented candidate that rose to the top of the pool.

The Transition Process

The first executive gave the board more than a year's notice that he was planning to retire at age 65.  He and the board president talked about the transition and the necessary skills and traits for a successor.  They identified both the strengths of the retiring executive that were vital to the organization and new skills that the new executive could bring that might be important for the organization’s future.

The board hired a transition consultant and allowed the consultant to guide them through the mechanics of the transition.  The consultant also helped facilitate conversations about the organization’s future and helped integrate some of these plans into the search process.  For example, as part of a long-range plan to garner more support from the business community, one of the celebratory events held honoring the retiring executive was with the business community.  This event has now become an annual fundraiser sponsored by the business community.  This kind of integration helped make the transition process part of long-range, strategic direction of the organization.

At the same time the organization prepared for the retirement of the executive by undergoing a transformation of the board.  The board was becoming more active and more structured.  New committees with clear objectives, power and leadership were formed.  The board president noted that several individual board members stepped up and helped transform the board into a more engaged and active body.  So, despite anxiety on the part of some members of the board that ‘without the founding executive, the organization will fall apart,’ the founding executive was able to step back and let the board change and develop into a more active, seasoned leadership body.

New Executive and Post Hire Period

The new executive is a seasoned manager who worked closely with other executives and leaders in the area.  Several years earlier, she made a decision that she wanted to lead an organization working to alleviate poverty and had given herself five years in which to get the experience she needed and to find the right job.  A call from the executive of the interfaith coalition asking her to apply for his job came just three years into her plan.

In part because she hadn’t sought out the job, she feels like she was able to be really honest with the board during the interviews.  For example, she recalls stating, “Look, I don’t want us to be looking at each other in 6 months and saying ‘Well, didn’t we make a mistake.’”  She also acknowledges real differences.  “People love the retiring executive in a way that they will never love me.  But I’m okay with that.  And while we didn’t talk about this in specifics during the interviews, we did talk some about differences in style and skills.” A good example of this was when one person said, “You have big shoes to fill,” referring to the retiring executive’s successes and reputation.  The current executive laughed and said, “it is a good thing we wear different shoes.”  After she was hired, she really felt welcomed and valued.  There was some overlap between the retiring executive and the new executive, which provided the retiring executive an opportunity to help by introducing his successor throughout the community and showing that he really supported the change.

Three years after the transition, the organization’s budget is up from $900,000 to $2.2 million.  Personal giving is up by 23%, and the number of active congregations is up from 105 to 125.  There have been some changes in staff, but not a large-scale turn over.  They have launched 5 new, fully funded programs.  In this case, enough time has passed to judge the transition itself as a success.  The success of this transition is undoubtedly due to a plethora of factors including:

  • The retiring executive had a desire to explore other career opportunities and felt acknowledged and appreciated even as he was preparing to leave;

  • The incoming executive was a strong candidate with good management skills and an inclusive management style;

  • The retiring executive was comfortable with the candidate taking over the organization;

  • The board president served another term providing some continuity during the process;

  • The board strengthened itself and was able to rise to the challenge of choosing a successor and;

  • The organization received some outside facilitative assistance.

Case 4: Founder moves on

The Situation

The founder of an organization dedicated to developing multi-cultural environmental leadership left.  As the organization was being sponsored by another organization that acted as its fiscal agent, the organization did not have a board or their own 501(c)(3) status.  They did have an advisory committee.

Preparing to Leave

The founder had been with the organization for about 8 years when he decided that he needed to move on.  He had noticed a growing disconnect between himself and the staff in terms of interests and approach.  Further, his peers in the organization had left.  The founder was also questioning the multi-cultural philosophy that had framed the organization and consequently the mission and approach that they should take into the future.  In all, he was finding it difficult to maintain the same energy and enthusiasm for the work, and decided it was time to move on.

In hopes of sorting out fundamental questions related to the mission and leaving the organization with a clear direction, he hired a consultant to assist in doing a strategic plan.  At this time, he told both the staff and the consultant that he was planning on leaving.  Unfortunately, the completed plan did not resolve the issues for him and he ended the process feeling even further disconnected from the staff.  Having “thrown his life into the organization now for almost 10 years and with things in some disarray, it was difficult to think about leaving the organization.”

At this point, he hired a transition consultant.  The consultant’s perspective was organizational—how to maintain the organization when he left - and the founder received little support for his personal struggle with the transition.  Finally, after an auto accident, the founder decided that it was truly time to move on.  He gave the staff and advisory board a specific termination date and he sent letters to stakeholders and funders.

Transition Process

The transition team consisted of members of the advisory board, a few other stakeholders, and a transition consultant.  However, without a board of people committed to the organization and working to ensure its successful transition, there were few champions to manage the process.  Further, the organization still struggled with unresolved fundamental questions about mission and approach.  Without a board and founder, there was no one to make these decisions.

The transition team hired a former staff person to become the new executive director, but six weeks later that executive left because of the organization’s serious financial problems.  Although the incoming executive had asked for financial statements when he was interviewing for the job, he did not see them until after he was hired.  After six weeks of due diligence, the incoming executive determined the organization would be out of money within three months and that grants the organization had assumed it would be awarded were, in fact, not going to be awarded.  Further, he did not find the kind of community support that would have been important to his success.

At that point the transition team had been working for about a year, was exhausted, and was considering either merging with another organization or closing down the organization.  The organization had also lost almost its entire staff.

New Executive/New Beginnings

The former assistant to the founder, told by a colleague about the organization’s struggle, did not want the organization to close.  After years of being mentored by the founder, she believed she had the close personal connection to the organization, its mission, and the founder that are important for a new executive, and she was personally ready for a change.  She approached friends and colleagues in the local nonprofit community and received advice about taking on the troubled organization.  They encouraged her.  She, with an advisor, approached the transition team. The transition team gave her a couple of months first, to explore funding opportunities and second to determine if there was sufficient support in the community for her to gather a powerful board of directors for the organization and create a group of influential supporters.

In part due to her personal connections in the funding community (she had worked as a program officer at a local foundation) and her relationships with several influential leaders in the local nonprofit community, she was able to get funding released and begin to gathering a group that would become the board.  With these successes, the transition team agreed to hire her and then they disbanded.

The organization has five full-time staff, two part-time staff, a budget of almost $500,000 and has moved its offices to a more convenient location.  The organization is applying for 501(c)(3) status and has a high powered board that meets regularly.

There were several issues of importance during this transition.  First, the organization did not have a board of directors to guide it through the transition.  Second, some funders and other stakeholders were concerned about the organization’s instability and held back support during the transition.  Finally, the organization had lost all the staff and had few internal systems.

Fortunately, the new executive was able to address many of these issues because of her relationships in the funding and stakeholder community.  Her good relationship with the founder allowed her to solicit assistance in contacting unhappy funders.  Further her approach of soliciting input and feedback from key stakeholders before taking on the position helped her gain support.  Leaders of other key institutions told her, “If you take this on, we will help you.”  Some people even called and asked what they could do to help her.  For example, a well known organization development consultant joined the board and is providing pro bono strategic planning.  Another nationally known leader has assisted with the hiring new staff, a major issue for the organization.  Others continue to act as advisors as the new executive moves to create organization systems, solidify funding, lead meaningful programs, and continue to build relationships in the community.

For the new executive, an important, ongoing challenge is the sheer amount of work.  She knows that she can’t keep up her current pace and is seeking staff that will be capable of taking on the management of some programs.

While the organization is still not 100% stable, it has made giant strides.  Under the leadership of a new, energetic, entrepreneurial executive, it is likely to continue developing.

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We Wrote the Books on Nonprofit Leadership Transition

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The Nonprofit Leadership Transition and Development Guide: Proven Paths for Leaders and Organizations      
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Chief Executive Transitions: How to Hire and Support a Nonprofit CEO        
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Chief Executive Transitions:
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