Leadership Guide Article

Case Study: CHI Centers and Succession Planning

October 2007

CHI Centers, Inc. is a non-profit agency located in the Washington suburbs that provides a myriad of different services to adults with special needs. We serve over 1,000 clients, employ over 300 people and have an annual operating budget of over $15M. CHI is governed by a volunteer board of directors who are elected to staggered terms on an annual basis. As with most non-profits, CHI is run on a day-to-day basis by a Chief Executive Officer. We have been blessed to have Alan Lovell, PhD serve in this capacity for the last twenty-five (25) years. Under Alan’s stewardship, CHI has continued to fulfill its core mission of serving the disabled, while growing and changing to meet the challenges of today. Dr. Lovell is highly regarded in his field, and has forged relationships with political and business leaders across our State.

In 2006, I was elected as President of the Board. With the level of interaction that I now enjoyed with the CEO, I quickly determined how much he meant to the agency and how much institutional knowledge was stored in his head, and his head alone. While he stated that he had no current plans to retire, his horizon was obviously shortening. Thus, it seemed prudent to at least start thinking about how we would approach a transition. In addition, as a parent of a child with special needs, I am also very aware of the curve-balls that life can throw at you, so we also concluded that an “emergency plan” needed to be implemented.

A sub-committee of the Board was formed to analyze both aspects of succession planning (i.e., long term and emergency). The committee was made up of business people with a vast array of experience. Having said that, given the importance of the CEO in our agency, we decided to obtain professional advice to guide us through the process, hence our affiliation with TransitionGuides.

As a first step, we drafted an emergency succession plan that provides a formal procedure in the event of a sudden, unplanned absence by the CEO. We decided to specifically name an existing employee who would serve in an interim capacity while the Board took certain steps to find a successor. In our case, there were several advantages to naming someone now, including: (i) managing expectations of other staff; and (ii) allowing the named individual to receive training in other aspects of the CEO role. We also put in place a procedure and time-frames for expediting a search for a new CEO.

Once the emergency plan was in place, we focused on long-term succession. This process actually is more complicated, because the long-term plan is somewhat dependent on how your agency is organized. Here, we have a flat management structure with numerous department heads all reporting directly to the CEO. We had to consider whether it would be appropriate to hire a “deputy” as someone that might naturally assume the CEO role upon Dr. Lovell’s retirement. Of course, management style and budget concerns come into play as to whether this is a feasible objective. TransitionGuides assisted us in thinking not only about search committees and the like, but actually analyzing job duties, bench strength and organizational capabilities to truly put in place an effective plan. Today, we continue to review these issues and refine our approach.

Now that I am the immediate past-president, and Alan is still the CEO, I can breathe a sigh of relief. I personally hope his retirement is a long way off. Having said that, I think that the thought that was put into succession planning now, and the thought that will continue to be put into the process as the eventual day draws ever closer, will serve our agency well. Dr. Lovell’s retirement will likely be one of the most challenging issues that our agency will face. Planning for this eventuality is an important part of ensuring that our agency can continue to perform its core mission in perpetuity.

About The Author:

Laurence Skok CHI Board President

This article was written by Laurence Skok as a contribution to TransitionGuides in an effort to share with the nonprofit sector the benefits and importance of planning for succession as an organization and the impact planning has on organization. Laurence Skok serves as the Board President of CHI Centers and works as an attorney for Grossberg, Yochelson, Fox & Beyda, a seventy-year old successful law firm in the Washington, DC area. Mr. Skok specializes in commercial leasing transactions on behalf of both landlords and tenants and has experience in handling other business transactions including the purchase and sale of businesses. He received a Bachelor of Arts degree from the Vanderbilt University and a Juris Doctor degree from West Virginia University College of Law.

About CHI Centers:

Alan Lovell CHI Executive Director

CHI Centers Mission It is the mission of CHI Centers to join with others to create the conditions that allow all persons with disabilities to have opportunities to participate in community life; to have choices in the pursuit of personal growth; to maintain positive relationships with family, friends and neighbors; and to be afforded respect and dignity.