TransitionLeader

The e-newsletter on nonprofit executive succession and transition.   

Vol. 1 No. 3, Fall 2003   

 TransitionGuides Home Page | Newsletter Page   

• Feature Article: Preparing for an Executive Transition - A Step-By-Step Approach to the "Getting Ready" Phase.
   
• New Research:
  • New report by TransitionGuides profiles community foundation leadership - 55% of CEO's plan to leave within five Years.
  • Study of New York City's nonprofit executive directors finds that 45% will retire in five years.
     
• New Resources:
  • Classic book on executive transitions is back in print.
  • Executive director's survival guide published.
  • Illinois Arts Alliance publishes succession planning guide.
  • New book on manager's first 90 days.
     
• Executive Transition Management (ETM) Field-Building
  • New England Executive Transition Partnership progresses.
  • ETM interest in New York City.
  • Baltimore Area Grantmakers hold meeting to expand support for ETM program.
  • Maryland Association of Nonprofits publishes report on its ET Initiative.
     
• Recent & Upcoming Events:
  • Next Steps workshops held in Maryland and California.
  • Leadership succession workshop conducted in Minnesota.
  • Univ. of Maryland's Burns Leadership Academy hosts organizational leadership succession program.
  • Training for ETM consultants conducted.
  • Executive transitions was on agenda at 19th Fall Conference for Community Foundations.
  • Colloquy at ARNOVA Annual Conference set to explore development of ETM as new brand of capacity-building practice.
  • National Association of Private Special Education Centers leadership conference - first among many ETM presentations in '04.

In the last edition of TransitionLeader, we looked at the topic of leadership succession—the preparation that takes place, ideally, before an executive departs.  Since then, two new reports have been published that further underscore the need for succession planning.  The first is a survey by the New York United Way, which found that 45% of current executive directors of New York City nonprofits will retire in five years.  The second is a survey of community foundation leaders that TransitionGuides just completed, which reports that 55% of community foundation CEOs anticipate leaving their current positions within five years.  Links to both of these survey reports can be found in the "New Research" section below.  For guidance on succession planning we invite to you to review the succession planning case studies in edition #1 and edition #2 of TransitionLeader and the emergency succession planning tools on the TransitionGuides web site.

Moving from succession planning into the actual CEO transition, in this edition we begin a series of step-by-step articles that address the three phases of executive transition.  We begin with the “Preparation” or “Getting Ready” phase, which is the first phase of an executive transition beyond succession planning.
 

Preparing for an Executive Transition - A Step-by-Step Approach to the "Getting Ready" Phase
By Don Tebbe, Senior Associate, TransitionGuides

When faced with a change in executive directors, the first impulse of most boards is to dust off the job description and start running ads as quickly as possible.  Starting a transition that way is a bit like planning a cross-country drive with an outdated atlas.  You might arrive at your desired destination eventually, but there will be more than a few unanticipated detours and dead ends along the way.  Certainly the journey will be much more confusing than if you had invested in an up-to-date map and taken the time to consult with AAA about road construction.

Many boards are under the mistaken impression that the best transition is one that is over with as quickly as possible.  This is entirely understandable.  The prospect of a potential leadership vacuum is scary.  Moreover, an executive transition, if not painful, is certainly a challenging, out-of-the-ordinary experience for a board.  Having a sense of urgency about the transition is a good impulse, but rushing through the process is not.

Properly managed, a leadership transition provides a pivotal moment, enabling an organization to change direction, maintain momentum, and strengthen its capacity.  Crucial to capturing the opportunities is seeing--and managing--the whole transition picture.  Typically, boards focus on the executive search as the all-important activity.  In reality, the "opportunity window" opens with the executive's decision to depart (or the board's decision to terminate), and it remains open throughout the search and hiring process until at least the completion of the new executive's initial performance evaluation.

Executive Transition Management (ETM), the approach that we outline in this series, provides the insights, ideas and tools to capture the range of opportunities presented by a leadership change.  In using ETM, it is crucial that you broaden your thinking beyond "just the search" and embrace the entire departure-recruitment-installation process.  This holistic approach, which is the essence of ETM, can be reduced to three key words: Prepare, Pivot & Thrive.

Prepare - To successfully exploit the rich opportunities that a transition provides the board needs to invest some time up front to prepare for the search and transition.  The board should ensure that the organization is stable enough to make a good hire, the organization's situation is clearly understood, the current and future leadership needs of the organization have been fully explored, and all this information is captured in an updated job profile and a solid plan for the search and transition.

Pivot - One transition aspect often overlooked when the board focuses exclusively on the search is what the organization can do to pave the way to greater success for the new executive.  In most organizations there are legacy issues (or as we call them, "transition issues") that, if left unattended, might blunt the effectiveness of the new executive.  Identifying these issues and setting corrective action into motion before the new executive comes on board can help lay the groundwork for the executive and organization to thrive.

Thrive - Some simple actions in the post-hire phase can have a dramatic impact on success and help flatten the executive's learning curve: providing a solid orientation and encouraging the executive to build key relationships early; ensuring that there is an agreed-on set of priorities for the first 12 to 18 months of the new executive's tenure; building a strong social contract between the board and executive with clarity about roles, responsibilities and expectations; and establishing performance monitoring mechanisms and an evaluation plan that addresses both the board's performance as well as the executive's.

The following is an outline of some of the major steps in the "prepare" or "getting ready" phase of an ETM project.  This article is not intended to provide turn-by-turn directions, but to offer an overview map of some of the major features of the trip ahead.

Step 1 - Ensure that the organization is stable and ready to hire

Before launching the search, the first thing to consider is the organization's stability and its readiness to hire.  You want to ensure that the organization is financially, politically and emotionally ready to approach the hiring process in a proactive, future-oriented way.

Key questions include: Are there immediate concerns about the organization's viability?  Is it facing a financial crisis?  Is it politically under fire?  Is it facing some other sort of threat?  Similarly, what's the internal emotional climate?  Is there turmoil over the circumstances of the executive’s departure?  If the leadership team is too distracted by doubts about stability or infighting, or if they are still in "reaction mode" due to past events, they can't be expected to approach the planning process with the appropriate frame of mind.

In these turbulent cases, the board needs to attend to the organization's stability needs first.  If the incumbent executive's departure is imminent or he/she has already departed, the organization should consider hiring a skilled interim director to help "settle things down."  An interim director will also take the urgent pressures off the board leadership so that they will have the time and attention to address the transition in a thoughtful and deliberate way.  Most communities have a large pool of nonprofit consultants—many of whom are former executive directors—that is a rich source of potential interim leaders.  (We will have more on interim executives later in this series.)

In extremely unstable situations, depending on the severity and prognosis of the crisis, financial or otherwise, it might be wise to forgo the hiring process altogether and consider a merger or consolidation with another nonprofit as a means to ensure the viability of the programs.

Stability questions are not limited to organizations in crisis.  All organizations need to consider the executive's workload and address the need for interim management. Key deadlines and other obligations that might come due during the interim period also need to be identified.

Step 2 - Assemble the team

A transition committee should be appointed early in the process.  Usually this is a small team of board members (about four) and may include one or two staff members.  Larger, more complex organizations may have larger transition committees.  In these cases, six to ten members, or more, is not uncommon.  Typically, these larger committees have one or more subcommittees that focus on key areas of the transition, for example, a search subcommittee, a transition issues subcommittee, etc.

The transition committee has four main duties:

1. Ensure healthy closure with the departing executive and a plan for the interim period.  Provide for appropriate acknowledgement of the departing executive’s legacy.  Arrange a farewell ceremony that provides acknowledgement and allows the staff and board to come to terms with the loss of this leader.  Recruit an interim executive, if needed.  Provide for the transfer of duties to the interim and the successor executive director.  Clarify the departing executive’s role in the transition and beyond, if any.  Plan the departure communications.
   
    
2. Plan the transition and search activities.  Assess the board's and staff's time and skills to manage the transition.  Identify and contract with outside consultants that may be needed in the transition.  Ensure that the transition involves an appropriate level of assessment and planning.  Assess the organization's current status: its strengths, challenges and opportunities.  Ensure that the transition issues are identified and that a plan is in place to address them.  Clarify the organization's present and future leadership needs and articulate those in a profile of skills and characteristics needed in the next executive.
   
    
3. Execute the transition and search plans.  Ensure that the transition issues are addressed.  Place the advertising and conduct outreach that yields a diverse candidate pool.  Screen resumes.  Arrange and conduct the interviews.  Screen candidates, check references and forward finalists to the board for final consideration.  Negotiate the terms of employment with the selected executive.
   
    

4. Provide a healthy start for the new executive.  Ensure clear articulation of agreed-on priorities for the new executive's initial tenure—the first 12 to 18 months.  Announce the appointment to key external and internal stakeholders.  Provide the executive with an orientation to the programs, systems, people and stakeholders.  Encourage the new executive to build key relationships early.  Arrange for professional development and mentoring for the new executive, if needed.  Plan the initial performance evaluation.

Step 3 – Conduct an assessment to ensure that you understand the organization's situation

After the question of organizational stability has been addressed and the transition team is in place, the next activity should be an organizational review or an assessment.  The goal of the review is to ensure that the transition team and board truly understand (and agree on) the organization's situation, strengths and assets, transition type, challenges, and opportunities.

Transition type has to do with the organization’s status and trajectory.  The four classic types are:

• Start-up—A new project that needs help getting launched or established.
   
• Turnaround—An organization facing some degree of trouble and in need of a major shift in its situation and/or direction.
   
• Realignment—An organization, typically with a track record of success, which may appear to be on a solid footing, but the assessment reveals that it has peaked or may even be slipping into decline.  Its mission, programs, services and/or business model are out of date.  It is in need of a strategic makeover or significant restructuring.
   
• Sustain success—An organization with a track record of success that's on a solid footing and moving forward in a positive direction.

Whether the departing executive is the founder or a long-term executive is another major factor to consider.  Founder transitions typically involve more complicated separation issues.  Long-term and founder transitions usually involve more complex organizational development activities during the transition.  Often, these executives' jobs have become an eclectic mix of duties.  When you begin to unpack the job, you often find elements of two, three or more jobs.  Segregating and delegating these extraneous duties and getting down to the executive's core responsibilities can be a complicated developmental exercise in itself.

Step 4 – Identify the transition issues and develop a transition plan that maps out corrective actions

The success of new executives has as much to do with the circumstances that they step into as it has with the talent that they bring with them.  For this reason you'll want to make sure that the platform for your new executive is as solid as you can make it.

The assessment will typically surface a number of legacy issues, which might hinder the new executive's performance, if left unattended.  At a minimum, they can provide a major distraction during his/her entry phase.  Some of these issues might be better addressed before the new executive is hired.  At least consider beginning some corrective action if the issue is too big to tackle during the interim period before the new executive starts.  Examples that we have encountered include small system changes, such as financial information that was too limited, which was easily resolved with an update of the accounting software and a redesign of existing management reports.  Others have been larger issues with corrective actions that carry over to the new executive's tenure, such as restructuring a board whose composition did not fit with the expanded fund development role they needed to play.  Some large-scale changes may require outside consultation or expertise.

Step 5 – Conduct a leadership planning session to ensure that the board is clear about the organization's current and future leadership needs

Depending on how recently (and deeply) the board has been engaged in strategic or long-range planning, the leadership planning discussion with the board might be a matter of revisiting key elements of the strategic plan and moving directly into a discussion about the implications for the next executive's leadership role.

If a strategic plan is non-existent or it's out of date, the planning work may need to begin at a more fundamental level.  One potential planning tool is a board-staff mini-retreat that uses a capsule version of strategic planning to develop a shared sense of the organization's current and future leadership needs as well as identify the transition issues.  You might want to include outside content experts in part of the mini-retreat to help broaden the points of view and deepen the information base.

The products flowing from the leadership planning discussion include:

• A narrative statement (3-5 paragraphs) that lays out the leadership opportunity for the next executive.
• A list of key characteristics, skills and other attributes that you are seeking in the candidates.
• An initial list of priority items that the board would like to see accomplished early in the new executive's tenure.
• A list of the board's insights about how its own role might evolve. (Some of these observations might become transition issues to be addressed in the interim period before the new executive starts.)

Step 6 - Plan the hiring process

The leadership planning work should have resulted in clear impressions of the current and future leadership needs of the organization and offered some insights about the mix of skills, experience and leadership attributes that might fill those needs.  The next step is to translate these impressions and insights into a position profile and other search collaterals.

Position profile. This three-to-five page document captures the essence of the organization, lays out the leadership opportunity and outlines the essential characteristics sought in the next executive.  It begins with a brief organizational history followed by a summary description of the programs, staffing, governance and finances.  It typically also includes a description of the leadership opportunity or provides an outline of the expectations being set out for the new director.  It concludes with information about how to apply.

The position profile is usually posted on the organization's web site and serves as the basis for a condensed version (a position announcement) that is used in recruitment outreach e-mails.  It also serves as the "source" document for recruitment ad copy.

Compensation research.  Before launching the search the transition team should have an understanding of how the organization's proposed compensation package compares to its peers. There are a number of salary and benefit surveys available, both local and national.  Sources might include your organization's national office or association, your statewide association of nonprofits and the local United Way.  Other sources include reports by Abbott, Langer & Associates and Guidestar.org.  Many of these studies can be reviewed for free at the Foundation Center's affiliate libraries.

Search plan and budget.  A search plan is usually a short (two-to-four page) document that outlines the strategies for developing the candidate pool and summarizes the key search and selection activities.  It also should include a projected timetable.  It concludes with a budget that outlines the costs related to the search: advertising and outreach, consultation fees, candidate travel reimbursements and relocation stipend, if any.

Conclusion and Next Steps

At this point, the organization should be on its way to addressing the transition issues and ready to launch the search.

Selecting and launching a new executive is among the most influential and risky activities that a board can face.  The risks of a bad hire can be greatly reduced by good assessment and planning work that enables the board not only to attract the right talent, but helps them to weigh that potential talent against their rich understanding of the organization's current and future leadership needs.  The risks can be further reduced by removing past barriers and setting the stage for more effective leadership for your next executive.

Coming issues of TransitionLeader will address "phase 2," the search and selection and the "pivot" process followed by the post-hire phase.  The capstone in this series will be an article on the role of interim executives.  If you have any questions about the topics discussed here, feel free to call us at (301) 439-6635 or use the "ask a question" form on our web site.

Study of New York City nonprofit executive directors finds that 45% of them will retire in five years. Program launched to prepare new leaders - On October 23rd, the United Way of New York City announced the findings of a two-year study that found that 45% of current executive directors of New York City nonprofits will retire in the next five years.  Responding to the findings, the United Way established a program to train the next generation of nonprofit leaders.  The program will be offered for senior fellows beginning in January 2004, and for junior fellows beginning in March 2004.  Both will be delivered at Baruch College with tuition paid by the United Way. Click here to read more about the fellows program. Click here for a copy of the study. (PDF - Requires Adobe Acrobat.)
 

Executive Director's Survival Guide - Mim Carlson's and Margaret Donohoe's new book, The Executive Director's Survival Guide, has been published by Jossey Bass.  It provides new insight, inspiration and tools to meet the real life challenges and rewards of leading a nonprofit organization and thriving in this job.  It is filled with practical advice for succeeding in the position.  Available from Amazon.com or your favorite local book store.

Succession Planning Toolkit - The Illinois Arts Alliance has published a Succession Planning Toolkit.  Written from a search perspective, it is largely directed at transition rather than succession.  Nonetheless, the toolkit addresses important questions.  It should be a great help to board chairs and members, executive and artistic directors, and others concerned about the long-term well being of arts organizations.  Available from the Illinois Arts Alliance.

The First 90 Days - A new book by Harvard professor and transition expert, Michael Watkins, is likely to have crossover appeal to nonprofit leaders.  The First 90 Days: Critical Success Strategies for New Leaders at All Levels offers strategies for moving successfully into a new role at any point in one's career.  The book builds on the framework outlined in Watkins' previous works:  Right from the Start and Taking Charge in Your Leadership Role: A Workbook.  Available from Amazon.com or Harvard Business School Press.
 

New England Executive Transition Partnership – Former Boston Globe Foundation executive Suzanne Maas is working with a growing network of New England foundations and funders to launch an Executive Transition Management program.  Following introductory workshops on ETM supported by the Annie E. Casey Foundation, with coaching from CompassPoint Nonprofit Services and TransitionGuides, the New England ET Partnership raised funds for planning and has start-up commitments for a new program to be launched in 2004.  For more information, contact Suzanne Maas at smaas@maasmarketing.com.

Maryland Nonprofits Report on ET Initiative - In October, the Maryland Association of Nonprofit Organizations published a report on its ET Initiative.  The Executive Transition Initiative - Strengthening Maryland's Nonprofits During Leadership Change describes the Initiative's services, profiles seven organizations that used the service.  The report is available online - click here.  (PDF - Requires Adobe Acrobat.)

New York City - In September, TransitionGuides made a presentation on ETM as a capacity-building tool for the New York Regional Area Grantmakers and the Support Center of New York.  Follow-up discussions are moving forward.

Baltimore Area Grantmakers – In July, three foundations (Baltimore Community Foundation, Annie E. Casey Foundation and Goldseker Foundation) hosted an information session for Maryland foundations and corporations to expand support for the Maryland Association of Nonprofit Organizations Executive Transition Initiative.  Over thirty funders participated and follow-up is underway with several potential new Initiative supporters.

TransitionGuides offers assistance and consultation for foundations, nonprofit associations and management support organizations interested in establishing ETM programs. Please call us at (301) 439-6635 for more information.
 

Leadership Succession Workshop - In September, 60 Minnesota executives and board leaders attended a succession workshop led by TransitionGuides and hosted by St. Thomas University Nonprofit Management Center.  This session was part of an ongoing series of monthly gatherings of executives to discuss leadership succession and transition.

Organizational Leadership Succession - In October, the Neighborhood Reinvestment Corporation with Annie E. Casey Foundation support sponsored a three-and-one-half day leadership succession workshop for board chairs and executives that was hosted by the James MacGregor Burns Leadership Academy at the University of Maryland.  Teams from ten organizations participated in this pilot workshop.  Follow-up coaching is being provided to assist each organization in completing an emergency succession plan and in developing a longer-term strategy to provide ongoing attention to leadership development and succession planning for board and staff.

Training for Executive Transition Consultants - In October, TransitionGuides and CompassPoint sponsored a two-day colloquium for ETM consultants and a three-day introductory session for experienced consultants wanting to move into the ETM arena.

19th Fall Conference for Community Foundations - In October, TransitionGuides participated in the 2003 Community Foundation Conference in Baltimore presenting a session on Executive Transitions and Capacity: A Community Foundation Leadership Issue.

ARNOVA Annual Conference - In November, TransitionGuides, in cooperation with Neighborhood Reinvestment, will lead a colloquy at the Association for Research on Nonprofit Organizations and Voluntary Action annual conference in Denver.  The session, Executive Transition Management: Establishing a New Brand of Capacity Building through Theory, Research and Practice, will explore the development of ETM practice.

National Association of Private Special Education Centers - In January, TransitionGuides will be part of NAPSEC's 2004 Leadership Conference.

TransitionGuides offers customized training on a variety of executive transition topics for foundations, nonprofit associations and other groups.  Please call us at (301) 439-6635 for more information.
 

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 | 11/17/03
 

An Annie E. Casey Foundation ETM Partner