The e-newsletter on nonprofit executive succession and transition.
Vol. 2 No. 4, Fall 2005
In this Issue
Welcome to the fall edition of TransitionLeader. Thus far, 2005
has been an amazing year for those of us who care about and are involved
in ETM work. Interest in Next Steps workshops for long-term and
founder executives has culminated in two sold-out events. For the third
year in a row, ETM workshops where conducted at the Alliance for
Nonprofit Management conference, and their attendance was at an all-time
high. A recent story in the Wall Street Journal may signal that
the mainstream media are starting to pick up on the impact that boomer
retirements will have on nonprofits.
In previous
editions of
TransitionLeader
in a series of articles we discussed the "Prepare, Pivot and Thrive"
model of executive transition management in step-by-step fashion. In the
last edition, we looked at the role of the interim executive director.
In this issue, we explore founder transitions. (see
www.transitionguides.com
for earlier articles)
Dear Colleagues and Leaders,
Like many, I was appalled and angered by our country’s lack of leadership and capacity to care for and respond to those most vulnerable during Hurricane Katrina. As a white man with access to power, I have witnessed and know how leaders with power pick up a phone and make things happen. From my viewpoint, for days, nobody stepped up and made those calls and thousands suffered and many died as a result. It is indeed “unacceptable.”
As a leader who specializes in transition management, I’ve been asking myself and my colleagues what’s our responsibility? A sermon on Sunday gave me some important clues. The minister commented on a news reporter who asked how so many poor people got to be in New Orleans. For those like us who work in communities, this is an astonishing question. The minister went on to remind those less aware that there are poor in every community. The problem, he pointed out, is that for 25 years we’ve let the poor be invisible. Our national debate, he went on, has been about prayer in schools and abortion rather than equity and social change.
At TransitionGuides, our mission is to work for a more fair and just world through leadership transition and strategy services to leaders and organizations. I believe we can’t sit in the back of the church on this one and wait. We and all of us with a similar mission have a responsibility to enter into conversation in our communities and in the communities we serve about how we can contribute today in new and different ways to a more fair and equitable nation and world. There is enormous need for a response on the Gulf Coast and in every community in America.
We are initiating discussions with our partner organizations (management support organizations and funders), our consultant colleagues and leaders and organizations we’ve served to better understand how we can individually and collectively respond to this American tragedy and opportunity.
To facilitate these conversations, we will proactively seek to be part of the national conversation and will explore how our talents and resources can be helpful. We invite transition, search and organizational development consultants, interim executives, leaders of organizations we’ve served, management support organizations and anyone interested to dialogue about managing this transition and supporting organizations in identifying and supporting the leadership talent to respond.
William Bridges, thought leader on transitions, suggests leaders and organizations often address symptoms and miss the “big change”. We’ve gotten a powerful wake-up call. Let’s talk and work together to use our collective talents to make our communities and nation a more fair and just place for everyone.
Peace,
Tom Adams
Founder
Transitions: Creating Good Endings and New Beginnings
By Tom
Adams, President, TransitionGuides
The following article is a summary from Founder Transitions: Creating Good Endings and New Beginnings, the latest volume in a monograph series on executive transitions and executive transition management. Funded by the Evelyn and Walter Haas Jr. Family Fund and the Annie E. Casey Foundation, the series is a joint effort of CompassPoint Nonprofit Services and TransitionGuides among others, and now includes four publications, all of which are available through the Annie E. Casey Foundation and online at: http://www.aecf.org/initiatives/leadership/reading.htm.
Moving On: Challenges and Opportunity
Between the late 1960s and the late 1990s, America’s nonprofit organizations grew dramatically. Between 1977 and 1997 alone, the number of charitable organizations doubled from 406,000 to 835,000. Today, the generation of men and women responsible for the front end of this explosion of civic growth are approaching retirement. Three separate studies have projected that 50-85% of all nonprofit executives will leave their positions during the next five to seven years; founders and long-term executives made up between 39-52% of the respondents.
If you are a founder, you may have heard from colleagues or seen first-hand how traumatic a transition can be. If you are a board leader (or a funder), you know the organizational risks associated with a poorly managed executive transition. You may also recognize your reliance on the founder. Sustaining the work of the organization without this leader may appear daunting, perhaps nearly impossible.
The Transition Opportunity
Despite these (often warranted) fears, there is good news about executive transitions for both founders and boards. During the last decade, several national and local foundations have invested in an approach to these challenging periods called executive transition management (ETM). This emerging practice increases the odds of successful transitions for all nonprofit leaders, and particularly founders. It includes concrete steps and a process that a founder can use to manage his or her departure. It also offers board leaders a way to plan responsibly for and lead a successful founder transition.
New Beginnings shares some of what we have learned in developing ETM and provides founders, their board leaders, and supporters specific options for planning and managing a transition, whether it is happening now or won’t happen for ten years.
Why Founders and Their Transitions Matter
In the nonprofit sector, founders--their passion and entrepreneurial drive--create extraordinary social benefits. Given founders’ roles in building and sustaining critically needed organizations, it is important to celebrate their work and invest in successful transitions that protect their legacies. We need to pay attention to their transitions to ensure that founders’ unique contributions, often made over the course of most of a professional lifetime, are not lost.
By focusing needed resources and support on these transitions, we can provide good and fitting endings for the founders leaving their posts. At the same time, we can help to pass on the powerful community assets developed by founders and usher in a dynamic new generation of leaders whose creativity and energy can continue to provide inspiration, new ideas, and programs that respond to the ever-changing needs of our communities and nation.
Founder Transitions – Risky and Complex
While founders and particularly their transitions are not well studied, our experience during the last decade suggests that founder transitions are especially hazardous for nonprofit organizations. Most seasoned nonprofit leaders can tell you more than one story of a failed or traumatic founder transition.
Embedded in those stories, you will find a set of complex questions for founders and their boards that often touch the core identity of both the executive and the organization. Avoiding or mishandling these choices increases the likelihood of a difficult transition. Recognizing these issues and making wise and well-timed decisions can lay the foundation for a successful transition.
The Founder’s Dilemma
The founder’s challenge may begin with a simple question: Do I want to leave? This deceptively simple question may give rise to several issues (see the monograph for a full discussion of these issues):
- Identity
- Letting go of position and power
- Confusion about what kind of change or break is needed
- Career/professional uncertainty
- The loyalty trap
- Fear of organizational collapse
- Financial considerations
- Founder’s early life experience and motivation
The Board’s Dilemma
The relationship between the founder or long-term executive and the board contributes to the complexity of founder transitions (see the monograph for a full discussion of these challenges):
- Accountability/who’s “really” in charge
- Survival fear/responsibility panic
- Time and commitment anxiety
- Authority and power issues
- Competing values
- Accountability
- Unattended organizational weaknesses
- Fundraising dependence on founder
- Mission creep and/or static or unfocused direction
While there may be no simple solutions to these difficult problems, there are several paths founders and their boards can pursue to address these issues and strengthen their organizations.
Facing Transition – Paths for Founders and their Boards
Successful transitions require change both from the founder and the organization. The founder must tend to several private and very personal issues in order to prepare to move on. Similarly, boards and their leadership must often increase their levels of effort and involvement. Tim Wolfred of CompassPoint Nonprofit Services describes this board engagement process as “stepping up.” The quality of the executive’s private work and the board’s ability to step up can predict the success of the transition. Both the board and the founder then have a responsibility to plan for the transition itself.
Getting Started
Getting to a clear decision to move on generally requires a good deal of forethought centered on two key questions:
-
What’s going
on?
- Do I still want to lead this organization?
- Is it right for me? Am I right for the organization and its needs?
-
Am I ready to
make a decision?
- Am I physically and emotionally ready to take on this important life question?
- Am I financially ready to make a change, whether to retirement or another position?
- Do I have the necessary support systems in place to go through what is an emotionally and intellectually challenging change process?
Thinking about these questions does not necessarily lead to a transition. For example, one founder felt burnt out, but a three-week vacation to Europe re-energized him and led to a renewed commitment to his organization. Another founder decided after 15 years as an executive, she needed a sabbatical and returned from the sabbatical committed for another five years or more.
This private reflection period can last months or even years. At some point, however, some action becomes necessary. Possibilities include:
- Formulating the key personal and professional questions facing the founder;
- Taking a long vacation or sabbatical to prepare for or to begin exploring the decision to depart;
- Getting professional consultation or support around the transition decision; and/or
- Setting an initial timeline for deciding or for departing.
From Reflection to Assessment
Reddington and Vickers, in Following the Leader: A Guide for Planning Founding Director Transition, point out that as a founder begins to think about moving on, a new kind of leadership is required. “It is not the leadership of imagining a new thing, or creating, building, sustaining and renewing that thing…. now your leader wisdom needs to focus on… two kinds of challenges: the leadership of preparing the way and the leadership of letting go.”
The private reflection period is often followed by a private assessment phase. Here the founder privately launches both “letting go” and “preparing the way” activities. The founder may begin to broaden his or her circle of “trusted confidantes” or engage an executive coach who helps reflect on the hard questions for the founder and the organization. Peer networking in confidential and safe environments has also proven valuable to founders during this personal assessment period.
Going Public: Leadership Succession Planning
Depending on the circumstances and timing, the founder’s reflection and assessment should ultimately prompt a sense of urgency around a more active, public phase of the transition process. When there is 18 months or more before departure, this often takes the form of leadership succession planning.
There are two basic approaches to succession planning:
1) Replacement, focused on identifying emergency or long-term successors for the chief executive and other critical management or board positions; and
2) Leader Development, aimed at strategically investing in human capital in the organization at all levels, often with focused attention to key leadership and management positions.
Competencies and Key Relationships Review
For any of the types of succession planning, it is important to focus on the departing leaders’ competencies and key relationships. Often with a small working group from the board and/or with other senior managers, the founder creates a current picture of what her or his role is in the organization and what competencies it takes to be successful in that role.
In addition to holding a set of critically-needed skills or competencies, the executive often plays a major role in and controls the key relationships related to fundraising, policy and legislation, technical expertise, and other functions central to the organization’s mission.
This process of competency and relationship review also makes the founder’s “letting go” more real by sharing information and investing in expanding organizational capacity. It speeds the board’s “stepping up.”
Organizational Assessment and Capacity Building
Besides competency and relationship review, the other key piece of succession planning is organizational self-assessment and capacity building. When done with an eye to identifying and building on the strengths of the organization, the assessment begins the process of exploring the founder’s legacy: what values and ideas should be sustained after he or she leaves. It can also serve to create an action agenda focused on strengthening the organization both before and after the founder departs.
From Succession Planning to Active Transition
Typically, the public announcements of a planned transition occur incrementally. First, a team of board leaders works with the executive to craft a transition plan, timetable, and budget. They decide on what if any outside help is needed to manage the transition. These discussions include a detailed look at the communications plan.
For a number of reasons, the organization may consider an interim executive. (For more information about interims, please see the ETM Monograph series, Volume Two: “The Power in the Middle: Interim Executive Directors and Transitions.”) Given the complexities of founder transitions, some outside assistance is often useful. A separate monograph, “Capturing the Power of Leadership Change: Using Executive Transition Management (ETM) to Strengthen Organizational Capacity” describes the ETM approach in detail. A brief summary follows.
Executive Transition Management (ETM): Prepare, Pivot, and Thrive
ETM combines traditional executive search and organizational development services in a way that can be tailored to the transition and broader needs of any agency. It is a comprehensive strategy for managing the entire transition process from the departure of the current executive to the successful launch of the new leader that takes place in three identifiable phases:
- PREPARE: Transition & Search Planning
- PIVOT: Search, Selection & Organizational Preparation
- THRIVE: Post-Hire Launch and Support
(The three phases are discussed in a detailed, step-by-step fashion in a series of previous issues of TransitionLeader, beginning with Volume 1, Number 3.)
Final Thoughts: Legacy and Letting Go
While the ETM process follows a tested model, there is no simple recipe for founders seeking positive transitions. Each founder and organization is unique. A “legacy” must be handed on. Like an estate, there is significant value in this legacy. The founder’s challenge is to detach sufficiently to engage in a process of clarifying what about his or her legacy the organization should sustain.
Guided or facilitated story-telling about the organization, its history, and work is one way to identify and begin to clarify the founder’s legacy—for both the founder and the organization—providing a way for the founder, board, and staff to explore what about the values and mission are “sacred” and should be sustained under new leadership. Some founders find it helpful to draft an “ethical will” that describes what they think is important and valuable about the organization and what the founder wants to hand off to the next executive or his/her hopes for the future.
For the board and organization, updating a strategic plan or revisiting the mission, vision, and direction of the organization can also sharpen a sense of the founder’s legacy. Boards and founders face a balancing act of getting sufficient clarity about direction from the founder to hire the right executive, while leaving enough room for the new executive to contribute.
Clarifying the founder’s legacy is important to the communication planning around the transition, as well. This plan may include two to three sentences about how the founder wants to be remembered and for what contributions. Similarly, this statement can describe what the founder’s next focus will be and help develop his own new sense of identity.
Besides their legacies, all founders have their shadows or weaknesses. Sometimes in the pain of letting go, the founder’s many positive contributions may even get overlooked. It’s important for both the founder and the board to provide a balanced and, to the extent possible, a positive perspective on the founder and his or her contribution.
About the Author
Tom Adams is the President and Senior Managing Partner of TransitionGuides, a consulting and educational services company specializing in Executive Transition Management, and consultant to the Annie E. Casey Foundation’s Leadership Transition project. Tom has more than 30 years experience serving nonprofit organizations as an executive director, senior manager of a national organization, and as a consultant. His twelve years of research and practice in the area of nonprofit executive transitions includes five years as Director of the Neighborhood Reinvestment Corporation's Community Development Leadership Project and seven years as a private consultant to nonprofit boards and foundations.
United Methodist Health Ministry Fund pioneers succession planning workshop for grantees. UMHMF, based in Hutchinson, Kansas, sponsored a day-and-a-half workshop for long-term executives and their board chairs with 18 grantee organizations and 50 participants in July in Wichita, Kansas. There will be an additional workshop in November. Kim Moore, President of the Fund, explained, “We need healthy well-led organizations to do our job. We fund some great organizations with executive directors with outstanding track records. Our board saw this program--the workshops, the follow-on executive coaching for participants and building our succession and transition management consulting capacity--as an important and wise investment for our community.” For more information on the workshops or the project, contact Kim Moore at kmoore@healthfund.org or Tom Adams at tadams@transitionguides.com.
Enterprise Foundation Sponsors a Web-Based Seminar on Succession Planning. The Enterprise Foundation hosted a web-based orientation workshop on succession planning in collaboration with CenterPoint for Leaders, Managance Consulting and TransitionGudies in August. More than 50 participants explored--via phone and the web--how to apply succession planning to their organizations. To access the archive, including an audio-visual recording of the event, go to: www.enterprisefoundation.org/resources/trainingconf/training/elearning/archived.asp and click on "8/10/2005 Succession Planning and Executive Transition Management." For more information, contact Kent Buhl at Enterprise at (503) 553-5721 or Denice Rothman Hinden at (301) 260-9503.
Congratulations Bridgestar! Bridgestar celebrates its 10,000th member in its current newsletter and introduces a powerful new website. Visit them at www.bridgestar.org.
Next Steps is a Sell Out. The popular Next Steps workshop is in great demand for 2005! This year this unique learning and networking opportunity for founder and long-term executives was offered in three locations: New York in collaboration with the Support Center of New York, San Francisco/Oakland area in collaboration with CompassPoint Nonprofit Services and Baltimore in cooperation with the Maryland Association of Nonprofits.
Launched with support from the Annie E. Casey Foundation in 2002, the Next Steps Workshops help long-term and founder executive grantees explore the critical and complex issues around succession planning and transition. These intensive, two-day sessions provide a safe and confidential place to ask difficult questions and explore a variety of organizational and personal issues with peers and consultants. To date, more than 120 founders and long-term executives have benefited from Next Steps workshops in the Mid-Atlantic region and Bay Area.
Contact Melody Thomas-Scott at (mthomasscott@transitionguides.com or (301) 439-6635 to explore hosting this effective and popular workshop for founders and long-term executives. The 2006 calendar now being finalized, but the first 2006 offering will be in Baltimore in the first quarter.
Other Training Sessions Recently Offered by TransitionGuides
- In June, TransitionGuides presented workshops on Best Practices in Recruitment, Orientation and Succession Planning as well as Performance-Oriented Boards for the Ohio Association of Community Action Agencies at their annual conference in Akron.
- In July, the Michigan Community Action Association annual conference in Traverse City included a workshop by TransitionGuides on Leadership Development & Succession Planning.
- Also in July, TransitionGuides presented a morning kick-off workshop on Managing Leadership Change: State of the Art Tools for 170 executives of the Texas Department of Housing grantee organizations who gathered in San Antonio for their annual Executive Director’s conference.
- TransitionGuides, CompassPoint and other management support organization leaders with ETM programs led two one-day pre-conference sessions--one on interim executive directors and a second for ETM consultants--at the Alliance for Nonprofit Management at their annual conference in Chicago in July.
- In September, TransitionGuides was part of the Crossroads 2005 conference in Austin, Texas, presenting a workshop on Executive Transitions: Planning for the Future. The conference was sponsored by Greenlights for Non-Profit Success. More info at: www.greenlights.org.
TransitionGuides
also 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.
Succession Planning For Nonprofits of
All Sizes in
the August 23, 2005 edition of Board Cafe provides a thoughtful summary
view of succession planning along with a link to a sample emergency
succession plan. Available at:
http://www4.compasspoint.org/cpDir/files/documents/board_cafe/bc_2005_08.pdf.
Recruiting At The Elite Level
in the August 1, 2005 issue of The NonProfit Times provides
wide-ranging advice from a variety of executive recruiters on recruiting
top-level leaders. Available at:
http://www.nptimes.com/Aug05/npt2.html.
Demand Mounts at Nonprofits for Executives to Fill Top Jobs in the August 9, 2005 edition of the Wall Street Journal which talks about the impact of boomer retirements. It also mentions (but provides scant evidence) of the upward pressure that the talent shortage is placing on executive salaries. Perhaps the most interesting thing about the article is not the content but the fact that the mainstream media is starting to pick up on the impact the boomer age wave will have on nonprofits. The article is available only to WSJ Online subscribers, but a summary is available to the public on the Foundation Center website at: http://fdncenter.org/pnd/news/story.jhtml?id=113700020.
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