The e-newsletter on nonprofit executive succession and transition.   

Fall 2006   

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• Welcome
• Feature Articles
  • Sustaining Funder Relations During Executive Transition: A Conversation with Rick Moyers of the Meyer Foundation
  • Founder/Long-time Executive Director Transitions: 15 Points to Consider, by Punch Woods, former executive director, Tucson Food Bank
• Recent & Upcoming Events
• Next Steps Workshops for Founder and Long-Term Executives - Baltimore, November 30-December 1, 2006
• Other Upcoming Events
• Resources
• New executive transition guide for funders from Grantcraft
• During to Lead updated - Provides current data on executive turnover, compensation, career plans and retirement. Explores leading causes of executive burnout.
• What Business Execs Don't Know - but Should - About Nonprofits
• New board monograph coming from the Annie E. Casey Foundation
• In the Media
  • Navigating Transition Turbulence by Starting SMART
  • A New Mindset for Leadership Development
     

Thanks for your work as a champion of good endings and beginnings and increased attention to sustainable leadership development. With it our shared hopes for a more fair and just world get advanced.

Peace,

Tom Adams & Don Tebbe
 

The following is a summary of a conversation held between Rick Moyers, program officer of the Meyer Foundation in Washington D.C. and co-author of the 2006 Daring to Lead study, and a group of long-term executive directors about planning for leadership transition. The executives had concerns about sustaining funder support during and after an executive transition. Rick offered the following observations based on his experience as a funder and nonprofit executive. Rick presented his observations with the caveat that not all funders are alike. Thinking about each funder and their philosophy and goals helps leaders understand how and when to approach a funder about transition.

The Long-term Perspective – Sustaining a Positive Relationship

Organizations often think of funders and funding requests as a transaction: organization makes a request; funder considers and funds or doesn't. For the Meyer Foundation, Rick and his colleagues are interested in sustaining a positive relationship with grantees and suggest that executives and boards focus first on the relationship in planning for communication and discussion with funders. Rick observed, "If leaders think about how they would like to be treated, it will help focus on communication and actions that build and sustain trust and a positive relationship."

Funding Decisions Are Influenced by the Executive and Her/His Leadership and the Leadership Team

Most funders including Meyer don't fund leaders and organizations we are neutral about. Since our confidence in the organization is in large part based on confidence in the executive, actions are needed that demonstrate effective leadership beyond the executive and a planned approach to the transition that has a high likelihood of resulting in an effective successor.

Suggested Strategies for Sustaining Funder Relationships:

• Tell the funder as soon as you know you are leaving and do it firsthand. Hearing about your transition from someone else is not helpful to funder relations.
• If continuing support is central during the transition, bring a board member to the meeting, so there is a known leader to relate with. Put in a letter a clear and persuasive statement about why ongoing support during the transition is essential. In the letter and meeting, emphasize continuity of staff and board and the organization’s capacity to continue to achieve mission-based results. If timing of refunding isn't critical, and you can wait until the next executive arrives, accept delay and let the successor have fresh start with the funder.
• Provide the funder plenty of advance notice and request a hand-off meeting to close out current work and relationship and transfer relationship to a board leader or new executive, if there is an overlap period.
• Never works to try to wait until grant decision is made. Funders understand that organizations are vulnerable during an executive transition. Some funders are proactive in offering support during transition; some are neutral; and others have a policy that they don't fund until a new executive is hired. Regardless of the funder policy, actions that reinforce a positive relationship and provide clear communication during and after transition increase the odds of a positive future relationship and possible funding.

Founder/Long-time Executive Director Transitions: 15 Points to Consider
by Punch Woods, Executive Director (retired), Tucson Food Bank

At America's Second Harvest 2006 national conference, Punch Woods, who recently retired from his role as founder and longtime executive director of the Tucson Food Bank, led a workshop on founder transitions.  Below is a summary of  his presentation, which is based on a worksheet that he developed, with the assistance of Michael Groh, drawing on his transition experience.

1. Desirables to have in place before founder/long-time ED departs, may include:

• Healthy financial situation, such as:
  • Balanced budget
  • Realistic revenue and expenses
  • Adequate cash flow
  • Payables up to date
  • 90-day operational reserve
• Strong fund raising program, such as an annual plan with history of success
• Strong leadership/management staff staying on with successor ED
• High respect for organization particularly among key community leaders
• Recently adopted and owned strategic plan and/or directional priorities
• Leave neither trouble nor ambiguities behind, for example:
  • Remove problem staff prior to or plan to with successor ED
  • Clarify any policy confusions
  • Do any reorganization needed

2. What founder/long-time executive and board may want/need:

• Board representative conducts in depth meaningful exit interview, including the departing ED's comments about board strengths and needs.
• Board and ED mutually agree upon best post-retirement role.
• A high level of comfort about his/her successor.
• Some meaningful continuing role, while gradually declining relationship: advisor to, chair of committee, whatever works for the agency and successor ED.
• Overlap time to be helpful to the successor ED, board and staff. (Possible interview questions, "How would you feel about working with the departing ED?" "How long?" "In what ways?")
• At set date, 30 days or less, the departing ED physically moves out, but may have ongoing supportive roles with the successor including: scheduled meetings with successor to review issues, facilitate introductions to key external people, joint appearances, etc.
• Whatever may be mutually agreed upon and beneficial to departing ED and successor ED.

3. Departing ED needs to be a voice with the search committee as s/he and/or the search committee may feel the need. The departing ED will help ask the right questions and advise search committee. However, the board needs to end dependency on the departing ED and s/he should not be part of final decision; the board is hiring this person to work for them.

4. From beginning to end, staff, especially the lead management staff, needs to be included in hiring process including:

• Keep in mind the critical working relationship with staff, especially management staff.
• Hiring a successor ED is not simply adding a person to the team, but is creating a whole new team. And the rest of the team can make or break her/him.
• Board needs to listen to staff opinions and recommendations.
• Consider including two management staff and maybe other staff on search committee with equally full voice, vote and responsibilities.

5. Consider the importance of hiring from within. Secondly, look locally before considering someone outside of the community. (See Built to Last by Jim Collins for research on importance of hiring from within.)

6. Consider outside assistance: a skilled facilitator, manager or a professional search firm. S/he can be an objective voice, can say what others may feel but won’t say, and will know where to look. This person may prescreen applicants, check references, develop specifically relevant interview questions, follow up, and serve as a general ramrod.

7. Board of directors needs to be functioning well and/or have a board development plan in place, as in

• Doing best practices and/or seeking to do so.
• Has clear understanding of roles and boundaries.
• Knows board’s job description and responsibilities.
• Has high level of trust and confidence among one another.
• Function and communicate well.
• Board does not overestimate how "Good we are!" (It appears to be that it is the nature of nonprofit boards to confuse "we like one another" and "we believe in the mission" with quality of the board's performance.)
• Have accurate accounting of strengths and weaknesses.
• Be sure board and search committee have common agreement of the characteristics of the most desirable candidate.

8. Before beginning the search, launch a board development process and/or update (See 7 above). Create a strategic plan providing both framework and clear direction for successor ED and board.

9. Search committee and board must have the best possible understanding of the ED's job, both written and unspoken. Therefore consider, when replacing the departing ED, more than one full time equivalent (FTE) may be needed. The departing ED may or may not be working 60 plus hours a week, but s/he most likely was able to work smarter and faster, because of the long history with accumulated knowledge and experience. If hired from within, that person’s position may also need to be filled with 1.5 to 2 FTEs additional staff.

10. Begin process (ideally) 12 to 18 months before the departing ED's last day. For example, starting backwards:

• July 1, 2008 - Departing ED on retainer for specific responsibilities, time and pay
• June 30, 2008 - Departing ED's last day
• June 1, 2008 - Successor ED first day providing 30 days to work together
• May 1, 2008 - Successor ED resigns current position giving 30 + days notice
• March 15, 2008 - Board offers position, hires
• Feb-Mar 2008 - Deep reference checks and second and/or final interviews
• Jan -Feb Mar 2008 - Board and staff do first interviews
• Nov-Dec 2007 - Read/review candidates' resumes/applications, check references
• Oct - Nov 2007 - Advertise position
• Sept- Oct 2007 - Board development where needed, see 7 & 8 above
• July-Aug 2007 - Plan process, clarify job description, board self-evaluation
• June 30, 2007 - Departing ED advises board of retiring/departing date of June 30, 2008

11. Hire for characteristics that can’t be taught/learned: optimistic, open, charitable and trusting nature, collegial temperament, consistently shows good judgment in gray areas when under stress of time and/or workload. Program experience, fund development, finance, etc., can be learned.

12. Consider hiring an interim ED for six months to a year. This would provide more time/distance between the founder/long-timer and successor ED and give the board time to do needed development, develop strategic plan, clarify real need, reduce need to meet deadline, etc. May consider insider or not, but recognize the weaknesses and strengths of either decision:

• Insider would likely bring no surprises
• Insider would add consistency
• Insider may be quicker and easier
• Insider may not be the best fit
• May be problem if this insider interim wants to be successor ED and is not hired
• May be problem for board to not hire insider interim but shouldn't

13. What other issues need you consider and/or what may be unique about your organization that needs to be addressed.

14. Knowing your organization’s history and culture, to what are you most vulnerable? Overlook? Underestimate? Most likely get wrong? What will you do to not let this happen?

15. Plan celebration in which outgoing ED "hands the keys" to incoming, collectively and publicly, with high visibility. Do it with ceremony celebrating both the departing ED and successor ED. Possibly with spontaneous spoken well wishes from those in attendance, wave hands in the air with best wishes, a laying on of hands by everyone gathering around the successor ED, etc.

The Next Steps 2006 Calendar:

• Baltimore, MD - November 30 - December 1, 2006 - At the Annie E. Casey Foundation - For more info, call (301) 439-6635 or email Melody Thomas-Scott at mthomasscott@transitionguides.com or click here for more information.
   

• Completed Next Steps workshops:

  • Calgary, Alberta, Canada - March 6-7, 2006

  • Oakland, CA - June 5-6, 2006

  • Cleveland, OH - June 8-9, 2006

Leadership Succession and Executive Transition Clinics – 4 locations in Mid-Atlantic

Free 1-1/2 hour clinics that offer answers and advice for those facing a leadership change. Sponsored by the Center for Nonprofit Advancement, Maryland Association of Nonprofit Organizations and TransitionGuides, in cooperation with the County Government of Fairfax, Virginia.

• November 15, 2006 - Silver Spring, MD - Noon to 1:30 PM - Maryland Association of Nonprofit Organizations
• December 13, 2006 - Fairfax, VA - Noon to 1:30 PM - Fairfax County Government Center
• January 24, 2007 - Baltimore, MD - Noon to 1:30 PM - Maryland Association of Nonprofit Organizations
• February 14, 2007 - Washington, DC - Noon to 1:30 PM -  Center for Nonprofit Advancement

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.
 

  Resources

Daring to Lead 2006
CompassPoint has updated their previous landmark work with a new comprehensive national study of executive leadership at community-based nonprofits. Based on nearly 2,000 surveys from 8 metropolitan areas, the report provides current data on executive turnover, compensation, career plans, and retirement. It also explores leading causes of executive burnout.  More info at: www.compasspoint.org/daringtolead2006

What Business Execs Don’t Know - but Should - About Nonprofits
This article in the summer edition of Stanford  Social Innovation Review discusses the role that business leaders play in nonprofits - as board members, donors, partners, and sometimes as executives - while often underestimating or not understanding the unique challenges of managing nonprofit organizations. In this article, 11 executives who have played leadership roles in both for-profits and nonprofits reveal the critical differences between the two, and suggest ways that business and nonprofit leaders can use this information to create a more effective social sector.  Available at: www.ssireview.org/articles/entry/what_business_execs_dont_know_but_should_about_nonprofits/

Staying Engaged, Stepping Up: Succession Planning and Executive Transition Management for Boards
Coming soon from the Annie E. Casey Foundation, a new monograph for boards.  Available late 2006 or early 2007 at: www.aecf.org/initiatives/leadership/reading.htm or www.transitionguides.com/resources/monographs.htm

  In the Media

A New Mindset for Leadership Development by Karen Gaskins Jones and Denice Rothman Hinden in Volunteer Leadership, Spring 2006.
 

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