What is succession planning, and why does your organization need it? Succession Planning is “replacement planning” for key staff roles in your organization. Succession planning for nonprofits is routinely overlooked and yet a vital HR process. So, why is it often overlooked?
Nonprofit boards often don’t want to consider losing their outstanding chief executive. Also, there may be reluctance on the part of the chief executive (especially if he or she is the founder) to think about transitioning leadership of the organization to someone else. Whatever the reason, in the end, often neither the board nor the chief executive address it. However, the day will eventually come when the chief executive retires or resigns and then the scramble will be on to fill the void.
A study sponsored by Washington’s Eugene and Agnes E. Meyer Foundation found that 66% of chief executives are planning to leave their job within 5 years. Only 17% reported that their organization had a written succession plan. Ironically, 33% of chief executives believe that their nonprofit board will hire the right successor when they leave. I recently spoke with a chief executive who is adamant that he will not prepare a succession plan because he is fearful that addressing his succession might hasten his departure. Bad answer!
Why should your organization prepare a succession plan?
The mission of the organization is in jeopardy without thoughtful leadership transitions. Strong leadership is a critical component of an organization’s success or failure. The board must be prepared for the inevitable.
The board needs time to choose a successor with not only the right leadership capabilities, but also someone that will fit into the culture of the organization. A broad list of candidates should be considered in advance of a transition. Boards have a responsibility to find the best candidate and conduct a thoughtful ‘non-urgent’ review. They need to be comfortable that no stone is unturned and that internal and external candidates are considered.
Internal candidates need time to develop. My personal bias is to give a person who is already employed at an organization the opportunity to grow professionally for a couple of years. Statistics show that nonprofits chose an internal candidate only 40% of the time because boards fear they don’t have the fundraising or financial review expertise. Nonprofits that commit to succession planning give their current staffs better opportunities for advancement.
Thoughtful community connections need to be developed with organizational staff beyond the chief executive. I have seen organizations where all of the key donor and foundation relationships reside solely with the chief executive. If the chief executive leaves, the organization may suffer a reduction in funding until the next chief executive builds donor and funder confidence.
At BVU: The Center for Nonprofit Excellence, we recommend a succession plan that addresses all of the key leadership positions with candidates for both short-term and long-term succession as well as a process to implement the plan with time for professional development. Sorting this out early prepares your staff and board for orderly transitions. Succession plans should be prepared for key staff that have deep institutional knowledge and/or are in complex leadership roles.
Don’t put off addressing this critical process. It is vital for your organization and helpful for your funders, staff and board to know you are prepared. And most importantly, consider the consequences of not putting your organization in the best possible position to serve those that depend on you.