Planning for change – executive transition

Byron Johnson, Project Director, Compasspoint Nonprofit Services

Change is a part of our personal lives and a part of organizational life. We asked Byron Johnson at CompassPoint Nonprofit Services a few questions about the process of planning for a change in executive leadership.

What is a succession plan and why is it important for a non-profit organization to have one?
Succession planning builds staff skills towards achieving an organization’s strategic vision, builds the leadership capacity of staff, and develops a pool of potential management successors.  It also provides the opportunity for some organizations to diversify their agency leadership.

What should the succession plan include?
There are two types of written succession plans: 1) an emergency succession plan, and 2) a departure-defined succession plan.

An emergency succession plan ensures that key leadership and administrative functions and services continue without disruption in the event of an unplanned, temporary absence of an administrator. It should include the following components:
1. A current description of the key functions of the executive director
2. A list of functions that would be covered by an acting director, what his or her authority would be, and which functions would be covered by other staff, e.g., government funder relations covered by the Director of Programs.
3. Who has the authority to appoint the acting director.
4. Standing appointee(s) to the position of acting director (with first and second back-ups) and compensation for acting director(s).
5. A cross-training plan for the identified back-ups that ensures they develop their abilities to carry out the executive director’s key functions.
6. A description of how the Board will support and supervise an acting director.
7. A communication plan in the event of an emergency succession (who gets notified and when).
8. An outline of procedures to be followed in the event that an emergency absence becomes a permanent absence.

What are the challenges we might face if our executive left and we didn’t have a plan in place?
Lack of succession planning can result in what we call a post-transition “meltdown”.  An organization can become so traumatized when faced with the prospect of dealing with an unplanned leadership transition that program delivery, funding, and by extension, the whole community can be adversely affected.

What is a departure-defined success plan?
A departure-defined succession plan is created when an organization’s leader has announced they will leave in two or more years.  This plan includes identifying the agency’s goals moving forward, determines what the skills their successor will need to achieve those goals, and identifies what in the agency needs “upgrading” (board governance abilities or fundraising capacity, as examples) in order for the agency to advance their goals.  The two year planning timeline gives the departing executive and others time to address some of the upgrades before the successor comes on board.

Related to this is another way of thinking about succession planning: Strategic Leader Development, which is the ongoing practice of defining an organization’s strategic vision, identifying the leadership and managerial skills necessary to carry out that vision, and recruiting and maintaining talented individuals who have or can develop those skills.  This is also sometimes referred to as “building the bench”.

What should a departure-defined succession plan include?
It should include the following elements:

a) A plan for dealing with the personal and professional barriers for the executive director who’s leaving.
b) Setting a date for the executive director’s last day in the office.
c) Any plans for grooming their successor (when appropriate).
d) Integrating the succession plan into the agency’s broader strategic plan.
e) A communications plan—who will be told when about the executive’s planned departure?
f) Conducting a “Sustainability Audit” to identify the operational upgrades needed.
g) Plans for solidifying the management team, if applicable.
h) Identifying board and staff back-ups for the executive’s key relationships.
i) A plan for putting finances in order.
j) A plan for building financial reserves and securing multi-year funding.
k) Agreement on the ED’s emeritus role, if the departing executive will have an ongoing formal relationship with the agency.

How does the presence or absence of a succession plan impact fundraising?
Most funders and supporters breathe a sigh of relief when there is some form of succession planning rooted in an organization.  Knowing that the organization can and will continue in the face of leadership transition makes everyone feel at ease and as a result prevents many fundraising hiccups that may occur during a transition.

For more detailed information on success planning visit www.compasspoint.org or www.transitionguides.com.

Byron Johnson, CFRE is a Project Director for CompassPoint Nonprofit Services, one of the country’s leading nonprofit consulting organizations, based in the San Francisco Bay Area. Prior to joining CompassPoint, he worked in senior development positions for San Francisco State University, the East Bay Asian Local Development Corporation, and the YMCA of the East Bay. A past board member of the Golden Gate chapter of the Association of Fundraising Professionals, he is currently an advisory board member of the Multi Cultural Alliance, a special year-round fellowship program designed to diversify the fundraising profession and to develop skills among aspiring under-represented fundraising professionals. Mr. Johnson consults in fund development and other areas of organizational capacity building, which include fundraising planning and coaching, strengthening foundation and individual donor development work, and donor solicitation training.