Editors’ note: This article contains boxes and sidebars not available in the digital edition. Please order a reprint for the full article. It is adapted from Managing Executive Transitions: A Guide for Nonprofits by Tim Wolfred of CompassPoint Nonprofit Services (www.compasspoint.org) and published by the Fieldstone Alliance.

Today, a shift in executive leadership may be more charged than usual and more often delayed. Some long-serving executives who have neared retirement now say they may have to stay on longer. As a result, nonprofits may have to arrange for executives who extend their tenure while also considering organizational priorities for future leadership. This article outlines how organizations can use periods of transition to craft a leadership agenda that is true to their missions, that can engage existing staff members, and that help recruit the most well-suited incoming executives. Executives give several reasons for extending their tenure—and sometimes more than one:

  • “I’ve got to see my agency through this financial crisis and restructuring.” A variation on this statement is, “I’m the one who can bring in that stimulus money, and I’ve got to stay until that funding is nailed down.”
  • “Because of the decline in the stock market, my retirement savings have shrunk dramatically. I’ve got to save more before I’m comfortable leaving this job.” A variation on this statement is, “This executive job is extremely stressful, I know I need to get out of it, but I can’t until I know which jobs I could take. And I’m not clear on these options yet.”

It’s all reasonable on the surface. But while delaying executive departure has the potential of benefiting a nonprofit, it can also do harm.

Once a leader declares interest in leaving an organization, a nonprofit board must consider the prospect of an executive’s waning energy or a growing mismatch between an executive’s capacity and the skills needed in the job. The declaration heightens a board’s responsibility to pay attention not only to supporting an executive but also to preventing him from staying too long and risking organizational stagnation and decline. As the literature on executive transitions indicates, a nonprofit board’s responsibility is to help a leader devise a plan that works best for an organization and that is fair and respectful of a leader’s contributions.

Here are some suggestions for boards that face delayed executive departures:

  1. Strategies for executive fatigue and burnout. If a board agrees that an executive should stay beyond a previously planned departure date, it should monitor the executive’s stamina for leading and managing and look for burnout. If exhaustion is an issue, the board can take the following measures:
    • help an executive restructure his job, perhaps by instituting a four-day workweek or by encouraging the delegation of some tasks to others; and
    • encouraging an executive to work with an executive coach.
  2. Strategies for skills mismatch. If a mismatch in skills is apparent or if a board believes that an executive should leave on schedule, it should ensure that an executive is treated as fairly as possible by offering a retirement package, by providing job coaching, or by moving him to another position or onto retainer to consult with his successor. While often frowned upon, these last two options are legitimate if structured to support the work of the agency and the incoming executive.

In the end, however, when a leadership turnover has been scheduled, the same principles for managing executive transitions apply in turbulent times as in “normal” ones. And for some agencies, the future is sufficiently uncertain that characteristics such as agility, persuasive power, and strategic thinking should be considered even more desirable characteristics for an interim executive—if you use one—and for a more permanent executive hire.

Starting with a Leadership Agenda
Turbulent times can pose more of a moving target than do periods of calm; but to hire the right person as your next staff leader, you have to be clear about your organization’s strategic vision, goals, and the internal capabilities that must be built to enable these goals. Without an understanding of where you’re going and what you need to get there, you have a pilot with no flight plan. When many external variables are in flux, your planning may take shape as a set of broad goals and conditional strategies. New leadership at a midsize arts institution in decline, for example, may face more conditional factors than would an executive at a federally qualified health center (where the level and kinds of finance streams and partners may support longer-term planning). Still, however planning is accomplished, an organization’s vision and capacity-building goals are referred to as a leadership agenda.

Crafting a leadership agenda need not take a lot of time. At CompassPoint’s Executive Transitions program, for example, when a board and staff are well organized into a committee to take on the effort, creating a leadership agenda can be done within a month’s time. At maximum, developing a leadership agenda should take no longer than two months.

Gathering Data
In creating a leadership agenda, gathering and analyzing data (steps 1 and 2 are similar to the first stages of a strategic planning process (see Figure 1). A nonprofit gathers information from key stakeholders regarding client needs, program adjustments recommended to meet those needs, and revenue sources to support the work.

Five segments of an organization’s stakeholders should be tapped: a nonprofit’s board, the departing executive, staff, funders, and peer agencies. Some committees may also want to check on client satisfaction with services and for ideas on new services. Some organizations may have other important audiences, such as a volunteer corps, that are essential to nonprofit operations. To gather this information, questions for stakeholders should focus on acknowledging an agency’s achievements and strengths, how current services could be improved, identification of critical unmet client needs, organizational constraints to improving performance and expanding services, and potential sources of support for program upgrades.

Funder input. Funding officers in the foundations, corporations, and government agencies that support your work will likely have the broadest view of the particular fields of service in which you operate. The foundation that funds a youth development organization, for instance, will likely know about innovations in the youth development arena and how shifting revenue streams might threaten financial viability or provide opportunities for program expansion. Your nonprofit’s managers and fundraising staff will have contact information for primary funders. Committee members can spread the calls to these funders among them. One member should gather all the interview results into a report.

Staff input. Among internal stakeholders, the incumbent executive will have the strongest viewpoint on future service opportunities and on needed internal capacity building. An organization should also tap staff members for their views. Organizations often use a staff survey to gain staff perspectives on future goals, internal capacity needs, and the leadership profile of an incoming executive. To promote candor, survey responses are anonymous. CompassPoint’s transition consultants routinely use the sample staff survey template on page 89.

The survey attempts to balance staff input on what’s right with an organization and with the current executive with input on what needs to change. All organizations have room for improvement in how they deliver programs. In the nonprofit world, where funding for administrative systems such as human resources management and technology support is hard to come by, requests and complaints about infrastructure tend to dominate staff responses.

This creates a conundrum. You want the process to respond to these issues without unnecessarily overcorrecting a weakness, sullying the previous executive’s name, or undercutting management in general. So it may be wise to hire a consultant to conduct interviews and manage a response to “problems” that emerge. Some organizations try to hire the “opposites” of previous managers to change a more systemic problem. This tendency is well worth avoiding.

Crafting the Agenda

After gathering information from multiple perspectives, the committee should meet to analyze the data and arrive at the following:

  • a vision for what the agency should look like in three to five years;
  • a set of strategic directions that flow from that vision;
  • the needed improvements to program and administrative systems to pursue strategic directions;
  • board development needs; and
  • the resulting first-year performance priorities for the next executive.

Mission Youth Services’ sample leadership agenda appears on page 90.

A Candidate Profile
With the leadership agenda in hand, the transition and search committee can craft a candidate profile. This profile expresses the must-have skills, experience, and attributes of an incoming executive to successfully pursue the strategic directions and capacity-building priorities in the leadership agenda.

Beyond its utility in focusing the recruitment activities, the profile, with skills sorted between required and preferred, eases the committee’s work of selecting candidates during the screening process. Without up-front agreement on the priority skills, the committee will struggle to choose among strong candidates with disparate profiles.

The candidate profile for Mission Youth Services provides an example generated from its leadership agenda (see box above).

The Payoff of Leadership Planning
Expending the time and effort to arrive at a cogent leadership agenda can be daunting, but the payoff is huge. When you spend the time thinking about what your organization can and should do to most effectively serve its community, your efforts build excitement and engagement for a mission-driven staff and board. It sharpens your picture of what you need in your next staff leader. And it draws talented candidates who gravitate to and are inspired by the strategic vision and goals you have set for your organization.

Tim Wolfred, Psy.D., leads Compass­Point’s Executive Transitions program, which he established in 1998. For more information on his book Managing Executive Transitions: A Guide for Nonprofits, see www.managingexecutivetransitions.com.

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