By Tess Escay Reynolds, Leadership Advisor and Founder of On-Hand Leadership Partners

This is the first of two articles on succession planning by Tess Reynolds, the consultant who conducted our series of four workshops on the same topic in 2022-23. You can find her second article here, as well as her blog post here.

Introduction

What’s the number one misconception about succession planning?  That the organization and its Board must wait till the top executive is contemplating leaving.  On the contrary, succession planning is for every organization, whether the leader is leaving or not, new to the organization or been there “forever.”

Succession planning begins with the acceptance that leaders leave.  Whether planned or unplanned, whether to retire or to advance to their next “dream job,” leaders will leave sometime.  Succession planning is simply that – planning for the inevitable.  Once you accept that truth, you can take steps to be prepared – whether you are the chief executive, or a Board member, or the Chair.

Succession Planning generally refers to planning for the transition of the top executive – “thinking in advance about how to set the stage for a strong transition,” according to Jan Masaoka and Tim Wolfred, formerly of CompassPoint. Once there is a succession plan for the top executive, it is wise to also do succession planning for the next level of executive leadership, and for Board leadership (especially the Board Chair and the Board Treasurer).  Succession planning is both a risk mitigant as well as an opportunity to advance leadership.

Whose responsibility is it to have a succession plan in in place?  For CEO transitions, the ultimate responsibility belongs to the Board.  One of the top responsibilities of a nonprofit Board is to select, support and evaluate the performance of the top executive.  Ensuring there is a succession plan in place for the chief executive is the Board’s responsibility.  And, as you’ll see further in this article, there is no way to have a good succession plan without deeply involving the Executive Director or Chief Executive (“ED/CEO”).

Begin with the end in mind: organization sustainability

Succession planning begins with the end in mind.  The leader’s leaving is not the end; in fact, it is also a new beginning – for the departing leader, for their successor, and most importantly, for the organization and all its people.

The ultimate goal of succession planning is organizational sustainability: the ability of the organization to achieve its mission and thrive in spite of leadership change.  Marcus Coetzee defines organization sustainability as “the reduction of organization risk that increases the likelihood that an organization will survive and thrive in the future, coupled with the mitigation of harm to the things and people around it.” Other definitions of organization sustainability include being able to “keep the business going” and “future-proofing” the organization (Colbert and Kurucz, 2007).  

With organizational sustainability in mind, it makes sense to begin today regardless of your leader’s tenure or thoughts about leaving.

The Seven Steps to a Successful Succession

My model presents seven steps to a successful succession, and this first article addresses the first four:

Step One: Conduct an Organization Sustainability Assessment.

Step Two: Create an Emergency Succession Plan.

Step Three: Build Leadership Development into your emergency succession plan.

Step Four: Work on Personal Readiness and create a Predeparture Plan.

The above four steps are advised for all organizations, regardless of whether or when the top executive is considering leaving their role.  In steps one to four, the current ED/CEO drives and manages the process; although, the Board may lead in insisting upon the creation of an emergency succession plan.

A second article will address steps five to seven, which happen after the top executive has decided to leave.  

Step One:  Conduct an Organizational Sustainability Assessment

Begin by assessing the organization’s current state of health and sustainability, which will indicate its ability to successfully navigate through the transition of its top executive.  

Many philanthropic foundations, like REDF, have a deep-engagement and partnership model with their grantees. They conduct periodic Organizational Sustainability (or organizational health) Assessments (OSAs) to shine a light on where the organization is strong and capable of immediate growth, and where it needs “capacity building” to beef up its ability for scale and greater impact.  Some of these foundations provide supplemental technical assistance or capacity building support to help their grantees shore up these critical areas.

Because some OSAs can be rigorous and time-consuming, and because not all nonprofits have a current OSA, I developed  the B.E.S.T. Organizational Sustainability Assessment for REDF’s Succession Planning workshops in 2022-23.  Participants in those workshops ranged from small, early-stage ESEs to very large and mature organizations.  To level the playing field, my OSA was designed to help participants assess their organizations in less than an hour.  My philosophy is, it is better to start small than to not start at all.  (Note: I’ve customized this tool for my clients with additional indicators meaningful to them.)

My OSA uses the acronym B.E.S.T. which stands for four pillars of organizational sustainability:

• Boards that are effective at both governance and support;
• Economic and financial indicators that support stability and growth;
• Strategies that are clear and compelling, and implemented well; and
• Talent and culture that support effective decision-making in good times and bad.

Each pillar has 8-10 indicators to measure the organization’s current state of health and sustainability.  Some examples of these indicators are listed below for illustrative purposes.

Board effectiveness	Board is active and engaged, attending Board and committee meetings regularly, easily achieving quorum at every meeting.Board maintains a healthy balance of governance and support, avoiding the extremes of either micromanaging staff or ‘rubber-stamping’ staff recommendations.Board manages itself well, setting its own goals and assessing its own performance every one to two years.
Economic and financial health	Economic model (the relationship between revenue and expenses) is viable.  Financial systems are strong, reports are accurate, and financial audits are clean with minimal requirements for correction .Financial and HR policies and processes are documented and practiced on a day-to-day basis.
Strategy and Implementation	The organization’s mission and strategy are clearly articulated and used to drive decisions.“Success” is understood and “owned” at all levels of the organization.
Talent and Culture	Senior management functions as a high-performing team and can lead the organization in the absence of the top executive.There is a clear process for making important decisions (e.g., using DARCI or RAPID) and senior leaders have authority to carry out decisions within their respective areas.

The OSA is not intended to be a scorecard, but rather a catalyst for leadership discussions, staff development plans, capacity building initiatives, Board development, and more.  No organization is good at everything all at once.  Conducting periodic OSAs shine a light on which strengths to leverage and which weaknesses to prioritize shoring up. 

Strong organizations grow both in impact and scale. Strong organizations can weather economic downturns and catalytic opportunities – and leadership change.

Step Two: Create an Emergency Succession Plan

Every organization needs an Emergency Succession Plan.  Why? Emergencies happen.  People get sick, people die.  We’re not just talking about the top executive, we’re talking about their loved ones, and other key leaders they rely on.  Without a contingency plan, leaders scramble in every direction to catch balls in the air.  An Emergency Succession Plan is just that: a contingency plan. 

There are many free Emergency Succession Plan templates available online.  Clarity Transitions and Blue Avocado offer this one under a creative commons license. 

Top executives, make it a goal this year to have an emergency plan approved by your Board.  That will mean having discussions with your leadership team and Board what their roles and response would be in the event of an emergency leadership transition.  The discussions alone are worth the effort.  Without one, you, the ED/CEO, will be catching all the balls in the air – and that means you won’t be doing your own job as effectively. 

Emergency leadership transitions are often short – three months or less – and may be triggered by both planned and unplanned events.  A temporary planned event might be a CEO’s sabbatical or a pregnancy/family leave.  An unplanned short-term event might involve a medical emergency, for example. 

An Emergency Succession Plan provides a way for organizations to continue delivering their mission during an emergency absence of the top executive.  It appoints a specific acting successor (or successors) by role, defines their scope, designates their reporting lines, and identifies back-filled support.  The plan also includes an inventory of critical information needed by the interim successors.  Should the leader’s absence become permanent, the emergency succession plan buys time for the organization to make more thoughtful decisions about longer-term leadership decisions. 

The process of emergency succession planning often reveals leadership gaps in the organization.  Many nonprofits are simply not big enough or resourced enough to have a deep leadership bench.  Some may be lucky enough to have one or two strong executives, perhaps a COO or a Deputy Director, who can cover the top executive’s role in the event of an emergency.  Sometimes, two executives may serve as Co-Interim-Directors, such as the chief financial officer and the chief program officer.  

If there’s no one on the leadership team interested or able to serve as interim top executive, there are professionals who serve as Interim Executive Directors or Interim CEOs.  These professionals are often former Executive Directors who have shifted their careers to Interim leadership.  

Here’s a list of organizations across the U.S. who provide Interim Executive leaders.  If your city/region isn’t listed, ask peer organizations if they know of any.   

Step Three: Build a Leadership Development Plan based on your Emergency Succession Plan.

As noted above, the process of emergency succession planning often reveals leadership gaps in the organization.  This is an opportunity to take a competency-based approached to succession planning.

Developing leaders with succession in mind is motivating to staff.  It also helps promote equity and organizational excellence over the long run. Further, promoting and hiring from within reduces operational disruption and often costs less than external hires.  

A competency-based approach to succession planning would typically start with the top executive and all leaders below them, then cascade later to other levels of the organization.  Begin by identifying possible internal successors for each senior leadership role.  Estimate each person’s likely timelines for being able to take on that next leadership role or roles.  Second, create a short-term replacement plan to mitigate against unplanned or temporary absences.  Third, identify talent gaps and resolve whether the potential solution is professional development or recruitment or both.  Factor these insights into Leadership Development plans for each key position, and your overall organization development plan and budget.

Leadership Development Plans should be reviewed annually as part of the performance feedback process, and also the annual refreshing of the Emergency Succession Plan.

Step Four: Work on your personal readiness for transition. 

For the top executive, leaving – even contemplating the thought of leaving—can be hard.  Being a nonprofit ED/CEO is often much more than a job.  It can be family. It can be vocation.  It can also be exhausting and lonely; and burnout risk is high.  

You owe it to yourself to think about what leaving might look like, and when – before burnout hits or before a dream job offer comes.  Consider the following questions:

• What are the career implications to your leaving?  Are you thinking of changing careers or retiring?  
• How important to you are your professional identity and status as an ED/CEO?  
• How would leaving affect your personal health and wellness? 
• How would your leaving affect your organization?  Are there things you can do about it now?
• Financially, do you have constraints such as having sufficient retirement funds, or needing to restructure debt and expenses?  What can you do to address these concerns?

Give yourself the time to reflect and address these issues before making the decision to leave.  Meet with a financial planner, refinance your mortgage, sign up for a wellness program.  Put your own house in order while running your work “house.”  Being too busy is not an excuse. And, you might be surprised to find that working on yourself can make you a better leader.

Finally, don’t go at it alone.  Find a few trusted friends or colleagues to serve as your personal and confidential “cabinet” of advisors.  Sign up for a succession planning workshop – and tell your Board that you’re doing so because you’ve just read that every organization should have one.  Consider getting an executive coach to help you craft your personal strategy about succession planning and eventual transition.

The outcome of Step Four is your “Pre-departure Plan.”  It should answer questions like:

• What is an approximate window of time I’d like to transition out of my role/job?
• How much notice do I need or want to give?
• What do I need to put in place personally and professionally before I set my departure or transition plan?
• What do I want to accomplish as ED/CEO before I leave, to feel like I’m “leaving well?”
• What do I need or want from the Board and the organization in order to “leave well?”

Like any other plan, your predeparture plan will likely evolve with time.  You may or may not get everything you want.  The important thing is to be clear about what you want, before you take care of others’ response to your transition. 

Up Next:  Successful Executive Transitions

Steps One to Four are all about building a strong foundation for succession planning.  If you’ve done all four steps, there is nothing else to do until the top executive has decided to leave.  

Steps Five, Six and Seven are all about managing the transition period, between when the top executive communicates their planned departure to the Board, and the successful Onboarding of the new leader.   In between those two milestones, there is a lot to manage about communications (internally and externally), and for the departing leader to “leave well.” All these will be covered in my second article, Successful Executive Transitions.

About On-Hand Leadership Partners

On-Hand Leadership Partners was founded by Tess Escay Reynolds, who is a Leadership Advisor, Coach and Consultant for nonprofits and philanthropy.  She brings on-the-ground leadership experience and demonstrated success in program and talent outcomes.  Currently Tess works with ED/CEOs, leadership teams and Boards to achieve sustained impact for the people they serve and lead. Her work includes executive coaching, Board development, succession planning and the design and facilitation of staff and board retreats and leadership workshops. Previously, Tess was CEO of New Door Ventures for 16 ½ years.