Seven Lessons for Boards Facing Executive Transition

Twenty years ago, most executive transitions brought fear to the board. There were countless horror stories of organizations who struggled for years after an executive transition – some even went out of business. And if the departing executive was a founder or served a long tenure, the stories were more horrific and the risks more overwhelming.

The good news for board leaders is that national, regional and local funders, and leading national organizations recognized this pain and invested in making executive transitions less disruptive and more an opportunity to advance mission results.

Today, board leaders and executives benefit from resources and years of attention to improving outcomes from executive transition.

Here are seven of the most compelling lessons to guide boards during executive transition:

1. Executive transition is more than a search for a successor. Focusing exclusively on finding the next executive without paying attention to the transition increases the risk of a failed or flawed transition. Research confirms the wisdom of a “dual-focus”: the context of the transition process and the search. On average, ten percent of executives leave every year and a higher percent report they intend to leave. All boards will face executive transition sooner or later. Those that integrate a dual-focus on transition and search increase the opportunity for the organization’s mission to thrive under new leadership. Most boards want to go through the process once so it makes sense to focus on both the transition and search.
2. Often other big changes occur in an organization when an executive transitions. These are compounded when the departing executive is a founder, long-tenured or transformational executive. Wise boards pay attention to all of the changes and transition concerns and make informed decisions to identify which changes need to happen before an executive is hired and which should wait until the new executive is in place. These may include other departures of board leaders or managers, change in funding, a desire to change directions or move programs to the next level, among others. A more in-depth preparation phase prior to the search launch allows for attention to these other important issues. Where the departing executive is a founder or long-tenured executive, the letting go process is complex and better begun several (typically 2-3) years before the transition may occur. The combination of attention to succession/leader development and organizational sustainability (how leadership, strategy, business model, resources and culture work together) several years before a founder transition increases the likelihood of a successful outcome in a founder transition.
3. Some organizations need more time than others to prepare for a search for new executive. In some cases the organization will not attract strong candidates if it starts a search immediately. Organizations with challenges such as those in crisis, those with a forced executive departure (30% of executives leave involuntarily), and those exploring a merger, or those with an unengaged board/under-performing staff often need interim leadership before hiring a new executive. These situations (along with a number of others) are great opportunities to consider a professionally trained interim executive director. Interim executives are not candidates for the permanent position and have the skills uniquely needed for the short-term situation. There are pools of trained interims in most communities and for many mission areas.
4. Executive transition also provides boards the opportunity to revisit progress in living out values of diversity and inclusion or clarifying these values. This works best when the board is clear on the value of diversity and is committed to an ongoing process of recruiting, welcoming and respectfully engaging people of color, younger or older people, and/or persons with disabilities. Nominal efforts, for example, aimed at hiring one person of color, or adding one or two people of color to the board, typically result in short tenures for the people of color or lack of success by the board in its efforts. Executive transition can be a great opportunity to continue to deepen the organization’s understanding and commitment to these values.
5. Succession planning as an ongoing practice supports positive executive transitions. The potential for an internal successor is increased when supported by prior succession planning. Internal successors thrive when the process is thoughtful, the board and executive are aligned about the candidate and process, and the internal successor is prepared and supported for success. Internal succession is frequently a disaster when it is done quickly. A reaction to a sudden need for a new executive is oftentimes negative and there is no process to support the successor or the organization. An ongoing commitment to leader development and succession planning advances the leader capacity and potential for internal succession.
6. The successful onboarding of a new executive requires attention and is a multi-year process. Human nature and the energy it takes for boards to lead a transition and search process collude in a way that results too often in poorly handled beginnings for a new executive. Boards back off and executives are either happy to run with the transition or feel abandoned. In either case, the opportunity to craft a positive relationship and shared agreement on goals and success between executive and board is missed or underused. Without such an agreement, it is difficult for the board to define success for the executive or hold the executive accountable. Because there is a lot going on when an executive leaves, there is also a lot going on when a new executive begins. A research study (Daring to Lead, 2011) found that the desire for support and connection for new executives is more prevalent in the second and third year. If the executive survives the first year, it is in the second and third year the executive decides on how long to stay. There are processes and consultants trained in how to support successful onboarding in most communities.
7. Executive transition provides an opportunity to reexamine beliefs about leadership. The nonprofit sector has relied too heavily on heroic individuals whose passion and commitment drive an organization forward for a period of time. Unfortunately, over-reliance on a few leaders leaves the organization weak and vulnerable when executive transition occurs. Succession planning as an ongoing discussion ensures there is attention to ongoing leader development and defining organizational beliefs about who leads. Discussions of leadership beliefs provides for consideration of approaches to shared leadership including co-directors. Executive transition is another opportunity to consider shared leadership or other leadership structures.