Research shows between 60 and 75 percent of nonprofit executive directors plan to leave their position in the next five years.
How prepared is your organization?
This was the opening question to FAR members at the FAR February Luncheon. In addition, 10-15% of nonprofits hire a new executive every year. With an estimated 2.2 million US nonprofit organizations, this percentage translates to 180,000 new executives annually. Nancy Racette, COO and Principal of DRi Executive Search Firm, provided a thought provoking and solution filled presentation to set the stage for an effective CEO transition.
A transition process plan should look a lot like a good strategic planning process: it takes a well-constructed Board, a clear objective, needs assessment, and appropriate governance procedures. Like strategic planning, it also requires some flexibility. Having a transition plan prior to a CEO departure is the key element to a smooth and effective transition.
Preparing for a change in leadership requires the involvement of senior staff and the Board. There is often a disconnect between the Board and staff leadership as to the culture and wellbeing of the organization. Setting up a team that includes one or two senior staff and selected Board members to identify the gaps through anonymous surveys and confidential interviews, then building consensus with the needs and skill set required, is the first step in preparing a transition plan.
Some components to consider are how well the organization is performing, should the candidate be internal or external, and are the current strengths of the organization in line with the strategic plan. Once these questions are answered and the search criteria is set, the next step is identifying the staff roles during the transition. Questions such as;
Is there current staff that can be moved up or over temporarily? Are there tasks that can be moved to a specific department during the transition? Should an interim leader be hired?
The previous steps can be completed by a search committee or a professional search firm. Determining whether to use an outside firm or internal committee needs to include direct and indirect costs. Indirect costs can include loss of productivity due to focus on recruiting, biased results from internal surveys impacting the job description, and lost revenue over an extended period during the search.
Once the structure is determined and a search has begun, the next step is to create an on- boarding plan for the new executive. An onboarding plan starts with a timeline that includes a staff person and timeframe assigned in each step. One of the chief reasons a new hire fails is the lack of a well-planned, transparent on-boarding process.
Further details are available to FAR members in Ms. Racette’s