Introduction: What is a leadership transition?
A leadership transition can occur with the departure of key staff or executive leadership within the board. This can be a time of crisis or a time of opportunity, depending on how ready you are for it and how you respond to it as an organization. Change is never easy.
Leadership transition is necessary for effective organizational development. It is a difficult truth that organizations require change to be able to grow in new directions, but poorly managed change can be detrimental. Too few organizations plan for it; they pretend it doesn’t exist or they believe they don’t have time to deal with it now. It is a kind of head-in-the-sand approach, which is ultimately contradictory to serving your mission. Recent history has demonstrated how important it is to have contingency plans and know how to implement them.
Leadership transitions within the board:
Most leadership transition planning focuses on the transition of the executive director. Board leadership seems to come complete with its very own succession plan. We know who the officers are and how they would logically transition.
Every once in a while, there can be a major turn-over of key board members. You should have some idea how this would impact your organization. Maybe you have a number of board members tied to a corporation headquartered in your community. What if they moved somewhere else and took those people with them?
More commonly, the problem with board member transition is that there is none. Board membership tied to significant gifts or family ties can become an anchor holding an organization down over time, not letting it grow and change with the times. Board terms should be limited and should not be renewable past a certain point—regardless of the money involved. So when considering how your organization is equipped to deal with leadership changes, be sure to turn your focus to your board at some point. It is healthy and necessary for them to change, too.
Leadership transitions within the staff:
Staff transitions never feel planned, even when they are. Unplanned staff transitions can leave the board and staff in a state of shock and emotional turmoil. It is always a challenging time for everyone tasked with managing the change and placing a new leader at the helm. The organization is extremely vulnerable during this time of uncertainty. Because it is a true cross-roads moment for the organization, it is also a time of great opportunity and promise. Having a clear plan of action can provide the structure necessary to use the change to the organization’s benefit.
What happens to the board during these times?
A board will change focus entirely during this time. They shift from having a big-picture focus about strategic planning, fundraising, and policymaking to being directly involved with the organization’s day-to-day business in a hands-on way. The trick is shifting the board back when the transition is complete. Some board members may want to continue in this role and can micromanage the new staff and old staff right out the door.
What happens to the staff during these times?
The remaining staff are working in a crisis situation. The potential is there for almost anything to occur. The sooner an appropriate leader can be designated, the better. Clear communication from the board on a daily basis is essential to keeping things under control. The staff needs to be kept apprised of the process and should be involved as much as possible. They are the best resource the board has during this time. They know the organization from the inside out. If they are not engaged in the process, they are likely to be out finding other jobs.
What happens to the financial health of the organization?
Organizations’ pocketbooks always take a hit during a transition. The question is how big a hit. There are costs directly associated with hiring a new leader that can range from advertisements to consultants to temporary workers to relocation packages and more. But, the larger and more long-term hits happen around the outside perception of the transition and the things the organization puts on hold while searching for the right person. The outside world includes your funders. Individuals, sponsors, and grantsmakers are prone to hold back or diminish their gifts until they are convinced the organization is back on a healthy path. This often takes years, especially if they are not confident in the new leadership or the way the transition was handled. During a time of transition, it is often sensible to cancel, postpone, and put off a number of projects and programs. A surprising number of nonprofits, including well-established and financially strong organizations, operate on an astonishingly tenuous balance of cash flow. Removing even one of the income streams can be like plucking a card from a table holding up a seemingly solid structure. Again, it usually take years for the organization to right itself financially and establish its balance again. Boards often become very interested in building a cash reserve after a staff transition.
see a Fundraising Plan template (PDF)
How will this transition be viewed by the outside world?
That will depend on how quickly and effectively you control the gossip and issue a statement. If you have a succession plan, it should include a list of stakeholders and media contacts. You should operate like any smart business and develop a message about the transition and designate a single spokesperson for the organization. Everyone else involved (staff and board) should be issued written instructions by the chair to refrain from speaking about the transition to anyone outside the organization. The spokesperson should call or send notes to stakeholders within two days of designating an acting director, and a press release should follow. When appropriate, issue follow-up notes or talking points for the board and staff on how the search is going. Otherwise, people will speculate and gossip will ensue.
Adapted in part from Succession: Arts Leadership for the 21st Century, Illinois Arts Alliance