When Replacing a Long-Standing Executive Director - Don't Forget About the Exit Plan!

When a board succession plans for a departing, long-time Executive Director - most of the attention is focused on the recruitment and onboarding of the new leader...and rightly so. With that said, a critical (and almost always overlooked) component is the exit-plan of the outgoing leader. Following are two essential tips for you to consider:

1. Capture Institutional Knowledge
When any leader exits an organization - untold amounts of institutional wisdom and knowledge leaves as well. And while fresh leadership is often a positive - it can usually be optimized when key institutional knowledge can be retained. This information can include processes, professional networks & relationships, expertise, etc. If the exit is framed by advanced notice (such as a retirement), a multi-week plan to capture this wisdom can be advisable.

2. Set Terms of Exiting Leader's Continuing Involvement - or Lack Thereof
While most organizations make a clean separation with limited-to-no ongoing involvement - it can be advisable for the board to set clear expectations in advance. We occasionally see a retired leader continuing to participate despite the fact that it is a significant distraction and impediment to the new leader's onboarding. Even if a formality, it is a best practice to lay out the mutual expectations for the retiring leader.

CEO Search Committee Debate - Who's on the Roster?

When a nonprofit organization faces a leadership change, it will typically form a search committee charged with optimizing the recruitment and transition process. Committee formation, however, is rarely without incident and must occur around the central question - Who Should Be on the Search Committee?

BOARD PARTICIPATION
The committee must be anchored by a strong chairperson - ideally a well respected board leader who is prepared to facilitate a process filled with challenge and debate from all spectrums of the organization.

In addition to chairperson, the search committee should also include:

• Current Board Chair
• Current Board Vice-Chair or whomever is anticipated to succeed the Board Chair
• Member(s) of the executive committee

STAFF PARTICIPATION?
In almost all cases, we do not advise including staff on the search committee with the exception of a trusted, senior staff person who will not interfere with the board's efforts. We are often surprised at how often organizations will include staff on a search committee - at a minimum resulting in frustration and too often resulting in regret.

WHO ELSE?
In instances where an organization has a long-standing partnership relationship with a funder, inclusion of that funder on the search committee can optimize the search process in several ways. Perhaps most significantly, funder participation furthers the relationship and enables the committee to evaluate the candidates from the all-too-critical funders' perspective.

WHAT ABOUT THE OUTGOING CEO/EXECUTIVE DIRECTOR?
Generally, we advise against the inclusion of the outgoing executive with certain exceptions wherein it is beneficial to involve the outgoing leader. However, it is often advisable for the outgoing leader to participate in certain elements of the process such as assisting with the needs assessment and position profile development.

TAKEAWAY
It's difficult for a search to succeed if the search committee isn't properly formed. Be certain to include members that will optimize the committee's ability to evaluate candidates along with expanding the networking reach of the committee.

Board Recruitment - Don't Forget Relocating Executives (& The Trailing Spouse)

Communities are regularly enriched when companies relocate/recruit executive leadership. These leaders have invariably served on nonprofit boards in their previous communities and will wish to establish new board relationships after arrival. In the majority of cases, these executives are accompanied by a trailing spouse who will also offer valued non-profit board talent and/or experience.

Boards should research the trustee's past board service to identify Mission Affinity. Certainly, an executive who has a history of serving museums and performing arts may not understand why they are being recruited by a children's services organization.

In the absence of an established relationship that can facilitate a relationship to the new executive - a phone call to the previously served non-profit's executive director and/or board chair can provide valuable insight into a prospective trustee's talents and passions. Further, if appropriate rapport is built during this call, this contact may even provide a highly effective introduction to the prospective board member.

For-Profit Leaders Thinking of a Nonprofit Career? Tips for an Enlightened Transition

Based on a number of factors, an increasing number of nonprofit boards are tapping executives from the for-profit sector. However, the transition is often challenging - certainly, both organizations and executives need to be wary of the prevalent pitfalls in order to optimize the likelihood of success.

CONTEXT
Why are more non-profits tapping for-profit leaders? Following are a number of the more customary reasons:

1. The rapid professionalization of the sector - more and more non-profits wish to operate in more business-like fashion. This trend is driven by influence from funders and by the board's increased interest in efficiencies and cost-containment - if, of course, these concepts can positively impact the organization's mission.
2. Mission Affinity - for profit leaders perceive the opportunity to do work that is more personally satisfying...often with a nonprofit wherein the mission addresses a personal experience personally experienced by that leader.
3. Narrowing Compensation Gap - while still significant - the gap between sector compensation has steadily, albeit incrementally, continued to decrease.

CHIEF TRANSITION CHALLENGES

A number of the distinct differences can prevent a successful sector transition - the most frequently cited are as follows:

1. Board Interaction - Most for-profit executives are surprised by the unique nature of non-profit decision-making including the intricacies of board relations. Accustomed to rapid decision making, many for-profit leaders are not able to adjust to the sector's nuances.
2. Culture Shock - Despite the sector's continued professionalization, many for-profit leaders will not successfully adapt to the legacy cultural components of a given organization that will likely frustrate an unsuspecting leader.
3. Unrealistic Satisfaction Expectations - While tremendous intrinsic rewards are experienced by those that lead nonprofit organizations; those rewards are interspersed among the daily (and hourly) challenges of running an organization that are not dissimilar to the daily challenges in the for-profit sector.

TAKEAWAY

Despite the challenges, a sector transition can be successful and rewarding for both the organization and the new leader. Certainly, a leader must be clear as to the motivations driving the shift. Further, mission affinity is critical - a leader may be successful leading one nonprofit but not necessarily another. Certainly, you can match one of the many success stories that include the Rock and Roll Hall of Fame and Museum's leader Terry Stewart who was formerly the President and COO of Marvel Comics.