Leadership Development
Leadership Transitions: Crisis or Opportunity?
In an environment plagued with uncertainty for the nonprofit world, one fact is indisputable - change is coming. Recent surveys alert us to the plans of baby-boom executive directors to retire. Take your pick: A 2004 Annie E. Casey Foundation survey found that 23% of executive directors surveyed anticipate leaving their organizations within two years. A United Way of New York survey found that nearly half of EDs plan to retire by 2008 and in San Diego that number is approaching 70%. The results of The Nonprofit Center’s recent Leadership Survey can be found below.
Is the nonprofit sector prepared to address this potential massive leadership change? Are resources and energy being committed to developing new managers? If the experience of The Nonprofit Center at La Salle University is indicative of trends in the sector, the answers would be no and not much.
The Nonprofit Center was concerned that local nonprofits were not addressing the issue of succession planning. We wanted to know if replacements were being groomed now to take over the reins from executive directors who were moving on or retiring. In pursuit of this information, we recently conducted an informal survey to find out what was happening regarding succession planning. The results indicate that this area will experience a leadership gap within the next four years, as few plans exist to replace retiring baby boomers.
The anonymous survey revealed that more than 2/3 of the 223 local EDs responding plan to leave their current leadership roles by 2010 at the latest. At more than half of those organizations there has been "no discussion" whatsoever of succession at either the board or staff level and at 52% of organizations, there is no one in the organization suitable for grooming as replacement leaders. Even more startling is the finding that no formal succession plan exists in more than 90% of these nonprofits.
Unlike the business world, the nonprofit sector has not been taking the concrete steps necessary to build its bench strength by identifying talented people and developing them for future leadership.
If nonprofits do not act now to address their failure to have a plan for executive director replacement, as well as committing to developing new managers, this leadership gap will extend to include managers at many levels of an organization. We must ask ourselves what will happen to the people who depend on the important social and community services these nonprofits provide when the organizations face the departure of their leadership with no succession plan in place.
The Nonprofit Center has developed a Leadership Transitions Program to support nonprofits in protecting their vision and stability before, during and after executive transition. It offers three components, depending upon the needs of the nonprofit.
Succession Planning supports an organization's board in developing a plan to address the executive director's departure as well as committing to developing future leaders;
Executive Transitions guides nonprofit boards through the process of hiring or changing executive directors, developing a time and cost-effective approach to address every step - from assessing the organization's staff leadership needs to fostering successful integration of the new hire;
Interim ED Program to place experienced nonprofits executives at the helm for a four to twelve month period while the board and staff address key systems and capacity issues. Research suggests that those groups that use an Interim ED "emerge stronger, more financially sound, and with high levels of optimism about the future impact of their agency services."1 If your group is in a state of transition, an Interim Executive Director, could prove the most effect short-term leadership strategy.
The Nonprofit Center emphasizes continued support of the new director through targeted educational tools will help contribute to success. Chief among these are "CLEAR Circles," peer learning circles facilitated by The Nonprofit Center (see August 2006 Guidestar newsletter), as well as workshops like "Nonprofit Executive Directorship 10, one-on-one executive coaching, and a comprehensive certificate program in nonprofit management.
The time for a nonprofit to address the question of leadership change is before it happens. Your board should be asking itself what steps it is taking to be prepared to handle change at the top, to be in a competitive position to attract skilled senior executives? What experts are available to effectively navigate this critical passage? This is a time when we should be taking cues from the for-profit sector, which, to its credit, has long embraced these concepts.
1 Wolfred, Thomas, Interim Executive Directors, Executive Transitions Monograph Series, Volume 2, San Francisco California, 2005
Read the Chronicle of Philanthropy article on why young people are rejecting nonprofit careers >
