Fairmount InSights

Among the most important decisions an organization will make is selecting its leader. Yet, a recent study estimated that while 66% of nonprofit executives expect to leave their jobs within five years, only 13% of nonprofit organizations have succession plans.  If selecting its top executive is so critical, and one of the few variables over which a nonprofit has total control, how do we get it right?

Fairmount Ventures maintains an active practice in executive search; here are some things we’ve learned along the way.

  1. Start early: cultivate internal leaders

Succession planning is not a point-in-time event triggered by an executive’s imminent departure. One expert suggests reframing the issue as “succession development” rather than “succession planning.” That is, create a practice of preparing future leaders by integrating professional development with succession planning in order to identify and nurture future leaders.  This has the additional benefit of improving overall organizational performance. In the for-profit sector, researchers found that companies with well-structured programs to groom internal candidates to be their next CEO (e.g., General Electric, IBM, Procter & Gamble) outperform their peers.

  1. Distinguish between the executive’s and the organization’s needs

Determining the timing and process of an executive transition can be a delicate process, especially when a long-term leader is stepping down.  While executives deciding to move on should help set the timetable, the board needs to have the final say on how the process unfolds.  Outside counsel can help frame and facilitate this discussion by establishing objective criteria.

  1. Explore the optimal characteristics of your leader for the next 10 years

Chances are the coming decade will look different than the previous one, i.e., evolving community needs, funding, technology, competition, public policy, best practices, etc. Rather than ask, “How do we replace our current, beloved executive?” consider what will be asked of the next leader. Take the time to engage the board and senior staff in discussions in order to achieve greater consensus about the next leader’s essential attributes.

  1. Invest in the board’s understanding of what it takes for the organization to succeed

For board members to effectively govern, they need to understand what skills, knowledge, and leadership style are optimal to manage the nonprofit.  How should the executive be dividing his/her time between internal and external tasks? While staying in their lane, at least some board members need to understand the organization’s inner-workings in order to discern what will be essential in the next executive.

  1. Clarify the outgoing executive’s role

The current executive can be a source of support to the board without usurping its responsibility in selecting the next leader:

  • Identify the key issues the new executive is likely to face in the first 12 months on the job
  • Communicate with internal and external stakeholders that the organization is in capable hands
  • Stay out of the recruitment process; let the board fulfill this fundamental role
  • Follow the new executive’s lead regarding how s/he wants to be oriented

High performing organizations do not leave succession to luck or last-minute planning. They openly discuss it on an ongoing basis.

Time to discuss succession at your organization?

We’d be happy to be part of the conversation.

Give us a call at 215-717-2299 for a consultation, or email us at info@fairmountinc.com.

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