From Crisis to Clarity: Five Steps to Demystify Succession Planning

Article Highlights:

• How to start — and sustain — a robust and meaningful succession planning process.
• An Iterative Process
• Starting a Timeline to Strategize Succession Planning
• Sample Forms
• Sources

A smooth transition of leadership is essential to the stability and longevity of an organization, but few organizations have a succession plan in place. Is your nonprofit prepared?

How to start — and sustain — a robust and meaningful succession planning process.

Our family dog died the morning I received the phone call no one can prepare for. I was driving across the bay to deliver the news of our beloved pet to our university freshman daughter when my phone rang with an unfamiliar number — a community partner calling to let me know that my boss, beloved colleague, and our Executive Director had been hospitalized after experiencing a seizure. I was to contact his husband to let him know.

The next day, I began the communication to our Board of Directors, funders, and employees. Our Executive Director was diagnosed with glioblastoma, one of the most aggressive types of brain cancer with only a 5-10% survival rate. As Associate Director who had only recently begun my doctoral program, it was my responsibility to step into our ED’s shoes.

In the year that followed, I came to realize how ill-prepared our 40-year-old organization was for this transition. Eventually, this became the topic of my dissertation, as I wanted to help other nonprofits avoid the challenges we experienced, such as the risk to our organization’s stability and our mission.

While the specifics of our situation were unique and heartbreaking, every nonprofit is guaranteed to face executive transition. One of the most significant transitions for nonprofit organizations, executive transition has an impact on the organization’s finances, including donors and funder perception of the organization’s stability. Executive transition also affects employee engagement, to the degree that a poorly handled leadership transition can have detrimental impacts on the nonprofit’s programs and services.

But despite how crucial the smooth transition of leadership is to the stability and longevity of an organization, few organizations have a succession plan in place.

In 2021, BoardSource found that only 29% of nonprofit organizations had written a succession plan for executive transition. Historically, this figure is even lower for nonprofits under $1M. And considering around 92 percent of nonprofits operate budgets of less than a million dollars, the lack of succession planning in our industry is a crisis waiting to happen.

An Iterative Process

At the ground level, succession planning is an iterative process. Like strategic and scenario planning processes, succession planning is more an art than a science, maturing with use and reflection. This means that as you gain more experience in your role and as your organization changes, it is important to review and revise the plan.

In my doctoral research, the interviewed CEOs discussed their sense of responsibility to ensure the organization’s infrastructure is in place so that services may proceed with minimal interruption during a transition. Examples they offered included centrally locating important documents and critical finance processes, among other ideas. Their statements made me realize that succession planning walks the same path as strategic planning by allowing the CEO to reflect and create a roadmap to accomplish key organizational goals.

Of course, this process can still be a difficult one to start. To help you out, here are five steps on how to start (and then sustain!) a robust and meaningful succession planning process.

1. Start with risk prevention.

In terms of risk prevention, checklists[1]are incredibly useful. They help to routinize behaviors and processes, freeing up our brains to focus on the more complex. By creating routine processes, you can be present emotionally, especially during emergency situations.

In terms of risk prevention, key activities might include the creation and/or development of the following:

• A list of the key supporters (donors, funders, regulatory bodies) for your organization to facilitate quick communication when needed
• A list of community stakeholder and planning groups as well as a list of who regularly attends and who covers when needed
• An annual calendar of routine agenda items for board and committee meetings
• An annual calendar of routine agenda items for organization leadership teams

2. Create an emergency plan.[2]

At a minimum, an emergency succession plan makes sure that the next-in-command has access to all integral information and documents. This emergency succession plan should be used as a core document; however, everyone must also work together to continuously revise this document, adding in other elements like a communications plan and the format of a search committee. The review of these documents should be embedded with other annual processes, such as CEO performance evaluation or organizational risk assessment. This annual review may also include a review of the CEO job description so that it stays current.

It should be considered routine business to include an annual review and revision of the succession plan, continuing to build and revise it based on the organization’s needs. By making this an annual topic of conversation with your board, it may also help to reduce the perceived threat of discussing executive transition.

In terms of an emergency plan, key activities might include the creation and/or development of the following:

• An annually reviewed emergency succession plan
• A board policy on delegation of authority and standing appointments
• A list of your compliance and regulatory requirements
• More than one signer at your banking institutions

3. Begin regular conversations with organization leadership.

Creating feedback loops is critical to sustaining the succession plan, and the development of opportunities for embedded succession planning conversations allows your plan to grow and mature with the organization while normalizing the conversation concerning executive transition. Such conversations might be annualized as part of the organization’s risk assessment, executive goal setting, or board report. A review of the succession plan can be scheduled as one of the routine calendar agenda items by the organization’s leadership team and board governance committee, for example. Organizational leadership should also use this time to create professional development plans for emerging leaders.

In terms of regular conversations regarding organizational leadership, key activities might include the identification and/or adoption of the following:

• An annual routine process to embed a succession planning conversation
• A specific plan format that will help you move forward

4. Adapt an existing framework to develop leaders.

Perhaps unsurprisingly, most CEOs I interviewed during the course of my research wanted to leave their organizations strong. They wanted their organizations to be clearly positioned for growth — as if the next incoming CEO was their best friend. So how can you make that happen with the leaders already within your organization?

First, you must identify your temporary staffing patterns for key functions and create cross-training plans among team members. Things to look out for when you are creating a temporary staffing strategy (see template) might include any leadership and skills gaps evident in your organization.

My organization, for example, just reviewed our temporary staffing strategy and identified our limited capacity to create accurate budgets for grant proposals. To counteract this, we have begun offering grant writing training (including Excel) classes to several new leadership team members as well as looping them into our grant writing teams.

Essentially, you want to use your temporary staffing strategy to identify leadership and skill gaps that may be mitigated by creating professional development plans for emerging leaders during their performance evaluation reviews. This will create opportunities for emerging leaders to grow and showcase their talents while allowing your organization to invest in specific needs, such as leadership and financial management skill development.

In addition to creating these opportunities within your organization, there are opportunities to create these opportunities for leader development within your sector. That is, many nonprofits won’t have the capacity to have a deep bench of potential CEOs from within the organization. We must also cultivate potential candidates through our networks and affinity associations. This might mean inviting emerging leaders to co-chair a group or team in order to foster relationships with potential mentees. These interactions should provide insights into leadership style, values, and skills. Knowing this, you could then invite your mentees in for a conversation if a position in your organization arises.

In terms of leadership development, key activities might include the creation and/or maintenance of the following:

• A temporary staffing strategy (see template)
• Networks of viable leaders

5. Begin legacy planning.

Legacy planning is less about recognizing the individual leader’s accomplishments and more about, again, considering where you want your organization to be when you leave.

During the course of my research, several interviewed CEOs remarked that it was their responsibility to remember that the organization is so much bigger than any one CEO. Many also mentioned their perceived obligation to leave their organizations better than they found them so that their organizations could continue to grow and flourish.

From these discussions emerged strategies about the CEO being explicit about their organizational legacies. Many even discussed using a neutral party with no conflicting interest, such an executive coach, to talk about their progress towards that legacy.

In terms of leadership planning, key activities might include the creation of the following:

• A legacy statement

Starting a Timeline to Strategize Succession Planning

The most important thing to take away from this is that succession planning should be ongoing. But while the need for succession planning is universal, it will look different for each organization.

To get started, you might include a review of your succession plan at the end of each fiscal year. This allows your plan to be flexible and dynamic so that it reflects changes to the current organizational table. It will also help launch next year’s agenda items for both the leadership teams and the board.

Consider how the previous five steps might be broken up into a three-year timeline. In the first year, you would focus on completing steps 1 and 2, which would include creating stakeholder checklists, routine agenda calendar, authority delegation, and up-to-date regulatory requirements. Then, in the second year, you would build your succession plan by speaking with organizational leadership as well as creating a temporary staffing strategy. Depending on your organization’s leadership team size, however, this step might require more time. You might focus on the executive team in the second year and the senior leadership team in the following year, for example. And finally, in year three, you should deepen the succession plan by exploring legacy planning activities. You don’t have to do everything at once, but it is helpful to be working on some aspect of your succession plan every year.

And remember, the most important thing you can do is to begin to think through your succession plan. Start strategizing today!

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Sample Forms

Sample Temporary Staffing Strategy

Succession Planning Activities Checklist

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Sources

[1] You can read more on the power of checklists in Atul Gawande’s The Checklist Manifesto

[2] You can read more about using an emergency plan as the basis for your succession plan in Suzanne Hoban’s article, “None of Us is Getting Out Alive”

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• Innovative Leadership — Culture Doesn’t Have to Eat Strategy: Tending to Human Factors During Strategic Planning
• Insider Newsletters: An Easy Way to Keep Your Board in the Loop and Engaged
• Five Years and Growing: How One Nonprofit Built a Sustainable, Collaborative Mission
• Measure What You Value: Designing a Values-based Performance Appraisal System

 

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