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Executive Succession Planning -- Best Practices

Posted by BoardSource on Oct 7, 2014 9:49:11 AM

photo (4)By Tom Adams, director, Raffa PC

This post is the last in our series written by nonprofit leaders who are presenting sessions at the 2014 BoardSource Leadership Forum, taking place on October 9 & 10 in Washington, DC. We hope to see you there!

Most board leaders expect their organizations to have an up-to-date strategic plan. They also expect regular financial reports and an annual financial audit. This is considered good governance. However, when it comes to succession planning, board expectations are more mixed. Why do you think that happens?

Certainly, most board leaders would agree that the ability of their organizations to successfully achieve the desired mission results is directly tied to the effectiveness of leadership. Well-led organizations out perform poorly led organizations by light years. So if leadership is so vital to organizational success, why is it challenging for a board to pay as much attention to succession planning as it does to strategic planning or the finances?

Having worked with hundreds of organizations and their board leaders and executives on succession planning and executive transition, I appreciate the challenges boards face in approaching succession planning and why most organizations don’t have written succession plans.

The following are the obstacles leading boards have overcome in making succession planning a best and ongoing practice and the actions that made that possible:

Succession Planning is Personal and Can Be Risky
For the CEO, a board member inquiring about succession planning may churn up a wide range of responses. Some executives, particularly if she or he has been in the position for a long time, wonder if the board is sending a signal that it’s nearing time for an executive change. Other executives see succession planning as a management responsibility and fear board intrusion to CEO responsibility. Still, other executives are glad the board is being proactive.

The board leadership may hesitate in raising succession planning out of concern of how the executive will receive the inquiry. Sustaining a productive, mutually supportive board–executive relationship is the goal of most boards and executives. So if succession planning might threaten this relationship, or result in rumors among staff and board that undermine leadership, it is easy to postpone or to do the planning superficially with minimal benefit to the organization.

Best practice succession planning reduces this anxiety by focusing succession planning not exclusively on the executive, but broadening to include the management team and the board. Succession planning is about leadership continuity and how to sustain organizational effectiveness over time through attention to leader bench strength and development. More recently, leading organizations are also combining sustainability planning (focused on leadership, strategy/business model, resources and culture) with succession planning. This broader focus on long-term vitality and capacity to advance mission also shifts focus. Best practice succession planning attends to the basics (written, board-approved policies for both planned and unplanned absences or transitions of executive and emergency plans for key managers), unpacking the jobs of the executive and managers and advancing bench strength and leader development, and where appropriate, paying early attention to a departure planned in the next two to four years.

Succession Planning is Hard to Do Without Help
Even when there is a desire to do succession planning, making the time and going deep enough for real organizational benefit is challenging. Some boards may have the expertise to lead and facilitate a thoughtful process in the organization, but most do not have this expertise or expertise with time and detachment from the outcome.

For succession planning to be useful, there needs to be a trust relationship between the board and executive. If trust isn’t there, attention to that is needed before succession planning can begin.

A trusted facilitator from within the organization or an outside consultant experienced in nonprofit succession planning (which is similar but different from private sector succession planning) reduces the above risks and increases the likelihood of maximum benefit to the organization.

For more information, attend Raffa P.C.’s workshop, “Executive Succession: Don’t Leave it To Chance” at BLF, presented by Tom Adams, author of The Nonprofit Leadership Transition and Development Guide.

Topics: BoardSource Leadership Forum

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