By Lisa Walsh, partner, The Bridgespan Group
This post is the last in a series written by leaders who will be presenting sessions at next week's BoardSource Leadership Forum in New Orleans. We invite you to join us.
The number one responsibility of any board — for-profit or nonprofit — is management of the senior executive. Dozens of governance books drive this point home. Yet, when we talk with nonprofit leaders, it's simply not their experience. Nearly half (46 percent) of the 214 CEOs responding to a 2014 Bridgespan Group survey reported getting little or no help from their boards when first taking on the position. As one executive director put it, "The board essentially said, 'We're glad you're here. Here are the keys. We're tired.'"
Such comments were not the exception. Overall, survey respondents portrayed nonprofit boards as frequently disengaged or ill-equipped to effectively support their new leaders. Anecdotes and data tell the same story: When it comes to managing the senior executive, nonprofit boards underperform.This shortcoming is understandable given the nature of nonprofit boards. Board members are mostly volunteers. They are busy. They have other jobs. And according to a 2010 report by BoardSource, such individuals are typically brought on for their professional expertise and ability to represent constituents — not for their talent in managing people.
Yet onboarding matters tremendously, and many nonprofit boards regularly confront the challenge of bringing in a new leader from outside. A new Bridgespan survey on leadership development and succession planning polled 438 nonprofit executives, and found that more than one in four had left their job in the past two years. The same survey found that only 30 percent of senior executive openings were filled through internal promotions — about half the rate of the for-profit world.
When a lax onboarding process leaves the new executive struggling to succeed, the organization squanders a crucial learning opportunity and diminishes its effectiveness. Addressing this pitfall has to start long before the new executive arrives. It requires boards to adopt a leadership development mindset that links the board's strategic vision to expectations for the new executive.
We've boiled down our findings into five recommendations that can boost a board's performance where it counts the most: onboarding and supporting the new CEO.
- Lay the groundwork for the new leader. Helping a new leader succeed starts well before he or she is hired. The board needs to be clear about where the organization is headed before recruiting begins. Think three to five years down the road about potential growth, restructuring, new programs, or strategies. Taking stock of the organization also can help the board identify any tough choices that it might want to address before the new leader takes over.
- Collectively set the new leadership agenda. The foundation of the relationship between a board and its executive is a shared understanding of the organization's goals and their roles in a plan to get there — what some call the leadership agenda. This agenda should clarify the organization's priorities; develop action plans, roles, and milestones for each priority; and identify gaps in organizational ability or capacity to achieve them.
- Get clear on roles. Boards and new CEOs need to get clear about how they are going to work together. The more detailed a board can get with their new CEO about expectations, the less likelihood for pitfalls later. Adding a section to the leadership agenda that is explicit about working norms can be a powerful way to ensure that everyone is on the same page.
- Go slow in orientation to go fast on the job. The first few months on the job are the time for the new leader to listen and learn, forge relationships, and gain a sense of the organization's strengths and weaknesses, challenges, and opportunities. To ensure that the new CEO has time and space for these activities, the board needs to make orientation a priority, and keep some day-to-day duties off the new leader's plate at the outset.
- Make performance management routine. A critical component of the board's role in managing the executive director is to establish clear performance expectations and a cadence for ongoing performance reviews to provide the new leader with the feedback and guidance needed to succeed. Setting these expectations early — before things go awry — lays the foundation for a healthy and clearly defined relationship between the board and the new executive.
Time and energy devoted to executive leadership transitions are a direct investment in advancing an organization's mission. All boards have the capacity to ensure that their organizations hire and support strong leadership, and all should make it a priority. After all, it's their most important job.
