In recruiting for leaders of organizations in today’s rapidly changing environment, nothing is more central to a dynamic organization than its leader’s ability to deal with complexity, ambiguity, and uncertainty while guiding their teams to adapt and flourish in continual change.

When you are selecting a leader for your organization, here are several key points to consider, so you can distinguish managers from leaders and individual contributors from collaborative partners:

• Have they positioned an organization to carry out their vision, and was it attainable?
• Did their style of influence attract and energize people or did they manage by manipulation and punishments?
• Can they describe how they coached to promote competencies?
• How did they create achievable, challenging expectations, and how did they reward progress?
• Have they valued loyalty over creativity?
• How have they created high-performing teams?
• Do they assess and encourage risk or look at every opportunity with their risk-averse blinders?

You don’t want people “cutting their teeth” at your organization’s expense! Leadership is an art — intellect and degrees do not determine capability. Just because someone tells you they are ready for leadership, be certain they can pass the above litmus test. Remember, this is the difference between selecting a date for the prom and selecting a marriage partner; the prom is a big splash but it’s just one night …

If a major nonprofit or foundation needs a search firm, it would be well advised to turn to a smaller, more adventurous, and plucky firm which can deliver the type of inspired, visionary leaders that challenging times like these demand.

A few months ago, the executive director of a small arts nonprofit felt a crisis coming on.

He enjoyed his work immensely but wasn’t sure if the organization was the best vehicle for the kind of art he wanted to produce. Rather than bottling up his concerns, he brought them to his board members, who were supportive of his efforts to reconcile his artistic vision with the requirements of his position.

Still, it left the board with an unsettling question: “What do we do if he leaves?”

Avoid the Pitfalls of Departure

When a nonprofit leader leaves unexpectedly, it’s a crisis point that — if handled poorly — can jeopardize an organization’s operation. But organizations that prepare for the unexpected find that succession planning eases transitions.

The reasons for a leader’s departure affect an organization’s response to it. Executives leaving for personal reasons provoke different questions than if they move to a competing organization. Moreover, an unforeseen health condition or death will add emotions of concern and grief to the situation.

If you’re left without a leader, don’t rush to action. Take your time, giving people the chance to talk about what’s happened and come to terms with it. Communicate honestly with everyone, including paid and volunteer staff, board members, funders, and the community.

The Role of the Interim Executive Director

Appointing an interim director during the transition can help ensure stability and maintain the confidence of your stakeholders. Ideally, this person will function both as an executive director, leading the organization, and as a consultant, providing an external, neutral opinion on both process and substance. An interim is helpful during both planned, non-confrontational transitions and more volatile situations that involve firing an executive director. The board should require the interim leader to do the following:

• Keep the day-to-day operations of the organization moving forward.
• Provide leadership for staff, who may be worried about the future. Keep morale high.
• Assess financial stability, financial controls, and financial practices.
• Evaluate the organizational structure and all internal management practices.
• Analyze program strengths and weaknesses.
• Provide consulting guidance to the board.
• Stabilize operations and the organization’s reputation to help attract good candidates for the new executive director position.

When hiring the interim director, it’s best to work with a contract period of at least three months, with negotiable renewal periods. You’ll need three or four months to attract candidates, arrange interviews, and negotiate an offer. The hiring process may take even longer if the organization is perceived by potential candidates as being in disarray. An interim can continue to make organizational changes that make the job more desirable to candidates.

Done thoughtfully, the search process can turn a potential crisis into an opportunity to focus your mission and serve your community. Appointing an interim executive director will give you time to engage in self-analysis as you search for a replacement. Your work during this period can result in a greater awareness of your organization’s strengths and challenges and a shared vision of where you want to go.

The Big Picture: Succession Planning

The best leadership succession plan ensures continuity, builds a legacy, and leads to an orderly transition. The key is to build a solid foundation well in advance of the actual succession date. Here are essential strategies:

• Make sure all the organization’s leaders, including board members and senior managers, collaborate to develop a plan for exiting and incoming leaders.
• Set up a board-appointed search committee that could include staff representation. Have this committee examine the organization’s vision. The vision statement should describe the organization in five years and the qualities required of a CEO to lead toward that vision.
• Build the senior team’s business and leadership skills.
• Plan the development and retention of key staff.
• Document procedures to support the effective transfer of knowledge. Be sure that new leaders fit into your culture. If you’re left without a leader, don’t rush to action.
• Implement a strategic plan that includes succession planning.
• Identify gaps between required leadership and existing talent.
• Decide if a new leader can be promoted from within or if an external search is required.
• Evaluate your organization’s culture, and be sure that new leaders fit into this culture.

No succession plan will answer all the questions that come up after a leader leaves. But a good plan will give people confidence that the most important answers have been considered.

This article was published originally in Nonprofit World, Volume 29, Number 3, May/June 2011.

• over time, the organization becomes overly identified with the founder/leader;
• no succession plan exists;
• the founder/leader is at the center of all decision-making;
• the organization becomes reactive, rather than proactive, and there is little input from staff or board into decisions;
• staff loyalty, rather than ideas and expertise, ensures the founder/leader is surrounded by cheerleaders rather than challengers;
• limited or lack of professional development of existing staff leadership re-enforces and solidifies the founder/leader’s power;
• the board is often selected by the founder/leader, and their role is often relegated to “support” the leader/founder, rather than to lead the organization;
• the board may be a “rubber stamp” and unable to probe basic financial or programmatic questions.

As a consequence, the succession planning occurs when the founder/leader decides to retire or leave the organization. The mad scramble to manage the leadership change and address succession is often done with a sense of panic and urgency. As staff have not been developed professionally, there is no internal succession. Ideally, the board would create an interim leadership plan, allowing time to identify organizational and leadership challenges with a focus on the future. This, however, is often not the model embraced by founder-led boards, as they rush to fill the leadership vacuum. Many organizations do not survive and thrive following the departure of the founder/leader.

This is not easy work, and does require receptivity and candid conversations between the founder/leader and the board in addressing succession planning in the context of strategic planning. We continually find that the factors that contribute to a vibrant leadership transition include:

√ Willingness on the part of the organization to address succession issues honestly and transparently prior to the impending departure;

√ Interest in retaining outside expertise to help the board manage the more challenging aspects of transition and change.

Are you and your board ready for the sweet sorrow of change?

I will be focusing on creating strategic stewardship between the chief executive and board chair and how organizations nurture emerging and future leaders.

Today’s nonprofit organizations operate in a more challenging environment than ever before. Survival and success depends upon effective, innovative leadership, productive board/staff relationships, and anticipating and planning for the future. As changes in leadership are inevitable throughout the life of organizations, it is critical to plan ahead in order to ensure your organization’s sustainability over the long term. And in the short term, would your organization be prepared if its CEO were suddenly called to serve on a specialized Governor’s task-force for three months? What plans need to be in place to provide for leadership changes, both expected and unexpected, in order for your organization’s critical operations to remain sustainable?

To learn more about this program and to register, please visit the North Penn Nonprofit Academy’s website.