Nonprofit

The Nonprofit CEO Transition Playbook

 



​Selecting and onboarding a new CEO is arguably the most important responsibility of a nonprofit board, yet when the time comes to do so, many boards feel overwhelmed and unsure of how to proceed. However, by breaking down the process into clear and concrete steps, with well-defined roles and decision rights for all involved, the experience can engender greater alignment and buy-in among board members and ensure that the new leader gets off to a strong start.

When executed correctly, the transition planning process offers organizations the opportunity to critically evaluate where the organization is headed and what’s needed from the next generation of leadership in order to get there. Moreover, the internal reflection and debate that the process requires will ensure that the next leader is set up for success, entering the role with a clear understanding of their mandate and confident that they are backed by an aligned board.

While the specifics of the process may vary by organization, boards should aim to work through five broad phases, each with its own important questions to be answered:

The first step once an impending transition has been confirmed is to establish a board committee that can guide the search and transition process. The exact size and structure of the committee will vary by organization but should be large enough to balance representation and efficiency, and it should reflect a diversity of stakeholders, perspectives and functions. It should also include sufficient representation from the "power center" of the board so that they can be confident they will be able to get the necessary votes when the time comes. While input from the outgoing CEO and/or staff is vital to the process, they should not get a vote in choosing the next leader.

This is also the point at which to clearly define the expected process and timeline—even the most established and sophisticated organizations can get tripped up by not planning the process itself clearly enough or by not establishing the working norms of the committee. This includes everything from preferred methods of communication to expectations around time commitments. Participation on the search committee requires a significant commitment of time and mental energy, and the specific responsibilities of the role should be clearly communicated to those being asked to join.

When a CEO transition is on the horizon, it can be tempting to launch immediately into the search process, particularly if the departure is unplanned or an interim leader is required. However, investing time at this stage to align the board and build stakeholder buy-in around the skills and experiences needed in the next leader will save time in the long run and benefit the incoming CEO, who can trust that they have the full support of their constituents.

This begins with an open and honest conversation about the organization’s mission and future strategy, as well as the strengths and challenges of the organization to date. The type of leadership needed in a turnaround situation will differ from that needed by an organization anticipating significant expansion of programs. By engaging the board, senior leadership and other constituents in a discussion about where the organization is headed, it will become easier to prioritize the skills, competencies and experiences needed in the next leader.

Once the board has aligned around the ideal profile, it is time to begin identifying potential candidates. The search committee should look to the ideal profile articulated in the previous step as their true north and remain focused on the prioritized competencies. This becomes especially important as the search committee seeks to diversify its candidate pool and considers qualified candidates from other sectors; by remaining focused on the prioritized competencies and competency-based interviewing, rather than specific titles or experience, the search committee will minimize implicit or even explicit bias and potentially surface exceptional talent that they might not otherwise have considered.

The search committee, either on its own or with the help of a search firm, must prioritize confidentiality when approaching prospects, many of whom will withdraw from the process if they cannot be guaranteed that their involvement will be kept in trust.

After reviewing the relative strengths of the candidate pool, it is time for the search committee to make its decision. Whether presenting a single recommendation or multiple options to the board, the committee must be prepared to articulate how a candidate’s past experience, cultural fit and vision for the organization comport with the ideal profile and make the case for why their preferred candidate should be selected.

At the same time, the search committee must be able to successfully "sell" the opportunity to their preferred candidate, which requires an understanding of the motivations and incentives that will resonate. Particularly when seeking to attract candidates from outside the nonprofit sector who may have higher salary expectations, it is important that the committee understand and be able to articulate the role’s value proposition beyond compensation, including other motivators such as the mission itself. In some instances, the opportunity is a true calling.

Often the most overlooked yet most important step of a CEO transition, a robust onboarding program is vital to the long-term success of a new leader. Multiple stakeholders must be involved in order to clearly define the new CEO’s responsibilities, mandate and metrics for success. The board must also think carefully about how to transition important relationships with funders to the new leader.

Replacing an iconic leader

The departure of a founder or long-term leader can add additional complications to an already delicate succession. Boards must adapt their process to account for these factors:

  • Acknowledge and reflect on the disruption: Recognize the significant impact the outgoing leader has had and that their departure presents challenges but also significant opportunities. Allow time and space for both grieving and celebration of what the outgoing leader accomplished, and remind staff that the organization’s mission and values are not bound to a single person.

  • Resist promising the outgoing leader an ongoing role: While it can be tempting to make such offers (particularly to founders for whom the organization can be a part of their personal identity), it actually leads to more confusion, as staff are unclear about the chain of command, and prospective CEO candidates will be less attracted to a position if they suspect they will be forever in the founder’s shadow.

  • Don’t seek Founder 2.0—or do a complete 180: Depending on the circumstances of the departure, it can be tempting to seek a carbon copy of the founder or their complete opposite. Instead, reflect on the organization’s strategy and future direction in order to determine the skills and competencies that will be required in the next leader.

  • Keep the founder off the search committee: While it’s important to acknowledge the influence and perspective of the founder, they should not sit on the search committee. Instead, look for other ways to enfranchise them throughout the process, including involving them in discussions about the ideal profile of the next leader.

  • Clearly communicate expectations and boundaries: It is critical that the new CEO’s authority is not undermined by the lingering presence of the founder. Articulate the expectations and timeline for the founder’s ongoing role (if any), and set clear boundaries— in most cases, the founder should not retain a seat on the board or an office down the hall.

  • Determine if and how the board’s role will change: Founder-led boards are typically less involved in setting agendas, fundraising and recruiting members—it’s important to reach consensus as to who now owns these responsibilities. '

  • Institutionalize relationships: Be thoughtful and intentional about how important relationships, particularly with donors, are transferred from the founder to the board or new CEO.

 

AUTHORS

JAMIE HECHINGER is Head of the firm’s Social Justice and Advocacy Practice. She is based in Washington, D.C.

EMILY MENEER is the Global Knowledge Leader for the Nonprofit Sector. She is based in Boston.


     


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The Nonprofit CEO Transition Playbook