By Avrum Lapin
Strong, dedicated professional leadership is key to shaping the direction of any nonprofit; effective professionals influence the vision, direction and performance of their organization and employees. The nonprofit sector has often struggled to find highly effective CEOs and other senior administrators, as compensation and other workplace issues are often not comparable to the for profit world, even at the most senior levels.
Employing qualified, motivated executives is essential for the strength and health of any nonprofit, with those at the helm experienced and dedicated to the important mission and tasks. Reality today, however, informs us otherwise, reflecting and deeper challenge. Top executive leadership roles are often less appealing to Generation X and Millennial leaders (ages 24-52) and are, therefore, most often (still) held by those in the Baby Boomer generation. Problem is … Baby Boomers born between 1946 and 1964 are heading into retirement in droves at the rapid pace of about 10,000 a day.
While many articles have been written examining the preparedness of Baby Boomers to face retirement, a big question lingers about what will happen to the organizations and companies they have led and leave behind. Coupled with the expanding number of registered nonprofits (1.56 million nonprofits were registered with the IRS in 2015, an increase of 10.4 percent from 2005) this signals a looming leadership deficit likely to occur in the coming years.
This shortfall will likely be problematic for many nonprofits, especially smaller organizations that may not have the resources or the depth to have considered and prepared a proper succession plan. Smaller nonprofits may also be hindered by the narrow range of talent in their existing professional ranks. A smaller professional team translates to fewer employees available to be trained to move into leadership positions should someone retire. Yet, no matter the size of a nonprofit – large or small, succession planning is a critical exercise to ensure the stability and growth of any organization. In an environment where nonprofits face the inherent challenges of compensation, lack of investment in professional development, and a shrinking pool of qualified leaders, most organizations do not think that losing their chief executive is possible or imminent, but clearly demographics show otherwise.
Organizations of any size will benefit from creating structures to lay the foundation for the next generation of leaders. Succession planning does not need to be an expensive or overly complicated. The investment will yield dividends with a prepared organization and smoother transition, whenever the time comes.
Develop Leaders Internally: According to The Center for Nonprofit Strategy and Management, internal candidates for leadership replacement roles are preferred in about 50% of organizations. However, two-thirds report that they currently lack viable candidates. There are two methods that are generally accepted: one is choosing a successor and grooming for several years, the other is to create a culture that allows several people to vie for the role. In either case, the current CEO or professional leader establishes the means to model their skills and expertise, keeping a mindful and deliberate method of showing others what they do and how they do it.
Institutional Knowledge: There are many key pieces of information that are known inside executive’s heads that often seem intuitive or commonplace but are not widely known. These could be simple things like the vendors that are used to more important facts like the mission of the organization. Keeping clear databases that can be accessed will help to make the transition go more smoothly. A good rule is that if the information is not accessible while someone is on vacation, that information needs to be written down somewhere else. This will ensure that the information does not leave when an employee leaves and makes a transition that much easier.
Match the Mission with the Job: Understanding the mission and vision of your nonprofit will help to build and understanding of the type of skills and qualities that are needed to move the organization forward. Having the board and professional leadership sit together to understand the goals and challenges facing the nonprofit will help to illuminate what type of executive is best suited for the next phase.
Make a Workable Job Description: Often executive leaders have added substantially to their job descriptions over the years, adding skills and activities that were not part of the original plan. By creating a realistic job description that is meant to be for one person only, the organization can be prepared to address the potential needs that will come with the transition. For example, might there need to be salary adjustments to attract a new leaders? Might others need to be hired at the same time to cover all of the current executive’s activity? Are there people on the organization’s board, especially for smaller nonprofits, with hiring and interviewing experience to help identify, vet, and recruit fitting candidates? All of these questions need to be addressed before the next person can be found.
Determine Which Positions Need a Plan: When the term “succession planning” comes up, it is often relates to the CEO, Executive Director, or the CFO’s. It is possible however, that there are other positions within the organization that might also benefit from a succession plan. Perhaps there is a marketing executive who is the only one who understands social media? A customer service manager regularly who meets and exceeds all of the client’s needs? These people would be hard to replace and sharing their knowledge and skills would benefit the organization as a whole.
Create a Workplace that Retains Talent: Retaining talented employees is easier that replacing them. There is little to do if someone gets sick or retires, but nonprofits can control workplace satisfaction and morale. By focusing on personal growth, recognition and gratitude, talent is less likely to look for another job. Good management practices reduce the need for constant turnover.
Though there might not be a pressing need to start succession planning, the sooner a plan is in place, the better. There are many unforeseen circumstances that can create a situation where an executive is unable to serve such as illness, family crisis or accident, that having a plan in place can only benefit an organization. Succession planning can take some time, so it is best to start before it is needed. The plan needs to be actively updated, reviewed and refreshed as the organization changes and grows. By adding succession planning to the next board meeting, nonprofits can insure that they remain strong and well-positioned for the future.
Succession planning can help boost employee morale by showing that there is an opportunity for promotion and growth within the organization. Employee training and data management will help nonprofits even today as they prepare for the future. Beyond the internal implications of succession planning, well-executed transitions indicate to both individual donors and foundation grant-makers that the nonprofit is committed to a strong future even through major leadership transitions and may have a positive impact on fundraising. The old adage applies: “an ounce of prevention is worth a pound of cure.” Succession planning can be incorporated into current activities but is necessary to prevent potential pitfalls and problems down the road.
My colleagues and I are interested in your experiences. Let us know what you are thinking.
Avrum Lapin is President at The Lapin Group, LLC, based in Jenkintown, Pennsylvania, a full-service fundraising and management consulting firm for nonprofits. The Lapin Group inspires and leads US-based and international nonprofits seeking fund, organizational, leadership, and business development solutions, offering contemporary and leading-edge approaches and strategies. A Board member of the Giving Institute and a member of the Editorial Review Board of Giving USA, Avrum is a frequent contributor to eJewishPhilanthropy.com and speaker in the US and in Israel on opportunities and challenges in today’s nonprofit marketplace.
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