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April 13, 2018 4 min read
Think hiring executives at a for-profit company is hard? Try doing it for an organization whose existence hinges on community support, restricted resources, and an unpaid staff. Succession planning could spell the difference between failure and success for nonprofits.  

 Nonprofit board meeting

When is it time to put a succession plan in place for your not-for-profit? Ask the leadership team at the YMCA, and they might tell you, "yesterday."

The YMCA of Southeast Michigan has been operating for nearly 170 years, and they attribute much of their longevity to their structured succession planning. Scott Landry, CEO of the YMCA of Southeast Michigan, recently succeeded Reid Thebault with the help of Chairman of the Board Jim Nicolson. They know a thing or two about successful leadership transition because they've lived it. Here are a few of their recommendations.

1. Identify the type of transition you'll experience.

Your current success will dictate what kind of leader you'll need. Successful organizations risk stagnation if they pick a new CEO that's just like the last one, and underperforming organizations may need to reassess the job description for the CEO to better fit their needs. Some organizations may be looking for their first CEO; on the flip side, others might have a CEO who's been doing the job of 10 CEOs, leaving behind shoes that are nearly impossible to fill.

Refer to BoardSource's five leadership transition types, and find which one best matches your organization. This will help set the criteria for the type of leader you'll need.

The YMCA of Southeast Michigan has been operating for nearly 170 years, and they attribute much of their longevity to their structured succession planning.

2. Clarify roles during the transition.

A leadership transition typically begins with a comprehensive board meeting to discuss all aspects of planning, including who will play which part. During the selection process (which typically takes six to nine months when done according to the YMCA's plan), the departing CEO will still lead the organization. Although staff and volunteers will have a minimal role in the selection process, they'll be working with the new CEO regularly, so their input should be considered. However, make sure it's understood that the board will make the final selection; including everybody in the selection process is just too many cooks in the kitchen. That's where the transition committee comes in.

3. Assemble the transition committee.

This small group — hand-selected and personally invited by the leader of the board — will be in charge of narrowing down the candidates to the two who best fit the position. They'll either call on their network or turn to a headhunter to find candidates, and they'll identify the right people based on the criteria dictated by the transition type. People within the organization will also have questions about the transition, so it's important for morale that the committee stay accessible. Serving on this committee is no small task. Committee members can expect to spend significant time and effort over the course of several months, so dedication is the name of the game. Scott advises selecting only those board members who can attend every committee meeting for the best results. Establishing a timeline, like this sample from the YMCA, clarifies expectations.

Although staff and volunteers will have a minimal role in the selection process, they'll be working with the new CEO regularly, so their input should be considered.

4. Select your CEO.

Once the transition committee narrows down the candidates to two, the board will make their selection. The goal is a unanimous vote; because if the board is divided, it can create conflict. If the whole board is on the same page about the type of transition happening and what kind of leader they need, a unanimous vote is reasonable.

At this point, the departing CEO can help the new CEO by taking some time away. Reid suggests staying out of the office, avoiding meetings, and keeping a low profile so there's no confusion about who's in charge. And when the departing CEO does interact with organization members, staying positive about the new CEO, regardless of what the organization members share, is a key factor in maintaining unity and morale.

5. Make the announcement.

Staff and volunteers need to hear the news first. As Jim puts it, an organization with any competent rumor mill will already know, but since they're the ones keeping the organization moving ahead — often for little or no pay — they need to feel included to stay inspired. Once your staff knows, then you can let the media know. The more the organization is ingrained in the community, the more attention you can expect.

6. Integrate the new CEO into the organization and the community.

It's the job of the board to help a new CEO get to know the community by setting up as many introductions as is reasonable and being present for these meetings. Coffee, lunches, cocktails, whatever — find a way to get your community members some quality face time with the new leader of your organization, and make sure a board member is always at these first-time meetings to help make the connection.

Successful leadership transition is a necessary piece of any not-for-profit strategy. You never know what could happen to create a need for a new CEO, and with the limited resources, volunteer-based staff, and reliance on community support so common with not-for-profits, getting it right is all the more important.

Of course, every organization has its own nuances, but there's no need to reinvent the wheel. These steps will get any group on the path to a successful transition — and by following the best practices (and avoiding the pitfalls) of leaders who've done it successfully, you're in for a much smoother ride.