Succession Planning: A Strategic Treasure Hunt

By Cynthia J. Armour, CFRE

Succession planning is a critical yet often overlooked component of organizational sustainability. Over the past 30+ years, I have observed firsthand how staff and boards grapple with leadership transitions, often precipitated by a chief executive’s or board chair’s departure. This challenge is especially evident in under-resourced organizations, where stability is already precarious, and turnover can perpetuate disruption.

One example of this situation can be seen in a Washington, D.C. agency, where my sister is the current board president. The outgoing chair is an efficient and effective corporate banker, and she is a therapist. What she thinks she lacks in business acumen, she makes up for with her curiosity and ability to listen, making people feel heard and valued. It takes a variety of strengths to run a board, and it’s crucial to recruit diverse skill sets.

This young agency survived the pandemic but like so many, financial and human resources are stretched. Three different Executive Directors in the past three years have contributed to the uncertainty and destabilized its growth. When I asked her about the organization’ succession plan, she quietly responded “denial?” Then she and I both laughed and quoted our brother whose motto has evolved from “denial, that’s in Egypt, isn’t it?” to “denial works until it doesn’t work!”

In my previous article titled “Successful Succession,” I explored the high costs of avoiding planning for chief executive departures. It’s important to recognize, however, that planning for board transitions is equally vital, as board chairs and chief executives work in partnership (https://boardsource.org/board-chair-chief-executive-partnership) to guide strategy and lead respective implementation teams. Rather than treat these roles in isolation, an integrated, organization-wide approach to succession planning is crucial.

This issue isn’t new, but Covid has amplified the challenges of neglecting leadership continuity, particularly in small and medium-sized charities. Many well-meaning, but untrained or under-equipped boards and Executive Directors are caught in a reactive cycle, focused on day-to-day operations at the expense of long-term strategic planning. As a result, limited energy is often misdirected, and opportunities for growth and stability are missed. Momentum is lost spinning tires because they lack the right traction to get out of their rut.

Last spring I attended Third Sector Company’s inaugural Succession Planning BootCamp for consultants. I’ve participated in several of their online programs since the pandemic began and always find their courses, clinics, study groups and forums informative, practical, and thought-provoking. This one was equally inspiring.

In this article, I’ll explore some key research on succession planning, highlight common barriers, introduce fresh ideas, and offer practical solutions to help you rethink your approach. I will also link to my “Trusted Resources”. I’ll provide the traction, but your team will need to use the tools to move this priority forward!

Research Findings

I apologize to fellow Canadians for relying on U.S. statistics, but there’s more research available south of the border, and the issues are similar.

A 2006 national study by CompassPoint and the Meyer Foundation found that 60-75 percent of U.S. nonprofit Executive Directors planned to leave their positions by 2011, and 10-15 percent of nonprofits hired a new executive each year.

More recently, BoardSource’s Leading with Intent 2021 report revealed that only 29 percent of nonprofits surveyed (primarily U.S.) had a written succession plan or policy to guide executive transitions. Just 13 percent had a board succession policy, and 32 percent of executives hadn’t had a performance review in more than two years.

Meanwhile, Nonprofit HR reports that 80 percent of nonprofits don’t have a formal retention strategy, and 45 percent of employees plan to seek new or different employment by 2025, with pay being a major driver.

What Is Succession Planning?

Succession planning is a process that identifies critical staff and board roles within your organization and develops action plans to ensure an equitable pipeline of high-performing individuals is ready to fill them. By prioritizing talent development and leadership continuity, nonprofits can ensure that the right people are in the right roles at the right time, to safeguard organizational stability both now and in the future.

Although this process is essential, it is not easy to implement. However, by setting clear and measurable goals with a commitment to take incremental steps, organizations can better position themselves for long-term success. There are several types of succession planning, including:

• Crisis or Emergency Planning: For sudden, unexpected departures of key leaders.
• Transition Planning: When there is advance notice of a leadership change, providing time to build internal capacity.
• Strategic Leadership Planning: An ongoing process that evaluates both current and future leadership needs and competencies required.

At the BootCamp, Third Sector Company emphasized that the process should be viewed not just as a series of steps but as part of an organizational culture. Succession planning should focus on leadership continuity, while transition planning addresses specific roles, and career planning helps individuals build their skills and strengthen their commitment to the organization.

Barriers to Succession Planning

Succession planning is a fraught topic. In a recent conversation with charity sector veteran Sheree Allison, author of The Nonprofit Book of Wisdom, she compared it to “having a conversation about death; succession pushes a panic button”.

Succession planning implies organizational change, and resistance is common, despite the risks of avoidance. Fear-based reactions override logic. When emotions and egos are threatened, rational thinking gets disrupted, like a radio station that’s tuned to the wrong frequency. The result is noisy, distracting static, making it difficult to hear thoughtful dialogue. People who should be part of important conversations often defensively “tune out.”

At the Maytree Foundation’s November 2023 “Five Good Ideas” event nonprofit expert Joan Garry referred to CEO succession as “triggering” and suggested reframing it as “organizational readiness” to reduce anxiety. Her five ideas were: 1) don’t wait, 2) plan for a two- or three-year intentional process, 3) don’t call it succession planning, 4) invest in board leadership and 5) hold your outgoing ED accountable.

Additional barriers include the time-intensive nature of succession planning, board members’ inexperience, and the challenge of balancing short- and long-term priorities. Executive Directors may fear raising the topic due to concerns about being seen as replaceable, while staff departures may occur if internal candidates are not considered. Furthermore, culture is the glue that holds the organization together and can therefore be difficult to change if it’s traditionally been unsupportive. Finally, the absence of one or more individuals championing this priority can further impede progress.

For many, succession planning is just one more task on an already overwhelming to-do list. Unfortunately, necessity becomes the mother of invention, and desperation is the catalyst. The Eisenhower Principle, inspired by a quote from Dr. J. Roscoe Miller, president of Northwestern University, sums it up: “I have two kinds of problems, the urgent and the important. The urgent are not important, and the important are never urgent.” This perspective highlights that important actions are aligned with long-term goals and measurable outcomes. Conversely, urgent tasks tend to disrupt strategic objectives and focus on immediate, often external demands that derail strategy.

Treasuring Team Talents

Nurturing the talents of staff and volunteers requires deliberate attention, assessment, policies, procedures, investment, and action. When an organization’s culture and values reflect a commitment to building individual and team capacity, it can shift the narrative around succession planning and reduce resistance.

However, professional development is often one of the first areas to be cut from the budget. Worse still, many organizations never invest in training and support for staff, board members, or volunteers, which results in a lack of capacity to address challenges. Many struggling organizations unintentionally sabotage their leadership teams and make the organization a difficult place to work. When talent recruitment and retention become chronic issues, the reasons are often self-inflicted. Leaders avoid performance appraisals—whether for staff, board members, or the organization itself—on the pretense that they’re unpleasant. Yet, a lack of communication about measurable goals, recognition of accomplishments, or support in addressing roadblocks can be far more damaging. If organizations tracked the direct and indirect costs of turnover, perhaps they’d reprioritize professional development.

The broader issue of the “nonprofit starvation cycle,” where overhead costs are underfunded by grants, also exacerbates these challenges, though it is not the only factor. Organizations operating on a project-to-project basis may lack the long-term perspective needed to break this cycle. Without future-oriented planning and evaluation, it becomes difficult to anticipate the talents, skills, motivations, aptitudes and teamwork required to achieve strategic objectives. Regularly revisiting the strategic plan, identifying organizational priorities, and assessing the necessary staff and volunteer competencies are crucial steps. While accountability at this level may be initially uncomfortable, it gets easier with practice, funders and donors appreciate it and it is essential for attracting and retaining effective leadership.

Who’s Responsible for Succession Planning?

“Select the chief executive”, “support and evaluate” chief executive performance are two of the most significant responsibilities outlined in BoardSource’s Ten Basic Responsibilities of Nonprofit Boards. When done with intention, these tasks establish a constructive interdependent partnership based on trust, candor, respect and honest communication, one of BoardSource’s Twelve Principles of Governance That Power Exceptional Boards.

Succession planning is a key risk management strategy that ensures organizational sustainability. It requires collaboration between the chief executive and the board. However, particularly in smaller organizations where the Executive Director is already managing multiple responsibilities, it is often preferable for the board to take the lead in championing this process. Doing so strengthens the board’s governance mindset (a clear understanding of their roles and responsibilities and the ways in which individual trustee leadership can enhance the positive, value-added impact of the governance process, as described by Davis Campbell and Michael Fullan at Governance101.com).

Prioritizing succession planning as part of governance engages the board more fully in essential matters. If the board is sufficiently large, the task may be delegated to a Governance Committee, which oversees board management and has frequently replaced Nominating or Executive Committees. Given the current challenges of leadership recruitment, boards can elevate the importance of succession planning by adopting a governance-focused approach, which can also make the board more attractive to leadership candidates.

The governance committee’s basic purpose is to help the board — and ultimately the organization — reach its full potential. This simple statement encompasses a complex set of responsibilities that influence a board’s capacity for effective governance. Sometimes called the conscience of the board, this committee adds value by institutionalizing best practices in three areas: strategic recruitment, effective board engagement, and intentional revitalization. Every board should have a governance committee. (BoardSource)

In the event of a chief executive’s planned or sudden departure, the board is fully responsible for managing the transition. However, boards are often unprepared for the complexities of an executive search, let alone have consensus on the appropriate leadership skills and style needed or even how the search process will happen. For a taste of all that should be involved, see Bridgespan’s Nonprofit Hiring Toolkit. Suffice it to say recruiting a new chief executive is one of the board’s greatest responsibilities and it requires specific expertise that is incredibly time consuming! Considering all the necessary steps and proficiency required, proceeding without external assistance can be more costly than delegating all or part of such a rigorous search process. It is commonly believed that a rushed or desperate hire will result in an “interim leader”, whether intended or not. Unfortunately, that was the case with the organization my sister chairs. 

Changing What Doesn’t Work

Given the growing field of mindfulness, there is an opportunity for nonprofit leaders to apply similar intentionality to succession planning. By fostering a culture of capacity-building and continuity, organizations can normalize the conversation, reduce stress, and generate meaningful progress.

Covid accelerated trends that were already evident. That 2006 report indicated that 60-75 percent of nonprofit Executive Directors planned to leave their positions by 2011. For decades, leadership roles have been held by predominantly white baby boomers who have served with dedication but rarely had time to cultivate future leaders. They often set unrealistic standards for others to follow, particularly as many families today rely on dual incomes with demands on childcare and different priorities; few have the luxury of, or interest in, investing long hours in an often-thankless career. Retirees are increasingly involved in caregiving for grandchildren, elderly parents or both with an additional impact on volunteering.

Effective recruitment has always relied on clarity and communication. Yet, vague invitations are still common. Organizations cannot lament the lack of volunteers if they have not clearly defined the roles, expectations, and available opportunities. Providing well-defined, flexible options for participation increases the likelihood of engagement where individuals can find a role that suits them.

Organizations must also consider innovative approaches. While shared leadership is not a new concept, many organizations still struggle to recruit a single CEO or board president. Many arts organizations have successfully implemented co-leadership models with an Artistic Director and a General Manager working together for years. Similarly, co-presidents of the board may be easier to find than a single volunteer leader. 

Engaging in Strategic Conversations

What steps is your organization taking to engage staff, board members, volunteers, and the broader community in strategic conversations? Is your organization clear and transparent about its diversity, equity, and inclusion (DEI) policies? Do individuals feel welcomed, heard and valued? The more people are engaged and have a sense of belonging, the more invested they become in the outcomes and implementation of your organization’s strategic goals.

In 2021, the University of Toronto’s Rotman School published research titled Not-for-Profit Board Diversity & Inclusion: Is it Essentially Window-Dressing?

This report identified six key themes: 1) Board diversity is unlikely to be effective without a parallel commitment to inclusion; 2) Successful inclusion depends on the determined leadership of the board chair; 3) Board candidates need clear guidance on how they can contribute to the organization; 4) Onboarding for new board members needs to be re-imagined; 5) Lived experience adds valuable perspectives to board discussions; and 6) Sound diversity and inclusion principles align with broader governance best practices.

In 2022, a follow-up report titled From Window-Dressing to Real Change: Success Stories from Boards on a Journey of Diversity & Inclusion was published. These reports provide guidance for boards to become more deliberate in recruiting for demographic diversity and fostering genuine inclusion.

The Role of an Interim Executive

Rushed or desperate leadership recruitment—especially for a chief executive—can lead to costly mistakes. Don’t be penny wise and pound foolish.

One effective option to consider during a CEO transition is the objective and insightful role that a skilled Interim Executive can provide. This is a growing profession, more developed in the U.S. than Canada, yet frequently overlooked across North America. Boards facing leadership transitions usually need assistance, though they often hesitate to make the necessary investment.

What many don’t realize is the extraordinary value and relief a trained Interim Executive can bring to your team. Well beyond previous E.D. experience, these professionals offer specialized expertise. Thanks to programs like the Third Sector Company’s Interim Executive Academy and other formal educational initiatives, there is a growing network of graduates skilled in change and transition management.

Interim Executives bring specialized tools to offer unbiased insights for a defined period. They understand the urgency to find a new leader while being sensitive to the immediate and often anxious needs of the board and staff. This role isn’t for the faint of heart. Like emergency room physicians who excel at triage, these experts follow methodical protocols during leadership transitions that are purposeful, transformational, and profound. Many religious institutions, such as churches and synagogues, recognized the value of interim priests, ministers, and rabbis long ago.

Interim Executives are sometimes mistaken for placeholders or confused with an “acting” role, which is often filled internally. However, these are accomplished professionals with a track record in transitional leadership. They are dedicated to guiding the board and staff through the period between a chief executive’s departure and the appointment of a new leader. Unlike individuals seeking permanent positions, Interim Executives focus on supporting the organization’s board, volunteers, and staff to ensure that the incoming leader is well-positioned for success.

In my professional opinion (and I can say this without bias, as I am not seeking this role despite my training), this option is a worthwhile consideration, often lower than retaining a consultant who doesn’t necessarily specialize in transitions—or worse, making an unsuitable full-time hire. When carefully selected, an Interim Executive can become a valuable asset to both the board and staff, while also assisting in the selection of the next chief executive.

Next Steps

There is no time like the present! Reframe and normalize succession planning as talent development, leadership continuity and organizational sustainability. The benefits of taking proactive steps will be substantial. Board and ED teams will become more engaged, strategy will be communicated more effectively, and everyone will gain a clearer understanding of their respective roles and responsibilities, allowing them to contribute to objectives without unnecessary interference.

Organizations that are both effective (doing the right tasks and achieving goals) and efficient (optimizing processes) are more likely to attract the leadership talent they need but the only way to know is to monitor results. Change is possible, and one client in Toronto demonstrated this by aligning their CEO and board toward complementary, but separate goals. Within three years, they went from having no board nominees to having a “qualified” waiting list—because they had become a team that leaders were eager to join.

Another example of structured leadership development is found in Rotary Clubs which nurture their talent systematically. Their process is clear and well-defined. In Year One a Vice-President progresses to President Elect in their second year, then serves as President in the third year, and Immediate Past President in the fourth year. Each role has a clear job description, with training and mentoring provided.

Finding Candidates

Being a professional fundraiser and later an executive search consultant taught me how to cultivate relationships. I needed to be goal-oriented, well organized, ask and listen intently to learn about individuals’ interests and values – and not take rejection personally!

Building a strong talent pipeline begins with people. Understanding individual’s hopes and dreams is a necessary part of engaging their help; this can be as simple as asking a direct aspirational question on an application, noting it in their file and checking in annually. Next, it’s necessary to clearly identify the tasks that require support and then the matchmaking begins. Start with the organization’s existing network or database provides a solid foundation for recruitment efforts. By making requests specific and simple, individuals are more likely to step forward and contribute.

“Prospect research” for volunteer recruitment is the same as in fundraising; securing one donation usually requires 3-5 individuals and multiple interactions. Focus on people whose values and interests align with the organization’s mission and ask whether anyone in your network has a connection. If so, assess whether that person has the time and skills to contribute effectively to organizational goals. Most importantly, ask your contact for an introduction and talk to them! Even if there is no direct link, this is part of your treasure hunt. Demonstrate you’ve done your homework, tell them why you’ve selected them and then ask them directly if they can help. If you’ve identified that their interests align, don’t be discouraged if the initial response is no. You are cultivating a relationship.

Being specific in requests and making it easy for individuals to commit increases the likelihood of success. The Influential Fundraiser by Bernard Ross and Clare Segal outlines various ways to respond to different “no” answers, helping to manage the challenges of rejection during outreach. Although this example is fundraising-related, use it to help you develop responses and strategies to get a yes from a prospective board member or committee volunteer.

ACTION!

Succession Planning can seem overwhelming, but the following steps will help streamline the process. Avoid reinventing the wheel—leverage resources that are readily available. If your organization is part of a federated or multi-level charity (e.g. United Way) or a member of a capacity-building network like Imagine Canada, BoardSource, National Council of Nonprofits or any other, make sure you capitalize on member benefits and provided resources. Even without a membership, information is readily available. I respect and have vetted the links and names I’ve included in this article and consider them my “trusted resources”. Templates are an excellent starting point, and they can be tailored to fit your organization.

Board members, these steps are not listed in any strict order, but rather organized for logical progression. You may already have some measures in place, but policies ‘disappeared’ in board minutes and important decisions and documents weren’t centralized. Much of what is outlined below should be covered in annual board orientations and reorientations for new and existing members alike.

With this task list in hand, consider widening your support network by recruiting volunteers outside the board. With proper supervision this may include college students enrolled in a complimentary program; their contribution might be part of a necessary practicum or fulfil an assignment requirement. Expanding your circle of helpers with a very specific task list will broaden your pipeline and create opportunities for meaningful engagement.

Review these suggestions together as a board and delegate responsibilities evenly amongst the team. The purpose of recruiting new members with a job description is to communicate expectations clearly including service between meetings, by everyone. Idle board and committee members waste time and energy. At the start of every monthly meeting one cracker-jack board chair asks each person “what have you done for this organization since we last met?”

Tackle these tasks in the order that works for your team. These links are intended to help but if leaders need support be sure it’s provided. Start with smaller wins to build momentum and celebrate accomplishments together; you’ll find they’re contagiously motivating.

• Adopt a Succession Planning policy https://garthsonleadership.ca/ceo-ed-succession-templates/ and demonstrate a commitment to its implementation. The culture your leadership team creates reflects your dedication to this process. (Remember Peter Drucker’s quote: “Culture eats strategy for breakfast.”)
• Review your organization’s existing Succession Plan. If one doesn’t exist, you’re not alone. Some useful tools include Community Foundations of Canada Fact Sheet: Executive Director/CEO Succession Planning (https://communityfoundations.ca/wp-content/uploads/2022/01/Fact-Sheet_-Executive-Director_CEO-Succession-Planning.pdf) or have a look at the “Nonprofit Executive Succession Planning Toolkit” from the Federal Reserve Bank of Kansas City (https://www.kansascityfed.org/documents/82/nonprofit-resources-NONPROFIT-TOOLKIT.pdf) – to get started.
• Identify champions within your volunteer team who recognize the importance of leadership continuity, talent development and are willing to lead these efforts. Consider whether the Governance Committee should proceed or if a sub-committee, including non-board volunteers can take the lead and report back to the board for approval.
• Ensure board terms and limits (https://boardsource.org/resources/term-limits/) are clearly defined in your bylaws and adhere to them. If not, update them before your next AGM. (Most boards opt for 2- or 3-year terms, totaling six years with staggered terms.)
• Demonstrate a Governance Mindset. Inviting board applications that help screen suitable candidates is a good start. Here’s a sample from the Nonprofit Leadership Lab (https://members.nonprofitleadershiplab.com/wp-content/uploads/2021/03/NLL-Sample_Board_App_3_3_11am_2021.pdf)
• Provide clear job descriptions (https://boardsource.org/resources/board-member-job-description/) for potential board members, outlining expectations. Don’t be disappointed by unengaged volunteers if you sugarcoated the requirements.

• Use a board skills inventory (matrix) to assess current expertise and identify gaps, helping you target future members strategically. The skills required will depend on your organization’s needs.
• Offer an annual orientation for new recruits and a reorientation for the team. Seasoned board members can serve as mentors(https://boardsource.org/resources/mentor-to-board-development/) provided they are strong role models.
• Dedicate 20-30 minutes during board meetings to advance governance priorities and strengthen your knowledge. Don’t add this training to your agenda – find what time-wasting content you can replace. If you’re not already using a Consent Agenda, try this (https://boardsource.org/resources/consent-agendas/).
  • Encourage board members to research a governance topic that interests them. Invite them to present a brief introduction (based on best practices, starting with some links provided below) then ask yourselves “how does this presentation align with our organization and what small steps would make us stronger?” 
  • Use the following tools as a “springboard for discussion”. Keep in mind that geographic locations – country, province or state – have varying regulations so research local requirements.
  • BoardSource’s YouTube channel (https://www.youtube.com/channel/UCMRJi52tZdBwCktvpmztWIQ/videos) offers helpful resources at no cost.
  • The Chartered Professional Accountants Canada have an extensive series of publications all starting with the phrase “20 Questions Not-for-Profit (NFP) Boards Should Ask About”…CEO Succession…Human Resources…Overseeing Management of Risk…Directors Duties…Recruiting, Developing, Assessing and Renewing your Most Effective Board…Mergers and more. These “booklets” ask and answer the questions so there’s expert advice readily available and yet, for the sake of discussion, just spend 15-30 minutes on 3-5 questions (without the answers) to imagine how your team would respond. The value is in the dialogue that unfolds; document the conclusion the team generates. (Search not-for-profit resources at this link https://www.cpacanada.ca/pd-and-resources#sortCriteria= percent40cpapublisheddate percent20descending&f-cpatopic=Not-for-Profit percent20Governance)
• Evaluate the status of your organization’s Strategic and Operational Plans. If these are not regularly monitored, identify what updates are needed and how this impacts team priorities. The purpose of evaluation is to track results, change tactics if necessary and ultimately, make informed decisions. The board speaks with one voice and is responsible for oversight, not operations. The simplest way I’ve seen to monitor progress on a Strategic Plan is a report card that gives your organization a grade A+ down to D- on your top priorities. This assessment can happen as often as quarterly or just annually but don’t postpone beyond that. Another option is to measure Key Performance Indicators (KPIs) visually. This article from Nonprofit Quarterly provides some good guidance (https://nonprofitquarterly.org/financial-management-models-of-a-great-nonprofit-dashboard/). Here’s another resource from Imagine Canada about fundraising KPIs (https://imaginecanada.ca/sites/default/files/2021-05/Stop percent20Driving percent20in percent20the percent20Dark percent20- percent20Nonprofit percent20Fundraising percent20KPIs percent20101_Guide percent20(EN).pdf)
• Create and maintain a governance task list to document board roles and responsibilities that require support. Make a checklist for each item and ask members which ones most interest them, are they willing to chair that committee or task force and what training would help them succeed.
• Set annual governance-improvement goals and conduct a board review or evaluation 12 months later. Measurement and feedback help maintain accountability. Here’s a sample – https://nonprofitdocuments.law.stanford.edu/wp-content/uploads/Board-self-assessment-questionnaire-SLS-sample-03-22-21.pdf and there are lots available. The objective is to identify where improvements are necessary and make those priorities part of next year’s governance task list.
• Conduct an annual performance appraisal with the chief executive. Here are some helpful links – https://www.saskculture.ca/programs/organizational-support/organizational-resources/good-governance/reviewing-the-executive-director-performance, https://www.saskculture.ca/content/documents/Reviewing_ED_performance-chart_.pdf,  and https://joangarry.com/video/simple-executive-director-performance-review/.

Implementing any of these steps will strengthen your organization and ultimately benefit those you serve. Recruitment will be less onerous if you’re goal-driven, with clearly defined, manageable tasks and supportive instruction. Invite participation, post task lists/help needed announcements on your website and be prepared to respond promptly when people offer! Ask for specific, defined help. Retention will intensify when you demonstrate an organization that’s committed to learning and growth. Welcome diversity, provide opportunities to expand knowledge. Reduce people’s fear of change by sparking their inner-visionary and create a desired future together. It’s hard, yet smart work. That is the traction necessary to get out of the rut.

 

Cynthia Armour, CFRE, has spent the past 34 years consulting with nonprofit boards and chief executives. She specializes in fundraising, governance and transitional leadership. With a passion for lifelong learning, she encourages clients to be curious and provides stepping stones to keep you afloat. Please direct inquiries to cja@elderstone.ca or call her at 705-799-0636.