Four Steps to Succession Readiness

By Linda Kay Fairburn, MSOD

This article was published by the Canadian Society of Association Executive in the October 2012 Governance issue of Association Magazine.

ED succession planning - who needs it? We all do according to six Canadian and U.S. studies that predict a not-for-profit executive leadership transition rate over the next five to 10 years of 75% - 83%.

In Canada, the report from the Calgary Centre for Non-Profit Management by Boland & Associates, found that 82% of Canadian executive directors are expected to leave their current positions within five years. That's more than 132,020 organizations!

In 2003, "Cornerstone of Community" identified succession planning as one of the key concerns of the 13,000 Canadian not-for-profit organizations surveyed. And yet, most boards resist making plans to replace a chief staff officer. A chronic lack of human and financial resources available to not-for-profits necessitates the need for each to develop crises management skills, especially in the area of their greatest vulnerability, leadership succession.

Canadian Demographics

A demographic time bomb will seriously affect the leadership of not-for-profit organizations in Canada over the next decade. More than half of current chief staff officers are over the age of 50 and the majority will reach retirement age by 2020. That's 80,500 Canadian leadership transitions by the year 2020!

Canadian Chief Staff Officer Attrition Rates

In Canadian not-for-profit organizations, 10% of chief staff officers leave annually, a total of 16,100 transitions per year. As in the U.S., 66% of these leave voluntarily while 34% are terminated or forced out by their boards. Further to this, 33% of voluntary leavings are retirements - annually 3,507 leaders leave the sector along with their experience.

12 Barriers to Succession Planning

Simply put, we fear the unknown, deny the inevitable and hesitate to take action.

Do any of these barriers resonate with you or your organization? These are the most frequent reasons cited for delaying a board-led succession planning effort:

  1. We didn't know we needed one
  2. It's too hard or too complex
  3. It will take too much time or we have plenty of time
  4. We might get it wrong and make things worse
  5. The current leadership might feel threatened if we start to talk about how we're going to replace him or her
  6. There aren't enough resources to develop a good plan

These are the most frequently cited fears of a chief staff officer's willingness to participate in succession planning activities:

  1. Loss of personal and professional identity
  2. Loss of leadership control
  3. The potential for conflict with staff and the board
  4. No vision of life without work
  5. Denial and/or guilt
  6. The uncertainty inherent in change of any kind

Five Executive Transition Scenarios

1. Hiring a first CSO by an organization that has been previously led by a board of directors.

2. Replacing a CSO who is leaving immediately as the result of resignation, termination or death.

3. Replacing a CSO through an incremental and departure-defined transition, such as retirement.

4. Replacing a CSO with a long, successful history on the job, such as a founder.

5. Replacing a CSO for a temporary, short- or long-term absence brought on by an unexpected accident, injury or illness.

Succession & Transition Planning

Succession plans include all the thinking, planning, preparations and activities that take place prior to the announcement of a definite departure date. These essentially are organization development activities.

Succession planning is a board-led effort to ensure continued effective performance of an organization over time by providing for leadership development and replacement.

Transition plans, by contrast, take place immediately following the announcement of a leader's departure date. The focus of this work centers on two human resource activities: recruiting and on-boarding.

Who is responsible for Succession Planning?

The board of directors is responsible for succession plans for itself and the chief staff officer. Board succession planning is paramount in volunteer organizations where the board president is the stand in for the staff leader. In reality, it's often the CSO who pushes the board into succession planning; a true sign the board has delayed too long.

The chief staff officer is responsible for succession planning for staff positions under his or her direction particularly for key managers. In larger organizations, human resources may take over succession planning for staff positions on behalf of the chief staff officer.

Three Kinds of Plans

1. Planned/Unplanned Temporary Short-Term Plan

A short-term absence is one where the person will return to his or her position within one to three months - implement the Short-Term Plan.

2. Planned/Unplanned Temporary Long-Term Plan

A long-term absence is one where the person will return to his or her position within four to 12 months - implement the Long-Term Plan.

3. Permanent Plan

A permanent absence is one where the person is not returning to his or her position at all - implement the Temporary Long-Term Plan and begin the recruiting process.

What's in a CSO Succession Plan?

A succession plan is a series of documents that safeguard the organization and guide the actions of the board of directors by setting out policies and procedures that:

  • Describe the procedures for the interim and permanent replacement of the CSO
  • Define the process for recruiting and hiring a permanent replacement.

Usually when boards think about succession planning they think about one thing only - replacing the chief staff officer as quickly as possible. Given this mind-set boards usually make one of two mistakes in the search and selection process. Either they look for a carbon copy of the existing ED or they rewrite the job/position description to remedy any perceived deficiencies.

Unfortunately, neither option is likely to yield satisfactory, long-term results if the succession planning process begins only when the CSO leaves. This is because the planning process used is too shallow and fails to consider the long-term needs of the whole organization.

So What's Next?

You can't really do anything about how old you are, whether or not you are the founding director or member of the reported attrition rate. The only thing you can do is to prepare yourself and your organization for the day when the CSO steps aside. Succession readiness requires a succession plan.

Four Steps to Succession Readiness

Integrated Succession Planning for Nonprofit Corporations

Step 1 - Emergency Leadership Planning

An Emergency Leadership Plan involves the preparation of two comprehensive and official plans for what to do in the first 72 hours of a chief staff officer's unexpected absence. There are two time frames to prepare for: short- and long-term absences from the organization. Whether the absence is planned or unplanned, voluntary or involuntary, immediate or scheduled, the response is the same - implement the appropriate Emergency Leadership Plan. Resignation, termination or death will trigger the immediate implementation of the temporary long-term plan while simultaneously starting the recruiting process laid out in the board policies. Prime responsibility for this rests with the board of directors in consultation with its chief staff officer. It includes:

  • Emergency information and contact inventory
  • Identification of positions or individuals who will act temporarily in the vacant position
  • Definition of the lines of authority of the interim CSO
  • Transfer of authority to Acting CSO
  • Provision for oversight and support
  • Direction for human resources such as compensation and training activities for the interim CSO
  • Managing stakeholder communications and relationships during the transition
  • Providing operational procedures during the transition

Step 2 - Standing Succession Committee

This ongoing committee is established with the mandate to determine, lead, coordinate, monitor and report on the progress of succession planning activities within the organization. Prime responsibility for this rests with the board of directors. The committee's responsibilities include:

  • Create and maintain the Emergency Leadership Plan
  • Identify areas in need of assessment and realignment
  • Create a budget and secure funding for succession planning and transition activities
  • Attain and maintain succession readiness until there is a defined departure date
  • Create a permanent succession plan for the CSO
  • Liaise with outside consultants and various other groups
  • Form the Transition Committee and coordinate their activities in response to a defined departure date

Step 3 - Assessments and Alignments

Getting ready for leadership change involves stocktaking through various organization assessments, strategic planning, analysis of the board, and creating alignment with the organization's policies and by-laws and operational procedures. Prime responsibility for this rests with the board of directors in consultation with the CSO in collaboration with agency staff, volunteers, clients and appropriate others.

  • Board evaluation
  • Strategic planning integrated with agency operations and job and role planning for the chief staff officer
  • Internal and external organizational assessments as required - these may be of a behavioral, operational, cultural, financial, client or program oriented nature
  • Alignment of board policies and by-laws with operational procedures pertinent to leadership and succession of the CSO and Board (this may require legal advice)

Step 4 - Preparing the Organization

Prime responsibility for this rests with the CSO in collaboration with the board of directors, key managers and other agency staff. These activities will build significant capacity within your organization.

  • Test the alternative Emergency Leadership Plan
  • Complete short- and long-term replacement planning for key staff positions
  • Establish and maintain performance review procedures
  • Clarify roles for those in lines of authority
  • Carry out cross training for key positions

12 Benefits to Succession Planning

These are the most common benefits for the board and organization in having a succession plan:

  1. Opportunities for the development of risk management capabilities
  2. Building capacity for human resource development
  3. Cross training among staff and volunteers
  4. Testing an alternative leadership plan
  5. Expansion of organizational culture to include leadership succession
  6. Cost effectiveness that results from planning and preparedness
  7. Increased stakeholder consultation
  8. Peace of mind

These benefits apply to the chief staff officer:

  1. Satisfaction of leading a progressive organization
  2. Time to process and plan for personal future
  3. Leave a positive legacy
  4. Security of knowing your priorities are synonymous with those of the organization

There will come a day when succession planning is a routine part of leadership training. Until that time, we must do what we can to make leadership succession less intimidating and more comprehensible and attractive. We must create a culture of succession planning. A not-for-profit that begins with this concept in mind leaves a legacy that will safeguard its future.

Linda Fairburn BIS MSOD, is a Canadian best selling author and an expert in the area of succession planning. Her company, Make Things Happen Limited, provides succession planning and leadership transition assistance for nonprofit and charitable corporations in Canada and the United States by solving problems through consulting and facilitation or by providing the tools and education for organizations to solve them themselves. She can be reached at 519-766-1400 or email her.