Leadership Succession: Planning for Success

A 2009 study done by the Federal Reserve Bank of Kansas City found that “68 per cent of non-profit organizations lack a succession plan to get them through a leadership transition.” Change is inevitable whether we like it or not. It is proven, that a change in leadership, whether it is planned or unexpected, can alter the course of an organization. Having a solid succession plan can help ensure that an organization continues on a path towards success. In October 2012, Propellus CEO, Jamie Niessen, and the Board of Directors began the process of creating a succession plan for the organization.

“The driver for getting it done a year ago was the Imagine Canada standards program,  part of what Imagine has defined as a standard is for organizations to have a succession plan in place,” says Niessen.  “This absolutely makes sense. When I went through and did the work drafting this policy, I could see why it was a standard.”

What is a succession plan? At its very base, it is planning for the replacement of key roles within an organization. Generally speaking, most organization’s succession plans focus on leadership positions like the CEO. “A succession plan isn’t about naming your successor. It is about figuring out a talent pipeline for your organization. Even if you can determine that the organization doesn’t have the talent internally to take over a certain role, now you know what is required,” says Niessen. A succession plan includes documents like job descriptions, knowing which internal staff can fill key roles in the interim, and an understandable strategic plan in place.

“It starts with: ‘do we have a strategic plan?’ One of the chief risks to the organization in losing its leader is if the plan is in the leaders head, and the leader changes, then the organization loses ground. It changes direction and all that stems from a lack of organizational strategy.”

A good succession plan has a strategy for both a defined departure and an unexpected or emergency departure. A defined departure is when the leader declares that they are going to leave their position on a given date. With this type of departure, the organization has ample time to prepare and fill the role by that date. On the other hand, an emergency departure is when the CEO is injured or unable to come to work and fulfill their duties, or if the board decided that they no longer require the CEO to continue their duties. The awkwardness that comes with planning your potential emergency departure could be part of the reason why succession plans are not the norm. “There’s a lot of stuff in your head; fear and all of those sorts of things. Depending on the relationship between an ED/CEO and the board, the board asking for a succession plan, the CEO could worry it is a ‘signal’ of some kind,” says Niessen. “In the end, it’s their job to ask, and the CEO’s job to work with them.”

“The surprising thing for me was the level of dialogue this opened up. It also really creates clarity. The Board knows that their job is, and I know what my job is. Together, we make sure that the organization is ready,” Niessen adds.

A possible side effect of not having a leadership succession plan in place is funder insecurity. Sometimes when there is a change of leadership, funders become wary of investing in a program until there is a CEO in place, because of the uncertainties that the situation naturally brings about. “With a succession plan in place, the board chair has the confidence to sit down with key funders and say: ‘here is our succession plan, here is what is in place, we have a strong strategy regardless of the new person. This continues because it is core to our strategy. We can give you every confidence that this will continue,’” explains Niessen.

Not only can a succession plan effectively ease a nervous funder, but it can also generate more solid support. “If 68% of organizations do not have a succession plan and yours does, it is one more reason you are an organization deserving of funders support,” says Niessen.

It all comes down to whether the benefits of having a succession plan outweigh the awkwardness or fear of developing it – Niessen believes that the benefits are innumerable. “When you think about the risk to an organization of a badly handled CEO transition, it can be significant and far reaching. It is in both the Board and the CEO’s best interest to create such a tool. The condition that has to be present here is just mutual interest in the long term sustainability of the organization,” says Niessen. In the end, it comes down to the desire for the organization to succeed, even after a change in leadership. Having spent years leading an organization may make it more difficult to write the plan. “If you have spent 10, 20, or 40 years doing something, you don’t want to see it stumble after all of the work that you have put in,” says Niessen. “I think that the shared interest in the long-term success of the organization is really the base for this tool.”

If your organization needs help with succession planning or building a strategic plan, our experienced consultants can help. Contact Jeff D’Silva at 403-231-1431

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