Succession Planning. Why Talk About Succession Planning. Aging Leaders 6/26/2014. Kay Sohl
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1 Succession Planning Iowa Community Action Association July 10, 2014 Kay Sohl Why Talk About Succession Planning Demographic realities New opportunities Serious threats CAA Organizational Standards Aging Leaders Community Action - 50 th Anniversary Long time CAA leaders now over 65 Boomer generation over-represented in nonprofit executive directors Recession delayed retirement Recovery makes retirement possible Health may make it essential 1
2 Anecdotal Evidence National & state CAA conferences Average age of CAA leaders is dropping Boomer exodus may be nearly 50% completed New generation of CEO s energized & innovative CAA CFO s Many CAAs have grown their own Fiscal Director/ CFO Boomer generation over-represented among homegrown Growth of interest in the nonprofit sector among CPA firms, banks, universities CAAs have increased access to fully professional CFOs New Leaders May Not Stay Forever Unlike CAA pioneers, new leaders may identify more strongly with nonprofit sector than CAA movement May perceive positions as steps on a career path, not lifetime role 2
3 Organization Standards for CSBG Recipients Standard 4.4 private (from 2014 Draft) The Organization has a written succession plan in place for the CEO/ED, approved by the governing board, which contains procedures for covering an emergency/unplanned, short-term absence of 3 months or less, as well as outlines the process for filling a permanent vacancy Partnership Webinars Exits from the Top Executive Transition Management Leadership Succession Planning- Developing a Leadership Bench Partnership Toolkits Preparing For Your Community Action Agency's Future: Sustainability, Succession And Transition: Organizational Sustainability Planning Executive Succession Planning Executive Transition Management 3
4 Succession Scenarios Emergency Succession: Strategic Leadership Development Departure-defined Succession Emergency Succession Plans Clear process for appointment of acting Executive Internal/external communication plan Strategies if absence will be permanent Emergency Succession Templates Partnership Emergency Succession Toolkit Emergency Back-up Succession Plan Template Emergency Interim ED Job Description Emergency Backup Plan Detail 4
5 Emergency Back Up Plan Template Emergency Succession Planning Toolkit Communications Plan Short-term staffing plan Cross-training plan Critical relationships Annual key events calendar Critical Info & Contacts Beyond Emergency Plans. Strategic Leadership Development Ongoing effort to build the bench Recognition that effective leadership succession requires strong management support Develop both new & existing leaders 5
6 Build the Bench Strategies Assess current leadership expertise & gaps Systematic support for professional development Structured opportunities for external relationship development Developing New Leaders Demographic analysis of workforce & management Set goals for leadership demographics Clarify pathways to advancement Build support for emerging leaders Demographic Comparison Leadership Group Gender: 33 female & 12 male Median Age: 47 11% Hispanic or Latino; 80% White and 9% Other Seniority Years: 0-5 = = = = = = = 2 Agency Workforce Gender: 227 female & 53 male Median Age: 47 35% Hispanic or Latino; 55% White and 10% Other Seniority Years: 0-5 = = = = = = = 4 6
7 Departure-Defined Planning Stages Initial planning Preparation for transition Recruitment and hiring Post hiring transition Board Leadership Roles Board Chair roles Executive Committee Executive Transition Task Force Hiring Committee? Transition Task Force Develop plan & timeline for transition process Guide organizational preparation Lead recruiting & hiring effort Guide post-hire planning & support 7
8 Task Force Chair Requirements Deep understanding of CAA Board leadership experience HR experience Facilitation & listening skills Communication skills Task Force Initial Planning Clarify timeline Organizational readiness Search and hiring process Selection & transition Clarify roles & structure Task Force & Full Board Consultant & other support Preparation for Transition Organizational assessment Identify infrastructure, management, and leadership needs Explore options for restructuring executive team 8
9 Financial Readiness Assess current financial resiliency Identify potential financial risks and vulnerabilities Multi-year business plan Build reserves Identify potential support for transition process Board Readiness Explore potential impact of transition on current board/exec roles Identify missing board skills/relationships and strategies to address them Values Clarification Board and staff identify core values to guide the organization Commit to retaining core values throughout the transition process 9
10 Recruitment & Hiring Identify board, staff, and consultant roles Clarify decision-making process & timeline Obtain input on position requirements Communication Strategies Conversations with key stakeholders Clarify process & timeline Emphasize Board leadership and staff capacity??? Before the Search Begins Must have skills, capacities, experiences? Compensation: your scale in relation to today s market? Scope of the search? 10
11 Internal Candidates Strong potential successor(s) within your current team? Process for considering internal candidates Interim Executive Strategies Replacing a long term, beloved leader may create set-up for failure for successor Interim executive works through grief and power issues Increases likelihood of success for next executive Selection Process??? Final decision authority Role of hiring committee Input from staff, full board, partners, others Reference checking 11
12 Post Hire Transition Process Communication/introduction strategy Role of current exec in orientation Board and staff support & accountability structures Prepare for Success New exec and board leadership identify goals and performance indicators for 3, 6,and 12 months Coaching and exec support during transition Barriers to Preparing for Leadership Transition Executive ambivalence Board anxiety External relationships Staff morale 12
13 Executive Ambivalence Identity merged with the nonprofit Inadequate retirement $$ Anxiety about survival of nonprofit Board Anxiety Organizational survival Board survival increased responsibility Role and process confusion Funder/ Community Barriers Discussion of succession planning may undermine confidence Wait and See responses Lame duck??? 13
14 Staff Impact Barriers Anxiety about future of the organization Positioning for power shift Staff concerns about Board capacity to make appropriate selection Benefits of Succession Planning Reduce isolation of executive Build board engagement Encourage staff leadership development Support capacity building Baseline Realities Most EDs and CFOs are no longer doing the job they were hired to do Long term relationships allow complex problems to be addressed more quickly 14
15 Resulting Reality Long tenured leaders can manage a greater breadth and depth of responsibilities than will be practical for successor More Baseline Realities Must address both organizational and individual needs Need to avoid search for a clone Beware the pendulum effect Raising the Succession Issue Founder/leader strategies Board leadership strategies Funder strategies 15
16 Preparing for Transition Exec Organization Board Funders & partners Exec??? What s only in your head? Do Board and exec team understand key relationships and business strategies? More Exec??? Is your compensation package competitive for positions with similar scope? Are you working way too much? How deep is your management bench? 16
17 ??? For Boards Emergency succession plan? Clarity on Board role in emergency Plan for leadership transition???? For Boards Clarity on mission & values? Understand financial condition & resiliency? Aware of community perception???? For Boards Competitive position of your exec compensation Key roles of your ED Adequacy of management infrastructure 17
18 ??? For Funders Support for leadership development $$ support for succession planning Operating support during transitional periods Your Next Steps? Emergency plan in place? Initiate succession discussion Leadership development strategies? Organizational and Board readiness? Board leadership for transition Nonprofit Transition Resources Leadership Transition Series: Annie E. Casey Foundation CompassPoint Nonprofit Services 18
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