The Topography of Executive Transition: a Nonprofit Perspective*

by Kent Eklund, Linda Ewing, and Sarah Strickland

When there’s a planned or unplanned change by an organization’s executive director or president, the organization may look back and wish it had prepared differently for the event. Not all changes can happen smoothly, but executive transition need not be a wrenching experience. Thoughtful planning and use of best practices will do much to ease the stress of transition for the organization’s board, staff, stakeholders, and incoming executive.

Why should an organization invest time and resources into planning for an executive transition? We find several compelling reasons, including the following:

• An organization needs time to build awareness and understanding of transition issues.
• Anticipating and planning for a transition, versus having it come as a surprise, reduces organizational stress.
• Planning allows the board and executive to consider where the organization is in its lifecycle as a strategic issue.
• Planning allows time for the board to consider what type of leadership is needed to successfully move the organization forward.

What is an Organization’s Topography?

Topography is defined as “a study or detailed description of the various features of any object, entity, or process and the relationship between them.” With respect to executive transition, an organization’s primary topographical features include:

The “real-time” situation of the transition. Is it a normal departure, such as a retirement, with sufficient notice and communication from the outgoing executive? An emergency situation? Or is it an emerging process, in which the board and/or staff and the executive realize that a change is needed? How the transition comes about can impact the board’s subsequent decisions and highlight the need for a transition plan.

The stage of the organization in its lifecycle. Is the organization a start-up, in a growth mode, or in its mature stage? Is it declining and headed for a turnaround scenario? Different stages of an organization’s life cycle require different leadership skills.

Board preparation. Executive transition is the responsibility of the board of directors.  The more a board has prepared, the less likely transitions will be driven by a crisis set of time constraints.

Real Time Situations for Transitions

Three types of executive transitions take place: Normally Occurring, Emergency, and Emergent. Each type has its own dynamics and calls for differing requirements for a successful transition.

Normal scenarios.  These are the situations that can either be forecasted or result from normal transitions in the life cycles of organizations.  Normal transitions include:

• The leader retires.
• The leader pursues a career by leaving for another position.
• A founder closes the organization s/he founded.
• The board determines that a merger or alliance is the next best step for the organization.

The requirements for successful transitions include advance announcement of the strategy for leadership transition, a high-functioning board, a current strategic plan, and a strong executive management team.  The absence of any of these requirements will necessitate quick attention to them in preparing for the transition.

Emergency scenarios.  Emergencies can come in many forms—illness, incapacitation, sudden inappropriate behavior necessitating a change, sudden death, or long-term family emergencies necessitating the leader leaving the organization.  Once again, these occur quite suddenly, and the most important requirement in the absence of an emergency succession plan (which should always be in place) is to “buy time” to permit planning (See comments about the use of interims).

Emergent scenarios.  These are instances in which, over time, there is increasing recognition that a leadership transition is needed for the organization to thrive, and that a mismatch exists between the attributes of the current leader and the organization’s leadership needs.  Examples of this include:

• A new leader is placed in the organization, and the lack of fit with the mission, vision, and/or culture is quickly recognized.
• The organization enters a new stage in its development, and the current leader lacks the skill sets for the new stage. 
• A first-time leader is perceived, over time, to be in over his/her head.
• A leader with obvious deficiencies is left in place for the next chair to handle.

Several requirements lead to successful transitions under these most difficult situations:

• A truly independent board (which may need to be developed quickly)
• A strategic plan that highlights leadership needs for the next chapter
• Succession plans in place for both the board and the senior leadership team
• A well-designed and seriously followed annual executive evaluation process
• A working relationship between the board chair and executive that includes open dialogue about the future leadership needs of the organization.

The element of time. In all of the scenarios, the element of surprise can emerge.  Boards that do not fulfill the requirements for success are often puzzled about first steps. Our recommendation is not to rush, even in the emergency scenarios, and buy time, often with the appointment of interim leadership from within the organization (management or board) or externally contracted.  Each interim needs to be constructed around a specific listing of activities geared toward meeting requirements for a successful transition and within a specific timeline.  In short, interims need to be as carefully planned as any other part of the transition.  Boards that are unprepared and rush into a transition may only be postponing issues and setting themselves up for many months or years of pain until the next transition occurs.

Interim Leadership – Catalyst or Caretaker?  Yes!

By James Hawley

In my career, mostly in the for-profit sector, I’ve filled interim CEO and CFO roles on multiple occasions. Each interim engagement varied in scope based on the strategy in place and the operating and financial condition of the company. In three specific instances, I found key similarities to the issues described by my colleagues who focus on nonprofit sector transitions. In one scenario, the change was part of a planned, orchestrated process. In another, it was more of an emergency caused by the need to effect a “turnaround,” in the true sense of the word. In a third interim, my role was to help the organization address key issues, yet allow for transition to a permanent leader.

The specific roles I played were addressed and defined by the boards of directors of the organizations. (Technically, one entity was a nonprofit by structure but conducting business with over $100 million in revenue and almost 700 employees, so I will refer here to the entities as “businesses” or “companies.”) There were no board members to step into the CEO roles, and no internal candidates to fill the CFO slot. The engagements were clearly defined: my marching orders were to “go do the job.”

That said, there is an element of artistry to filling an executive role on an interim basis.  In making decisions and leading necessary changes, I have tried to embrace the physician mantra of “First, do no harm.”  In one of the interim CEO positions, for example, it was clear from a strategic perspective that the next leader should bring a strong business development perspective. I was reluctant, therefore, to radically redraw the organization chart to fit my preferences, only to risk organizational disruption if the permanent leader redrew it again according to his or her preference. While it made my leadership task a little more challenging, this decision saved the company’s 200-plus associates from significant angst and uncertainty.

An interim leader must take care to develop relationships both outside and within the company as quickly as possible, recognizing there may be some positioning going on among your new colleagues on multiple levels. My preferred style is participatory, with a strong desire to delegate and provide challenge and opportunity for those reporting to me. But decisions need to be made—and, depending on facts and circumstances, they may have to be made by that executive committee of one. It would be a disservice to all for an interim executive to abdicate his or her decision-making responsibility on the basis that she or he is only “temporary.” The interim leader’s decisions must be guided by business strategy, the market environment, the maturity of the leadership team, and the current phase of the organization in its lifecycle.

So is there a caretaker component to the definition of interim? Yes, there is. But there is also significant opportunity for leaders to serve as catalysts in moving a company toward its strategic goals. I have opined over the years that well-run organizations do certain things to be well run. Management teams, employees in general, and boards of directors will respond favorably to, and be very supportive of, actions designed to move the company farther ahead. The fact that leadership is defined as “interim” does not preclude making the case for sound business practices, policies, procedures, and strategies that associates have rallied around, participated in, and supported.

Those of us who sell a product or service cannot always ascertain why the phone doesn’t ring, but I’ve found customers to be responsive to sound business approaches once they know the company has an authentic interest in their issues and know who is accountable for making the decisions. This is where the company’s team has an opportunity to display its collective expertise. It should be a team that supports a customer, not an individual with an imagined “S” stitched onto his or her shirt.

Pollyanna doesn’t reside in our offices. Occasionally someone self-selects themselves off a team, and I’ve pointed that out to him or her.  Sometimes an individual’s skill set cannot adapt and grow to match the organization’s needs. In that case, it’s best for all to help that person find an opportunity that fits their goals and matches their skills. An interim executive must address these personnel issues, just as a permanent leader would.

Interim leadership has some unique aspects, but they are not so unique that they override the need to provide leadership or require the interim executive to alter his or her fundamental management style. The success of an interim leader will still be based on the ability of that executive to adapt to the needs of the marketplace, the company, and its associates, owners and other stakeholders—just like a permanent leader.

At Cincinnatus, we’re fortunate to have individuals on board who have experience and have excelled in interim leadership roles.  Please feel free to contact us if you have an interest in learning more about our expertise in this area                                                                                                                                         

Jim Hawley   

Jim Hawley is president of Cincinnatus, Inc., where he focuses on providing executive leadership as well as operating and financial strategies to corporations and nonprofit organizations.

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