It’s one of those situations that’s not a problem until it is a problem. Then it can be a big problem. Some organizational challenges send out warning signs. Little buzzers and whistles go off that clearly indicate “Issue! Issue! Issue!” However, with leadership transition, it’s like one of those mysterious diseases where the symptoms are that you feel perfectly fine. Then you die.

Ok. A little bit dramatic. But so is, often, the process of selecting a new leader. I serve on and work with many governing boards. Business and non-profit.  According to a McKinsey Company study nearly two thirds of all American businesses have no plan regarding leadership transition. Anecdotally, I’d say this is reflective of my experience in the non-profit community as well.

The thing about leadership transition is that we know it’s going to happen. I mean, Russia and China like to mummify their grand leaders and put them on display. But while they still take up real estate and require maintenance – they’ve transitioned out of leadership.

Fun Facts

Here’s some more fun figures: Over half of all executives are above 50. The average tenure for an executive is about 10 years. Organizations do best when they start actively preparing for transition about three years before it takes place.

Now, board members, take a look at your executive. How long have they been in service? What are their plans for the future? Are they currently doing a fantastic job and are planning to enthusiastically keep doing a great job 3-5 years from today? Or are they thinking about that cabin in the woods? Moving to be closer to grand babies? Starting their own business? Moving to a larger organization?

Do you know? Because it will happen. It can be a great experience for everyone involved. Why fumble it?

Five Ways To Support Leadership Transition

1. The Board Should Step Into Active Leadership and Create a Plan. Active leadership means doing not just hinting or suggesting. There’s a whole boring theory behind that but that’s just because academics need to come up with papers to write.) A board needs to actively lead in this area.

No one can predict the future. However, a board should make a practice of thinking through a plan to guide leadership succession. This relieves the current executive of some awkward conflicts of interest. It offers structure and intentionality to the process. It informs the strategic priorities of the organization.

The plan doesn’t need to be highly detailed. Some of the answers can come from your strategic planning work. (You are doing that aren’t you?) It should discuss things like:

• Who are we and why? What are our core values? What do we want this organization to be about? What is success for us?
• What are the priorities for the organization over the next 3-5 years? Is it to increase its value? To improve sustainability? To navigate a tough economy? To take advantage of new opportunities? Expansion? Careful slimming down?
• To do the above, what will be needed in any new leader? See my article on the Leadership Selection Funnel.
• What other internal leadership changes can we expect? Over half of all executives are recruited internally. Their promotion creates an opening for someone else. This can create an upwards cascading effect. Even if there is an external hire, any new leader will have a different approach, priorities, relationships and loyalties. Leadership transition is frequently accompanied by a temporary increase in staff turnover. How do you plan for that? Are there any key skills, experiences or roles in the organization that might change?
• What important relationships with clients or vendors are uniquely tied to the outgoing executive? Executives build their own networks. Those relationships don’t naturally transfer to the new executive. If there are key relationships or partnerships that can’t be lost – what is the plan to introduce someone new to those relationships?
• How do we best take, utilize, and focus the outgoing leader? In very broad and basic terms – businesses should usually try to increase their value as much as possible. Non-profits should try to increase their sustainability and financial health. Also, what key projects or goals is the outgoing leader uniquely positioned to accomplish?

2. The Board Should Provide Support for the Outgoing and Incoming Leaders. Leadership transition can be an emotional process for the outgoing leader. Particularly if they’ve played a major role in shaping the organization or are looking at retirement or down-shifting. A board will need to walk with the outgoing leader and provide support through this process.

Additionally, a board should watch for outgoing executive decisions that are made more based on the outgoing leader’s sense of personal timing and energy as opposed to the overall vision and goals of the organization. Many outgoing executives become risk-adverse, start thinking & planning in terms of their personal time-lines as opposed to organizational time-lines and only put energy into projects they think they can complete. They often need help to see over their personal horizons. They may need support and encouragement to know how to prepare and position projects that they may not complete.

Incoming leaders will also need support. They’ll need to have clear expectations and guidelines set. They will often benefit from coaching. If from outside the organization, they will need to be introduced well to the whole organization so they can quickly gain credibility and start working.

3. The Board Should Use the Transition Process to Calibrate and Tune-Up the Organization. Many boards become very “hands off” during transition. Afraid to wreck things. Instead, this is the time to (appropriately) become hands-on. Transition is like spring cleaning. Spring cleaning doesn’t mean winter was bad, less than or wrong. It just means a lot of time has gone by and it is now time to do a regular deep cleaning. It’s a good time to “deep clean” the organization. Take some time, look at what can be improved or strengthened. What do you keep? What needs to be let go?

Don’t dump that on the new, incoming executive. Particularly if they are an outsider. That just sets them up to look like the bad guy. The board needs to pull on their gloves (or hire a consultant to help with this, or work with the outgoing leader to do this) and get down on their knees and do a little bit of work.

Give the new leader a great, tuned-up organization to work with.

4. Create an Emergency Plan. I live in earthquake country. We just had a 7+ Richter scale quake this year. That’s big. I hate to admit that I’ve only done a half-way job at really planning and preparing for my family in case of an earthquake. We probably have what we need in the house. And garage. And crawl space. It’s just sort of scattered around. Some of it is hard to get to and I haven’t really thought through all that I need. So, I might have missed something important.

Don’t be me. (I shouldn’t be me. Now I feel guilty and have a new weekend project…) Create a rough plan that covers the basics of an emergency departure of your key leader.

• Who will step in as interim?
• If an internal person is stepping in – how will their old priorities be juggled?
• How will key decisions will be made?
• What key functions need to be protected?
• Where are the executive’s passwords to everything?
• Who can sign things and agree to contracts?
• How will you handle making a permanent leadership choice?

Make things easy for yourselves and your organization. A little but of extra work right now will make a word of difference in the very foreseeable and unavoidable future.

Would your board or leadership would benefit from skilled and experienced support to plan for or navigate your leadership transition? Contact me at christian@vantageconsulting.org or 907 522-7200.