1. Built to Last Succession Planning for Founders & Nonprofits Tim Wolfred Tim Wolfred Consulting

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3. Today’s Agenda  Introduction to succession planning o What is it o Its benefits o Survey results o The awkward topic  Organizational Readiness for Succession o Key elements for sustainability o Emergency succession planning

4. Today’s Agenda  Founder / Executive Readiness o Knowing when it’s time to leave o Barriers & resources o The transition path o Grooming a successor  Board Readiness o Succession Policy & Sustainability Plan o Leading transition & search o The post-founder board

5. 5 Succession Planning What is it?  A risk management best practice  Preparation for a successful leadership handoff  A leadership development strategy  A path to organizational sustainability  A critical board and executive responsibility

6. 6 Additional Benefits of Succession Planning  Makes the CEO position more “doable”  Retains talented staff  Engages and reassures the board  Gives confidence to funders

7. Survey Results 25 Respondents  Staff size?  0 to 6 employees – 13  12 - 16 plus – 3  20+ - 6  Emergency Succession Plan in place?  Yes – 6  No – 19  Grooming a successor?  Yes – 21  No - 4

8. Survey Results  ED’s: How much longer on the job?  “Just passed the baton” - 1  2 years or less – 6  3 to 10 years – 7  “As long as the Lord directs” – 3  Board ready to manage the transition?  Yes – 14  No - 7

9. The Awkward Topic  What are your fears?  What makes it difficult to talk about succession planning?

10. Small Group Discussion Fifteen Minutes  In groups of 2 organizations (4 people?), discuss the status of succession planning in your organization.  Be prepared to report out 2 themes that emerged in your group.

11. 11 Three Windows on Succession Planning 1.Organizational Readiness 2.Founder / ED Readiness 3.Board Readiness

12. Organizational Readiness for Succession Issues of organizational sustainability often get too little attention in succession planning. The result is frequently a FAILED leadership transition.

13. Organizational Sustainability: The Key Elements  Sharply focused mission & agreement on strategic priorities  Viable business plan  Healthy finances, especially a financial reserve  Solid management team o Emergency succession plan

14. Resource Focus on Sustainability: A nonprofit’s journey, Dennis McMillan, 2013

15. Mission Focused & Strategic  True to your founding principles  Check on “mission creep”  Clear on where you’re going next – a “strategic plan” guides & eases big decisions

16. Viable business plan & healthy finances  Annual “profit”  Ability to jettison low impact/high deficit programs  Sufficient unrestricted reserve for emergencies & new directions  Diversity of revenue sources – into the future  Key resource relationships are backed up

17. Resource Nonprofit Sustainability: Making strategic decisions for financial viability, Jeanne Bell, et al., 2013

18. Merger or Consolidation?

19. Solid Management Team  Each member is fully skilled for their position  Strong team culture for decision making & mutual support  Team can lead the organization in the absence of the ED

21. Emergency Succession Planning  Definition: Preparing for unplanned departures and temporary absences  A risk-management best practice

22. Emergency Succession Planning Five Key Steps 1. Identify critical ED functions 2. Name a backup for each function 3. Develop a cross-training plan for the backups 4. Name who would become Acting ED 5.Specify board’s monitoring & support role for the Acting ED

23. Sample Outline EMERGENCY SUCCESSION PLAN Procedure for the Appointment of an Acting Executive in the event of an Unplanned Absence

24. Cross-Training Tools  “52 Free Development Opportunities for Nonprofit Staff”  “’Building Future Leaders’ Diagnostic Survey”  “Building a Talent Pipeline” www.bridgespan.org/Publications-and- Tools.aspx

26. Small Group Discussion Twenty Minutes  Consider the 5 elements of organizational readiness  Sharply focused mission & agreement on strategic priorities  Viable business plan  Healthy finances, especially a financial reserve  Solid management team  Emergency succession plan

27. Small Group Discussion Twenty Minutes  From among the 5, choose the one that most needs attention in your organization and discuss why.  What’s the biggest barrier you face to successfully taking it on.  Be prepared to report out one or two barriers from your group.

28. Founder / Exec Readiness Knowing When It’s Time to Leave “Five Ways To Tell It's Time To Leave” http://blueavocado.org/content

29. 29 Founder Readiness  ORGANIZATIONAL barriers to letting go:  No obvious successor  “No one else can do this job”  Unfinished agency business  Staff and board resistance

30. 30 Founder Readiness  PERSONAL barriers to letting go:  Finding the next job that engages my wisdom, skills and passion for serving the community  Fearing an empty retirement  Inadequate personal savings  Questions of employability

31. 31 Founder Readiness Resources for getting ready  A personal coach  Career planning  Financial planners  Peer support groups  ExitsfromtheTop.com

32. Final Leadership Tasks  The leadership of letting go  The leadership of preparing the way “Following the Leader: A Guide for Planning Founding Director Transition” Emily Redington & Donn Vickers,.” The Academy for Leadership & Governance, 2001, 34 pp. www.thejeffersoncenter.org www.thejeffersoncenter.org

33. The Founder’s Transition Path  Making the decision  Attending to organizational sustainability issues  Advising the transition & search committee  Orienting the successor – on-site, then on-call  Disappearing for awhile  An “emeritus” role – under the supervision of the new executive

34. Grooming a Successor Do’s & Don’t’s o Do engage the board throughout the process o Do Identify the executive skills needed— generic & specific to your future vision o Do create a training program to fill the candidate’s gaps o Do measure progress regularly o Don’t promise the top job upfront

35. Small Group Discussion Twenty Minutes  Gather in groups (5 to 6 per group) of executive directors and board members  Executive directors: Discuss what are the biggest barriers to your leaving, your biggest fears.  Board members: Discuss your biggest concern regarding your exec’s departure.  Be prepared to report out 2 themes that emerged in your group.

37. Board Readiness  Adopt a “Succession Policy”  Create a Sustainability Plan  Prepare for Transition & Search Process  Attend to Board Development

38. The “Succession Policy”  Outlines how a planned departure of the executive will be handled & how an unplanned departure will be handled.  Declares an organizational commitment to ongoing talent and leadership development. Raffa Template

39. Creating a Sustainability Plan  Form a Succession Planning Committee – Board and staff membership  Conduct a “Sustainability Audit” : “What are our vulnerabilities?”  Draft a plan to address the vulnerabilities

40. 40 Board Leadership Departing EDBoardIncoming ED

41. Transition & Search 12 months before ED departure 1.Form “Transition & Search Committee”  Board, staff, others 2.Committee drafts Transition & Search Plan  Review current strategic goals – for program impact and capacity building needed.  Create candidate profile - skills next ED needs to meet those goals  Delineate Founder’s transition tasks  Set date for starting recruitment

42. Transition & Search  Plan a brief founder overlap with successor  Define the founder’s “emeritus role”  Plan founder acknowledgement events 3. Recruit aggressively 4. Screen & hire 5. Get healthy closure with departing founder  Goodbye rituals  Appropriate separation 5. Carefully launch the new executive

44. Board Development  Build the post-founder board  Annual board self-evaluation & development plan  Annual evaluation and check-in with the executive

45. Small Group Discussion Twenty Minutes  Question: What does our board need to be doing now? Discuss your choices with your group  What assistance does it need?  Choose the top two of each that emerge at your table.

46. Stand & Declare Fifteen Minutes  What will you commit to doing going forward  What help do you need in pursuing that commitment

47. Tim Wolfred Tim Wolfred Consulting tim@wolfredconsulting.com 415-647-5265