Year after year, in survey after survey, nonprofit organizations have identified succession planning as their No. 1 concern. But they are missing an answer hidden in plain sight: developing leaders inside their organizations.
It’s an issue sure to become even more pressing: In the past two years, 25 percent of senior nonprofit executives have left their jobs, according to a recent Bridgespan Group study. Nearly as many plan to leave in the next two years. At this pace, the equivalent of the entire corps of senior nonprofit executives will need to be replaced in the next eight years.
And a full 50 percent of the 438 nonprofit executives polled by Bridgespan said top talent is leaving to pursue opportunities that will help them develop their careers. “I haven’t even had the right experiences to move to the next level if I wanted to,” said a senior-ranking executive at a Jewish federation.
Most organizations will replace these leaders by hiring an executive from another nonprofit, creating a revolving door for talent. Our survey showed that only 30 percent of senior spots at nonprofits are filled by internal candidates — about half the rate of the business world. That means higher costs for recruiting and training and the loss of institutional memory. And many new hires don’t work out: In the business world, 40 percent of new CEOs resign or are asked to leave in the first 18 months.
How to close the gap in leadership development? Our research over the past three years identified four keys to attracting and keeping effective leaders:
- Put in place managers who are committed, effective mentors and champions of up-and-coming talent.
- Identify professional-development opportunities that are in line with organizational and individual needs.
- Work with staff members to create plans for their own professional growth.
- Establish mechanisms to ensure follow-through on those plans, including linking progress on development goals to performance evaluations.
Consider how Sister Paulette LoMonaco, executive director of Good Shepherd Services in New York City, has integrated these elements into a culture of training high-potential staff members to meet the organization’s future needs. Yan Li, a member of Good Shepherd’s finance team, and Greghan Fischer, her supervisor and the organization’s chief financial officer, created a plan specifying development goals for Ms. Li — such as strengthening communication during meetings and guiding more senior program directors on budget and strategic questions — and the personal investment it would take to help achieve them.
Ms. Fischer began with coaching Ms. Li and giving her practice in leading budget meetings. At each meeting, she observed Ms. Li’s leadership style and afterward provided feedback. To help Ms. Li overcome her natural reticence, Ms. Fischer brought in a communications coach.
Then when Ms. Li’s supervisor took maternity leave, she took charge of all budget meetings, which forced her to translate her sharp analytical skills into clear recommendations.
“She stepped in and led budget meetings and did it so well that people felt clarity and support,” Ms. LoMonaco said. . Ms. Li began helping others, including senior program directors, improve their knowledge of analytics.
“The transformation is striking,” says Ms. LoMonaco.
On returning to work, Ms. Fischer promoted Ms. Li to assistant director of contracts. “She will now stretch us all to think of things a little differently, role modeling for others that they can grow in confidence and position, too,” Ms. LoMonaco said. “She literally has found her voice.”
Nonprofits perennially struggle with staff development. Indeed, in the Bridgespan survey more than half of nonprofits scored their organizations below six on a 10-point scale on their ability to develop staff. Nonetheless, we believe the solution to the leadership-development deficit is within reach of most nonprofits if they invest in identifying future leaders and give them assignments, mentoring, and formal training to develop those skills.
The Center for Creative Leadership recommends thinking about development this way: 70 percent should come from on-the-job training, 20 percent from coaching, and 10 percent from coursework.
It takes focus, money, time, and action to help a nonprofit’s aspiring leaders find their voices.
But to sustain and expand the impact of the organizations they support, boards, CEOs, and grant makers need to turn their concerns about succession into plans for developing homegrown leaders.
“When you invest in developing talent,” says Adam Simon, director of leadership efforts at the Charles and Lynn Schusterman Family Foundation, “people are better at their jobs, people stay with their employers longer, and others will consider working for these organizations in the first place because they see growth potential.”
Libbie Landles-Cobb is a manager with the Bridgespan Group in San Francisco and a coach in its Leading for Impact program. Kirk Kramer, a Bridgespan partner in Boston, heads the firm’s leadership and organization practice and is co-author of the 2013 study “Nonprofit Leadership Development: What’s Your Plan A for Growing Future Leaders?” Katie Smith Milway is a partner in Boston and co-author of the 2009 report “Finding Leaders for America’s Nonprofits.”
