Without a Succession Plan, ‘You’re Cruisin’ for a Bruisin’ ’

The more groups plan for a change in leadership, the better their chances of having a smooth transition.

Unfortunately, succession planning isn’t something most groups think to do, says Kevin Dean, the CEO of Momentum Nonprofit Partners, which provides training and services to groups. When Momentum polled groups in the Memphis area five years ago, fewer than 10 percent had succession plans. In a report released in 2020, that figure was up — but still only 29 percent of the groups surveyed had plans.

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“If you don’t have a succession plan, you’re cruisin’ for a bruisin’, as my grandmother used to say,” Dean says.
It can be a complicated topic to broach. Many directors don’t want to think about it — particularly if they are founders of organizations. They worry they might signal to their boards that they are not committed to the work if they talk about their eventual departure — even if they have no intention of leaving soon.

It is important to normalize those conversations, says Anne Wallestad, CEO of BoardSource. She is leaving the organization after 14 years. She says that discussions about her tenure have been part of her annual review process. The completion of an employment contract is also a natural time to talk to the board about succession planning, Wallestad says. “The moment of transition is not the moment to be thinking about succession for the first time.”

Not Set in Stone

Succession plans can take many forms. One key thing to figure out is who will take charge if something happens to the leader suddenly. Sometimes the answer is a board chair or another top executive. The plan should also include some thinking about fundraising, as donors often leave or pause when a new director starts. Some leaders also include basic operational information — the things someone would need to run the organization if the CEO left unexpectedly.

A leadership transition can also be an important time for organizations to stop and think about who they are, who they want to be, and what kind of director they will need next, says Jan Masaoka, CEO of the California Association of Nonprofits.

Courtesy Doug Sauer

Succession plans shouldn’t be set in stone. It’s critical to update them regularly, says Doug Sauer, the former CEO of the New York Council of Nonprofits who recently retired. He developed his first succession plan when he was 60 but didn’t retire until he was 72. New board members had to be informed about the plan, and Sauer had to communicate with board members his thoughts about when he might leave. As the employer, the board needs to know what the leader is thinking, he says.

Like many leaders, Sauer was on track to retire when the pandemic struck. He delayed the decision to help the group adapt to new working conditions and the crises that many of its members were going through. The COO has stepped in as the interim leader, and Sauer remains under contract with the group to help with funders and members during the search for a new leader.

Rebecca Terrell, the former CEO of Choices – Memphis Center for Reproductive Health, planned for her retirement well in advance. Three years before leaving, she brought in a former employee who had left to get a graduate degree as the new director of operations. That position gave her a good overview of the group’s work. Terrell thought that person would be a good candidate to replace her one day, so she gave the director of operations increasing levels of responsibility over time to help train her.

Terrell told her board she planned to leave about a year before her departure. She recommended the operations director to the board for the leadership position, and the board interviewed and hired her.

Terrell had individual conversations with donors before announcing her retirement and introduced them to the operations director as the person who was going to take over. “I was able to personally introduce this person who is going to be stepping up and convey my belief and trust in her leadership ability and some excitement about what the next steps were,” she says. “It was just an unusually smooth transition.”