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Like death and taxes, there is one other certainty in the life of an association executive. The CEO will retire, resign, or otherwise leave the job by unforeseen circumstance. Formally preparing the organization for the inevitable transition in leadership is known as succession planning.

Succession planning starts with the organization’s leadership answering three questions:

1.  If the CEO dies, what information needs to be accessible that will help the successor (or an interim manager) immediately do the CEO’s job effectively?

2.  What are the sequential steps the governing board needs to follow to choose the right leader for the future?

3.  How long will it take, what will it cost, and is there more than one future leadership option (e.g., hire externally or promote internally)?

OPERATIONAL CONTINUITY

When Dr. John Carver wrote Boards That Make A Difference and introduced the concept of executive limitations, one universal policy was to prohibit the CEO from operating without at least one other person substantially aware of major organizational issues. The spirit of the policy is to ensure an organization has operational and administrative continuity, which is the basis for succession planning.

An operating, or policies and procedures, manual contains sections and details helpful to the succession process. The deliverable is to provide, for a potential successor, one repository of comprehensive information on every conceivable aspect of relevance to performing the job effectively. Typically, this may be on a disk or in a printed binder and, if it contains sensitive information, stored off-site with an appropriate confidante such as the organization’s legal counsel (with key staff and board members aware of its location). Material that should be covered includes:

1. Board of directors (list of directors; terms of reference; meeting schedule; briefing/orientation binders; committees of the board; minutes, etc.).
2. Staff (names; titles; job descriptions; personnel policies; reporting relationships; contract personnel; performance appraisals; salaries; staff meetings, etc.).
3. Organizational details (policies; organization chart; by-laws; strategic plan; business plan; annual budget; filing system; manuals for operating systems; key suppliers; contracts; official documents such as letters patent and leases).
4. Comprehensive status and operating details regarding the key business lines or member services, such as major events (contracts, contacts, project timelines); publications; and advocacy.
5. Financial (budget; signing authorities; financial reporting to the board; auditor and audit; banking and investment details).

SUCCESSION IS FUTURE-FOCUSED

Organizational continuity and the best succession plans do not start with the question, “Who Is Next?” but rather with the question, “What Is Next?”

Good succession planning must begin with a vision and strategy for the organization’s future and not just its current requirements. Once the organization is clear on the future condition it aspires to; the future outcomes it will realize; and the future results which constitute success, only then can it evaluate whether a successor’s knowledge, skills, experience, and personality are likely to take the organization where it wants to be.

To best define the job success criteria, the person or group responsible for choosing the future leader should follow the same process applicable to strategic planning, including consultation with and input from key stakeholders. The incumbent CEO has a role to play in providing insights and ideas to the board about the organization’s future needs.

Strategic outcomes may likely already exist and are included in the not-for-profit organization’s current strategic plan or annual business plan, expressed as goals or key results which the organization aspires to accomplish.

Questions that should be asked of those whose input is sought may include:

1. What trends have been identified that will shape this sector and the organization over the next decade?
2. What are the important issues facing this organization and its members over the next 3-5 years?
3. What qualifications, experience, and skills must an outstanding candidate bring to realize the organization’s future goals and to be successful in the CEO role?

A step an incumbent CEO can take to help the board think about the qualities of a successor is to draft the successor’s job description. Of course, any official job description must be reviewed and endorsed at the governance level.

FINDING THE SUCCESSOR

The successor is either going to be an existing internal candidate or an external one. If there are internal prospects, it will be necessary to evaluate the abilities of existing staff to succeed to the leadership role. If no internal candidates exist, the process and cost to recruit a candidate must be documented.

A pivotal step for the governing board is to decide early in the succession planning process what the organization wants from succession – a seamless transition with leadership continuity (an internal candidate who is prepared for the role), or a bold new direction with a very different leadership style (possibly an outsider recruited for the leadership role).

Some organizations identify and groom an internal candidate, only to pass over the heir at succession time by choosing someone else; almost always an outsider. Why does this happen? The governing body or other decision-makers at the actual time of succession either do not feel bound to the decision of a past board, or more often believe that to fully serve the best interests of the membership they should conduct a broad search to ensure there is no better succession candidate available to the organization.

In organizations contemplating an internal candidate for the future role, an evaluation of the prospective leader’s strengths and weaknesses often takes place first. The purpose of the evaluation is to identify experience gaps or shortcomings in the potential succession candidate, and job training or professional development opportunities necessary to prepare the candidate for the CEO role. Other measures that may be helpful to prepare a successor include job shadowing and career coaching.

Boards may conclude there is more than one potential successor internally, or that no suitable internal candidate(s) exists.

Ralph Suppa, CAE, of the Canadian Institute of Plumbing and Heating, participated in a comprehensive assessment of his abilities and potential in 2000 before he was officially appointed to succeed as the Institute’s president and general manager in 2002.

The process at CIPH involved 360 degree feedback from staff and board input, the incumbent CEO’s evaluation, and the active participation of the candidate. A variety of tools were used including interviews and extensive testing. Ralph Suppa encourages associations to go through a leadership evaluation exercise to help prepare for succession “ I understand that the board was given the opportunity to conduct an executive search or conduct an evaluation of my leadership. The latter was chosen. In my estimation the leadership evaluation tool helped validate and confirm that I should be considered as the next president and general manager of CIPH.”

The succession plan needs to include the process and cost to recruit a new leader if no internal candidate exists. The incumbent CEO also must impress upon the governing board that a recruiting process is measured in months, not weeks. Few boards or search committees will say that a CEO recruitment process is easy. It requires hard work, time, and financial resources.

Tony Taronno, board chair of the Insurance Brokers’ Association of Manitoba (IBAM), recently chaired the committee to select IBAM’s next CEO. His principle recommendation for association boards is to obtain support. “ Without question you must hire a professional to help you through the process. I am so glad IBAM did that. The recruiter has the connections and knows the steps. Most volunteers don’t have the time to do it; which presupposes a volunteer knows what to do in the first place.”

Interim management may be required if there is no succession plan; when the organization’s CEO leaves suddenly and the board feels the organization is in transition; or where the future leadership profile of the CEO has not been fully defined. A major advantage to engaging an interim CEO to manage through the transition is that the organization benefits from the experience of a qualified CEO until the successor is ready or hired.

KEY SUCCESSION STEPS

Keys to successful succession planning include:

1. Creating the succession plan and having it in place before it is needed.
2. Information is documented in detail to ensure operational continuity, and its location is known to and accessible by people other than the incumbent.
3. The succession plan (and detailed information on operations) is updated frequently as the organization evolves, for example, when a new strategic plan is adopted. The plan requires specific steps, accountabilities, timelines and a budget.
4. The succession plan must have a champion. While the incumbent CEO is likely to help create the plan, the plan itself must be owned by the board of directors and especially the board that will be hiring and working with the new leader.
5. Successful succession is based on the staff leadership required to achieve future goals or a future condition. Organizations should consult widely in defining the knowledge, skills and abilities of its future leader, including its members, the board, the incumbent, other staff, and appropriate external resources (e.g., CSAE and ASAE have information on future trends affecting associations).

SIDEBAR

WHAT CAN CEOs DO TO HELP PREPARE FOR A SUCCESSOR?

Burt Nanus and Stephen M. Dobbs, in Leaders Who Make A Difference, note that few non-profit CEOs are given the opportunity to select their successor but nevertheless can help prepare for a successor by following these steps:

1. Groom internal candidates with board support.
2. Offer to organize the search process (although this will usually be a board prerogative).
3. Meet informally and individually with board members to offer information about prospects for a successor, especially in-house candidates.
4. Profile other recent leadership changes in similar organizations to provide a sense of the market and the competition for suitable candidates.
5. Obtain current compensation and benefits information.
6. Identify a transition team to carry on if the successor cannot take charge promptly.
7. Offer to be available for consultation with the successor.

Jack Shand, CAE, is president of Leader Quest Inc., the job experts™ in Canada’s non-profit/association sector (www.jobexperts.com). Leader Quest provides executive recruiting and HR consulting services to associations, charities, NGOs and regulatory organizations including the Canadian Society of Association Executives. Jack led three national associations as CEO in the first 20 years of his career and he is an honoured life member of CSAE. Jack can be reached at jack@jobexperts.com.

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