LeadingAge Magazine · September-October 2017 • Volume 07 • Number 05

Managing Leadership Succession

September 18, 2017 | by Jack Curtis

Succession planning is a hot topic in aging services boardrooms, due to a large cohort of CEOs reaching retirement. Here’s a look at what a good succession and onboarding plan includes.

An unprecedented number—approximately 50%—of current nonprofit CEOs are approaching retirement within the next 3 to 5 years, as BoardSource reported in its January 2015 report, Leading with Intent: A National Index of Nonprofit Board Practices. Yet according to research cited by Deffet Group, Inc., an executive search consulting firm, approximately 20% of aging services organizations have “actionable” succession plans for their CEO succession. To address the rising pressure and accompanying anxiety, a thoughtful succession plan can smooth the process, calm fears and enable an organization to prepare for unexpected departures. The succession process can be viewed as a good example of turning a challenge into an opportunity.

“Leadership transitions are inherently about change,” says Kimberly Wilborn, immediate past chair of The Friendly Home board, and a board member for Friendly Senior Living, Rochester, NY. “A wise board of directors and senior executives know change is hard and recognizes the opportunity to affirm their mission and strategic goals and determine where the organization wants to go, and what kind of person can best lead them into that new chapter.”

“The transition of the CEO,” says Elizabeth Feltner, vice president of Deffet Group, “is the single most important activity that boards undertake, and the selection of a successor is the most important decision the board will make. The process leading up to that decision can be long, complex and very demanding. Yet, they’re well aware that, ‘As the CEO goes, so goes the organization.’”

Whether it’s an unplanned vacancy or an anticipated transition, the board of trustees, as the legal stewards of an organization, generally addresses the leadership succession. It initiates, drafts and guides the planning process, approves the compensation for the new CEO and makes the hiring decision.

What are the critical steps to achieve a smooth and healthy succession? The organization must navigate through 3 phases: research (which includes the candidate search), interviewing and onboarding (also called orientation or acculturation). As the work can be difficult and demanding, an organization’s board may explore external assistance and decide to partner with a recruitment firm or consultant to manage the recruiting, and, sometimes the entire succession planning process.

Friendly Senior Living photo
Photo courtesy of Friendly Senior Living.

Getting Started

The bulk of the legwork leading to the interview stage is performed by the transition and search committees. Comprised of board members, both committees must bring together a diverse, well-rounded range of backgrounds, perspectives and skills and focus their talents on their critical tasks. Committee members are generally thrilled to serve, according to Feltner, but often underestimate the time and energy required.

“When you get that range of expertise along with the passion the board members already have, plus the willingness to invest their time,” says Feltner, “the process can be highly successful.”

The first phase involves looking both inward at the organization and outward for prospective candidates. This inward component generally centers on the organization’s workings and goals.

The transition team performs the “upfront work”—and later, the tail-end duties. It’s tasked with preparing for future transition of the CEO. Their work is necessarily ongoing. In one of its first steps, the team assesses the viability of the strategic plan and its ability to inform the development of the job description and the succession plan. The team reviews the budget and conducts a needs assessment, which encompasses an organizational profile that considers current capacity as well as challenges and opportunities (that the new leader will address). They assemble a snapshot of the outgoing CEO’s strengths and weaknesses. The team also develops and implements the requisite internal and external relations.

Before the search launches, the team must evaluate and possibly update, in response to market forces, the CEO compensation and job description. While not recommended to serve as a member of the search committee, the current CEO can lend expertise to the process by, for example, participating in the information gathering phase. These collaborative, intentional steps shape the search.

The other component of the research phase, the one that looks outward, drives recruitment and evaluation of candidates. The search team has a very specific goal, and its work is tied to a timeline. It has definite starting and end points. To pull potential candidates into the process, the team launches a broad-based outreach campaign consisting of ads, website postings, regional networking and word-of-mouth.

After a round of phone and in-person interviews, top tier candidates are brought back to meet with focus groups. Ideally, the stakeholders should include staff at all levels and resident council members. Using criteria established by the transition team, the team selects from its candidate pool a slate of (usually) 3 finalists, which it presents for consideration by the full board, kicking off the interview phase.

To guide the conversations with the final 3 candidates, the full board designs ranking criteria, develops questions, and follows an established protocol. After the initial round of interviews, the focus groups that provided input earlier in the process also meet with the candidates, perhaps in casual settings, and later share their perceptions with the board.

Time for Onboarding

Once the candidate is named, the staff and constituents informed, and an announcement release submitted, directors tend to relax. But their important work is not over: It’s time to initiative the third phase—onboarding. Upon the signing of a new CEO, the transition ream “re-emerges” to implement a thoughtful, comprehensive process that integrates the new leader into the flow of the organization and ensures that the organization experiences a comfortable transition.

The board, in tandem with the new CEO, should establish a new leadership agenda that sets priorities and details clear goals and expectations. The transition team sets in motion welcoming and acclimating meetings and events that help the CEO build relationships with the board and the entire organization. Ideally, throughout the coming year, the board needs to monitor their new leader’s progress on the agreed benchmarks.

Another set of actions and goals is crucial to successful transitions: strategic leadership development. To ensure ongoing leadership talent and to support organizational sustainability, organizations need to develop their own internal talent pipeline. Leader development should emanate from the board throughout the organization and thus involve the entire staff in succession planning.

Best Practices

What are the hallmarks of a successful transition? It’s largely a matter of approach and attitude.

For Feltner, “You can’t communicate enough. It’s hugely important to keep people informed and engaged. Often some anxiety arises within the organization at all levels, especially if the departing CEO’s tenure has been long. Thoughtful, timely communications are invaluable in alleviating the unease. Furthermore, staff want to be recognized and to feel they have a voice. Communication and transparency can do a great deal to gain buy-in from staff and instill enthusiasm and trust in the process.”

“Great succession plans,” according to Wilborn, “are built on commitment to and passion for the task at hand. The participants need to be fully invested and open-minded and recognize the process involves some difficult conversations. The board must move mindfully and not be driven by emotion. Best outcomes come from those who have done their homework.”

According to Dan Deffet, founder and CEO of Deffet Group, “Key measures of a successful transition are: when a lot of communication has taken place to welcome the new CEO and to start the fostering of relationships between the new leader and the board, senior leadership, staff, outside constituents and residents; when the CEO has been ‘inundated’ in the culture of the organization; and when the CEO has been educated on the board’s expectations and on the strategic plan.”

Less-Than-Best Practices

Along the way, there are pitfalls to avoid.

“The biggest problems arise,” says Deffet, “when committees move forward without a clear vision of the process, their organization’s leadership needs, and the finalists’ qualifications. Sometimes the board may favor, for example, an internal candidate, which can short-circuit the process and not allow it to work fully.”

“The process can be exciting as well as arduous,” says Feltner. “People often find succession work more demanding than anticipated. Mistakes can be made when members aren’t fully engaged. Problems occur when the committee has not invested the time to have really meaningful conversations—with themselves and the candidates.”

To Wilborn, “The worst succession outcomes unfortunately bear out the adage, ‘quick to hire; slow to fire.’ It’s important to do a full and thorough search and not take shortcuts, because everyone wants the best possible results. Trust the process and take each and every candidate to their full and natural conclusion.”

Time to Celebrate

“It’s important to see the search,” says Deffet, “as a journey with a promising destination.”

“I believe that in succession planning, we are building for the next generation,” says Wilborn.

The final takeaway: At the start of a new era, be sure to celebrate the achievements of the departing CEO and have a good and constructive time welcoming the new CEO.

Editor’s note: Feltner and Deffet will present an education session on CEO transitions at the 2017 LeadingAge Annual Meeting & Expo in New Orleans, LA.

Jack Curtis is a writer who lives in Brookline, MA.

“Knowledge is Power”: Tools for Succession Planners

To help their nonprofit organizations achieve successful transitions, board and staff members can turn to a wealth of online material on leadership succession—guidelines, strategies, templates and toolkits.

“Web sources offer a lot of good advice and forms,” says Kimberly Wilborn, a board member for Friendly Senior Living, Rochester, NY. “Using toolkits, for example, organizations can do some of their homework, such as conducting self-reflective focus groups, on their own. I believe knowledge is power, so anything you can learn anywhere is awesome.”

Here’s an introductory listing of succession planning process resources and toolkits: