It’s time for real talk about leadership transitions

By Dana O’Donovan and Jarasa Kanok

Over the past decade, the practice of planning for nonprofit executive transitions has developed considerably. Organizations anticipating the exit of a founder or longtime CEO create detailed timelines and activity plans for the leadership transition, and the transition plan is designed to give key stakeholders confidence that the organization is taking all the right steps to ensure an effective, orderly transition. But, as the boxer Mike Tyson famously said, “Everyone has plans until they get hit for the first time.”^[i]

Our conversations with incoming and outgoing CEOs and board members of nonprofits with recent leadership transitions confirmed that far from ensuring an effective, orderly succession, traditional transition plans are often quite technocratic and fail to adequately take into account the very real human dimensions of the transition, which are brought into even sharper relief when a more diverse leader is coming into the CEO role.

These shortcomings were what led Alexandra Quinn, after taking the helm of Health Leads, to begin to compare notes with other leaders going through similar transitions. Quinn, who found her own transition into the CEO role to be unexpectedly challenging despite having the right elements of “the plan” in place, sought to better understand whether her and her organization’s experience was typical.

As Quinn explains, “We had the resources, the planning, our stakeholders had the best of intentions…. And yet this transition was one of the most challenging moments our organization has gone through. Despite the planning we did, I was still blindsided by the challenges and difficulties we encountered—and the fact that the organizational issues that required the most guidance and advice were not written about or talked about anywhere. Looking back, I would have done quite a few things differently or (hopefully) better, and once I started talking to peers in similar situations, I saw a lack of ‘real talk’ about how these transitions actually happen—the emotions, the change in relationships, and organizational, board, and partner dynamics.”

These concerns echoed many of the challenges that we at the Monitor Institute by Deloitte—the social impact consultancy within Deloitte LLP—have seen over the course of more than two decades of advising nonprofit leaders. Building on Alex’s initial conversations, we conducted a series of in-depth interviews with the CEOs, founders, and board members of nonprofits that have recently undergone a leadership transition.

Our investigation revealed that traditional transition plans—with their focus on timelines and steering committees—typically do not leave space for acknowledging that these transitions are being led and experienced by human beings, who are experiencing human motivations and emotions during a period of significant organizational and life changes.

Outgoing founders are often either focusing their emotional energy on their next big step or they’re retiring and leaving their life’s work in the hands of a relative stranger. Board members who have worked for years with the outgoing CEO are now tasked with building a new relationship with a leader they don’t yet know well—a leader who will be closely examining existing weaknesses in the organization for which the board may bear some responsibility. The senior management team is either getting to know a completely new incoming leader or adjusting to a longtime colleague stepping into a new role, while also mourning the loss of a beloved founder (or celebrating the exit of a “less-well-liked” one) and potentially considering alternate career options. And incoming CEOs are establishing themselves in their new leadership position and learning to manage existing teams and strategies while also mapping out their new agendas and plans.

As Health Leads board member Susan Donahue observed, “A leadership transition, whether smooth and well-planned or abrupt, is more fraught with emotion than people realize.” Even the language leaders use in describing their experiences—“it’s like dropping my baby off at the fire station” or “it’s like my best friend is now dating my ex”—dramatizes the gulf between the orderly activities laid out in a transition plan and the somewhat messy, human interactions that are the actual work of leadership transition.

It’s an environment that is inescapably fraught with very real human emotions that have the potential to significantly disrupt or stall an organization’s development. But through our conversations, we were able to identify three key strategies that can help organizations more effectively integrate the human element into their executive transition processes:

• Understanding the organization’s unique context and human systems. Rather than taking a “one size fits all” approach outlined in many traditional transition plans, the design of a transition plan needs to take into account the specifics and nuances of an organization’s particular cultural and operating context.

While at first it may seem comforting to follow the highly prescriptive, traditional approaches to transition planning, the reality is that these processes are more art than science. That explains the inevitable conflicting advice: The outgoing CEO should immediately/never join the board; the incoming and outgoing CEOs should always/never work at the organization concurrently during the transition; the vetting and hiring process should be long and transparent/as short as possible and on a need-to-know basis.

These contradictory recommendations shouldn’t come as a surprise though, since the truth for all organizations is that they will need to customize their transition plan to account for their organization’s unique circumstances.

Investing up front in diagnosing the context of the organization—and particularly the dynamics of the people involved—needs to be a critical first step in any planning process once the new CEO is in place. That means assessing a number of issues related to different stakeholders in the transition:

o   The founder. Are they leaving voluntarily or being forced out? Will they remain in a relationship with the organization? Does there need to be a relationship between the new CEO and the founder?

o   The board. What is the nature of board members’ relationships with the founder? With the new CEO? With existing staff? What are each board member’s underlying motivations for serving? What board relationships are most critical for the new CEO, and how should they be effectively transitioned over from the founder?

o   The management team. How strong is the current management team as individuals? As a team? What is the nature of the relationship of each team member with the founder? Is there potential resistance from any of the management team to new leadership? Were any of the management team under consideration for the CEO position, or did the management team favor an alternate candidate?

o   The staff. How strong is the organization’s staff? What is the nature of the relationship between staff members and the founder? Is there potential resistance from any of the staff to new leadership? What will it take for the incoming CEO to build trust with staff?

o   Donors, partners, and other critical stakeholders. How strong are the organization’s relationships with donors, partners, and other critical stakeholders? How transferable are the relationships—or conversely, how vulnerable are these relationships through the transition?

Understanding these dynamics—and the nuances of the broader organizational systems, culture, and operations (for example, the degree of financial stability of the organization or the investments the organization has made in addressing bias and creating more equitable processes and systems)—allows leaders to more explicitly address the human issues that will emerge during the transition, from quickly shoring up nervous funders to having active discussions about the best way for the outgoing CEO to support the incoming CEO (be it a board seat, a short-term advisory role, an on-call arrangement, or something less formal).

• Planning for the transition of critical relationships. Incoming CEOs consistently reported being surprised by the amount of time and energy required to build one-on-one relationships with members of critical stakeholder groups. This is driven by many factors, including that the incoming CEO will often have a very different leadership style than the previous CEO. If a strong operational leader, for example, follows a visionary founder, the outgoing CEO may need to explicitly manage the transfer of key funder relationships since they know the funders well enough to be very targeted in their messaging. Similarly, incoming CEOs who were promoted from within the organization may need to actively manage in a way that addresses skepticism from their former peers in senior management. Diverse new CEOs reported heightened challenges in building trusted relationships as they also had to contend with unconscious bias and inequities hardwired into existing organizational practices as part of their transition.

These factors, along with the strength of feelings that can surface on both sides in the conversations, significantly impact the amount of time and energy an incoming CEO will need to invest to build strong, trusting relationships where possible, and determine which relationships may not be durable enough to survive the leadership transition and how to unwind those with respect and humility.

New CEOs should engage in forward planning to block out the time and space to identify and connect with all key stakeholders, expecting that there will undoubtedly be emotions to manage through the transition period. At the very least, a new CEO should expect that they will need to make contact with each identified major stakeholder in the organization: the outgoing CEO, each board member, each executive team member, each major donor, key staff members, key organizational partners and constituents, important community members, and other external influencers and advisers. CEOs will need to work hard to make each interaction personal (emails do not suffice, phone calls are required at minimum, and face-to-face conversation is often necessary). And in each interaction, the new CEO needs to:

o   Convey a positive first impression, because initial impressions can quickly reverberate through a funder community or board

o   Authentically communicate that the stakeholder is important and that their perspective matters

o   Set the right tone, balancing a respect for past work with an enthusiasm for future directions

o   Establish a plan for following up, because the first meeting is just the beginning of building a new relationship

And unfortunately, the incoming CEO needs to do this all nearly simultaneously (often within the first several weeks). They likely don’t have the luxury of making initial contacts over a long time period, because nearly all of the stakeholders see themselves as essential, early contact points.

But making time for these early conversations can also have real benefits for the CEO. They often provide tremendous insights into the strengths and weaknesses of the board, donors, and internal staff, and most incoming CEOs find that the early discussions generate important insight, perspective, and advice that establish a strong rhythm for ongoing communication throughout the organization.

In addition, in our interviews incoming CEOs noted that challenges around communication and relationship-building may be accentuated with new leaders of color. As more boards recognize the importance of promoting diverse leadership, these new leaders may have styles and experiences that don’t fit neatly into the systems and relationships that have been established by a longtime founder. In many cases, more diverse incoming CEOs may have to invest even more heavily to overcome unconscious bias and build relationships across lines of difference. As Sam Cobbs of Tipping Point observed, “As a Black man, I have to do a lot of careful listening because board members may assume they know my perspective on things without asking me what I think.”

• Investing in support for the incoming CEO. Although most traditional transition plans focus on getting the new CEO in place, once the new executive is on board, significant investments in leadership development and communications are still required to ensure a successful transition, long after the hiring process or even the new CEO’s first 60–90 days.

One of the keys to a smooth transition is the intentional investment in inclusive and transparent communication at all levels, to avoid information gaps during a period of high stress. As veteran strategic adviser and our former colleague Katherine Fulton used to say, “Into a void people will project their fears.” A lack of communication can lead staff to fill in the blanks in ways that erode trust and create skepticism, so an incoming CEO must plan for communications that will be timely, thorough, and inclusive. In addition to investing in transitioning the most critical relationships discussed above, an incoming CEO needs to prioritize formal and informal small and large group communications (all staff emails, town halls, newsletters, board reports, etc. depending on the organization’s communication norms). As the incoming CEO of VisionSpring Ella Gudwin recalled, “I knew [communications] was going to take a huge amount of my time and energy—and I knew it was absolutely vital for me to be in close contact with all of our stakeholders from Day 1.”

To make these communications effective, the incoming CEO must strike the right tone—seeing with clear eyes the improvements needed in the organization without looking backward to criticize the outgoing CEO (which are, of course, implicit criticisms of the organization and the board). Acknowledging those weaknesses and formulating a plan for action are a part of the incoming CEO’s responsibilities, but doing so in a respectful-yet-firm way is essential.

Many CEOs also see it as important to be explicit up front about the design principles and commitments for how stakeholders will interact during a transition, outlining how people can discuss decisions that don’t feel right or share feedback directly and in a timely way. And new CEOs should set up regularly scheduled time for dialogue and check-ins with all key stakeholders (board, management, funders, and other partners)—particularly with those where they anticipate there will be strong emotions and where they anticipate needing to build or strengthen key relationships.

Coaching is also important. The incoming CEO will be in the process of establishing his or her own leadership style, separate and distinct from the leadership footprint left by the outgoing CEO. As Karla Monterosso, now of Brava and formerly of Code2040, stated, “There is a very particular entrepreneurial personality type in the founder CEO that emphasizes vision and innovation but not necessarily operations and financial model. The second CEO is typically a culture leader of a different kind, who is building the organization’s capacity to sustain and grow its impact.” Given that a founder or longtime CEO’s leadership style has been imprinted for years upon an organization, the incoming CEO needs to be intentional and seek support from a few trusted advisers and/or an executive coach in building capabilities and maintaining self-awareness early on in his or her tenure.

Even with all of these elements in place, let’s recognize once and for all that any CEO transition process—even an effective one—will be hard. Emotions and organizational and board culture will come into play. Relationships will be tested. Incoming and outgoing CEOs will make missteps. Because of this, traditional transition plans are necessary, but not sufficient. By more deliberately anticipating the human element through the process however, organizations can at least help their incoming CEOs come out swinging and anticipate (if not avoid) some of the inevitable punches that will come their way.

Authors:

• Dana O’Donovan is the Practice Leader of Monitor Institute by Deloitte, the social impact unit within Deloitte LLP, that works with social impact leaders to help surface and pioneer "next" practices—breakthrough approaches for societal challenges.
• Jarasa Kanok currently serves as Chief of Organizational Effectiveness and Strategic Planning at the Union of Concerned Scientists, a national nonprofit science advocacy organization. She was previously a Senior Manager at Monitor Institute.

Authors’ note: Interviews for this post were conducted prior to the COVID-19 pandemic, but the key lessons remain just as relevant today.

[i] Oroville Mercury-Register, “Biggs has plans for Tyson” (Associated Press), August 19, 1987.