Internal Executive Succession: Demystifying the Potential for Organizational Gains and Disasters

^{We are pleased to offer this guest post by Thomas Adams, Director of Succession and Sustainability at Raffa, as part of our Mission Driven Leadershift series.}

Selecting an internal candidate as the next CEO/executive is full of opportunity and risk. Too often the choice seems so clear and compelling – an apparent no-brainer and obvious choice for the Board. Other times Boards and executives anguish and disagree about whether and how to best consider a potential internal successor to the executive.

Considering an internal candidate without a thoughtful assessment and decision-making process can be a seductive and slippery slope to organizational decline. Done well, selecting an internal successor ensures continuity of current positive work and offers the potential to catapult an organization to yet higher performance and mission impact.

For Example

Here are two different examples of approaches to internal succession:

Organization A came to an agreement between the retiring 30 year founder executive and the Board to promote the associate director to CEO in two years when the founder retires. This decision was made with minimal process. Six months later, the relationship between the CEO and associate director had totally deteriorated and the organization was at risk of a major setback. Changes in the deputies attitude, impatience with the transition and lack of accountability for his work fueled the break down.

Organization B had a retiring executive who had stepped into the role 15 years prior during a crisis and led a major turn-around. He was beloved by the Board, staff, donors and communities served. He strongly recommended his deputy be selected to succeed him without an external search. While open to whatever the Board decided, he argued it would be perceived as a slight to the internal candidate if there was a search. Some Board members disagreed. With outside assistance, the Board agreed to consider the internal candidate first before launching a search. The internal candidate knew he may or may not be selected. A thoughtful vetting of the internal candidate resulted in unanimous decision to promote him to CEO. The Board used outside help to facilitate onboarding and the executive transition. As a result, the organization is thriving.

What Made the Difference?

What made the difference in these two situations?  The attention or lack of attention to:

1. fit,
2. process, and
3. transition and onboarding support caused one to implode and the other to succeed.

Fit

Fit is about the readiness of the internal successor to lead effectively this organization with its culture, opportunities and challenges. Leadership requirements are largely shaped by the context. Too often a superficial look at what a person has accomplished and their personality results in a premature and misguided decision to hire.

Process

A  thoughtful transition and selection process ensures that the fit is right and supports the successful transition from one executive to the next. Such a process holds open all possibilities – yes, no, maybe about the internal candidate – until a thorough vetting process is completed. This process involves the departing executive, the Board and the management team or staff depending on size of organization. Led by a neutral facilitator or consultant with executive transition and HR experience, the process includes:

• Formation of a Board transition committee charged with leading the vetting process;
• Development of a position profile with clear statement of strategic direction, 12-18 month priorities and competencies required in next executive;
• Formal interview(s) of the candidate(s) by the Committee;
• Meeting of candidate with managers or staff and opportunity for managers or staff in smaller organizations to provide input through the neutral facilitator;
• Rigorous reference checks; and
• An opportunity for all Board members who choose to spend time in an informal discussion with the candidate about her goals and aspirations as CEO.

Such a process gives the Transition Committee the necessary information to make a thoughtful recommendation to the Board. The recommendation may be to hire the internal candidate; to consider her along with other external candidates; or to do a search and not consider her further.

Transition + Onboarding Support

The way things begin are often the way they end. The process above clarifies the key transition issues the new executive and Board will need to address. It also provides important information about what onboarding support might involve and how the Board and management team might best support the successful hand-off of leadership and first year of the new executive.  A successful transition requires careful attention to the details of onboarding. Onboarding typically includes development of a 90 day executive work plan, support for key relationship building and development of an approach to performance review between executive and board. Depending on the organization and transition, onboarding may also include a review of financial, technology or HR systems, strategic planning or a sustainability review or board development, among other possibilities.

Selecting an executive is among a Board’s most important actions. If considering an internal candidate is part of a Board’s deliberation, a rigorous process will serve the internal candidate and organization best.

About the Author

Tom Adams is Director, Sustainability, Succession and Transition Planning services for Raffa PC. Tom and the entire TransitionGuides team joined Raffa PC in January 2014. Prior to January, Tom served as president and co-founder of TransitionGuides, a national consulting and educational services company based in Silver Spring, MD, that advises nonprofits on leadership succession, executive searches, and transition management.

Tom and the team joining Raffa PC have assisted more than 400 local, regional, and national nonprofits from a wide variety of missions. He has served nonprofits as an executive director and consultant for more than 30 years. Tom has led leadership and capacity-building projects for the Annie E. Casey Foundation, as well as other national and local foundations. A national thought leader, speaker, and trainer on leadership and leadership topics, he has published extensively, including his current book, The Nonprofit Leadership Transition and Development Guide: Proven Paths for Leaders and Organizations. He has a particular interest in coaching and consulting with founders and long-term executive directors/CEOs and their boards of directors. In 2009, Tom was presented with the Innovator Award by the Alliance for Nonprofit Management for his leadership in advancing executive transition and succession planning practices for the nonprofit sector.

Tom received his BA from St. Mary’s Seminary and University and his MSW from the University of Maryland.

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