The Nonprofit Leadership Transition and Development Guide

Proven Paths for Leaders and Organizations

Tom Adams

• Publisher: Jossey-Bass
• Year: 2010
• Print ISBN: 9780470481226
• eBook ISBN: 9780470599846
• Edition: 1
• Topic: Business
• Subtopic: Nonprofit Organizations & Charities
• Index: Business

The Nonprofit Leadership Transition and Development Guide

In this dynamic resource, Tom Adams (an expert in succession planning who has worked with hundreds of organizations) shows how intentional leadership development and properly managed leadership transitions provide nonprofits with the rare opportunity to change direction, maintain momentum, and strengthen their capacity. This accessible guidebook is filled with illustrative stories, instructive lessons, best practices, and practical tools that can be used to ensure a successful nonprofit leadership transition.

"It is terrific to have a book which so effectively addresses the unique challenges and opportunities of leadership in the nonprofit sector, replete with sound advice and concrete examples. Tom Adams brings a wealth of experience and savvy to the topic. Paid and volunteer leaders of nonprofits at all levels will benefit from reading it."—Irv Katz, president and CEO, National Human Services Assembly

"The guide is one of its kind in providing a realistic frame for the world of nonprofit leaders. It is long overdue in the sector as a real tool for leaders. Maybe even more important, it helps nonprofit boards of directors and philanthropic organizations to understand the connection between their investment in leadership and achieving organizational goals." —Diane Bell McKoy, CEO, Associated Black Charities

"Rich with instructive examples and advice, this book is grounded in the reality of nonprofits. It will be an extraordinarily useful guide to nonprofit organizations of all types and sizes." —Ruth McCambridge, editor in chief, Nonprofit Quarterly

"Make no mistake: attracting and retaining top talent should be priority number one for the nonprofit sector. Adams's book offers practical advice for how to embed this priority into the sector's DNA. All who care about nonprofit effectiveness would be well-served to give this book a close read."—Kathleen P. Enright, president and CEO, Grantmakers for Effective Organizations

1

The Leader’s Way

AN INTRODUCTION

THIS BOOK IS ABOUT the irrefutable connection between effective leaders and organizational results and impact. It challenges those who lead and care about the work of nonprofit organizations to appreciate our leadership advantage, to face some “ugly truths” about our current practices, and to consider the amazing gains in impact possible through focused and intentional attention to leader recruitment, development, and transition. It makes a powerful case for preparing for and successfully managing change in key leaders as an essential competency of successful leaders and organizations. It further offers a way for organizations to become more intentional about leader development despite limited resources. The results of adopting the practices suggested are a more leaderful organization that more consistently meets and exceeds its mission-driven goals.

Well-led organizations consistently outperform organizations that struggle to find and fully engage executive, board, and staff leaders needed to successfully carry out the mission. This is true for all sectors—for-profit, public, and nonprofit. While the case for the connection between leader effectiveness and organizational effectiveness is clear, how to consistently attract and retain the leaders needed for a particular organization and its work is more illusive.

The intent of this book is to contribute to the extraordinary work of America’s nonprofit sector by offering practical specific actions that are proven to dramatically increase an organization’s capacity to attract, develop, and retain the leaders needed to sustain success. Through attention to leader transitions, succession planning, and leader development, we will demystify the path to a more leaderful and effective organization.

A local advocacy group in the Midwest was founded by a teacher who grew up in Central America.^a She was tortured for her role in fighting to end oppression and was forced to flee her country and come to the United States. She started a nonprofit and over a period of twenty years built an organization that provided education and health services to 2500 low-income immigrants each year. Finally, aging parents in her home country and her own health forced her to begin considering leaving the organization. The board had relied heavily on her and was a mix of professionals and recent immigrants served by the organization. In her final two years as executive, the organization did not meet its expenses and built up a $500,000 deficit. The board advertised and had difficulty finding candidates who met their requirements. They wanted someone with the same passion and commitment as their founder plus proven fund-raising and management experience. They did not find that person so they appointed a senior manager from the staff. He was quite skilled in working with the people the organization served, but had limited experience in raising money. In twelve months, the deficit grew to $1.5 million and the center was forced to lay off half its staff and severely reduce its services.

A human services organization in the Southwest was founded by five collaborating churches. During the period when the organization was forming and starting up, it served thirty families a week through volunteers and one part-time social worker. With success, the board decided to hire its first executive. Over the next four years, the organization had three executive directors, each less successful than the one before in achieving the goals set by the board. After the third executive resigned, the board decided to close the organization. The church leaders and volunteers were too exhausted from the efforts over the past four years to keep going.

A community development organization in the Northeast was founded by three activists concerned about displacement as their neighborhood attracted upper-income buyers looking for a convenient urban neighborhood. The organization grew and was the city and region’s largest owner of affordable rental housing. With a staff of twenty-eight and a talented six-person management team (three of whom were the cofounders) the organization thrived. Over a three-year period, four of the six leaders including two of the founders left the organization. Two left due to health issues and two for promotions to run larger organizations. No middle managers were ready to move up to the top leadership positions. Of the four senior managers hired from outside the organization, two left in the first year and one more in the second year. The organization struggled for the next five years, and when the last founder died, funding dropped by 30 percent and the organization lived largely on rental income from properties developed by prior leaders. The golden era was over and the community was disappointed and angry at the lack of growth in available affordable housing.

Unfortunately there are many stories like this. They are stories of organizations full of passion and leaders. The passion and compelling work is enough for a period of time, sometimes a long period. Ultimately, however, without deeper attention to the connection between sustained leadership and inevitable leader transition, the organization weakens and in some cases closes down.

This book is written in the midst of the 2008-09 recession. There are many points of view on its impact on the sector depending on the leader’s background and role in the sector. Some point to the negative impact of failed leader transition or organizations struggling with leaders who cannot provide the skills and competencies required in a new resource environment. For a number of foundations, executives are dealing with losses of 20 to 40 percent of the value of their assets and significantly reduced annual contributions. Organizational priorities and whose work is most valued are under much closer scrutiny.

Some leaders of color see organizations that serve communities of color or are led by leaders of color as most vulnerable to reduced resources and forced merger or elimination in times of economic distress. Paul Light of the Brookings Institute predicts that one hundred thousand nonprofits will cease operation during the current economic downturn.¹

Regardless of our philosophies or points of view about the sector and current economic conditions, the underinvestment in the leaders and infrastructure of nonprofit organizations is no longer acceptable. The cost of weakened and failed organizations like the three organizations above is too great for a wealthy democratic nation.

The idea that organizations with effective leaders achieve more and better results than organizations with ineffective leaders is self-evident. The deeper question that this book addresses is whether organizations can take actions that increase the effectiveness of their leaders and therefore their results. This question also seems straightforward. Certainly examples of for-profit companies, governments, and leading nonprofits exist who demonstrate this capacity.

In the for-profit world, companies such as GE and UPS stand out as often-cited examples of companies that consistently invest in leader development and as a result lead their industries. It is tempting to attribute the capacity to pay attention to leader transitions and development to size. Larger organizations in any sector have the resources for that, not midsize and smaller organizations. What follows argues strongly (and we hope persuasively) that attention to leader transitions and development is about commitment and action rather than about size and resources.

The nonprofit sector is building a habit of investing in leader transitions and leader development. As with any new habit, progress is uneven. I believe this habit will grow over the coming decades, because we are at the beginning of a major leadership turnover. Though nonprofit sector experts argue over the numbers involved, leader transitions are as certain as death and taxes, and they have the potential to have significant impact on organizational effectiveness. It makes sense for leaders and organizations to enthusiastically embrace practices that reduce the risks of a failed or poor transition and increase the odds of organizational progress and in some cases organizational transformation.

Once a leader and organization decide leader transitions are important, it is a small step to engage in succession planning. As we explain in greater detail later, a number of actions can advance succession planning. The important decision is the commitment to the habit of paying attention to succession all the time.

Any discussion of leader succession of necessity requires clarification of what it means to lead in a particular organization and who are the leaders. Most nonprofit organizations who have this conversation conclude that two types of leaders are important to their success: positional leaders (those who have a title and formal leadership role like executive director, development director, board chair, treasurer, and so on) and informal leaders (those whom the organization relies on to carry out much of its work—managers, staff, volunteers, and board members). When the positional leaders and an organization commit to investing in leader development of both positional and informal leaders, they make huge steps on the path to becoming a leaderful organization. The decision to invest in positional leaders or informal leaders achieves similar results. An organizational habit of paying attention to leader development is deepened.

What follows expands on the benefits, barriers, and changes that are necessary for the habit to take deeper root in the sector. In this process we will define further what is meant here by “leaderful organization” and other terms important to exploring these ideas.

For those of us who lead nonprofit organizations—on staff or a board—paying attention to the importance of leadership is challenging. While reading, you may even have a little voice reminding you of some of our many deeply engrained defenses or rationalizations for inaction, such as:

• “Sure, investing in leaders is important, but we don’t have the resources.

• “I don’t expect to leave any time soon, so why worry about executive change now?”

• “Sure, our management team is aging, but when we need to, we’ll find great successors for ourselves. We always have.”

• “We’ll get to that as soon as we finish this big project.”

• “We have too many people to serve to take the time to talk about leadership or to have our staff distracted from our mission.”

• “We have all the talent we need. Every time I put an ad in Idealist I get more energetic people full of passion for our work than I need. Why should I spend precious time and dollars on leader development when I can hire a new leader whenever I need one?”

• “This sector is built on passion and commitment. That trumps leader development any day. As long as I have that in the staff, I can make it work.”

This book challenges the reader to reexamine these and other half-truths that severely limit the impact of the nonprofit sector. It offers a set of practices that if adopted will increase the effectiveness of leaders and any organization’s capacity to achieve the results it seeks. To explore this possibility, bring an open mind and a commitment to try out the practices that have worked for other leaders and organizations.

Besides offering a case that a commitment to leader development is both possible and makes sense, this book offers a framework and set of practices that serve as a guide to building a leaderful organization. Since resources are indeed scarce, we offer a point of view on how to make the most of any investment in leader development. This book offers concrete processes and examples to be used at two strategic points of investment:

1. Preparing for and making the most of leader transition when it occurs

2. Building attention to leader identification and development into the ongoing processes of the organization through leader development and talent management

Embracing this approach means letting go of some of our “either/or” choices that limit possibility. For example, given the two investment points above, either we invest in one or the other. “Either/or” thinking argues that investing in both leader transitions and a leader development system isn’t possible. “Both/and” commitment says it is not only possible, but vital to success and sustainability.

A second “either/or” debate that frequently arises in considering leader development is “either we invest in our top leaders and managers or in our next generation.” Yes, available resources will require choices. However, once there is a shift to a commitment to creatively exploring leader development with the same passion we bring to the results we want in the world, more possibilities open up.

To make these ideas concrete, contrast two organizations in your mind’s eye for a minute. Think about your favorite “humming” organization—the one where the board and executive and staff have a clear agreement on their work and how it will contribute to good. There is great chemistry among the leaders. Ideas are explored, plans are made, the appropriate people and resources are in place, and the results are amazing. If you are fortunate, this is your organization or one you have been a part of. If you haven’t personally experienced it, you’ve probably heard about such organizations and seen and felt their impact. It is amazing and irrefutable.

Now think about one of the struggling organizations you know—the one that doesn’t seem quite able to get it together. It feels as if there are constant crises—some small, some large—all distractions from getting the work done. Leaders may stay the same or change. It doesn’t seem to matter. For some reason, this organization can’t get anywhere close to humming. In fact, you may know one or two organizations that don’t exist any more because everyone became exhausted from years of ineffectiveness.

If...

Table of contents

• Endorsements
• Title Page
• Copyright Page
• WEB CONTENTS
• Foreword
• Dedication
• PREFACE
• Acknowledgments
• THE AUTHOR
• Chapter 1 - The Leader’s Way
• Chapter 2 - Managing the Power of Emotions
• Chapter 3 - Founders and Founder Transitions
• Chapter 4 - Seeking Diversity Through Leader Development
• Chapter 5 - Executive Transition Management
• Chapter 6 - Getting Started on Succession Planning
• Chapter 7 - Departure-Defined Succession Planning
• Chapter 8 - Leader Development and Talent Management
• Chapter 9 - Many Paths to a Leaderful Organization
• Appendixes
• NOTES
• RESOURCES
• INDEX