Tag Archives: succession

Judy Coffey | October 8, 2024

 

Next year I will transition as Board Chair of a local nonprofit. As I make this transition, I have been reflecting on the importance succession planning plays in the selection of a new board chair and new board members. Succession planning is crucial for ensuring the long-term stability and effectiveness of an organization.

Succession planning for a nonprofit board chair involves identifying and developing potential leaders, and creating a pipeline for board positions to ensure a smooth and impactful transition.  It is important to maintain open communication and align the board’s vision for its leadership.

Some valuable steps for your nonprofit to consider as you develop your own succession plan include:

 

 

KEY STEPS FOR A NONPROFIT SUCCESSION PLAN

+ Assessment:  Regularly evaluate the skills, expertise, and performance of current board members to identify potential leadership successors.

+ Identify Key Roles:  Clearly define key leadership roles within the board and ensure a balance of skills, industry experience, academia, philanthropy, and demographic backgrounds. Utilize a board leadership job description for each role.

+ Training and Development:  Provide ongoing development opportunities to board members and encourage emerging leaders to participate in committees as a way to gain experience. Establish a mentorship program pairing experienced board members with those members who show potential. Also, look for local board training opportunities through nonprofit associations. This allows the emerging leaders to network with other nonprofit board leaders.

+ Diversity and Inclusion: Promote diversity within the board to ensure a broad range of ideas, perspectives, and skills, fostering a more resilient leadership team. Utilize the organization’s DEIB policy to support board recruitment strategies.

+ Nominating/Succession Committee: The Nominating/Succession Committee should be responsible for recruiting members with diverse backgrounds, and identifying current members with leadership potential. Internal talent can bring value to leadership positions, they are familiar with the organization’s culture, resulting in a smooth transition. External talent can bring new skills and a fresh perspective.

+ Communication:   Everyone on the board or in the organization has their own perceptions and opinions, it is important to maintain transparent communications regarding succession planning.   During this time encourage board members to express their interest in a leadership role, or thoughts regarding prospective candidates. Without strong communication, boards tend to become too dependent on vocal board members and not inclusive of all voices.

+ Term Limits: Implement term limits for board members to ensure regular turnover and opportunities for new members and leaders to emerge. A well-developed term limits policy supports the organization’s diversity goals, fresh perspectives, and a rotation of leadership amongst the community.

+ Exit Interview: Conduct exit interviews with outgoing board members to gather insight and feedback, improving the successions planning process.

+ Board Evaluation: Conduct an evaluation of the board’s overall effectiveness at least every two years, using feedback to refine and improve the succession planning strategy. You can also ask board members to self-evaluate their performance and provide growth opportunities in their board roles.

+ Community Engagement: Foster relationships with the local community to identify potential external candidates who align with the organization’s overall mission and values. A nonprofit that is well-networked within its service area allows multiple entry points to engage with community members who are interested in serving on a nonprofit board.

 

 

Sufficient board succession planning is vital to the ongoing success of a nonprofit, and helps sustain the mission and community impact. Too often boards approach succession planning in an episodic manner, addressing the issue only when they need to replace a chair or members. An effective succession plan is an ongoing process that adapts to the changing needs of the nonprofit and development of its leaders.  Succession planning is a strategic investment in the organization’s future.

Whether your nonprofit needs an emergency plan for an unexpected board departure, or a strategy for future succession, Leap Solutions is here to support your organization through the process.

We provide a structured process to:

  • Identify significant challenges your organization may face in the next 1–5 years
  • Identify specific competencies, skills, and institutional knowledge critical for key leadership positions
  • Identify high potential board members and employees across the organization
  • Identify contingency plans for unforeseen board departures

 

Succession transitions are complex and challenging processes without the added complications of being caught unprepared. Fortunately, Leap Solutions is ready with the needed resources to help you plan and guide you through effective succession transitions. Reach out and let’s discuss your nonprofit’s plan to succeed.

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Leap Solutions, a division of George Petersen Insurance Agency, is a diverse group of highly skilled management, organizational development, executive search and recruitment, and human resources professionals who have spent decades doing what we feel passionate about: helping you feel passionate about what you do. We are available to work with you to develop practical solutions and smart planning decisions for your organization’s immediate, near, and long-term needs.

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Leapsolutions | August 31, 2022

By Jonna Dye

Every family business leader should have a planned exit strategy or a plan to ensure their business survives and prospers beyond their leadership. A family business succession plan is designed to do just that.

 

 

In this issue of our newsletter:

  • Introduction

  • Get Help with the Process

  • Start Early with the Planning

  • Be Thorough in the Transition

Introduction

I have always felt a love for family businesses. I not only “grew up” in a family business but also worked for family businesses for most of my career and then launched a family business of my own with the hope it would be a legacy for future generations. Most of us have been involved in, or at least observed, leadership changes in businesses and the challenges those transitions cause for organizations. In a family business, compound those challenging transitions with family dynamics, including childhood relationships which may have been rocky, and taboo topics such as parental aging, death, and personal finances, and voilà, I present to you family business succession planning.

Considering these challenges and how painful this sounds, why would anyone attempt succession planning in a family business?  It’s because it is difficult to suppress the entrepreneurial spirit that inspires someone to be their own boss and create a family-based business. However, every family business leader should have either a planned exit strategy or a plan to ensure their business survives and prospers beyond their leadership, either due to retirement or some other circumstance. A family business succession plan is designed to do just that.

Succession planning in a family business is not a one-time activity; it is a process and a very long one. Family business leaders often subconsciously begin laying the groundwork for succession (or lack thereof) while the next generation is still young. This is done by how they talk about the business at home. I vividly remember my parents’ business conversations at the kitchen table. They ran the family cattle ranch, a business that had been in our family since the land was homesteaded by my great-grandmother. I recall their concern as they discussed unforeseen expenses and unfavorable market conditions. However, my parents were in business for the love of it, both the joys and the challenges. My point is that making a conscious effort to present a balanced perspective on the business will enable the next generation to better understand and appreciate business ownership and leadership.

I believe most family business owners hope their children want to follow in their footsteps and join the family business. However, in navigating the sometimes-stressful process of family succession, many founders take on too much by themselves or put undue pressure on family members to join the business. Others don’t start early enough to identify and prepare the right people for future roles. With so much at stake emotionally and financially, the key is to get help, start early, and be thorough.

When you consider the facts about family businesses, you realize the uphill road a family must travel to beat the odds. Cornell University has provided interesting stats on family businesses here.

So, what are some of the best practices for family business succession?

 

Get Help with the Process

My father used to tell us that wisdom is found in the council of many. To this point, an advisory board or council is of great value to the family business. It should include your lawyer, accountant, an organizational specialist, and colleague(s) from your industry whom you respect. Many families face the same complex issues (business valuation, founder involvement following succession, sudden loss of a critical family member, etc.). Because many of these are common challenges, joining a family business forum can be helpful. You can see how other people resolve these challenges, and you will also be able to add value to other family businesses by sharing your experiences and perspectives.

 

 

Start Early with the Planning

Start the conversation with the next generation early to understand their interest in the business and affirm that no matter what they choose to do with their life, the family will be there to cheer them on. Even if they are young, let them know that you find family business rewarding and fulfilling. You can also reassure them the family business is not the only way to make a living. It’s one of many options available for them to explore.

Encourage family members to get work experience outside the family business. Outside work experience will provide them with different perspectives, increase their self-confidence, and give them the opportunity to bring back knowledge and best practices from outside the family business.

When the next generation joins the family business, hire them into an existing, well-defined job with measurable goals. It is best to have them report to a nonfamily member. Carefully choose who this will be and set the reporting relationship up for success by clearly communicating expectations.  These expectations should include guiding, mentoring, and developing the family member. Nonfamily employees may perceive family members as having less responsibility or accountability. Having the family member complete their education and successful outside work experience can help alleviate nonfamily employees’ concerns in this area.

 

 

Be Thorough in the Transition

Succession transitions are complex and challenging processes. Many founders fear a loss of identity, loss of self-worth, or loss of purpose associated with transitioning out of their leadership role and handing the reins to the next generation. And, if a founder is tied financially to the business, these complexities can feel like impossibilities. One of the goals of the business, estate, and succession plan is to create financial security which is not dependent on continued involvement in the business. A founder dependent on the company for their ongoing salary will find it almost impossible to transition. Planning carefully with an advisory board or council helps support this transition and the succession of the newly appointed family member.

It is also helpful to document “why” it is important to you as the founder that the business continues. During the transition process, when things get particularly difficult, and you begin to question the process, you can refer to your “why” statement and re-focus on the importance of a successful transition.

At the end of the succession process, you should be ready to hand your business over to the next generation. It is important that you are fully committed to the plan you have developed, that your staff is aware of the plan, and that your successor can depend on you to follow through with it.

Fortunately, there are resources to assist you on your journey. Leap Solutions Group is ready to help you plan, provide the needed resources, and guide you through a successful transfer to the next generation. Reach out, and let’s discuss your plan.

 

 

 

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Leap Solutions is a diverse group of highly skilled management professionals serving our clients with their organizational development, human resources, and executive search and recruitment needs. We have spent decades doing what we feel passionate about helping you feel passionate about what you do. With the ever-changing COVID-19 response, our HR specialists can help you get a handle on the guidelines, programs, and legislation that may impact you and your employees. Through all of our services, we are available to work with you to develop practical solutions and smart planning decisions for your organization’s immediate, near, and long-term needs.

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