STRATEGIES FOR NONPROFIT SUCCESSION PLANNING: CULTURE ALWAYS TRUMPS STRATEGY

By June 10, 2019 August 19th, 2019 Blog, Newsletter

By Dr. Nathan A. SchaumleffelProprietor & Senior Consultant, Driven Strategic LLC

To begin, I’d like to warn all my readers that this article is a trilogy, so just like Lord of the Rings it might not all fully make sense by the end of Part One or Part Two. So, please be patient and read all three articles to better understand the strategies for nonprofit CEO & senior staff succession planning that I offer by the end of the three-part series.

You’ll also be able to register for a free webinar on the same topic that will take place at 12:00 Noon EDT on Tuesday, July 9th, 2019. You can register for that program here: https://attendee.gotowebinar.com/register/5834489581174211853

This article, Part One of the trilogy, will focus on the proverbial 30,000 foot view related to people and culture in nonprofit organizations and their collateral impact on whether employees will stay or depart the organization where they are employed.

By the end of Part Three, I promise I’ll be way down in the weeds providing very specific strategies surrounding nonprofit CEO and senior staff succession planning.

For the purposes of this article series, I subscribe to Susan M. Heathfield’s description of succession planning:

“Succession planning is ensuring a nonprofit organization will never have an open position for which another employee is not prepared. Succession planning is a systematic process of ensuring that employees are recruited and developed to fill each key role in a nonprofit organization before it becomes vacant.”

Throughout the three articles, I will use the terms senior staff and C-Suite interchangeably. For those of you unfamiliar with the term C-Suite, it refers to the following senior staff positions in organizations:

  • Chief Executive Officer (CEO)
  • Chief Operating Officer (COO)
  • Chief Financial Officer (CFO)
  • Chief Human Resources Officer (CHRO)
  • Chief Information Officer (CIO)
  • Chief Marketing Officer (CMO)
  • Chief Strategy Officer (CSO)

What we know right now is that CEO and senior staff are departing their positions and organizations at a brisk pace. In a previous e-newsletter, 501(c) Services shared that 2019 CEO turnover is up 22% compared to 2018. We also know that there is an astronomical cost to CEO and senior staff turnover.

As nonprofit leaders, we should be asking ourselves:

  1. Why are nonprofit organizations experiencing an increase in CEOs and senior staff departing their organizations?
  2. How do we slow down or stop the out-migration of employees?
  3. Before someone leaves a CEO or senior staff position, how do we prepare to fill the vacancy with someone competent?

From my perspective, we can’t answer #3 until we answer #1 and #2 in order.

CEOs and senior staff are departing their positions in nonprofit organizations for a variety of reasons including: toxic organizational culture, work-life imbalance, burnout, physical and/or mental health issues, ineffective governance by the Board of Directors, new family responsibilities (e.g., caregiving for older adults, children with special needs, or infants), ineffective performance, lack of upward mobility, new employment opportunities, retirement, or even sudden death.

Succession planning is about employee retention and employee retention is ultimately about culture.

Doug Osborne made the point that attracting and retaining top talent is one of the greatest culture challenges facing leaders today.

Culture is a CEO and senior staff succession planning issue! Most importantly, culture is a mission and vision issue.

Throughout this series of articles, I’ll come back to three things:

  • Organizational Culture
  • Employee Retention
  • Succession Planning

Why are nonprofit organizations experiencing an increase in CEOs and senior staff departing their organizations? Culture is a likely culprit!

Culture Always Trumps Strategy

In January 2018, I was in Kansas City listening to Jatrice Martel Gaiter, Executive Vice President of External Affairs for Volunteers of America, give her keynote address at the Nonprofit Leadership Alliance’s Alliance Management Institute. Ms. Gaiter said something that really struck a chord with me. Jatrice warned conference attendees that, “Culture always trumps strategy!”

Over the next few months, I reflected on her warning and applied it to my nonprofit management consulting work. Then, I took her statement further.

After nearly 30 years of working in nonprofit organizations in a variety of roles, from volunteer to staff member to board member to founder to CEO to educator to researcher to community partner to consultant, in a single statement, I summarized my entire educational philosophy and professional consulting practice regarding how to lead and manage nonprofit organizations with laser focus on the mission and vision on a day-to-day basis.

Many of my clients, colleagues, and strategic partners call this my “pracademic” approach…real-world solutions with a heavy dose of research, data, and evidenced-based management decision-making.

So, here’s what swirls in my head on how things oughta be done in nonprofit organizations:

“Culture trumps strategy;

strategy drives structure;

structure requires resources;

resources accomplish objectives, produce outputs, & achieve outcomes;

outcomes effectuate mission;

mission begets vision!”

OK! Slow down, and read that slowly, bit by bit, a few more times! Think about your experiences working, managing, and leading in the nonprofit sector…whatever the role. Think about the good times, and the bad, and then place any of your experiences within this statement.

Does my educational philosophy and professional consulting practice approach hold true? You betcha!

When consulting with nonprofit organizations or coaching nonprofit leaders, every solution and recommendation I provide is focused on positioning to realize your vision and mission.

Most nonprofit consulting comes down to accurately diagnosing an organization’s areas for improvement. Rarely to never does it make sense to invest in programmatic changes to fix a strategy issue, nor does it make sense to implement a structure solution when you have a culture issue. It surely doesn’t make sense to focus on objectives, outputs, or outcomes when you have a resource issue.

The vision, mission, and core values of an organization is the prism in which you should look through as you make decisions related to human resources from recruitment to recognition, from onboarding to promotion, and from succession planning to separation.

It is human resources that accomplish objectives, produce outputs, and achieve outcomes! Culture is a human resource issue at all levels of nonprofit organizations including the CEO and C-Suite!

Remember that the social sector is about ethically improving the human experience; the communities in which we live, play, and work; and the world in which all species co-exist. In most cases, nonprofit organizations’ greatest tool and resource to achieving their vision and mission is its staff and volunteers. Staff and volunteers are people, and people build relationships with those served by nonprofits in which you work.

Throughout this article series, think of staff as mission-focused human resources. They are the glue between your mission and those your organization serves. When you add up all of the relationships between staff, volunteers, board members, and clients, you have organizational culture.

Organizational culture can be healthy or it can be toxic. Toxic culture is a staff turnover issue and an unemployment expense issue. More important than the expense of employee turnover, it is critical to contemplate how CEO and C-Suite staff turnover impacts the efficacy of a nonprofit organization to make a measurable impact on its mission.

One way many describe organizational culture is as “the way we do things around here” or as the “unwritten rules that drive workplace behavior.” Dennison Consulting asserts that organizational culture is learned.

Learned culture drives employee behavior related to fairness, transparency, accountability, empowerment, support, respect, civility, collegiality, conflict resolution, among other things. Culture even goes further south when an organization is made up of a group of employees that tend to have low emotional intelligence (i.e., EQ). An organization full of employees with low EQ, maturity and anger management issues, mental health challenges, among other interpersonal issues tend to behave in ways that create and maintain a toxic culture.

An excellent measuring stick for the health of your culture are your high performers who have performed well for a long period of time. If your traditionally high performing staff seem toxic, then you need to ask yourself: Is the toxic employee poisoning the workplace or did the organizational culture poison the employee? If a high performer seems toxic, you probably have an organizational culture issue that is likely going to cause a vacancy that will need to be filled, will impact progress towards your mission, and cost the organization a tremendous amount of money.

As a nonprofit professional with human resource management responsibilities, it is paramount for you to ethically supervise and interact with staff to create a healthy and inclusive organizational culture.

If you, as a staff supervisor, are sensitive, or better yet – acutely aware, to the critical importance of supervisor-staff relationships and its impact on the culture of the nonprofit organization in which you work, then there is a better chance your organization will have culture that is ready to plan and implement strategy.

All nonprofit organizations should assess their culture. In fact, when I facilitate strategic planning, I’ve built organizational culture assessment early into the strategic planning process.

Nonprofit organizational culture for staff has to emphasize accountability, transparency, responsiveness, diversity, equity, inclusivity, efficiency, and effectiveness. Focusing on creating a culture within the scope of your organization’s vision, mission, and core values will allow your staff to thrive.

Remember succession planning is about employee retention and employee retention is ultimately about culture. If you’re serious about your mission, then you need to be serious about creating a culture that retains employees and prepares for vacancies at the CEO and C-Suite level by embracing succession planning.

 Embracing Succession Planning

In the nonprofit world, there never seems to be enough funding and there seems to be less time than even money to get socially impactful work done. So, the question arises: Why should nonprofit organizations of all sizes embrace succession planning?

Nonprofit organizations should embrace succession planning, because of the myriad benefits to not only the employer, but also to the employee as outlined by Susan M. Heathfield. Succession planning increases self-esteem and self-respect, reinforces desire for career development opportunities, provides structure to career planning, and shares the employee’s value across the organization.

Susan Heathfield also made a strong case for succession planning as a worthwhile activity for organizations. Succession planning contributes to employee retention and continuity of services to clients, which is great for your mission. She also made the case that succession planning prepares employees, which can facilitate organizational growth and provide maximum flexibility for re-organization. She continued that succession planning creates an internal pool of candidates and maintains institutional history and knowledge for specialized job functions.

According to the Society for Human Resource Management, benefits to succession planning for the organization include adapting to demographic changes and talent scarcity, identifying skills gaps and training needs, retaining institutional knowledge, boosting morale and retention by investing in employees, and replacing unique or highly specialized competencies.

Even with all of the advantages of actively conducting succession planning, BoardSource reports only 27 percent of nonprofit organizations have a written succession plan. From my experience, I would estimate that number is actually less than five percent considering there are almost 1.9 million nonprofit corporations in the United States today. Even more alarming, the Harvard Business Review reports that almost half of companies with revenue greater than $500 million have no meaningful succession plan.

Embracing succession planning activates your strategic plan and leads to nonprofit sustainability! It can be difficult to separate succession planning from employee retention strategies.

Until Next Time

Remember Jatrice Martel Gaiter’s warning, “Culture always trumps strategy!”

Don’t forget the Lord of the Rings story line took the trilogy to fully make sense! Be sure to read Part II when it arrives in your in-box!  In Part II, I’ll address employee retention as a tool for CEO and senior staff succession planning!

Consider making a free 30-minute consultation appointment with me to discuss succession planning issues or any other nonprofit issue in your organization! Otherwise, I look forward to seeing you on the webinar!


©Driven Strategic LLC, 1826 Ohio Street, Terre Haute, IN 47807 – All Rights Reserved

X