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By July 14, 2019August 19th, 2019Blog, Newsletter

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

As I said in Part I of this three article series on strategies for nonprofit succession planning, succession planning is about employee retention and employee retention is ultimately about culture.


“Culture trumps strategy; strategy drives structure; structure requires resources; resources accomplish objectives, produce outputs, & achieve outcomes; outcomes effectuate mission; mission begets vision!”

It is human resources that accomplish objectives, produce outputs, and achieve outcomes!  Think of staff as mission-focused human resources. They are the glue between your mission and those your organization serves.

No matter how much time and energy is devoted to strategy, the organization’s culture can unwittingly undermine this work. The advice, then, is to use all opportunities to create a culture in line with your organization’s vision, mission, and core values that allows your staff to thrive.

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.

If you happened to miss Part I, 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 this series of articles, I’ll come back to three things:

  • Organizational Culture
  • Employee Retention
  • Succession Planning

In Part I, I posed the following three questions:

  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?

In the first article, I addressed why nonprofit organizations are experiencing an increase in CEOs and senior staff departing their organizations (e.g., toxic culture, lack of upward mobility).  In Part II of the article series, I will address how we slow down or stop the out-migration of employees through strategic nonprofit leadership.

So, what strategies should nonprofit organizations use for CEO & senior staff succession planning? Let’s take a look at four of the eight strategies that your organization can implement!

Strategy #1: Effective Governance, Leadership, & Strategic Planning to Shape and Maintain a Healthy Culture

Culture is a mission and vision issue!

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.

In Part I of this article series, I shared Jatrice Martel Gaiter’s warning, “Culture always trumps strategy!” And, organizational culture always starts with the board of directors!

Metaphorically, the cornerstone of any nonprofit organization, legally, ethically, and culturally, is the board of directors.  The cornerstone or foundation stone concept is derived from the first stone set in the construction of a masonry foundation, important since all other stones will be set in reference to this stone, thus determining the position of the entire structure.

Considering the board of directors is the cornerstone of any nonprofit organization, it is critical that the organization gets board development right. Board development starts with constructing and adhering to your governing documents, designing your organizational structure, and being intentional about board member recruitment.

As I shared with the National Association of Park Foundations, to keep your cornerstone from crumbling, board members need to be systematically identified, carefully recruited, and intentionally selected, so that the organizational culture is meticulously engineered as envisioned.

Building a competent board is the eighth of ten BoardSource responsibilities of nonprofit boards. Building a competent board starts with the Governance Committee when identifying, recruiting, selecting, on-boarding, training, engaging, evaluating, and developing competent board members into an effective team in a leaderful organization.  Leaderful organizations demonstrate best practices in succession managementStrong board leadership is critical during a CEOs tenure, and during a CEO transition.

In nonprofit organizations that are well-led, the board of directors establishes themselves as ethical leaders for the entire organization by practicing the BoardSource Board Member’s Code of Ethics on a daily basis, as well as sets and monitors the organizational culture as a part of good governance.  Setting the organizational culture includes expiring the Golden Rule, and adopting The Platinum Rule, to treat others the way they would like to be treated!  Now, The Golden Rule, although well-intentioned, is outdated when it comes to being culturally competent.

Living The Platinum Rule requires that board members, CEOs, senior staff, staff, and volunteers demonstrate empathy for others. Kelly Pallanti, Founder/CEO, HR Nonprofit Consulting LLC, said:

“Empathy is one of the most underdeveloped skills for communicating, building trust, influencing, and resolving conflicts. Mastering this valuable tool can increase your emotional intelligence and give you the power to have a positive impact on your organization’s vision of a mission-driven culture.”

Demonstrating empathy is critical to good governance and leadership by board members.  The tenth of the ten BoardSource responsibilities of nonprofit boards is to support the chief executive and assess his or her performance.  The Board Chairperson must set the tone and drive the Board & Executive relationship, which significantly impacts the organizational culture.

To slow down or stop the out-migration of employees, especially CEOs & senior staff, the C-Suite, it is absolutely critical for the board of directors: 1) to understand and act on their role to set a healthy culture; 2) to monitor and assess the culture on a regular basis to maintain a healthy culture as a part of their strategic planning and strategic management; and 3) to change the culture before it becomes toxic.

Remember succession planning is about employee retention and employee retention is ultimately about culture!  The board of directors is the cornerstone of culture, which means their governance behavior, including strategic planning, impacts employee retention and succession planning.

Culture is a CEO and senior staff succession planning issue!  Strategic nonprofit leadership for succession planning starts with culture and good governance, which transcends into strategic planning!  As Susan M. Heathfield articulated, “to effectively do succession planning in your organization, you must identify the organizations long-term goals.”

Beginning with the framework for strategic planning offered by John M. Bryson in Strategic Planning for Public and Nonprofit Organizations, I’ve modified his strategic planning process into six phases that I recommend and facilitate with organizations, as well as have integrated the Association of Strategic Planning’s philosophy of Think – Plan – Act:

  • Step #1: Get Prepared (THINK)
  • Step #2: Assess Needs of Targeted Audience, Analyze Stakeholders, & Audit Organizational Culture and Processes (THINK)
  • Step #3: Collect Data & Gather Input (THINK)
  • Step #4: Agree on Strategic Priorities (PLAN)
  • Step #5: Assemble Plan & Assign Accountability (PLAN)
  • Step #6: Share & Implement the Plan (ACT)

Strategic planning is simply a systematic process of thinking, planning, and acting!

Step #2 in my modified strategic planning process is designed to assess and address organizational culture before proceeding to strategy development (i.e., Step #4) that addresses structure, SMART objectives, short- and long-term outcomes, and strategic outputs (i.e., Key Performance Indicators – KPI’s, & Efficiency Ratios).  The goal is to preemptively, through a thorough strategic planning process, nurture a culture that guides strategy, drives structure, facilitates outcomes, and achieves the organization’s mission and vision in the correct order.

Culture always trumps strategy, which means culture assessment and addressment must be a central part of a robust nonprofit strategic planning process led by the cornerstone of the organization, the Board of Directors!  In Step #6 of the modified strategic planning process, the Board of Directors must share and implement the strategic plan in a way that shapes and maintains a healthy culture.

The Board must make succession planning a priority in the strategic plan!

Strategy #2: Include Human Resources Planning in the Strategic Planning Process

Strategic nonprofit leadership for CEO and senior staff succession planning starts with culture and good governance, which transcends into strategic planning and continues into strategic human resource management.

Nonprofit leaders should recognize the proverbial “fit” in human resource decisions are often a candidates’ fit with organizational culture.  When boards of directors focus on developing a healthy culture, it allows nonprofit organizations to grow their own heirs apparent to the CEO & C-Suite level.  Among many things, nurturing culture means being able to articulate your nonprofit organization’s culture as a part of the CEO and senior staff recruitment, selection, and onboarding process, as well as acting like you want your employees to stay at your organization on a day-to-day basis.

Assessing and articulating your culture must be included in Step #2 of the strategic planning process.  After articulating the culture, human resources planning should be integrated into Step #4: Agree on Strategic Priorities and Step #5: Assemble Plan & Assign Accountability.

Among other things, the strategic plan should include SMART objectives related to human resources that enhance organizational culture, retain employees, and facilitate optimal succession, which includes, but is not limited to:

  • Requiring professional development for managers on effective staff supervision and the critical importance of supervisor-staff relationships and its impact on the culture of the nonprofit organization. Note: Research shows us over and over again that employees quit their bosses, not their jobs. Managers are often the messengers of and contributors to toxic culture.
  • Appreciating diversity, ensuring equity, and promoting inclusion as basic building blocks to establishing positive supervisor-employee relationships to enhance employee retention.
  • Requiring in-service training for all staff and volunteers on increasing emotional intelligence (i.e., EQ), demonstrating empathy, improving interpersonal relationships, maintaining civility and collegiality, and resolving conflict.
  • Building effective workplace relationships to establish and maintain effective teams that work towards the mission of the organization.
  • Providing positive and negative feedback to diverse staff.
  • Receiving positive and negative feedback from diverse staff.
  • Creating a clear internal career ladder that eliminates the issue of lack of upward mobility.
  • Providing mentoring and professional coaching for all employees at all levels of the organizational chart.
  • Updating position descriptions on a regular basis.
  • Establishing, implementing, and enhancing the personnel evaluation and performance assessment process.
  • Completing employee annual performance reviews.
  • Re-training staff members who struggle to successfully meet performance standards with the assistance of Human Resources and/or Executive Director.
  • Supporting employee development and continued education opportunities for career growth in the nonprofit sector.
  • Accommodating work-life balance of staff members (for example, managing remote employees).
  • Appreciating and recognizing successful staff performance.
  • Investing in talent management.

As you can see, the things that strengthen the relationship between supervisors and employees also enhance organizational culture, retain employees, and facilitate optimal succession: employee development, work-life balance, flexible work environments, appreciation, and recognition!

Strategy #3: Invest in Talent Management

Nonprofit leaders should invest in talent management to activate their organization’s strategic plan to achieve the SMART objectives, strategic outputs, and short-term outcomes related to human resources.  As I mentioned in Strategy #2, strategic nonprofit leadership for CEO and senior staff succession planning starts with culture and good governance, which transcends into strategic planning and continues into strategic human resource management.

Effective staff supervisors realize that achieving the organization’s mission and vision is a marathon, not a sprint. Better yet, the marathon is really more like an adventure race. To strengthen relationships between supervisors and employees, the race requires an investment in staff. Employees are often referred to as the human capital of the organization or the organization’s talent.

Whatever the label, we must remember that every staff member is an individual with individual needs and motivations for working for an organization. Some staff member motivations are self-serving, while others are altruistic, and most are both.

Talent management needs to have an organizationally self-less component! Talent management is not always about what the organization needs, but what the employee wants and what his or her household needs.

The supervisor must determine the personal needs, goals, motivations, and reasons for working for the organization for each staff member. Self-interest is the greatest motivator! Effective staff supervisors embrace their staff members’ self-interest and work to strategically align self-serving motivations and personal goals and interests with the nonprofit organization’s strategic goals, objectives, and priorities from their current strategic plan.

One strategy for strengthening a supervisor-employee relationship is to invest in your human capital – invest in your staff! Invest in staff member’s development toward their personal goals. Effective staff supervisors, one-by-one, employee by employee, identify how each staff member, in their current position, can be supported and invested in through employee development and continued education opportunities for career growth in the nonprofit sector.

How can we openly use an employees’ current position through investment to get them to their next career step….not the next step you need out of them…but the next step they want for their career? Honest and regular two-way dialogue through regular one-on-one meetings with direct reports is critical to understanding each staff members’ needs, desires, wants, and goals for their current position and career.

Remember The Platinum Rule is: Do unto others as they would have you do unto them. Apply the Platinum Rule to investing in your staff: Invest in each staff member as they would have you invest in them!

Addressing strategic human resource management issues during strategic planning is talent management.  Talent management shapes organizational culture, enhances employee retention, and facilitates succession planning!

As discussed in the Leaderosity Effective Staff Supervision in Nonprofit Organization course, depending on the size of the organization, the talent management or human resources function may be handled by the Chief Executive Officer (CEO), Executive Director (ED), Chief Human Resources Officer (CHRO), human resources department or assistant, or even by a manager. The human resources function can also be called personnel, human capital management, or talent management and acquisition. Human resources covers a range of roles from attending to the work culture of the organization, hiring, evaluating and rewarding the organization’s workforce, and ensuring that all employee-related laws and regulations are both met and implemented appropriately.

One important role of the human resources function, as highlighted in the Leaderosity course, is to manage the Employee Life Cycle. The Employee Life Cycle refers to the stages of an employee’s time in a particular organization. The employee’s supervisor is key at each of these stages, especially at the stage of talent management.

Susan M. Heathfield shared some very relevant tips regarding what every manager needs to know about succession planning:

  • Talent management is recruiting superior employees.
  • Talent management is developing employees’ knowledge, skills, and abilities.
  • Talent management is preparing employees for advancement or promotion into ever more challenging roles in your organization.
  • Talent management is cross-training employees to handle mission-critical tasks when there is an abrupt personnel change.

To develop talent internally, Ms. Heathfield also recommends creating opportunities for success and failure for employees by intentionally moving employees laterally for cross-training; assigning employees to special projects for skill and experience development; appointing employees to team leadership roles; and providing employees with internal and external training and development opportunities.

Investing in talent management means implementing human resources objectives from your strategic plan, such as creating a clear internal career ladder that eliminates the issue of lack of upward mobility and providing mentoring and professional coaching for all employees at all levels of the organizational chart across their careers. Mentoring and professional coaching also means providing regular and timely positive and negative feedback to employees on a daily and weekly basis. Managers should not be waiting for an annual performance evaluation cycle to correct employee behavior, especially as middle managers move towards the C-Suite and CEO roles.

Staff supervisors will have to accept the fact that sometimes an investment in a staff member will be “spent” in another organization.  Staff members will leave your team and organization to take another opportunity in other organizations. It is normal and natural for staff to come and go. Recognize that you will benefit from other organizations’ investments in staff as you attract new staff members to your team.

Stay or go….the key is that by investing in staff members while they work for you, you strengthened your relationship with them as a supervisor and you built a culture that will not only retain a higher proportion of employees, but also attract talent as a core succession strategy.

If done well, talent management can lead to the convergence of the organization’s needs and the employee’s wants and employee’s household needs!  If done well, talent management can contribute to retention and create a healthy culture!

Strategy #4: Assign Responsibility for CEO & Senior Staff Succession Planning

Believe it or not, most nonprofit organizations do not have a strategic plan!  Kind of like wealthy celebrities who don’t find time to prepare and sign a will before their death….Prince, Aretha, Bob Marley, even Jimi Hendrix and Abraham Lincoln!  And the organizations that do have a strategic plan usually have a really pretty bad, out-of-date, or not actionable strategic plan, which makes it not surprising at all that succession planning is not a priority and especially not articulated as a priority in the strategic plan.

So, for Strategy #4, it is critical to have a strategic plan (i.e., Strategy #1), include human resources in the strategic plan (i.e., Strategy #2), and actually include talent management (i.e., Strategy #3) and succession planning (i.e., Strategy #4) as SMART objectives in the human resources section of the strategic plan with accountability assigned.  Assigning accountability is essentially clearly assigning who is going to do what by when.  Mind blowing, right?!?!?  Plan your work, work your plan!

Nick Price made a very clear and legal argument for board members to get serious about succession planning:

“Succession planning falls under ‘duty of care,’ which is a fiduciary duty of all board directors. Board directors are responsible to ensure the long-term sustainability of the organization. Recruiting and maintaining effective leadership at the top is a major part of the board’s fiduciary responsibilities.”

I personally recommend codifying succession planning in the governing documents of the organization, preferably the by-laws, as a responsibility of the Personnel or Human Resources Committee, or perhaps, even the Governance or Executive Committee.

Until Next Time

Well, there you have the first four of eight strategies I’ll offer for nonprofit succession planning.  That should be enough to chew on for now with Part II of our three article series!

In Part III, I’ll get into the role of the outgoing CEO or senior staff member; valuing and rewarding strategic living; embracing volunteer engagement; and finally, the nuts and bolts of writing a succession plan!

Remember succession planning is about employee retention and employee retention is ultimately about culture.

Don’t forget the Lord of the Rings story line took the trilogy to fully make sense! Be sure to read Part III when it arrives in your in-box!

If you’d like a sneak peek at the remaining four strategies for nonprofit succession planning, feel free to watch my recorded nonprofit succession planning webinar at my website!

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

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