According to most board governance experts, one major responsibility of a nonprofit board is to hire the chief executive officer (CEO). What’s the best way to identify and hire the most qualified person to lead the organization into the future? It isn’t as easy at it appears and it’s definitely not a task to be taken lightly.
Hiring the right CEO requires time, thoughtful discovery, and patience. Managing the transition from one CEO to the next executive leader is often a pivotal point in the organization’s lifecycle. Although the board may be in a rush to fill a vacancy, often an interim CEO is prudent. If the departing CEO was strong, long-serving, or well-loved, an interim CEO provides time for staff and donors to grieve and prepare to accept a new leader. When the CEO’s departure was precipitated by problems, an interim can resolve the issues so a permanent replacement won’t bear this burden. Some organizations that elect to skip the interim find themselves with an “unintentional interim.” Then they must make a new hire after a year or so anyway.
Some boards choose to go it alone, some employ a search firm, and others work with a transition consultant. Most boards have members who’ve hired plenty of people in their for-profit enterprise. Hiring a nonprofit CEO presents unique challenges and opportunities. In addition to all the competencies required of any leader, the nonprofit CEO will:
- serve as the organization’s top leader—thus, he/she has to be comfortable being the “top dog;”
- report to an ever-changing and evolving board (rather than reporting to one individual);
- be an effective ambassador of the organization, especially with donors and funders;
- oversee a financial system that is quite different from a for-profit’s; and
- be the face and voice of the organization, often in a very public way.
An objective third party can help the board manage the leadership transition. A consulting firm that provides executive transition services combines search expertise (offered by a traditional search firm) with nonprofit management, governance know-how, and change management to help the board and staff successfully navigate the often-choppy waters of executive transition.
The full Executive Transition Management (ETM) process will include three phases.
- Prepare the organization for the transition by envisioning the future and determining the skills needed to lead the organization into that future.
- Search for and select the best candidate.
- Get the new executive, board, and organization off to the best start by developing strong communication and onboarding plans and setting a shared leadership agenda.
Whether an organization decides to employ one or all three phases, outside help can be beneficial. No matter how the cost is measured, it is a critical time in the organization’s history and an opportunity to take advantage of the power of change. A successful transition to new leadership results in tangible and intangible benefits—increased momentum for financial support, new and renewed relationships, and employee enthusiasm.