From Where We Sit

Succession Planning and Mitigating Nonprofit Risk

I was recently asked to contribute to a whitepaper on avoiding and mitigating risk; my thoughts were focused on the enormous value of succession planning. For all nonprofits, some level of risk helps drive innovation and the successful balancing act hinges on taking smart risk. Below are excerpts of this exceedingly well written document, ultimately developed by Green Hasson Janks:

Many nonprofits are founded to address a specific issue, and the founders have invested an enormous amount of time and effort in getting up and running. With limited resources, they turn their passion into a working organization. But when nonprofits are successful, they grow, and they can outgrow the managerial abilities of their founders. Alternatively, a longstanding, successful nonprofit will need to fill open positions that are key to organizational success. In either scenario, nonprofits must be prepared for a smooth transition — otherwise, there is a risk that revenue and mission can be impacted.

We interviewed nonprofit recruiter Shelli Herman, founder and president of Shelli Herman and Associates, and asked her to give us insight into the complicated process of succession planning.

“Most nonprofits feel they aren’t preparing for leadership succession very well,” Herman notes. “There are a couple of things they can do now, however: first, identify where there may be opportunities for succession at the senior level; second, start thinking about who you can train internally for other roles; and third, develop a point of view about external hiring. The truth is that world class nonprofits are doing a lot of solid internal succession planning work, but being this proactive is not as common. The result is that people leave and the organization goes into panic mode. Herman adds, “When a position opens up, the organization needs to come up with a meaningful job description and formulate a search committee that is an agent of the board. The entire board should not be executing the process — it needs to be a lean, agile subset of the board.”

The mistakes Herman sees nonprofits make in succession planning and recruiting include:


• LOOKING FOR SOMEONE EXACTLY LIKE THE CURRENT CEO. When change is afoot, organizations have to sit back and recognize that this is a perfect opportunity to make change, to possibly reboot and to rethink such that they make the organization more prepared for future growth and opportunity. When an organization gets comfortable, it’s a recipe for trouble.

• THE WRONG FIT. The organization views that there is an internal candidate (that may be the COO or a different #2 person), but once that person is actually in the job, the board discovers that this individual is actually not the right person. The same thing can happen with an external candidate; someone can interview well and be the successful placement, but once he or she is in the job, boots on the ground, you realize it is a cultural misfire. Both can happen, and there are risks both ways.

Herman adds, “An organization can’t mitigate every risk regarding hiring, but it can have a comprehensive approach to help lessen risk that includes:

• A THOROUGH INTERVIEW PROCESS. To reduce errors, a nonprofit should aim for a process where it asks thorough questions and performs reference checks and has many different people interview the candidates. This may include board members, staff, critical stakeholders, donors and other people with contemporary insight into the organization.

• GOOD ONBOARDING. If poorly done, the person is set up to fail.

• STAYING INVOLVED. The board can’t check out once the person starts. Being exhausted after the search is not an excuse. Be involved and make sure things are going well.”

CASE STUDY: THE SOLUTION MAY BE CLOSE BY! Shelli Herman conducted a recent CEO search for a nonprofit that was stable but not growing. The board felt strongly that the right candidate would be someone from outside the organization. The other complicating factor was that the organization was reacting to some of the less favorable traits of their outgoing CEO. Organizations often err on the side of looking for someone so different from prior leaders that they swing too far from center and end up making mistakes in the hiring process. In the end, and after a comprehensive national search, the board ended up hiring someone inside the organization; they felt that this individual had both institutional memory and a profound understanding of the culture, and they would be able to advance the organization in a way that would be sustainable. The board was not complacent, but realistic about how change might best occur organizationally.

As Herman indicates, succession planning extends beyond just the CEO, to the roles that matter most in the future. Donella Wilson [Partner, Nonprofit Practice Leader, Green Hasson Janks] notes that every organization should have strategies to manage and develop multigenerational talent — if an organization does not invest in the professional development of its leaders, then retention of future leaders is in jeopardy. Such strategies could include participation in external professional development courses but also participation in internal decision making — in other words, allowing talent to have a voice in leadership.

A question that organizations can face is whether to have an interim leader. There are some obvious negatives with “interim” implying “temporary” and possibly alack of commitment. But the positives include a fresh perspective and an objective assessment, and if tensions and a lack of trust have developed internally, then an outside leader can bring a sense of calm and reassurance. In addition, an interim leader can help the board clarify its vision and future leadership needs. An interesting point to note is that an interim leader skilled in management and transitions is more important than familiarity with the nonprofit’s mission and programs.


1. Develop a detailed job description and embrace change

2. Don’t overlook internal candidates

3. Make the search committee a lean, agile subset of the board

4. Perform a thorough interview process and actively test candidates for cultural fit during this process

5. Execute a comprehensive onboarding plan

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