How nonprofit organizations can ensure stability and sustainability through succession planning: make HR a strategic partner in the process

Citation

Santora, J.C. and Bozer, G. (2015), "How nonprofit organizations can ensure stability and sustainability through succession planning: make HR a strategic partner in the process", Strategic HR Review, Vol. 14 No. 6. https://doi.org/10.1108/SHR-09-2015-0069

How nonprofit organizations can ensure stability and sustainability through succession planning: make HR a strategic partner in the process

Article Type: How to ... From: Strategic HR Review, Volume 14, Issue 6

Joseph C. Santora and Gil Bozer

Joseph C. Santora is based at Ecole des Ponts Business School, Paris, France.

Gil Bozer is based at Sapir Academic College, Shderot, Israel.

Interest in nonprofit succession planning has generated a good deal of interest among nonprofit practitioners and academics in recent years. Executives leave organizations for a variety of voluntary (e.g. retirement and job changes) and involuntary (e.g. death and termination) reasons (Gibelman and Gelman, 2002). In addition, recent survey and research findings (Cornelius et al., 2011; Deaton et al., 2013) have predicted that there will be a major exodus of nonprofit executive directors (EDs) in the coming years as baby boomers in leadership positions will be retiring in large numbers. As a result, many nonprofit organizations, especially small and less well-funded ones, will struggle with the appointment of their next ED as they are often forced, unlike the private sector, to search for their next leadership successor beyond their own organizations due to poor succession planning practices (Cornelius et al., 2011 and Fall 2013 Special Issue, International Leadership Journal). In fact, the average results of 11 independent surveys from 2006-2015 indicated a meager 24 percent of nonprofit organizations participants had a succession plan.

Many nonprofits do not plan for an executive succession for various reasons. First, there is the deceptive belief on the part of many EDs that they are immortal (“Who me? I will never die”.). Second, nonprofit boards often lack the professional wherewith all (capabilities or knowledge) to deal with such a strategic issue (“Why? We do not even have a strategic plan”.). Third, nonprofits lack an adequate internal leadership pipeline to groom a replacement or to identify a potential insider to replace a departing ED (“We’re too small to do leadership development”; “leadership development is a nice, not a must to have”.). Fourth, nonprofit organizations lack the financial capacity to provide employees with leadership development initiative to foster and develop their leadership and managerial skills (“We do not have money in our budget for such luxuries”.). The list of potential excuses are endless, but nevertheless the inactions and failure of nonprofit boards of directors and their EDs to design a succession plan, whether it is an emergency succession plan (“Our ED was killed by a bus while crossing the street at lunch time” or “our executive director had enough and just quit”.) or a more normal succession issue (“Our executive director has just informed us of her decision to retire”.), are often disruptive and potentially deleterious to the effective operations of the organization.

Five ways for HR to play a strategic partner role in succession planning issue

Based on our experiences and research (Santora and Sarros, 1995), we offer several ways that HR as a strategic partner can help nonprofits improve their succession planning efforts. We envision applying these suggestions will lessen the organizational disruption or angst, particularly among administration staff, and ultimately create a more stable and sustainable organizational environment. HR personnel must become a strategic partner with the board of directors and the incumbent ED in the succession planning process from working with the board and the incumbent ED to designing and implementing organizational leadership development programs to developing internal recruitment and promotions policies for various types of succession plans (e.g. emergency plan and retirement). The following five recommendations represent ways in which HR can be a strategic partner with nonprofit boards and the incumbent EDs in succession planning issues:

1. Nonprofit boards of directors and EDs must acknowledge and confront the issue of succession head on rather than to bury their heads in the sand. HR can take an active role as a change-agent in brokering the succession plan with boards and EDs. Once committed to the design of a succession plan, they should revisit the plan annually to ensure its efficacy.

2. The board and the ED must commit to a leadership development planning strategy. While finances may be an issue at times, HR plays a vitally important role in this initiative, even in small nonprofits where the HR function has been outsourced or it has been embedded in another management function (usually finance). Some alternate strategies to provide non-profit staff with reliable non-financial (and often costly) leadership development initiatives have been provided in other literature (Santora et al., 2014).

3. The board and the ED must make serious strategic human resource decisions about hiring insiders or outsiders as successors. Conventional wisdom suggests that hiring insiders signals maintaining the status quo, while hiring outsiders signals a change in organizational strategy. Of course such a strategy “depends” on a number of factors including organizational performance, size of the organization and whether or not there are internally qualified candidates.

4. The board and the ED must declare their HR philosophy. Do they believe in “developing and managing internal talent” or do they believe in “buying talent”? Does the former approach send a strong message to employees, one that suggest there is an opportunity for career advancement? Or does the latter approach (often, though not exclusively employed by smaller organizations) suggest that career advancement does not matter and then the organization is likely to experience a brain drain among talented internal staff. For Tichy (2015, p. 9), selecting an outsider “means your pipeline has failed”.

HR can play an important role with the internal or external successor transition and its aftermath. It can serve as a buffer between the successor and the staff, and it can help prepare the successor and the board to refine existing policies to ensure smooth future successions.

Conclusion

Succession planning issues are vitally important organizational issues. The identification and appointment of a successor will have a lasting impact on the organization. HR has a range of significant strategic roles to play in the succession process and the succession event itself from helping to structure a proactive approach to the inevitability of succession and to the design of guidelines for boards and departing EDs to follow in their searching for a successor including prerequisites, competencies and leadership skills to locate and select the best successor. Thus, leading to and ensuring organizational stability and sustainability.

References

Cornelius, M., Moyers, R. and Bell, J. (2011), Daring to Lead 2011: A National Study of Nonprofit Executive Leadership, CompassPoint Nonprofit Services and Meyer Foundation, San Francisco, CA.

Deaton, A.V., Wilkes, S.B. and Douglas, R.S. (2013), “Strengthening the next generation: a multi-faceted program to develop leadership capacity in emerging nonprofit leaders”, Journal of Nonprofit Education and Leadership, Vol. 3 No. 1, pp. 34-46.

Gibelman, M. and Gelman, S.R. (2002), “On the departure of a chief executive officer”, Administration in Social Work, Vol. 26 No. 2, pp. 63-82.

Santora, J.C. and Sarros, J.C. (1995), “Mortality and leadership succession: a case study”, Leadership & Organization Development Journal, Vol. 16 No. 7, pp. 29-32.

Santora, J.C., Sarros, J.C. and Esposito, M. (2014), “Nonprofit founders and succession: how to ensure an effective leadership handover”, Development and Learning in Organizations, Vol. 28 No. 1, pp. 16-19.

Tichy, N.M. (2015), “Succession: the need for radical transformation”, People & Strategy, Vol. 38, pp. 8-10.

Corresponding author

Gil Bozer can be contacted at: gilbotzer@gmail.com