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Reconceiving Leadership Transition and Its Management

Organizations traditionally view leadership transition from a linear short circuited perspective. It is assumed that a leader can transition in or out of the organization without creating holistic change throughout the organization. When a board receives a resignation from a CEO, most often the transition is seen as a finite task. They attempt to find the right person to replace the CEO as quickly and efficiently as possible. The board then hopes that this person can be inserted into the organization without impact on systems, volunteers, or the larger community. In reality, the transition of leadership is a catalyst for seismic changes throughout every aspect of the "living, breathing organism" we know of as "the organization." The new leader has to come to an understanding of the organization's strengths, weaknesses, and strategic perspectives. They have to weave their leadership into the collective roles of the leadership team while honoring or negotiating around the organization's culture. The new leader has to earn the right to be trusted by the board, the staff, volunteers, and the community, to name a few of the tasks that create an effective transition. In this section we describe a shift in thinking from the linear task-oriented transitions currently used by organizations; and we broaden the transition process to include a continuous growth process for the leadership and the organization. Process takes time and attention at all levels of the community.

The Problem with Current

The mismanagement of leadership transitions has tended to compound and exacerbate the problems that have led to them. Why? Because management generally takes a narrow, remedial view, often in the mood of crisis. More often than not, leadership transitions focus almost exclusively on the search process, not enough on the direction they want the organization to move and the style in which they want to move it. They tend to rush, correctly nervous about all that can be lost during the transition but, rather than manage the transition to preserve the organization and separately take time with the search, they rush to find a savior.

Participation in the search process is often confined to a few people. When that is so, information is limited and lost, and communication is poor. Staff, clients, and funders grow nervous within the vacuum of information, make up stories, and pass them around. Rumors abound, creating fires that have to be put out.

Then, once the new leader is chosen, the organization is handed off like a colicky baby—"Here, you take her!" The search process may have lasted longer than expected. The board is exhausted and feeling out of its depth, almost irritated that the new leader has taken so long to enter the scene. In this scenario, boards often act like neglectful parents, failing to exercise even the minimum of oversight. Alternatively, they are so pleased with their choice that they confidently hand off the organization to their knight in shining armor, fully expecting that she will repair what has been lost and bring the organization back to lost glories.

Now a honeymoon stage begins, generally, with little accountability between boards and new leaders—and with equally little support. With time, the exuberance and optimism begin to ebb. Cracks emerge: Financial reports are not as positive as they might be; program development is slower than expected; fundraising is uninspired. The board, who had put too much faith in the leader, then tends to overreact. It grows critical, pulls in the reins too hard, and speculates about the need for new leadership. Mistrust and conflict build.

In other words, the downward spiral that we mentioned at the beginning of the chapter is virtually built in from the beginning of the new leader's tenure. It is built in because inadequate attention is paid to the period that follows the introduction of the new leader. The cycle leading to the need for another transition is built into the beginnings.

The Opportunity

In spite of and often because of all the sturm und drang that surrounds leadership turnover and transition, it also presents a unique opportunity for organizations. It may be the only time—except during an extensive and creative strategic planning project—that organizations not only have the opportunity but are charged with the task of reviewing their mission and objectives, their strategy and capacity, their resources and standing in the world. To select a new leader, organizations must ask: to do what? How best might a leader succeed within the constraints and the opportunities presented by this organization? In this market? Who is the best kind of leader for us? How should we relate to this leader?

In effect, leadership transitions present both the opportunity and the requirement for getting one's house in order. How can you select a new leader without knowing where you want that person to lead or what resources are available? The type of resources—people, finance, infrastructure, partnerships—you have tells you a great deal about the kind of leader you should pick. If you are poor, for example, you may want to choose someone who can do with less, an improvisational person, an unspoiled person, a person who can turn around declining staff morale. Or you may select a relatively unambitious leader, someone with not so much to prove, someone who is happy to be the steward of a stable organization and doesn't need to build a giant. The opposite is also true. If resources are plentiful and the will is there, you might look for a leader who has built organizations before, who can seize the moment to rapidly take you to the next level. What a tremendous intervention it can be to select just the right person for this moment in the organization's history.

Transition as Crisis

Leadership transition means replacing one seemingly irreplaceable person with another, a move that requires everyone else to reorient their work, thinking, and relationships to adjust to this change. As a result, all leadership transitions can be considered crises. Organizations in crisis are temporarily off balance, understandably confused, and somewhat disorganized. They make us uncomfortable, and we almost never seek them out. But, they are a fact and a force of nature, as much a part of our personal and professional lives as the births and deaths, the unfulfilled yearnings of adolescence, and the broken hips of old age. And as much as we try to avoid these crises, they often enough leave us in a better place.

The tendency in times of crisis is to pull in, to maintain, and to protect what you've got. It is the rare person or organization who sees the opportunity in crisis, and rarer still is the person who intentionally takes advantage of the confusion—the disorganization, the grasping for solutions—as the catalyst to move on, to improve, to take the next big step. Rarest of all are those who organize themselves so that they are nimble enough to regularly adapt to change in positive ways.

Incremental change is possible without crisis, improving a little here, a little there. But major change requires the loosening of bonds that generally hold us tight. It requires us to be off-kilter so that we must seek some fundamental new balance. It requires us to lose something basic—a leader—to seek not just a replacement but someone who will move us in directions we really wanted to move in the first place.

Our book's purpose is to lay out a map for the intrepid traveler who believes there is great value in sailing through the rough weather of leadership transitions.

There are three types of crisis. In our approach to leadership transition, we must respond to each and take advantage of each.


By definition, crises create confusion and disorganization. The technical word used for such a state is disequilibrium. Although painful, disequilibrium also creates opportunities. As the physicist Ilya Prigogine observed, systems in disequilibrium are vulnerable to change. Everyone who has tried his hand at changing people and organizations knows how difficult it normally is. People are stuck in their ways, skeptical or fearful of change. Most of the time, systems resist change, but during crisis, their resistance is lowered. There is a loosening in the patterns of thought and behavior. There is an urgency that pushes people out of their comfort zone and into innovative approaches to old problems.

Usually these innovations don't last long; people fall back into habitual ways of thinking and doing things. But if these innovations are buttressed by solid and sustained management practices, by creating formal structures and processes that institutionalize the innovations, lasting change is possible.

With this potential in mind, we need to put aside our normal anxieties and embrace the change potential that is inherent in leadership transitions. When new ideas, now solutions, emerge during the transition period—say the value of a strong executive team, long dormant during the reign of an autocratic leader, or the introduction of more regular financial reporting to keep abreast during the potentially chaotic time—they can be grasped and institutionalized. As the saying goes, we must seize the day.

Even more importantly, a transition team has the opportunity to assess whether an organization's programs really do stand a good chance of realizing the mission, whether the financial model is adequate, and whether the type of leader you have had is the best fit for the current organization. So many basic questions come to the fore—if the transition team permits them to.

As we suggested, the tendency during crisis is to minimize damage, to plug the hole left by the departing leader, and to bring the interim confusion to an end as quickly as possible. But if you can establish a trusted transition management process and it takes time to really assess what the organization needs, you have a chance to take advantage of opportunities provided by the disequilibrium that has been created.

Part 2, Chapters 3 through 6, describes the fundamentals of effective leadership: the clarification of mission, vision, objectives, and strategies; good governance; and how to align all resources in the service of mission and strategy. As new ideas burst forth and potential leaders appear during the transition period, we need ways to assess whether they are in keeping with our values and whether they will move us in the direction we have chosen. We need a picture of our future to guide our present search.

Trouble and Pain

Even in the best of situations, change creates anxieties. There is fear of the unknown and the loss of the well known. Even when the past has been difficult, it is hard to give up. Dramatic transitions due to the death or illness or impropriety of leaders jolt those whose lives are intimately connected with organizations. Sustained failure and conflict create their own form of internal havoc and employees and volunteers who show the symptoms of traumatic stress disorders: general anxiety, overreaction to small events that trigger old fears, and inappropriately dramatic behavior.

There are two requirements for managing these stressful situations. First, there is a need for strong, consistent management and clear communication to eliminate the fear of strange things happening behind closed doors. During extended transitions, people always fear that their interests won't be protected. They fear that deals will be struck behind their backs or that chaos will reign. All of this can be addressed by solid, transparent management by teams composed of boards of directors and senior staff or a wise and experienced interim director. There should be teams to search for the new CEO and to manage the everyday operations of the organization. Both need to communicate regularly on both progress and difficulties to reassure, to maintain credibility, and to sustain an optimistic view.

If distress is high and trust is low among stakeholders, it is important to create a transition management process that is more inclusive, one that provides a regular forum for people to ask questions, express their concerns, and share their fears. This kind of openness may not come naturally to the people who serve on boards. They may be more accustomed to keeping financial information private—the domain of the inner few. They are likely to believe that the search process will be best served by minimizing complications. They may fear that clients and community members can't handle too much information. Although all of these concerns may be well grounded, a well-managed, inclusive process will answer them. If communication is clear and as assuring as the facts will bear, both distress and disorganization will decrease instead of escalate. Equally important, the inclusiveness of transition management will have strengthened and broadened a constituency to support the incoming leader.

Five chapters, 7 through 11, are dedicated to professionalizing transition management to provide order and clarity during this potentially difficult period.

Developmental Crises

There is a third type of crisis to consider: the developmental crisis. Organizations, like people, pass through recognizable stages: for example, from start-up, grass roots, or entrepreneurial to managerial and on to a synthesis of entrepreneurial and managerial. Transitions from one stage to another are rarely smooth. Often the developmental shift is both signaled and facilitated by the introduction of new leadership. To protect their investment venture, capitalists traditionally maintain at least 51 percent of board votes so they can replace the founding entrepreneur with an experienced manager at a strategic time. This is a conscious way to facilitate a developmental transition.

This kind of planned transition is rare among nonprofits, but it points the way. The core idea is this: to treat transitions not as a way to repair the old but instead as the main instrument for moving an organization into its next, more effective stage of development.

At their most productive, developmental crises bring forward the best of who we are and help us let go of what is no longer appropriate. The resolution of the adolescent crisis, for example, requires young people to let go of much that had been charming in childhood to bring into the foreground more of the independent, reasonable decision maker. When adolescents cannot move through this developmental conundrum, they remain mired in internal conflict, unnervingly shifting between childish and counter-dependent modes of behavior. Organizations caught in the vicious cycle of poor transition management are like adolescents caught in cartoonish expressions of themselves—and remaining stagnant at best.

The implications of the developmental view are twofold. We will ask our transition team to determine what the next developmental stage will be and what kind of leadership will best move them in that direction. Second, we will ask the team to support the new leader through the stages of development that each leader goes through.

As our prior mention of a honeymoon period suggests, we also believe that the quality of leadership and the relationship between volunteer and professional leaders move through recognizable stages. Leadership tenure usually begins with a sense of great, often exaggerated promise. As reality sets in, there is a tendency toward disillusionment. And, if people don't act precipitously on their sense of disillusionment, a third stage emerges in which good and bad qualities of leadership, together, prove acceptable. Each stage presents its own challenges. Managing well through all these stages represents the best chance of sustained and effective organizational leadership. Chapter 12, "Succession Planning," presents a model for managing the (developmental) cycle of leadership.

An Expanded Sense of Time

Earlier, we criticized the hurried, narrow style of transition management that we have found too common to nonprofits. This approach almost makes sense if you think of transitions as beginning with the departure of the old and ending with the entry of the new leader. Within that time frame, there is a straightforward task to be done, and it is best to do it as expeditiously as possible.

If, however, you believe that the build-up to the departure holds important information for the selection of the new leader, and if you believe that positioning the new leader well counts, you must consider a much lengthier transition process. We think of transitions as beginning with the first strong signs of trouble with the current CEO or, in the case of effective leaders, the first strong signs that they will leave. The period does not end when the new leader is hired but when the new leader has her feet on the ground—that is, when the new leader can act effectively as a leader. The build-up to departure may take years, and it certainly tends to span many months. The period between the announced departure and the introduction of the new leader can vary. It can be brief—a few months—but counting on that is wishful thinking. It is more likely to be 6 to 9 months, especially when the process is deliberate and thoughtful. And it can be up to 18 months, when, for instance, the selection process brings out schisms among the board, leading to indecision.

We are now talking about a period that encompasses between one and three years—the same length of time as the tenure of many, current nonprofit leaders.

By expanding the time understood to be under transition management, we can expand the scope of the management. Instead of focusing almost exclusively on the selection of the new CEO, the management team can prepare the organization so that the new leader can succeed. If, for example, one faction in a divided board had clashed with a CEO, we know that we must bring the board together on key issues—before hiring a new leader. If the board had served as a rubber stamp for a founder, an arrangement that had worked when the organization was small enough to work with the founder's skills but failed to hold the leader accountable when the organization grew larger and more complex, it is vital to restructure the board. It should be more demanding, requiring more information to evaluate movement toward objectives. And, for this new stage of organizational development, the board should create a little distance between itself and the new leader to maintain perspective.

On either end of this spectrum of time—one and three years—we see an extended period in which the board of directors must play an active governing role and, for periods, an active role in the management of the organization. With the expanded time comes the possibility—the necessity—of managing a much more extensive set of challenges.

As crisis managers, for example, the board must establish a reassuring solidity, beginning with the notice of the CEO's departure and ending with the grounding of the new one; and the board must communicate to all stakeholders that this is what the team intends. To communicate about such an extensive process, the transition team must imagine where the organization is going and by what strategic means it will get there. Then the team must find and hire a leader capable of realizing the strategic plan, charge the new leader with this challenge, and help position her to succeed.

An Expanded Sense of Who and What Must Be Transitioned

Leaders work in context: organizations, communities, financial markets, and so on. So must boards and transition teams. To manage well, boards need to understand their organizations much more deeply than they ordinarily do. They must ask, for example, what came before the departure? What led to contentious or drawn-out departures? Or, if it is a long-standing and much-loved CEO, what kind of culture was built around her? How did people prepare, both formally and informally, for her departure? What kind of expectations, positive and negative, were built in anticipation of the new leader? Transition teams need to ask about the market the new leader will enter: for example, the market for clients, and the competition; the market for funding, and the competition; the market for employees, and the competition. It is within these markets that the new leader will succeed or fail.

There are many dimensions of organizational culture, structure, and processes that provide valuable information about what kind of leadership will succeed, and it is up to the transition team to learn about them—and to be honest with themselves. It's a terrible mistake, for example, to bring an ambitious leader into an organization with potentially ambitious goals when it is clear the resources will be scarce for the next few years. It might be equally disastrous to bring an African American leader into an organization consisting primarily of Latino staff in a Latino community that feels itself at odds with the neighboring African American community. There has to be an alignment among the board's ambitions, its willingness and capacity to raise funds, the stated objectives of an organization, the community it serves, and the type of leadership it seeks.

Self-reflection is the byword here. To select a leader well, organizations have to understand themselves. What is its organizational culture, for example? Let's suppose it had been built around a charismatic founder who made almost all important decisions and to whom people, out of respect and admiration, ceded that right. Let's say that this worked out well for almost ten years, until she left. At that point, believing no one could replace her and that her major lieutenants could collectively lead, a kind of plutocracy was established. This leadership group, however, never gained a full legitimacy. Many other staff people didn't accept their leadership and felt unfairly excluded from the decision-making process. In effect, the group never achieved the legitimacy needed to lead an organization. The absence of leadership legitimacy contributed to both conflicts and a lack of productivity that had brought the organization to a perilous financial position.

Perhaps the organization could move further along toward a participatory culture in which responsibility and decision making were even more broadly shared. If the transition team believed that this would work well for the staff, and if the board believed it could hold even a broad-based leadership accountable, it would seek a leader able to work in this mode. If, on the other hand, the board believed that the culture still yearned for and performed best under a more authoritative leader, it might hire one who could also be extremely respectful and consultative with staff, thus achieving a synthesis of the first two forms of leadership.

The greatest opportunity of leadership transition is to hire a leader who is both aligned with the organizational culture and seemingly able to perform superbly in the service of the organization's objectives. This may seem obvious, but it is not so obvious to many search processes, which emphasize either cultural fit or goal alignment to the exclusion of the other.

A Renewed Focus on Objectives

Most importantly, we want to know how well organizations under the departing leadership were achieving their objectives, how and why they were succeeding, and how and why they were coming up short. Unless and until we have a hypothesis about what worked in the old leadership, we can't accurately determine what we need in the new. This is critical. All too often, boards evaluate CEOs based on their personality and forget to focus on objectives. If the organization is moving effectively toward achieving objectives, the leader is succeeding, even if she doesn't look good in doing so. Shifting board and public perception away from show and charisma to results would be of immense value. It would be crucial to the selection of new leadership, crucial to communications to stakeholders about the selections, and crucial to the way the new leader is supported during the first year.

Many a CEO have fallen to the style and personality axe. It is said that they don't fit. They are too autocratic, too democratic, too assimilated, too ethnic—whatever. When boards focus on these and other process variables—the CEO doesn't know how to manage teams or women or the younger generation—they often lose sight of their own objectives. The leadership transition process represents a moment when boards can and, in fact, must refocus on their objectives: to clarify and affirm them; to keep them front and center during the search and selection process; to hire the leader who is most able to achieve them. That's why Chapters 3 and 4 provide guidelines for the development or review of mission, vision, and strategy in organizations.

We believe that the fundamental challenge of leadership is to align all organizational resources in the service of its mission, vision, and strategies. Hiring a new leader without some clarity about strategic direction is asking him to fly blind. It is asking for the disaster that usually takes place a little after the initial honeymoon stage in the form of a struggle between the disillusioned board and floundering CEO. Developing at least a rough agenda for the organization's future to serve as the new leader's guide star is a vital part of successful transitions.

Back to crisis management. The uncertainty of the moment lends itself to a clarification of purpose. The opportunity to clarify one's mission and strategy and to hire primarily based on the new leader's ability to realize them is the principle advantage of leadership transition. The opportunity to refocus the organization on objectives, even before the selection of a new leader, presents an opportunity of almost equal magnitude.

The Centrality of Boards During Transitions

During leadership transitions, the challenge and the opportunity for boards of directors is to figure out who they must be to guide and constrain the kind of leader best suited for the upcoming years. There, in fact, is the irony. Although the board is supposedly focused on the search and selection of a new CEO, it cannot perform this job well unless the members can perform in an optimal way. So they must focus equally on rules and activities of good governance. They must focus, first, on themselves.

We know that boards conduct searches, but most of us don't exactly see the implications of that observation: Boards of directors govern. Essentially, governance consists of three activities: fiduciary responsibility, setting policy, and hiring and managing the CEO. Boards have these responsibilities all the time, but during transitions, their governance is more visible. Strengths and weaknesses show themselves more vividly, which is not all bad. It provides the opportunity for self-reflection.

One of the key challenges during the transition period is self-governance: How can the board improve itself? How can it prepare itself to govern better during the tenure of the incoming CEO?

Improved functioning is particularly important during the first six months to a year of the new CEO's tenure: finding the right balance between guidance and giving the new leader room to lead is key. Often a separate "kitchen cabinet" is helpful to keep mission, vision, and strategy front and center; to encourage the CEO to find her own way of realizing organizational objectives; to connect the new CEO to staff, funders, and community leaders; and if a geographic move is required, to introduce the leader and her family to the community.

Because poor board functioning is often a primary cause of leadership turnover, board transformation must be a primary goal of leadership transition. Before selecting a CEO, boards should evaluate themselves as individuals and as a collective entity. They should determine what kind of board will be most effective during the next stage of organizational development. It isn't only CEOs who must shift focus from stage to stage. Founding boards, often with their loose structure and processes and willingness to roll up their sleeves, are different from more mature boards that operate within more formal rules and structures and with different core functions in mind.

Imagine, for example, a young organization that is primarily supported by foundation grants. Here, fundraising is largely a staff function. As the organization grows, it determines that public funding and individual donor contributions are necessary. The staff doesn't have sufficient connections with individual philanthropists and government figures. Now the board must take on a major role in fundraising. But a founding board may also lack connections. The composition of the board must change for the organization to continue growing. Simultaneously, the transition team must be looking into a CEO and a board that can dedicate skillful attention to public funding and to building an individual donor base.

The Importance of the Board-CEO Partnership

Organizations are built on relationships as much as they are on individuals. The effectiveness of the CEO depends very much on her relationships with the financial officer, program and development directors, and the board president. In that sense, the history of these relationships provides critical information about the selection and integration of new leaders. This is particularly true of the board-CEO relationship, which our research suggests is the key to the retention and success of organizational leadership.

CEOs come and go—as they should. So, too, board presidents and board members. As a result, the partnerships between boards and CEOs may shift several times during the tenure of a single CEO. As each new board president comes into the picture—often every two, three, or four years—new relationships have to be established. Each new board president tends to set his own tone rather than seek continuity with the past and to act as though he, not the whole board, is in charge. As he does so, the CEO has to adjust—or, as often happens, appear to adjust. When the reality behind appearances comes clear, differences between board presidents and CEOs have to be reconciled.

Over the long haul, these periods of reconciliation and compromise appear with some regularity. Boards have to assess their ability to manage these regular, predictable changes. They need to ask themselves whether they have developed the habit of candid, open conversation and conflict resolution.

Even more important, boards must learn to exercise self-discipline. When a board member, for example, speaks to the CEO, who is he representing? Has the president checked his board to determine support—or lack of support—for positions he takes with the CEO? Can a board succeed in maintaining more continuity than discontinuity from one president to the next? Without doing so, it may confuse, alienate, and anger the CEO and set the ground for conflict. This is one of the key subjects we address in Chapter 5, "Good Governance."

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