Shelagh Gastrow: Succession and resilience in the non-profit sector
Leadership succession in the non-profit sector is always fraught with risk. What does it take for an organisation to survive a failed leadership transition? This takes us to the issue of organisational resilience, whereby an organisation can withstand change, whether unanticipated or proactive in relation to a changing environment.
The Wikipedia definition of succession planning is “a process for identifying and developing new leaders who can replace old leaders when they leave, retire or die. Succession planning increases the availability of experienced and capable employees that are prepared to assume these roles as they become available”. My experience of succession planning hasn’t been so clear cut. I have worked in universities and the non-profit sector and leadership succession is always fraught with risk. The idea that new leadership can be developed is valid for large companies, but in small organisations and in specific specialist university units, this is easier said than done. Often appointments are made with potential future leadership in mind, but frequently the promise evident at the time of the appointment does not always come to fruition and, in smaller organisations, there simply aren’t the resources to appoint an alternative. Non-profit organisations often find difficulty identifying funding for posts as many donors are still stuck on programmatic funding only, so financial resources to employ additional staff are not always available. In addition, there is rarely funding for staff development and training to upskill existing staff. There are ongoing advertisements for leadership positions in the civil society sector and it has become more difficult to identify and successfully employ an external candidate. The issue of replacing a “founder” leader of an organisation is complex. Founders are driven by passion, energy and have generally taken significant risk, both personally and organisationally. They have had a clear idea of their vision and have taken every opportunity to achieve that vision. There are often issues about “founder syndrome” and this itself can cause havoc in an organisation. In the end, however, everyone leaves an organisation at some point and a new leader should be able to enter the organisation with ideas for possible new directions without destroying the successful elements that already exist. With an effective hand-over, a new leader should be able to take the organisation to places that are innovative yet still aligned with the organisation’s purpose. However, a smooth handover is not always the case and organisations have to survive some extremely risky and bumpy transitions. What does it take for an organisation to survive a failed leadership transition? This then takes us to the issue of organisational resilience whereby the organisation can withstand change, whether unanticipated or proactive in relation to a changing environment. A resilient organisation has various key elements that should sustain it through a bad leadership transition. These would include well capacitated staff, effective programmes, good stakeholder relations, particularly with donors and beneficiaries, financial commitments from donors and a significant reserve fund. Most importantly, the organisation needs an effective and functioning board. The board plays a crucial role in making further decisions about a failed leadership transition or a sudden cut in funding by a key donor. Ensuring a degree of resilience should be part of any organisation’s advancement plan. Building resilience (and potentially some form of succession plan) should take into account all posts that are critical to the success of the organisation and pose most risk if the incumbents had to leave. Organisations grow and shrink regularly, but the minimum core should be explored and risk assessed. It is not, therefore, only about the director or the CEO. Resilience also depends on the systems and personal relationships within the organisation. A heavy bureaucracy in a small organisation inhibits organisational flexibility and adaptive capacity. This means that when things go wrong, the organisation is so inward looking and reliant on policies and procedures, that there is little room for discretion and innovation. At the same time, proactive planning to engage with the fast-changing societies in which we live is critical to making informed strategic and planning decisions. Organisational culture therefore plays a role in an organisation’s ability to weather change, including its capacity to adapt, to innovate and to reposition itself. In an article in the Harvard Business Review in June 2011, George Everly points out that organisations can develop a “culture of resilience”. He says this culture is based mainly on leadership and that key leadership personnel have the ability to “tip” the organisation towards resilience and “to serve as a catalyst to increase group cohesion and dedication to the mission”. Everly identifies the “attributes of optimism, decisiveness, integrity and open communications while serving as conduits and gatekeepers of formal and information flows throughout the organisation and enjoying high source credibility”. If a critical mass of individual leaders in an organisation exhibits the above, then the organisational culture itself can shift. Ultimately, organisational boards are responsible for the fortunes of the organisation. There is often confusion about what governance means in the non-profit sector and we often observe a jumble between fiduciary responsibilities and management. While an organisational leader makes a huge contribution to organisational culture, it is the board that has oversight and should explore early warning systems of stress or implosion, while ensuring that the organisation is flexible and innovative enough to weather all storms. In the end, organisations come and go and often their purpose is no longer relevant. However, if an organisation that is playing an essential role in our civil society declines for lack of resilience, that impacts on others. Every effort should be made to ensure that its functionality survives, either through mergers or absorption by other similar organisations. DM