Transition Management Consulting, Inc.

Interim Management Supports Board of Directors

by Jackie Eder-Van Hook and Robert T. Van Hook, CAE | Jan 01, 2003
Executive departures are challenging for boards of directors. Boards often are not prepared for the time-consuming tasks they need to address, nor are they ready for the behavioral challenges they may find in the staff or in the board itself. This article, written for board members, shows how engaging an interim executive can help boards navigate these transition periods.

The departure of a nonprofit executive director signals a period of organizational upheaval, regardless of whether the separation was voluntary or involuntary. An executive transition is the time between the announcement of the departure of Executive A and the arrival and acclimatization of Executive B.

This period can be unnerving and counterproductive for organization's staff, Board of Directors, and stakeholders. For the Board, the executive's departure may seem like a crisis, and how they deal transition may have lasting effect on the organization - for better or worse.

We have observed the following human behaviors common to executive transitions:

Increasing Conflict. It's common to see an increase in "acting out" and unhealthy, inappropriate behaviors as staff and boards struggle to find meaning in the departure, e.g., complaining, arguing, or absenteeism.

Power plays aplenty. As the saying goes, "nature abhors a vacuum" and transitions provide fertile ground for those who pursue formal/informal power. Staff, boards, and stakeholders can be seen jockeying for positions of power, such as staff circumventing the chain of command or grabbing for territory, titles, and budgets. (Those individuals requiring a more structured environment may appear to be grabbing for power when, in reality, it's a coping mechanism designed to decrease their anxiety and increase stability.)

Turnover: a near certainty. Changes in staff, board members, volunteers, and vendors increase during transitions. The loss of a CEO offers a relatively easy way out for individuals who are unhappy, feel undervalued, loyal to the CEO, or planned to leave anyway. One client saw 50% of their staff resign, while another saw several vendors terminate their contracts, because the client was too time intensive.

Emotions run high. The Board, staff, and stakeholders have relationships with departing executives and the departure creates feelings of loss. It's common for people to go through the stages of grief similar to when a person dies: denial, anger, bargaining, depression, and acceptance, even if the relationship with the departing executive wasn't positive.

Regardless of who is feeling what, emotions are running high and must be attended to and managed. If the executive was terminated, staff may experience survivor syndrome- feeling guilty about keeping their jobs. They may even wonder, "Am I next?" This can result in staff keeping a low profile and further reducing the organization's effectiveness.

Fuzzy chain of command. The organization feels unstable to staff and they look to the board to make things feel "safe." Boards in their effort to support staff, run the risk of over-stepping their authority and create unhealthy dynamics for the incoming executive.

In one client system, the Board felt badly about the departure of their CEO, whom they liked. Despite the Board hiring an interim executive director to manage its day-to-day affairs, board members began trying to resolve individual staff complaints. One staff person complained about her salary, title, and authority.

At that moment, the Board deviated from their governance role in which they address staff issues only through policy setting or as the court of last appeal.

The Board members' desire to be sympathetic to the needs of the staff further aggravated a volatile situation, resulting in legal intervention and staff resignations. There is no one right way for Boards to respond to staff, yet Boards and their consultants must be vigilant about the short- and long-term consequences of their actions.

Rush to solve "The Problem." To the Board, an executive departure is a crisis compelling them to replace the executive as quickly as possible. This occurs in part out of fear, a desire to be done transitioning, anxiety about managing the organization after the executive leaves, and believing that prompt, decisive action is required. Rushing to "fix the problem," however, may hinder the organization's long-term ability to meet its mission. It may prolong the transition by hiring a CEO without fully considering the organization's needs, compromise on who is hired, or hire the wrong person.

Executive hires cost an estimated 15-40 times base salary in direct/indirect costs - making the right selection crucial. No matter how fast the Board would like to move, an executive search takes 5-9 months and often longer. Smart organizations use this time to take stock of where it is, where it wants to go, and what kind of executive it needs to help get there. Organizations that aren't so smart accrue a future debt that like a loan must be paid in the future.

Creating "The Story." When an executive departs, the Board either implicitly or explicitly creates a story about the CEO's tenure - this is natural. In the case of a terminated CEO, the story may attempt to make the Board feel less guilty, and if the executive resigned, the story may attempt to help the Board feel less abandoned. The challenge, however, is that the stories are incorporated into the organization's culture, regardless of whether they are true.

Unfortunately, boards are often blind to how their own dynamics affect the CEO's success. If the CEO was unqualified, the Board needs to review their selection, evaluation, and remediation process - was it fair, realistic, clear, or did they simply hire the wrong person.

Conversely, was it the Board's perception that the CEO was unqualified when in fact they, consciously or unconsciously, chose not to hear what the CEO was saying. Consultants play an invaluable role by asking questions and making observations about these stories, thus, ensuring the stories don't unconsciously become the new corporate legend.

The instability created by transitions produces an environment ripe for change - it's a rich time to identify sacred cows; explore interpersonal and group dynamics within and among board and staff; and examine roles, mission, and operations organization-wide. Consultants and/or professional interim executives can support these efforts by:

  • Providing feedback on your observations. Sometimes it is useful to simply provide data and let them draw their own conclusions. While other situations may require direct feedback to get them "unstuck."
  • Being honest about what you experience and see. Describe your observations about what's happening in the organization without being dogmatic or entrenched into what you, the consultant, believe is true. After all, "truth" is subjective and in the eye of the beholder.
  • Trying to get fired. As consultants, we need paying clients, yet political correctness and risk avoidance can harm your client. If you aren't concerned about being fired, ask yourself, "Am I doing the best job I can for this client?"
  • Supporting the organization positively. First, consultants can't be good at everything - do those things at which you excel, refer the others, and save your reputation. Getting help when you need it is a great opportunity to model positive behaviors to your clients. Second, consultants are brought into organizations for many reasons. One aspect that gets lost is our duty to inject positive energy into the client system. Our clients are tired, overworked, over-committed, and there's no end in sight.

Through empathy and even some old fashioned cheerleading, our clients are given a brief respite from their daily grind resulting in a greater ability to sustain themselves during the transition. Staying positive is crucial to everyone!

  • Recognizing client dependency. Under-skilled, over committed, or lazy boards and staff can easily become dependent on both executives and consultants. These dependencies can create disastrous organizational dynamics. It is incumbent on consultants to find a positive, healthy way to talk about what is happening with their client in the moment.
  • Leveraging areas where the greatest change can occur. While the adage "in order to create change, you must light many fires" seems true, it's imperative to select areas where there is the greatest likelihood of the fire catching hold. Organizations become change weary from tackling too many things at once, particularly during a transition. Be strategic about striking that match.
  • Modeling good behaviors. Tell your own stories of fear, anxiety, anger, disappointment, and ego as a way to model vulnerability and provide a space for your clients to talk about what is going on for them. Managing emotions in a healthy way can effect positive change or at least serve as a release valve for volatile emotions that may be lying just beneath the surface.

Boards must understand that during executive transitions, they are the lynchpins to the organization's success. Our job as consultants is to get boards, staff, and stakeholders to better understand the underlying dynamics of change and transitions and support them in turning the crisis of an executive's departure into a process of positive change, learning, and growth.