Transition Management Consulting, Inc.

Steps to a Successful CEO Search and Succession

by Jackie Eder-Van Hook and Bob Corlett | May 11, 2017

Associations that plan for executive succession can identify roles and responsibilities needed to ensure a smooth transition. The planning process should include your outgoing CEO, who can be an essential partner in the search for a successor.

After working hard for many years, CEOs certainly don't want to leave their legacy up to chance. With some advance planning, associations can avoid common pitfalls in the CEO selection process, significantly improve the search committee's understanding of what factors to consider, and dramatically reduce their risk of making a hiring mistake.

Every organization will experience an executive departure at some point. A leadership change always poses challenges, but how much disruption it causes depends largely on how well the transition period is anticipated and managed. The process will proceed much more smoothly if the association—in particular, the board of directors—has developed a strategy for executive change to help mitigate the downside risk of being caught unprepared.

Often, executive vacancies are planned, as when a CEO takes a new job, goes on sabbatical, or retires. In these instances, an executive typically will remain in the position for a time to help the board of directors navigate the transition process. When executive vacancies are unplanned, such as terminations or death, the board of directors is left to figure it out on their own.

"A succession plan is an integral part of organizational strategy, and many of the same best practices for strategic planning should be applied when developing a succession plan."

Planning for succession helps key stakeholders, including the board, search committee, and association staff, to understand roles and responsibilities in the transition. Here are a few tips for navigating an executive succession and preparing for the executive selection process.

Start with a Plan

Wise associations prepare for an unplanned or planned departure with succession policies [PDF]. No single succession policy can completely predict what an organization might face at the time of an executive vacancy, but a well-crafted plan can anticipate some of the obvious issues and consider possible variables, such as the type of vacancy and estimated duration. For example, the organizational dynamics and needs during a vacancy of 30 to 60 days will be quite different from those that arise during a longer vacancy or when the association is dealing with a traumatic and unplanned event, like an executive's death or termination.

Make sure your succession plan addresses critical management and legal questions, including:

  • When it is acceptable or unacceptable for staff or a board member to serve as acting executive?
  • When is it better to engage a professional interim executive from outside?
  • What is the bonus or compensation policy for the external interim or acting executive?
  • What is the executive role, title, tasks to be performed, and with what authority and accountability?
  • What is the exit strategy, if an interim doesn't perform well?
  • What happens to staff serving as acting executive after the transition period ends?
  • If a board member is appointed, must he or she resign from the board and for how long?
  • Can the internal acting or external interim be a candidate for the long-term position?

At a minimum, the succession plan should include key information, including a glossary of terms, position description, organizational charts and rosters, professional advisor list, key documents list, board resolution to change authorized signatories, executive search services RFP and evaluation tools, and search committee charter.

A succession plan is an integral part of organizational strategy, and many of the same best practices for strategic planning should be applied when developing a succession plan:

  • The governing board needs to own the plan because it is part of their organizational risk management responsibilities.
  • It is often helpful to have an independent party facilitate the succession planning process.
  • The plan should be reviewed and updated regularly to ensure accuracy and relevance in the current environment.

Partner with the Outgoing CEO

Once the board establishes a succession plan, the search committee will be called upon to use it. But most search committees are unfamiliar with the true nature of the association CEO's job. Consequently, when an outside executive search firm surveys the search committee and association staff about what they are looking for in a future leader, their answers are often general or vague.

The outgoing CEO can help bring more rigor to the selection process by partnering with the search committee in the following ways:

  • Review the strategic plan with the search committee and rank the most difficult and strategically important items that the incoming leader must be ready to address.
  • Be sure the search committee includes people who represent the future of the organization's membership, whether they are board members or not.
  • List business scenarios that keep the outgoing CEO awake at night. Rank them according to the amount of risk they pose to the association and discuss what kind of career experiences might prepare someone to understand and address them.
  • Review the skills gap between the current team's capabilities and the competencies that will be needed to address the strategic plan and nightmare scenarios.
  • Encourage the committee to apply rigor to the job description and position announcement, ideally by comparing it with other CEO position announcements. After reading a few announcements, the committee will be able to avoid using the vague boilerplate language found in most announcements, replacing it with more tangible and concrete language specific to the situation.

Later in the search process, the committee will find it far more productive to evaluate a candidate's ability to handle the specific situations and fill critical skill gaps, rather than pondering whether a candidate possesses attributes like strategic vision or global perspective without this context.

Planning for the inevitable succession—regardless of whether the departure is planned or unplanned—is a fundamental responsibility of the board. Not only can thinking through possible departure scenarios and creating an action plan significantly reduce the anxiety caused by a leadership succession, it also causes the volunteer leaders to consider how it can strategically fill this leadership void.

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