Transition Management Consulting, Inc.

Why Association Executives Ignore Risks and Don't Plan for Succession

by Robert T. Van Hook, FASAE, CAE | Feb 08, 2011
At lunch recently, I asked a CEO if he had a succession plan. "No," he said. "I have three senior people that could likely step in and take over if I left."

"Oh yeah?" I asked. "Which one? Would he or she lead by committee? How would the board make the decision? If you were gone, would your board and staff be in a mental condition to make good decisions?"

The CEO looked puzzled, and he jotted himself a note on his BlackBerry.

In the world of executive leadership, we act as if we'll be in our jobs forever. Yet every executive leaves sometime. In a survey of association executives that we at Transition Management Consulting conducted last year, only 23 percent of respondents had a succession plan. So, why not? What are the barriers? We asked the CEOs why they had not done succession planning, and here are some of their answers.

I'm not ready to retire. Retirement is just one way executives leave. The majority of CEOs leave by voluntary or involuntary termination, well before retirement age. We often equate succession planning with grooming internal candidates for the CEO position, but most associations are unlikely to have the necessary "bench strength" or the money to develop it.

Denial. Thinking about departure is a little like thinking about death; we just don't like to do it. But executives don't like to talk about departure with their boards, either. The fear seems to be that if you talk about succession with board members, they'll think you're preparing to leave. Or they'll get the idea that maybe you should leave. Or perhaps it would make it easier for the board to get rid of you. These are all irrational fears, assuming you're doing your job well (and if you're not, then you have other problems to solve).

We'll figure it out. Some executive departures are abrupt and don't leave enough time for a thoughtful search for a replacement. Executive searches take from five to nine months, from the time a search committee is formed until the new executive walks in the door. When a CEO departs or is terminated, board, staff, and possibly members feel loss and fear about an unknown future. It is a crisis for the organization, and the worst time to plan anything is in the midst of a crisis.

It's not my job. Many boards and CEOs simply think succession planning is not important. We argue, however, that succession planning is a fundamental part of risk management and a basic responsibility of the board. Succession planning is thinking strategically about a key event in the lifecycle of an organization.

I'll do it myself. Some executives we surveyed had written their own succession plans. While perhaps that's better than no plan, it lacks buy-in and commitment from the board. How many executives unilaterally write strategic plans for their associations? Like strategic planning, succession planning is a way of thinking, not just a document, and it is best done with a subset of the board, such as the executive committee, and then approved and renewed by the board.

I have good people to step in. If an organization has 20 or more employees, there is a fair chance that someone on the senior staff could fill in. But there are a lot of questions: Which senior staff member would best handle the executive job? What would happen to the work that person is doing now? Has this person had training for the executive role? If the executive is not around, how will the board know which person is the right one? Will the interim CEO be a candidate for the regular CEO job? A good succession-planning process addresses all of these questions and leaves behind a record for others to follow.

A CEO departure is a crucial conversation for boards and CEOs to have. For most organizations, the conversation will be about what to do in the case of an unplanned absence or departure rather than a planned retirement with lots of lead time. Don't wait until the crisis hits to do something about it.