Future-Proofing Your Charity: The Art of Succession Planning (Part A)

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A Case Study of Succession Planning

By Dave Prowten, Former President and CEO of the Juvenile Diabetes Research Foundation of Canada

Is it time for me to leave?  Am I being asked to go?”  I thought I was doing a good job. These were some of my first thoughts when my Board Chair spoke with me about my succession plans.  Perhaps I shouldn’t have been surprised since I had been at JDRF for nearly 8 years, but this was the first time I had been asked what my future intentions were.  To be fair, it was presented in a very supportive way:  “Dave if you want to stay until you are 65, that’s great. But if not, can we discuss what your plans might be so the Board can have some visibility?”

Looking back, the question makes 110% sense, and my first thought should have been why we hadn’t had this conversation earlier.  I had been with the organization for many years, we had a strong leadership team in place, and one of the key responsibilities of the Board was to hire and fire the CEO.  

Succession planning was a critical element of risk management for our Board.  Charities like ours are vulnerable when they lose a key leader because this can negatively impact the organization’s momentum.  

Given that there are many reasons why a leader like myself might leave an organization, and even without much notice, it was critical to have a succession plan in place. This involved knowing if there were any internal candidates so the Board could include them in the search and interview process.  

I was fortunate since our Head of HR had done a great job of building an annual process that allowed me to have key information about our internal candidate pool.  This helped the Board as they decided how to proceed with the executive search for my replacement.  This led to some critical decisions. Was there an internal candidate? Would we do an external search if there is an internal candidate? Would we proceed with an internal search first?  Remember, this was a key governance decision for the Board, and having current information set them and the organization up for success. 

I also learned that the CEO succession plan was a dual responsibility – the Chair and Board were responsible for hiring the CEO, but the CEO was responsible for developing their team, and ideally, developing at least one potential candidate for the leadership role.  However, this is never a certainty, because people leave or are on a development path that may not line up with the CEO’s timing.  Having clarity about this is also important.

For me, what ensued were lots of discussions over many months that were always respectful of what I wanted to achieve and allowed the Board to be able to build a plan and implement a strong governance process.  Open and frequent communication was key to achieving a successful outcome.

As leaders, we care deeply about our organizations and ensuring they are strong while we are there, but setting them up to thrive after we leave is equally important.  Just like the adage states, we should always strive to leave the campsite in better shape than when we found it. (End of the Case Study)

A Response to the Case Study

By Jim Foster, COO at Cause Leadership Inc.

Succession planning is a fundamental aspect of organizational management aimed at ensuring smooth transitions in leadership roles and other key roles on the team. Every good executive leader is essentially building succession into the fabric of the organization at all times. The organization is better served when boards and CEOs always take a long-term view of their staff and leadership needs.

What Succession Planning Involves

A successful succession plan involves identifying potential successors and preparing them to assume key positions within the company when current leaders depart. While succession planning is often associated with corporate entities, its importance extends to non-profit organizations (like JDRF in the case study above), where leadership stability is crucial for maintaining momentum and fulfilling its mission.

In the case of JDRF, the Board Chair kicked off the succession planning process by initiating a discussion with Dave, the CEO, about his future plans. This pivotal moment highlighted the importance of proactive discussions about leadership transitions and the need for a structured approach to succession planning. These conversations and planning processes are an important part of board governance.

How to Manage Effective Leadership Transitions 

Dave’s experience at JDRF underscores the critical role of succession planning in ensuring organizational resilience and continuity. The Board’s inquiry into Dave’s future intentions prompted reflections on the organization’s readiness to manage his leadership transition effectively. Recognizing the potential risks associated with the sudden departure of a key leader, the Board took the initiative of putting a succession plan in place to mitigate these risks.

Under the leadership of the Head of HR, JDRF Canada established a robust process for identifying and assessing internal leadership talent, providing the Board with valuable insights into potential successors. This enabled informed decision-making regarding the best approach to succession, whether through internal promotion, external recruitment, or a combination of both.

Moreover, Dave’s experience highlighted the dual responsibility of succession planning: while the Board is responsible for hiring the CEO, the CEO plays a crucial role in developing internal talent and grooming potential successors. Despite the inherent uncertainties and challenges in succession planning, open communication and collaborative decision-making between the CEO and the Board were instrumental in navigating this process successfully.

Organizational Sustainability is a Key Objective

The case of JDRF illustrates the significance of succession planning in ensuring organizational stability and sustainability. By initiating discussions about future leadership transitions and implementing a structured succession planning process, JDRF’s Board demonstrated its commitment to risk management and governance excellence. Moreover, Dave’s proactive engagement in succession planning underscored the importance of leadership foresight and collaboration in preparing their organization for a seamless leadership transition.

As leaders, it is incumbent upon us to prioritize tough conversations with senior leaders about succession planning as part of our stewardship responsibilities. By cultivating a culture of talent development and succession readiness, organizations can turn risks associated with leadership turnover into opportunities to position themselves for long-term success. Just as Dave and his Board Chair recognized the importance of leaving JDRF in a better state than they found it, leaders and board chairpersons across industries must embrace succession planning as a strategic imperative for organizational resilience and growth.

(Part B of this article will be published in July.)

Cause Leadership is available to advise you about your succession plans. Contact us.

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