“Here’s the keys, there’s the restrooms, and here is your office – good luck!” is a terrible orientation for any staff member, but this is the orientation that many nonprofit executive directors receive. It’s ironic because boards have taken great care in selecting the new chief executive, paid them the highest salary in the organization, and then don’t position them for success.
In this episode, we talk about six ways your board can prepare the organization for a successful new chief executive.
Listen to the Episode Here!
* Please note that the John Fulwider book is an Amazon affiliate link and, at no additional cost to you, I will earn a commission. Know that I only recommend I’ve personally read
and genuinely believe are worth your time, not because of the small commissions I make if you decide to purchase them.
Welcome to the Successful Nonprofits Podcast, I’m your host Dolph Goldenburg. And today will be one of our solo podcasts, and I’ll be sharing with you what I’ve learned about setting your new chief executive up for success. You see, through my interim executive engagements and my executive coaching clients, I’ve been involved in a lot of executive director transitions. I’ve seen the successful tactics boards have used, as well as the counterproductive actions that have set up a new CEO to fail.
According to the Harvard Business Review’s article titled After the Handshake, one-third to one-half of all new CEOs fail within the first 18 months. And the wash-out rate for first-time executive directors is even higher.
For many, serving as a chief executive is the hardest, highest pressure job they have ever had. In addition to the normal stress and distractions of starting a new job, there’s so much more that turns this into a pressure cooker. They may have been a manager before this point in their career, but now everyone looks at and listens to what they do. Now they report to a board of 10 or 12 people instead of just one boss. Every problem in the organization is their problem, and there are a crushing number of demands on their time and attention. And let’s not mention that payroll is a metaphorical gun to their head every two weeks.
Obviously, recruiting a great candidate to be your chief executive is the first step in ensuring their success, and this episode will assume that you’ve already selected a high-quality candidate who is generally a good fit for your organization.
In this episode, I’m going to talk about the six things you can do to help your nonprofit’s new executive director succeed and, as a bonus, I’m also going to summarize three Harvard Business Review articles on this subject.
Make hard and unpopular decisions long before the new chief executive starts
Since the search for your next permanent chief executive will likely take 6 to 12 months, this is the perfect opportunity to make hard or unpopular decisions. If you’re thinking about eliminating a program, closing a facility or cleaning house in your senior leadership team, it’s best to do that months before the next chief executive starts.
Far too often, I’ve seen organizations postpone decisions so that “the next executive director can make this important decision.” Consequently, the new chief executive may be faced with organizationally momentous decisions without having the necessary organizational experience or knowledge. In these situations, the new executive director is bombarded by input from formal and informal leaders in the organization. In the worst scenarios, these are highly politicized stakeholders who may be pushing for a decision that is in their own interest.
Here’s an example from my own life. Almost a dozen years ago, I accepted the permanent executive director position at a multi-million dollar organization.
- Two weeks before my first day, the organization voted to eliminate a program
- Even though I was essentially informed of the decision after the fact, the staff saw me as the grim reaper – – – as the person who killed off a program and laid off a third of the staff.
Unnecessarily putting difficult decisions on your new chief executive’s shoulders in their first few months typically shortens the honeymoon period and forces the executive director to deplete their social capital quickly.
Provide the New Executive Director with Playbook
Now let’s assumed that you’ve used the interim period to make and implement those difficult decisions, we can focus on creating an onboarding plan to help your new chief executive succeed, and this onboarding plan starts before their first day as CEO.
Let’s continue this conversation by talking about the new executive director playbook. When I’m the interim executive director, I always draft a playbook that outlines everything I think the new executive will need to know during their first year. The playbook is typically a 45 – 65 page document that includes both tactical notes and strategic notes. This includes information on
- the annual budget process;
- a review of the annual cash flow cycle and fundraising strategies;
- human resource notes (including a frank assessment of senior leadership team members);
- facility issues;
- outstanding legal and PR Issues
- contact information for key vendors and partners;
- notes on key partners, funders and individual donors;
- a calendar with all board meetings, standing meetings, upcoming special events and appointments that I scheduled during their first 90-days.
I also, by the way, control the chief executive’s schedule until they start. (Within reason, of course. I ask them if they prefer morning, afternoon or evening meetings; and I also ask if there are any family or medical commitments I should schedule around). This allows me to reach out and schedule an introductory meeting between the new chief executive and all key funders, individual donors, partners, staff and board members. To help the chief executive have some sanity in their schedules, I typically only book one or two meetings each day.
This helps a new chief executive in many ways. First, it ensures that they meet with the most important constituents first, as opposed to meeting with the most aggressive or loudest stakeholders. But it also enables the chief executive to start meeting with the right people right away, instead of sitting in their office the first two weeks while trying to figure out who they should meet with.
I’ve actually had chief executives tell me that the playbook was their bible throughout their first year. They knew that the playbook could answer almost any question they might have – – – or at the very least tell them where to find the answer.
Role for the outgoing chief executive
While working on your new executive director’s playbook, it’s also a good time to outline the role for your outgoing executive director. And this is especially important if your former chief executive was a founder director, exceedingly popular or very successful.
In my own life as a former chief executive, I always felt that my role was to be a resource to the incoming chief executive and a cheerleader. But I also needed to be silent about anything I might not agree with, and would never allow staff members to come to me and complain about my successor.
It’s almost always a mistake to invite outgoing chief executives to serve on the board because they can’t disagree with the new chief executive without undermining them. It’s also a mistake to retain the former chief executive as a contractor or an employee. In these situations, I will usually see staff and sometimes even board members using the former director as a “sounding board” for dissatisfaction with the new director.
Establish first year goals
Another way to control dissatisfaction is to establish first-year goals for the nonprofit’s new executive director. The board chair and new chief executive should work on four to five big goals for their first year. These goals will be the primary criteria for evaluating the chief executive at the one-year mark. When considering goals, I’m hoping that you think of them as high-level and not tactical. Let me give you some examples of possible goals:
- Design and implement an employee engagement plan
- Strengthen internal controls so there will be no material weaknesses or significant deficiencies in your first annual audit
- Recruit and onboard a new development director
- Build strong relationships with board members and the board as a whole
As I’ve already mentioned, many people will be clamoring for the new chief executive’s attention. Each person will undoubtedly be asking the chief executive to take action, start a new initiative or support their efforts in some new way. And these broad goals will help your new chief executive manage their energy and their attention. They can focus on those things that will move your organization forward, instead of helping the person who screams the loudest or most consistently.
I also encourage you to negotiate a work-life-balance goal with the new chief executive. It has to be a goal that is meaningful to them, but I often suggest that the new director schedule a two-week vacation in their 8th or 9th month. Whenever I suggest this to a coaching client, they almost always balk. They’ll explain that they have never taken or felt that the needed a two week vacation. It feels completely unnecessary during those first few months when everything is new and their energy is high. But, at the end of the year-long coaching engagement, many clients have told me that the two week vacation was critically important for their well-being, and they will continue taking one in future years. Whenever I hear this I think, “Yes! Another chief executive soul has been saved.”
Establish strong relationships
The onboarding plan has to help the new chief executive build strong relationships with board members and staff management team members. The ultimate goal is that there is no daylight between the chief executive and the board, and also no daylight between the chief executive and the management team.
The board chair and chief executive should meet weekly for the first year – – – and likely no less frequently than every other week after that. If you expect that a new chair will be appointed in the next 12 months, it’s a good idea to have the chair elect join into this meeting. Assuming that the meeting is 60-minutes, I would suggest allocating roughly equal time to discuss the fire-of-the-week (which is the tactical stuff every chief executive deals with); board development; and a relationship building question.
These relationship building questions help the new chief executive and board chair better understand each other and create ground rules for their relationship. If you’re looking for appropriate relationship building questions, I can highly recommend John Fulwider’s book Better Together. John was on the podcast – back on episode 23 – and we’ll link to his episode in the show notes (https://successfulnonprofits.com/portfolio/john-fulwider/). Full disclosure, we’re about to remove the first 55 episodes of the podcast due to audio quality, so John’s episode will only be available for a limited time.
The chief executive will also want to build relationships with individual management team members, and a weekly meeting can be good for that as well. You can ask each management team member to create their own agenda for your meeting, but definitely include a meaningful relationship building question in every agenda.
Finally, the board chair plays an important role in managing staff expectations about being able to lodge complaints about the new chief executive starts. The vast majority of chief executives face some type of backlash during their first 18 months, typically from staff or other constituents who had grown accustomed to the prior chief executive. No matter how hard the new executive director tries to be like their predecessor, they will never be a twin. And those complaints are almost inevitable.
For this reason, it’s entirely appropriate for the board chair to meet with staff before a new chief executive starts. The chair should explain that the board selected the new chief executive director because they believe this person is the best person to lead the organization into the future. The board fully anticipates that the new chief executive will be very different from the last one, and the new person has the full support of the board. The Chair should also explain that the board will only consider complaints or grievances against the executive director if they are legal or ethical in nature. Otherwise, the board will uphold the chief executive’s authority to manage the organization.
Believe it or not, that presentation to staff is the easy part. The difficult part will come 10 to 15 months later when a long-tenured staff member complains to a board member. Boards want to be compassionate and help make things better for that staff member, but it’s in the best interest of the organization to politely decline to hear complaints that are not legal or ethical in nature.
Finally, get an executive coach for your new executive director. I started this episode by explaining that the role of a nonprofit executive director is a lonely and difficult job. At all levels of the organization, everyone’s eyes and ears are on you. Your words and your actions get magnified in ways you never thought possible or probably even thought healthy.
A coach can play so many roles for you:
- A safe sounding board
- A guide who has been there before and gotten others through it successfully
- A teacher and trainer
- An accountability partner
Getting a coach is a sign of strength, not a sign of weakness. World class athletes have coaches – and do you know what – so do athletes who are weekend warriors. If as an adult you’ve ever had a trainer at the gym, a yoga instructor or a music teacher – then you’ve had a coach.
If your board is truly committed to a new executive director’s success, coaching is a modest investment to help navigate this onboarding period.
I also promised to tell you about some great resources, and I’m going to suggest three Harvard Business Review articles and two books. While Harvard Business Review has a pay wall, you can read a certain number of articles for free each month. In addition to my own lived experience, these articles and books have shaped my own consulting practice and certainly shaped this podcast. So these are great resources if you want to know more:
After the Handshake. Here’s the gist of that article:
Why do a third to half of all CEOs fail?
- Newcomers misread the political situation and overestimate the organization’s willingness to change
- Board members and staff management team members fail to recognize the complexity of a CEO transitions (and therefore don’t plan accordingly)
- The new executive director only has operational goals (leaving out equally important cultural, personal, and political ones).
How do we address these issues?
- Develop a thorough onboarding process.
- The outgoing CEO and board members should all have a role in helping the newcomer navigate organizational culture and politics.
5 myths of a CEO’s first 100 days
Myth #1: New CEO’s should make changes quickly
Fact #1: new CEO’s benefit from inspection AND introspection
Myth #2: New CEO’s should make an impact ASAP
Fact #2: New CEO’s should learn how the organization ticks and work with it to achieve goals
Myth #3: New CEO’s should create their leadership team by finding the best talent
Fact #3: “Teamability” may be more important than individual ability.
Myth #4: New CEO’s quickly define and communicate performance expectations
Fact #4: New CEO’s should first establish and communicate expectations for themselves
Myth #5: New CEO’s must strive to be the smartest person in the room.
Fact #5: No one knows everything. Smart people surround themselves with team members who know things they don’t.
Three Challenges Every New CEO Faces
Challenge #1: Managing Energy
- Maintaining energy is crucial.
- Knowing what issues are a waste of time/energy.
- Establishing a strong senior team that doesn’t refer trivial decisions upward.
Challenge #2: Managing Relationships “Up and Out”
- CEO’s reported that they spend 50% of their time managing “up and out”
- UP: the most successful CEO’s dedicated significant time developing relationships with board members and individual directors.
- OUT: CEO’s noted that though developing relationships with external stakeholders is more difficult and time consuming, it greatly paid off in the long term.
Challenge #3: Managing Information Flow
- New CEO’s struggle with managing “informational asymmetries” because their new positions contain less day to day managing.
- To be informed without micromanaging, new CEO’s should create a culture in which the right information flows up and out,
- Translate intuitive decisions in logical frameworks (for the sake of external stakeholders)
John Fulwider: Better Together
I’ve recommended this book and bought it for many professionals, too. If you’re looking for a resources to help guide and build the relationship between the chief executive and the board chair – then this book is for you.