Managing the Cycle of Leadership
We might have called our book Board Management because much of it focuses on the role that boards play in setting direction, managing CEOs, and holding whole organizations accountable to achieving their objectives. We have focused on a specific period in the life of the board—the transition from one CEO to another—but the job doesn't start and stop there. The best way for boards to minimize unwanted leadership turnover is to manage well throughout what we call the cycle of leadership. Chapter 12 describes this process in full.
Here's what we mean by managing the whole cycle. We have identified a regular sequence of challenges faced by all leaders and board-director partnerships. Each stage in the sequence presents particular challenges. When these challenges are met proactively and rigorously, continuity and quality are sustained.
During the transition period, we highlight four activities:
- Maintain a well-functioning transition team.
- Create job descriptions and strategic plans.
- Sustain honest, positive communication with all stakeholders.
- Conduct a highly competent professional search and selection process.
Following the selection of a new CEO, there are four key challenges:
- Introduce the new leader with expectations in proportion.
- Position the leader with key stakeholders.
- Charge the new person with a clear sense of objectives and strategies—"Manage these well and we will consider you a success."
- Disband the transition team, leaving the CEO fully in charge of the organization's operations.
A period of relative stability should follow assuming the introduction goes well. When leadership is stable and at least relatively effective, boards and CEOs relax; they often don't want to think about the future. But this may be the most important phase of the cycle. Here are the particular management challenges during this phase:
- Assessment—Make sure that the organization is on track: true to its mission and strategies; operationally effective; financially sound; functioning with up-to-date systems, providing adequate support to the CEO; and nurturing the partnership between the board and the CEO. The assessment can be managed internally or with the assistance of a consultant.
- Strategic planning—Every several years, the organizational assessment should be part of a strategic planning process that clarifies the mission, vision, and strategies and realigns the organization in the service of those core values. The plan's implementation also serves as the essential job description for current and future leaders.
- Annual performance review—This is for both the CEO and the board president (and regularly for the full board).
- Succession planning—This is for both emergencies and regular leadership transition.
Because you cannot guarantee stability and success, it helps to plan for times of difficulty. These times will crop up as regularly as others. To prepare, we suggest two steps. First, develop the habit of conversation and problem-solving between the CEO and the board. Second, identify an outsider—a trusted community member or a professional consultant—who is familiar with the organization and ready to help when regular problem-solving approaches fail.
Ultimately there will be another decision by the CEO to depart since every leader reaches an end to her tenure. To anticipate expected and unexpected departures, it helps to prepare a transition plan, identify a potential transition team, and build a communication plan.
The transition of the board president is a similar process. Because board presidents come and go with regularity, it is vital to create a plan for volunteer leadership transitions. The major challenges to address include these:
- Clarifying the mission, objectives, and strategies—In effect, the board president is charged with monitoring the CEO's implementation of strategy, and a new president must be on board with the existing plan.
- Training or orienting the new president—For example, there may be a six-month period of shadowing the current president.
- Clarifying roles and expectations between the CEO and the president—Whether it is the CEO or the president who is new to this partnership, there is a period of coming to agreement on how the work and relationship will proceed.
- Nurturing the president-CEO relationship—The incoming president must be charged with doing this well.
It is our hope that the following chapters will make these difficult but vital tasks more easily accomplished for the good of each organization, the nonprofit sector, and those it serves.