Boards

Beyond the Heir Apparent: Navigating Internal and External Nonprofit Leadership Searches 

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The question of who will lead an organization into the future is a pivotal one. Should you hire a known quantity from within, or conduct an external search? If you have a potential internal successor, navigating the process requires careful consideration of several key factors. In my experience with ED searches, I have seen that regardless of which path you follow, step one is vital.



Step 1:  Assess Your Organization’s Future Needs

  • Identify the leadership qualities required for the organization’s future over the next 3 to 5 years. Your organization doesn’t need to clone your current leader or choose their opposite. Instead, consider what the agency needs to thrive in the future.
  • What is essential in this phase of the organization’s journey? Is it stability, a fresh perspective, growth, or transformation? Do you need an externally focused leader? Someone who can revamp operations? 
  • Be sure to gather input from the entire board, staff, community partners, and funders for a well-rounded perspective. 

Once you have this broad overview, schedule time to thoroughly consider its implications. This means the board’s decision will be based on what is needed for the long-term sustainability of the organization.

 

Step 2: Vet the Internal Candidate

Once you know what you need, vet the internal candidate. Do they have the skill sets identified in step 1? Do they have the soft skills needed to be a successful leader? There needs to be a strong consensus among the board that the internal candidate meets most of what the organization needs. (This article suggests around 70% agreement as a benchmark.) The vetting process could include inviting the candidate to a board meeting to meet the whole board, a formal interview, and checking references outside the organization. Be upfront with the candidate that this is a process and not a foregone conclusion.

Often the internal candidate has been put forward by the outgoing leader as an heir apparent. This vote of confidence should certainly be weighed, but don’t let the ED’s perspective unduly influence the outcome. Encourage them to share their concerns about the candidate as well as their strong points. Sometimes an ED puts forward an internal candidate out of fear of who the board might select. It is important to remember that this is the board’s decision, not that of the outgoing ED. The board should also be careful not to assume that an outsider is the better choice, either. The internal candidate may be ready to lead. (More thoughts on vetting an internal candidate.)

In addition, hiring the internal candidate maintains organizational knowledge and encourages staff to grow their skills and stay with the organization. There is real value in promoting from within for building morale across the board. (Learn more in my article about creating a solid plan to develop staff skills.)



Step 3: Reach Consensus on a Decision

After this process, the board needs to come to consensus through an open, participatory process. If the internal candidate is clearly a good match for the position, they should move forward with the hiring.

If the board isn’t sure, give the internal candidate feedback and encourage them to apply for the position. This is a delicate process and an area where an external search consultant can benefit the relationship between the board and the internal candidate. While an external search will take longer, the costs in time and money are worth it for accessing a diverse talent pool with fresh perspectives and ultimately making the best decision possible.



Step 4: The Importance of Managing Transitions and Relationships Well

No matter who is hired, there must be a strong transition and onboarding process. This article has good pointers on why that matters.

If you do go forward with an external search and have an internal candidate apply, make sure to:

  • Ask the internal candidate to keep their candidacy a secret (at least until the finalist stage) – it will save everyone headaches later on.
  • Be sure all candidates have the same information at the finalist stage (or earlier if appropriate). External candidates should know about the challenges facing the organization. 
  • Have a one-on-one conversation with the unsuccessful internal candidate to tell them why and what skills they should work on developing. This will go a long way toward retaining them. I encourage the unsuccessful internal candidate to let the person hired know about their candidacy. This lets the new leader work on building a relationship with that person, which will also help them stay.
  • Some additional pointers on including an internal candidate.



Conclusion

Deciding to hire an internal candidate is an important decision. As a search consultant, I can help you throughout this process, even if you decide not to conduct an external search. Contact me for a free, no-obligation discussion.

In one search I conducted, the board had a strong internal candidate, but they weren’t fully convinced she was the right hire. After an external search with three fantastic finalists, the board realized that their internal candidate was best-suited for the position and chose her. I’ve also conducted searches where the external candidate was chosen over a strong internal finalist after careful consideration. When boards take the time to seriously consider their options, they can make an informed decision.



Navigating Change and Growth: My Journey at Lincoln Bike Kitchen

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Lincoln Bike Kitchen (LBK) was an organization in need of a major transition. With no staff members previously, the functioning of the nonprofit relied heavily on the dedication of its board members for all administrative and operational tasks. The Lincoln Bike Kitchen’s mission to repair donated bicycles and provide them to the community was supported by a strong volunteer base that preferred to wrench on bikes rather than manage spreadsheets. Recognizing the limitations this model presented, the board concluded that hiring staff was the essential next step towards organizational growth. At the same time, they were embarking on a capital campaign as part of an upcoming move to a larger location and needed staff support to manage the campaign details. LBK hired me as their interim executive director to help them reach their goals.

Upon joining, I met with board members to assess the needs at LBK. My agenda prioritized not only tangible improvements such as software implementation but also a cultural shift within the board to adapt to a staff-led management approach.

I set up the Bike Kitchen’s first donor database and populated it with donor information from the previous three years, after extensively cleaning the data. This enabled the Capital Campaign Committee to identify and communicate with their top donors. I also developed procedures to track and recognize donations throughout the campaign.

Another important change was switching to using QuickBooks from spreadsheets for financial management. With construction and adding staff, a spreadsheet was no longer sufficient to track all transactions and they were ready to make the change. Together with a volunteer, we set up a chart of accounts appropriate for a small organization and began tracking all income and expenses.

These were two of the concrete steps I took to prepare the organization to grow. In addition, I focused my work on helping the board transition its role from directly managing all aspects of the nonprofit to a governance-based model overseeing an executive director who would be in charge. I also implemented various changes to smooth the way for the new executive director as I anticipated that this person wouldn’t have prior ED experience. 

Some of the steps I took included:

  • Establishing regular board meetings, board packets, and board agendas
  • Updating bylaws and ensuring compliance with existing term limits
  • Trainings at board meetings about the upcoming changes with a permanent ED and how the board and an ED could work together successfully
  • Drafting fiscal policies and personnel policies

After I led the board through the hiring process, I encouraged the board and ED to work together on setting mutual goals and an evaluation process for the new ED.

Along the way, I was reminded of many lessons I’ve learned. As always, it takes longer than you think. I was in the position for about seven months. I made great progress on many fronts and helped the Bike Kitchen complete its capital campaign but wished I had more time to help build consensus about what the new ED’s role would be. Toward the end of my time, we were focused on wrapping up the capital campaign, planning for the move and selecting the new ED, and there was little time for anything else. 

I had hoped to help LBK implement improved bike tracking and communication systems but that proved to be a bigger task than we anticipated. There weren’t solutions in place that we could implement right away. 

Nevertheless, my contributions, particularly in financial acumen, non-profit governance expertise, and administrative management, were well-received by the board members. While my tenure may have been brief, the groundwork laid has paved the way for the Lincoln Bike Kitchen’s continued growth.

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Are you looking to transition your organization to having its first staff member? Or do you need to focus on a different kind of transition? Contact me to discuss ideas.



Sometimes It’s Cheaper to Hire a Search Consultant

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Engaging a professional executive search consultant can offer substantial cost benefits. This was borne out in a recent collaboration with a nonprofit board that had initially attempted to find a new executive director on their own. After months of stress, no candidates were found who were right for the position, prompting the board to enlist my expertise. I helped them find multiple highly-qualified candidates and they hired their top choice.

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Case Study: Effective Communication in a Crisis

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I was recently involved in a situation where a nonprofit had to deal with a quickly escalating negative PR issue. I learned a lot about how to manage the issue quickly and effectively.

The situation: a video was posted online that showed a board member conducting herself in a manner both contrary to organization policy and generally accepted behavior. The board member continued to add fuel to the fire in the video’s comments in an attempt to defend herself, and also publicly identified herself as a board member of the organization. The video rapidly went viral with people sharing and commenting on it from around the world. The organization’s leaders were receiving many messages demanding they do something about this board member.

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An Executive Director Search on a Budget

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Many small nonprofits aren’t ready to hire a search firm to find their next executive director. Organizations can do the search themselves but should involve people in the process who have experience in searches and follow best practices. Below is an overview of the process that will result in the best possible hire on a budget. Keep in mind that this method will take a significant amount of the board’s time to carry out.

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The Little Book of Boards – Review

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The Little Book of Boards: A Board Member’s Handbook for Small (and Very Small) Nonprofits

By Erik Haneberg

A client recently introduced me to this wonderful book on board work for small organizations, which describes most of the organizations I work with. It’s a well-written overview of how boards can work best and how to avoid the pitfalls that many of us fall into. There aren’t a lot of good resources for small organizations out there and this book really fills the gap. It’s also easy to read.

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Succeeding as an Acting Executive Director

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Being promoted to acting executive director can be an honor but comes with its fair share of stress. You are suddenly taking on a new set of high-level responsibilities while still trying to maintain your existing work. There’s a huge advantage to the organization to temporarily fill a position internally. It is a fairly fast and simple process, but there are significant challenges to overcome.

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Getting Meetings Started Off Right

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Lack of board engagement is a frequent complaint I hear from executive directors. They feel like they never hear from their boards and when they do, it is negative. There are lots of reasons for this. Sometimes the board isn’t asked to do anything interesting or thought-provoking so they lose interest in the work. Other times they aren’t sure what their role as a board is, or what their role as an individual board member is. To help have better board meetings, I’ve suggested two books: Boards on Fire and The Art of Gathering.

In this article, I want to specifically address how to start a meeting so that everyone will stay engaged. A great beginning will make for a great meeting. I highly recommend taking the extra time to engage your board members at the start with one of these questions.

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Conducting a Great ED Interview

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Interviewing someone for an executive director position is not as easy as hiring for any other position in a nonprofit (or business for that matter). Making a good hire is critically important to the organization. It’s frustrating when I see board members rush through the process or assume it is easy to do.

I’ve shared a number of resources previously including How to Make a Good Hire, the Advantages of Using an Executive Search Firm, and the Value of Using an Interim Executive Director.

Here I provide some sample questions you can use in initial screening interviews and second-round interviews.

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