Executive Director

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.



Start with the Ending

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A Guide for New Executive Directors

As a seasoned executive director, I’ve learned that the most effective leaders are those who not only excel in their current roles but also thoughtfully plan for their departure. While it may seem counterintuitive to think about leaving as you’re just beginning, a strategic approach to succession planning ensures a smooth transition and positions your organization for continued success.

Key steps to take from day one:

  • Develop relationships with all staff, board, and key partners. It’s easy to get caught up in small crises when you start a position but building relationships will allow you to make the changes you need long-term. All of the other steps will result from this initial work.
  • Conduct a comprehensive organizational assessment. This will identify quick fixes to implement right away and longer-term projects to explore.
  • Understand the finances in-depth. I create both short and long-term forecasts to help the board make realistic plans for their new executive director. I need to understand all of the funding sources and their potential for continuation
  • Implement board succession planning – including planning for term limits, filling vacancies, and recruiting officers. I often find that this has been neglected at nonprofits.
  • Explore succession planning with the board and work with them on a succession policy.
  • Create an operations manual. I document my work as I go knowing that I will be handing it off to someone else soon.
  • Start leadership development planning while assessing staff capabilities. I won’t make significant staff changes, but I will take care of any serious issues. I might suggest staff restructuring or a change in responsibilities. Or I recommend staff who are potential future leaders and how to expand their skill sets.
  • Help the board establish initial goals and evaluation processes for the new executive director so everyone is on the same page about priorities from the beginning.

Sometimes I wish I had taken my own advice. For example, it took three months to understand the complex finances at one organization where I was the interim. They had various funding sources and were paid in arrears for most of their work. I wished I had spent more time focused on what was coming in from the beginning. The board and I addressed some deferred building maintenance, but in retrospect, we should have focused more on fundraising before spending funds we didn’t have.

Remember, a well-planned departure is not just about handing over the reins; it’s about setting the stage for future success. Start with the end in mind, no matter how far off it is.

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.



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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Hiring the First Executive Director for Your Organization

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You’ve started your nonprofit organization and it has grown with the help of an amazing team of volunteers. But now it is getting too successful. You and your fellow volunteers have full-time jobs and can’t devote the time to the nonprofit that it needs. What’s the next step? Hiring someone is a big decision and has the possibility of growing the organization significantly. But it also comes with a lot of challenges as the current board and volunteers are used to doing things their way and need to be ready to let someone else take over.

Hiring that first staff person can make a tremendous difference for your organization. It levels up your work in a way that is hard to imagine in advance. Having paid staff means you have someone with the time to devote to the work and to building relationships in the community. It also means someone who has professional experience in nonprofits or who has the time to dedicate to learning about how nonprofits best work. And finally, having paid staff often leads to more stability in your organization as compared to an all-volunteer group. Funders and potential partners will take your organization more seriously if you have paid staff – they know you are going to be around and doing the work long-term.  

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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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Skills of a Successful Executive Director

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Becoming a strong executive director takes a wide range of skills. No one can be strong in every single area, of course, but you do need to have the basics down in each and know where you can improve. The skills listed below are all ones you can learn with practice.

When I first became an ED, I had a variety of skills from my previous nonprofit position, but there was a lot to learn. The biggest areas of growth for me were financial management, fundraising, and HR, as I came from an organization with whole teams for those tasks. Other skills I had already. I was passionate about the cause, and cared about helping others. I had written and managed grants of all kinds. I had managed staff, and programs. Especially in those first few years, I spent my time learning the areas that I wasn’t as strong in.

Below are a few of the broader skills to consider developing if you are interested in an ED role. The good news is that they are applicable across all sectors. All my ED knowledge was quite valuable in my later roles as an interim ED in very different types of nonprofits.

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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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Departure-Defined Succession Planning

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A wide range of terms are used in succession planning and the type of plan you create varies depending on your current stage in the process. I covered the basic types of planning necessary for all organizations in my article on succession planning. In this article, I will provide an overview for those organizations that have a long-time executive director who is planning far in advance for a transition.

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What Interim Executive Directors Do [video]

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What Interim Executive Directors Do – recorded August 12, 2020

Interim executive directors play an important role in a nonprofit leadership transition. But what do they actually do? Why are they valuable? How can you become one?

Watch here.