Executive Transitions: Getting the First 90 Days Right

Executive transitions are difficult, no matter how you slice it. It takes a great deal of emotional and mental energy and time from the staff and board -- and money from the budget -- to get through a transition, whether you do it well or poorly and whether you do it all in-house or hire a recruiting firm.

So, doing it well is critical for protecting that massive investment of energy, time, and cash.

Yet, so many organizations get it wrong.

The first 6 months of 2022 saw a 39% jump in nonprofit CEO exits over the year before, and nonprofit CEO resignations accounted for 22% of all CEO departures. The voluntary resignation rate in the nonprofit sector in general is at around 19%, higher than the 12% estimate for the overall labor market.

The average tenure of a nonprofit CEO is about 6 years. It is a lonely and draining job, the reasons for which are a good subject for a later article. So we'll call 6 years a win (at least within the current structure of the nonprofit sector) -- yet, so often, we hear of nonprofit executives leaving within 2 years or fewer.

What are these nonprofits getting wrong? Often, it's blamed on a "failed search," so they seek out a different search firm, hoping for better luck next time. In reality, the most common missteps have nothing to do with the search firm or the quality of candidates interviewed.

The most common missteps:

1. The board doesn't do its due diligence ahead of even advertising the position. They fail to take full and honest stock of what the organization needs in its new leader, from a strategic and staff-cohesion perspective. They therefore end up creating a job announcement that describes a unicorn, fictional "nonprofit CEO" or just copy-paste the old announcement. So the recruiting (whether outsourced or no) doesn't have enough strategic direction.
2. The board fails to create a realistic, measurable, milestoned, and flexible first 90-day and 1-year plan for the new CEO, either not putting one in writing at all or making it unachievable and rigid.
3. The board fails to set-up the newly-hired CEO for success by: not digging up all of the skeletons out of the closet before they even start (or not being transparent about known skeletons during the interview process), not ascertaining what the CEO needs to succeed in their 90-day and 1-year plans, undermining the CEO's authority with inherited senior staff (unintentionally or no), leaving the relationship-building with donors and external partners entirely to cold calls from the CEO (instead of making the introduction themselves), failing to set-up regular 1:1s between the chair and CEO, not heeding the CEO's calls for help, and/or expecting that a rock star CEO can and should just "handle it" on their own.
4. The board assumes that a seasoned leader doesn't need an external executive coach/adviser during the transition process.

Some CEOs, whether this is their fifth CEO position or their first, find a way to muscle past the first couple years despite those obstacles, but their success is gravely hindered; and their burnout rate, negative feelings toward the organization, and distrust of the board are high. Almost always, they end up leaving, either not on their terms or not on the board's.

Almost always, when the CEO appears to surprisingly fail to reach their expected potential, the narrative the organization tells itself is that it was just a "bad fit" or they outlived their usefulness. Rarely does any introspection occur. And the same failed process starts over again, run the same way (but maybe with a different search firm).

This vicious cycle can be interrupted if the organization is willing to do the work, and the board is willing to be honest with itself.

Ideally, when possible, it's best to bring in an external executive transition consultant to guide the organization and the new CEO through the process -- in addition to the search firm. An external consultant can see the forest for the trees, see past bad habits and processes, and address the skeletons in the closet in a way only a third party can.

To sum up a complicated, multi-step process briefly, organizations can best set up their new CEO (and, hence, the organization itself) for success by following these main steps.

Step 1: The board needs to do its homework ahead of time.

• Do your research on your own organization. Make sure you know the full status of the finances, who the major donors and partners are, where the main challenges lie, what the staff are hoping for from the new CEO, what internal processes, habits, and policies need fixing, etc. Expose the elephants in the room, dig out the skeletons. And then be fully transparent with the search firm, the transition consultant, (and, eventually, with the final interview candidates).
• Do the DEIA work ahead of time. Do not attempt to recruit a new CEO who identifies as BIPOC, LGBTQIA-2, or any other underrepresented identity without having done serious, thorough work on the organization, led by external experts.
• Put strategic thought into the position description. Use what you learned in your research to write a position description that aligns with what the organization needs in this moment and for the next five years. Be open to outside-the-lines experience and backgrounds. Don't write it so vaguely that it's not clear who you need, nor so narrow that you weed out outside-the-box candidates, nor so lofty that no one can actually meet the criteria. Every organization needs a different leader with a different skillset and background at different times in its lifecycle. Remember, there is no one, perfect CEO who could be plunked down into any organization and knock it out of the park.
• Create a realistic 90-day and 1-year plan for the CEO. Make it very clear what the CEO is expected to accomplish in those timeframes. Specifically lay-out what the board, board chair, and committees will do to support the CEO's success (this is a team effort). Include milestones and measurable outcomes. Include what time and money investments the board will make to support the CEO beyond their salary and benefits -- what resources will they need that they may not have now?
• Provide the new CEO, no matter how experienced they are, with a professional development budget and an executive transition coach/adviser -- a neutral third party who can help them strategize their way through the first 90 days to meet their goals and set them up with the plan for reaching their 1-year goals. This adviser can also join some of the 1:1s between the chair and new CEO for further support to both during the transition. If you hire this coach/adviser ahead of time, they can help you with the above steps through guided discussions and surveys with the staff and board and directly draft position descriptions and 90-day plans, collaborate with the recruiter to maximize success, and have a working relationship with the board so that they are best set-up to then directly help the CEO. They can even moderate and facilitate the whole transition process.

Step 2: The board needs to support the new CEO's success

• Don't curb your enthusiasm. Make a big fanfare to donors, supporters, partners, and the public about the new CEO. Introduce them to all stakeholders, network for them, be a connector and cheerleader at relevant conferences and tradeshows.
• Set-up bi-weekly 1:1s between the board chair and new CEO for at least the first year so that challenges are addressed quickly. Respond to any calls for help and support from the CEO, not just with platitudes, but with practical, helpful, timely action. Provide feedback constructively -- don't be so conflict-averse that the CEO is blindsided down the road instead of supported all along. Directly check-in on the 90-day plan bi-weekly and on the 1-year plan bi-monthly -- adjust it if it needs adjusting -- remove obstacles to success -- take an active interest in the board's role in this team effort -- this isn't just a CEO test.
• Don't undermine the new CEO's authority. Resist the urge to continue a direct connection to the Acting/Interim CEO or senior staff. The new CEO is now your only direct employee -- support them, address issues directly with them. Save your discussions about them with the staff for anonymous 360 reviews at the end of the first year (unless a staff member brings you an official grievance according to Handbook policy).

There is no failsafe way to hire, at any level. But there are ways to better protect your time, energy, and financial investment in the laborious CEO hiring process. Set the board-CEO relationship off well from the start, building mutual trust and respect. Make it a team effort -- don't leave them to sink or swim on their own, no matter how experienced they are.

If your organization needs help working through an executive transition, I can help. My services include everything outlined in this article, except the direct DEIA work (I can connect you to other consultants for that work). Feel free to send an inquiry to [email protected] and check-out more information here.