Why Nonprofits experience failed transitions from Founder-CEOs and What Can be done — 2

In the first of this three part article, published about two week ago here: http://bit.ly/1oXI89Y I had argued that many Founder CEOs are in a dilemma over their inability to transit. This also has serious implications for how organizations are able to strengthen their institutional processes and procedures. I posited that many legacy nonprofits litter the civic space in their shadows due to failed or falling transitions to Successor CEOs. The fear of failing or failing transitions has kept a number of Founder CEOs from thinking of commencing a transition process whereas they and their organizations could do with leadership change.

In this part, I will touch on the 6 factors that I pointed out as major reasons for failed or failing leadership transition from Founder CEOs to Successor CEOs in nonprofits. Recall these to include: Preference for Loyalty over Skillsets, going for emotional satisfaction over competence, bequeathing a weak and inefficient Board to the Successor, disengaging when the organization is totally adrift from its vision and mission, leaving without ensuring that institutional structures, processes and procedures are in place and, allowing the shadow of the Founder CEO run the show without the Successor CEO being able to assert self. As pointed out in the article, these can be bunched under three main heads as follows:

Transition Process and Quality of Successor

In most cases, Founder CEOs end the search for Successor CEO before it begins. They ignore the fact that what is needed is someone who has similar fighting spirit as they had when they started the organization. Even more, someone who is hungry to take the organization to the next level and not be tied to doing it the way that they as Founder CEO always did it. In most cases, Founder CEOs focus their search on internal candidates even when they pretend to have initiated a wide search for the appropriate candidate. The danger with a gamed search for Successor CEO is that it does not allow the best candidate to emerge.

There are two possible scenarios that usually play out in such situations — One is the tendency to pick the most loyal member of staff as the preferred candidate without paying much attention to the skillsets needed to take the organization to its next development level.

Bearing in mind that most Founder CEOs learn the tough task of leading while at it and are heavily driven by their vision and passion for the issue, it is always not the best to hire a successor who would have to struggle and stumble through the second developmental phase of any organization.

Secondly, there is the issue of trying to satisfy self emotionally by seeking to hire a particular type of candidate because it is the vogue thing to do and, other organizations that went through succession did it. This may range from looking for a candidate from certain group like youth groups, race or ethnic coloration that satisfies that emotional yearning and offer some temporary bragging rights. I have heard a Founder CEO tell friends that she hired a male successor because it was the right thing to do after she led for such number of years. In the instances mentioned above, it is always the case that preference is given to loyalty and emotional satisfaction rather than competence and skillsets. Of course, there are other instances of such.

Institutional Status of Organization

Learning also show that most Founder CEO’s succession plans failed or are failing because of the poor institutional status of the organization at the time of transition. In some cases, Founder CEOs start thinking of what else they might be getting into rather than the health of the organization that they are leaving.

There are three major areas to examine in determining the institutional health of an organization. The first is the composition and efficiency of its Board. Weak boards invariably lead to weak management and organizations. Since most Founder CEOs constitute boards that meet their individual style and addresses their ‘network’, bequeathing same board to the Successor CEO as it is, is never a good quality Founder CEO decision. The quality of an organization’s board is important in determining the success or otherwise of a Founder CEOs transition.

Secondly, it is common knowledge that many organization at some point begin to suffer from mission and vision drift and a number of failed and failing transitions begins when the organization is at its low ebb due to the presence — obvious or non-obvious of mission and vision drifts. The moral here is never leave without ensuring that the organization is on point regarding its vision and mission and how that is communicated.

Finally on this, is the most obvious danger of having a Founder CEO run an organization with a weak board — That is weak institutional structures and processes — especially financial processes. Most organizations that experience failed transitions always contend with institutional structures, processes and procedures at the point of disengagement. It is open secret that many Founder CEO’s management style rely more on exercise of discretion than on adherence to laid down institutional rules and procedures. A Successor CEO should be clear on limits of discretion in decision making than get the impression that s/he is at liberty to run amok with discretionary decision making.

Founder CEOs Emotional Capacity

The last part of this is about the Founder CEOs ability to understand their role post-transition or what I call their emotional capacity to manage transition pre and post. It is common for transiting or transited Founder CEOs to struggle with drawing the line between their role while in post and their role when out of post. (I will discuss possible roles for Founder CEOs in a separate article in future). Most Founder CEOs are wont to continue to dabble into daily decision making and processes in the organization post transition because they are not able to understand the difference between the organization and them as individual. Some plant their preferred staff to ensure that they get all the ‘juicy information’ on what is going on and control the outcome of most decisions of the Successor CEO without appreciating the facts and reasoning that informed the Successor CEO’s action.

In this part of the article I have outlined the major challenges that Founder CEOs overlook in planning their transition which contributes to the reason why transition from Founder CEOs and Successor CEOs fails in nonprofits.

In the third and final part, I will be discussing what can be done to help Founder CEOs transit without dire consequences on the organization.

Comments and questions would be most appreciated as we co-learn on how to improve the capacity of nonprofits to deliver change and, preserve legacy organizations; while encouraging Founder CEOs to move on and allow their legacy mature.